Ricardo's theory, in the first place, is a modification of Adam Smith's. He accepts Smith's statement that wages are determined by the 'supply and demand of labourers,' and by the 'price of commodities on which their wages are expended.'[304] The appeal to 'supply and demand' implies that the rate of wages depends upon unchangeable economic conditions. He endorses[305] Malthus's statement about the absurdity of considering 'wages' as something which may be fixed by his Majesty's 'Justices of the Peace,' and infers with Malthus that wages should be left to find their 'natural level.' But what precisely is this 'natural level?' If the Justice of the Peace cannot fix the rate of wages, what does fix them? Supply and demand? What, then, is precisely meant in this case by the supply and demand? The 'supply' of labour, we may suppose, is fixed by the actual labouring population at a given time. The 'demand,' again, is in some way clearly related to 'capital.' As Smith again had said,[306] the demand for labour increases with the 'increase of revenue and "stock," and cannot possibly increase without it.' Ricardo agrees that 'population regulates itself by the funds which are to employ it, and therefore always increases or diminishes with the increase or diminution of capital.'[307] It was indeed a commonplace that the increase of capital was necessary to an increase of population, as it is obvious enough that population must be limited by the means of subsistence accumulated. Smith, for example, goes on to insist upon this in one of the passages which partly anticipates Malthus.[308] But this does not enable us to separate profit from wages, or solve Ricardo's problem. When we speak of supply and demand as determining the price of a commodity, we generally have in mind two distinct though related processes. One set of people is growing corn, and another working coal mines. Each industry, therefore, has a separate existence, though each may be partly dependent upon the other. But this is not true of labour and capital. They are not products of different countries or processes. They are inseparable constituents of a single process. Labour cannot be maintained without capital, nor can capital produce without labour. Capital, according to Ricardo's definition, is the 'part of the wealth of a country which is employed in production, and consists of food, clothing, raw materials, machinery, etc., necessary to give effect to labour.'[309] That part, then, of capital which is applied to the support of the labourer--his food, clothing, and so forth--is identical with wages. To say that, if it increases, his wages increase is to be simply tautologous. If, on the other hand, we include the machinery and raw materials, it becomes difficult to say in what sense 'capital' can be taken as a demand for labour. Ricardo tells Malthus that an accumulation of profit does not, as Malthus had said, necessarily raise wages[310]; and he ultimately decided, much