This chapter examines the “natural” features of a growing economic system, deriving from its inherent dynamics. It highlights the emergence of “natural” rates of profit as a central characteristic of industrial economies and develops a labour theory of these rates, linking them to the fundamental functions of the price system.

The chapter explores the macroeconomic nature of the real wage rate and provides a historical perspective on the determination of relative prices and physical quantities in a dynamic context. It delves into the asymmetric relationship between total profits and wages, considering the roles of new investments and total consumption in shaping economic growth. Finally, the discussion revisits Adam Smith’s distinction between “labour embodied” and “labour commanded,” framing a compact definition of the natural rates of profit as a cornerstone of the pure labour theory of value.

Chapter IV delves into Piero Sraffa’s price system, a cornerstone of modern economic theory, emphasizing the relationship between prices, income distribution, and production structures. The chapter begins by introducing the framework of Production of Commodities by Means of Commodities, outlining key assumptions about single-product industries, circulating capital goods.

A detailed analysis of relative prices is provided, examining their behavior under varying profit rates, with discussions on extreme cases: a pure labour theory of value, and a pure capital theory of value. The relationship between the wage rate and the profit rate is highlighted.

The chapter then introduces the “Standard system”, showing that it is possible to treat income distribution independently of prices, and that this possibility is not tied to the pure labour theory of value.