DOCSLIB.ORG

Notes on the Margins of Adam Smith's Wealth of Nations

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Notes on the Margins of Adam Smith's Wealth of Nations Notes on the Margins of Adam Smith’s Wealth of Nations Mohamed El-Hodiri Kansas, Fall 2005 BOOK I • Chapter VII. Micro economics Natural Price: = Natural Wage bill+ Natural Rental bill + Natural Profit of stock bill Market Price: = Market Wage bill + Market Rental bill + Market Profit of stock bill • Chapter VIII. Labor economics Wages: natural and market (see p. 83 # 11). Changes in natural wages, Changes in market wages • Chapter IX. Beginnings of a theory of capital Profit of Stock: natural and market. Changes in natural POS and market POS. See p. 105 #2. • Chapter X. General Equilibrium (sort of) Wage rates and POS rates equalize across employments of labor and stock • Chapter XI. Land Economics o A. rental of land is POS on improvements (start at the margin) see p. 160 # 2 o B. embryonic differential rent see p 162, # 1 o C. on the margin market shenanigans o D. History on the sub-super margin E. First period 195 F. Second period G .Third period H. Embryonic monetary economics I., J, K, M, N. Continued monetary theory o O .Improvements and natural price (Technological progress) o P. More economic history BOOK II. Capital Theory • Intro o Necessity of accumulation at the onset of division of labor o Deepening of capital as labor divides more o feedback • Chapter I. Division of Stock o Micro Poor people do not have capital gains (nor dividends); they live on subsistence and have opportunity to accumulate. People earning above subsistence can consciously accumulate in order to derive future income. The potion not consumed goes into: • Circulating capital • Fixed capital • Proportions vary by occupation o Macro (National accounts). National Stock (meaning National Wealth) divides to: Consumption Stock Fixed Capital Stock • Machinery • Structures • Improvements on Land • Improvements on Labor Circulating Capital • Transactions fund • Consumer goods inventory • Goods in process inventory • Undistributed finished goods inventory • Chapter II. Of money Considered as a particular Branch of the Stock of the Society or of the expense of maintaining National Capital. Aggregate money as the stock that produces transactions services. Or the productivity of pure finance capital. BOOK III Economic Growth and Development; the evidence. • Chapter I. The Natural Rate of Growth o Urban-rural trade benefits both. o Urban centers evolve when there is no free land o Export lead Egypt China North America • Chapter II. Decline due to no trade because of decrease in agricultural activity o Subsistence o Share croppers Coloni Partiari . No improvements • Chapter III. Rise and Progress of Urban centers o Role of good government o Contact with others and taste for refinements • Chapter IV. Commerce of urban centers induced improvement of rural regions BOOK IV Systems of Political Œconomy. Trade Policy • Chapter I. Of the principle of mercantile System o Question “wealth as money” o Gold to a Spaniard, Sheep/horse to a Tartar (our nomads and their nomads) o Diamonds are a girl’s best friend? o Money measures value, if no value is generated the what is the worth of money o Europeans and the accumulation of gold and silver at all costs o Argue for trade not gold • Chapter II. Of restraints upon the importation from foreign countries of such goods as can be produced at home. o Monopoly at home o Duties and domestic prices o Capital account (investors from abroad) o Losses to service sector (commercial margin • Chapter III.. Protectionism to solve trade deficits problems • Chapter IV. What is wrong with this picture • Chapter V. Export subsidies • Chapter VI. Of treaties of Commerce • Chapter VII. Of Colonies o a. Motives for establishing new colonies o b. Causes of prosperity of new Colonies o c. Of the advantages that Europe has derived from the discovery of America, and from that of a passage to the East Indies by the Cape of Good Hope. • Chapter VIII. Conclusion of the Mercantile System • Chapter IX. Of the Agricultural Systems or of those Systems of Political Œconomy which represent the Produce of Land as either the sole or the principal Source Of Revenue and Wealth of every Country. BOOK V Of the Revenue of the Sovereign or Commonwealth • Chapter I. Of the Expences of the Sovreign or Commonwealth o A. Of the expence of Defence Defense ids first duty in primitive all are worriers-hunters Shepherds are seasonal worriers distribution of income through gracious hospitality and of wealth through raids. In Agricultural societies need to specialize in war Standing Army as result of specialization Cost to society and benefit of standing army o B. Of the Expense of Justice Second duty: protect every citizen from other citizens Hunters have no property Civil government supposes a certain subordination. Possible causes are: • Superiority of personal qualifications • Superiority of age • Superiority of fortune • superiority of birth • Top of hierarchy is the sovereign history of how that evolves • Financing the expense of justice (court fees) o C. Of the Expence of Publick Works and publick institutions Third duty of sovereign is to construct and maintain infrastructural works esp. when the benefits can not be individually assigned • Public works and institutions for facilitating Commerce o In general o In particular • Of the expence of the Institutions for the Education of Youth • Of the expence of the Institutions for the Instruction of People of all Ages. • Of the Expence of supporting the Dignity of the Sovreign • Chapter II. Of the sources of the general or public Revenue of the Society o A. Of Funds or Sources of Revenue Which may particularly belong to the Sovereign or Commonwealth (publicly owned assets) o B. Of Taxes Taxes upon rent; taxes upon rent of land Taxes which are proportional , not to rent, but to produce of land Taxes upon rent of houses Taxes upon profit or upon revenue arising from Stock Taxes upon profit of particular employments Appendix Taxes upon wages of labor Equal Burden Consumption taxes • Chapter III. Of Public Debts o Stages of history when borrowing is not necessary o Debts incurred in emergencies o Intergenerational fairness o Internal balance o External balance .
Load more

Recommended publications
  • The Falling Rate of Profit Thesis Reassessed: Owart D a Sociology of Marx’S Value Theory of Labor
    University of Tennessee, Knoxville TRACE: Tennessee Research and Creative Exchange Masters Theses Graduate School 8-2007 The Falling Rate of Profit Thesis Reassessed: owarT d a Sociology of Marx’s Value Theory of Labor John Hamilton Bradford University of Tennessee - Knoxville Follow this and additional works at: https://trace.tennessee.edu/utk_gradthes Part of the Sociology Commons Recommended Citation Bradford, John Hamilton, "The Falling Rate of Profit Thesis Reassessed: owarT d a Sociology of Marx’s Value Theory of Labor. " Master's Thesis, University of Tennessee, 2007. https://trace.tennessee.edu/utk_gradthes/261 This Thesis is brought to you for free and open access by the Graduate School at TRACE: Tennessee Research and Creative Exchange. It has been accepted for inclusion in Masters Theses by an authorized administrator of TRACE: Tennessee Research and Creative Exchange. For more information, please contact [email protected]. To the Graduate Council: I am submitting herewith a thesis written by John Hamilton Bradford entitled "The Falling Rate of Profit Thesis Reassessed: owarT d a Sociology of Marx’s Value Theory of Labor." I have examined the final electronic copy of this thesis for form and content and recommend that it be accepted in partial fulfillment of the equirr ements for the degree of Master of Arts, with a major in Sociology. Harry F. Dahms, Major Professor We have read this thesis and recommend its acceptance: Stephanie Ann Bohon, Robert Gorman Accepted for the Council: Carolyn R. Hodges Vice Provost and Dean of the Graduate School (Original signatures are on file with official studentecor r ds.) To the Graduate Council: I am submitting herewith a thesis written by John Hamilton Bradford entitled “The Falling Rate of Profit Thesis Reassessed: Toward a Sociology of Marx’s Value Theory of Labor.” I have examined the final electronic copy of this thesis for form and content and recommend that it be accepted in partial fulfillment of the requirements for the degree of Master of Arts, with a major in Sociology.
    [Show full text]
  • 1 Strange Food, Paper Alexandra Halasz Dartmouth College
    Strange Food, Paper Alexandra Halasz Dartmouth College [email protected] for I did but seal once to a thing and I was never mine own man since 2 Henry VI 4.2.76 I. In Shakespeare’s 2 Henry VI, Jack Cade responds affirmatively to his fellow rebel’s suggestion that they ‘kill all the lawyers’ by offering a metamorphic emblem of materiality and historicity: Is not this a lamentable thing that the skin of an innocent lamb should be made parchment, that parchment, being scribbled o’er, should undo a man? Some say the bee stings, but I say, ’tis the bee’s wax, for I did but seal once to a thing and I was never mine own man since (4.2.72-6). Creatures and the things they make or become are bound in a process of continual displacement. Jack himself is displaced by a past act of ‘seal[ing] once to a thing’. The past act, moreover, is unfinished, for it is one in which the making of a mark on some thing obligates the actor to a stipulated future. The ‘thing’ and the man thus cross into each other in the unfolding of time.1In a recent essay, Julian Yates argues that the ‘skin 1 I quote from the Arden edition, King Henry VI, Part 2, ed. by Ronald Knowles (Surrey: Thomas Nelson and Sons, 1999). The crossing is explicit in the textual history of the speech: parchment acquires motive force when the quarto’s line, ‘Why ist not a miserable thing that of the skin of an innocent lamb should parchment be made,& then with a litle blotting over with ink, a man should undo himselfe’ becomes the 1 of an innocent lamb’ Cade invokes at the beginning
    [Show full text]
  • The Historical Transience of Capital: the Downward Trend in the Rate of Profit
    MPRA Munich Personal RePEc Archive The historical transience of capital: the downward trend in the rate of profit since XIX century Esteban Ezequiel Maito Universidad de Buenos Aires 2014 Online at http://mpra.ub.uni-muenchen.de/55894/ MPRA Paper No. 55894, posted 11. May 2014 13:03 UTC The historical transience of capital The downward trend in the rate of profit since XIX century Esteban Ezequiel Maito1 ABSTRACT This paper presents estimates of the rate of profit on fourteen countries in the long run. The performance shows a clear downward trend, although there are periods of partial recovery in both core and peripheral countries. The behavior of the profit rate confirms the predictions made by Marx, about the historical trend of the mode of production. Finally, an estimate of the global rate of profit for the last six decades is done, also highlighting the particular role of China in systemic profitability. Keywords: rate of profit - Marx - mode of production – core/periphery. 1 Universidad de Buenos Aires - Argentina. Introduction There is, in the origins of classical political economy, a concern about the downward trend in the rate of profit. Adam Smith and David Ricardo, among others, have argued in their own way the existence of this trend2. The systemic tendency to crisis and insufficient profit generation has also been reflected by other exponents of different economic schools, expressing, on one hand, the eminently real character of the trend, and on the other, the theoretical particularities of these economic schools3. Marx established, as the most important law of political economy, the law of the falling tendency of the rate of profit.
    [Show full text]
  • On the Theory of Non-Capitalist Economic Systems
    Clásicos y Contemporáneos en Antropología, CIESAS-UAM-UIA En The Theory of Peasant Economy, (eds. Thorner, Kerblay y Smith), 1966, págs.1-28. ON THE THEORY OF NON-CAPITALIST ECONOMIC SYSTEMS Alexander V. Chayanov In modern theory of the national economy, it has become customary to think about all economic phenomena exclusively in terms of a capitalist economy. All the principles of our theory—rent, capital, price, and other categories—have been formed in the framework of an economy based on wage labor and seeking to maximize profits (i.e., the maximum amount of the part of gross income remaining after deducting material costs of production and wages). All other (noncapitalist) types of economic life are regarded as insignificant or dying out; they are, at any rate, considered to have no influence on the basic issues of the modern economy and, therefore, are of no theoretical interest. We shall have to accept this last thesis in regard to the indisputable dominance of finance and trading capital in world commerce and the unquestioned part it plays in the present organization of the world economy. But we must by no means extend its application to all phenomena in our economic life. We shall be unable to carry on in economic thought with merely capitalist categories, because a very wide area of economic life (that is, the largest part of the agrarian production sphere) is based, not on a capitalist form, but on the completely different form of a nonwage family economic unit.1 Such a unit has very special motives for economic activity and also a very specific conception of profitability.
    [Show full text]
  • The Two Conflicting Approaches to the Concept of Capital Within Economic Thought
    Vol. II (LXV) 83 - 91 Economic Insights – Trends and Challenges No. 4/2013 The Two Conflicting Approaches to the Concept of Capital within Economic Thought Alexandru Pătruţi PhD. Student, the Bucharest University of Economic Studies, Department of International Business and Economics, Faculty of International Business and Economics, 6, Piata Romana, 1st district, 010374, Romania e-mail: [email protected] Abstract The concept of capital is probably one of the most disputable topics within modern economic thought. Differences between the various theorists on the definition of capital are almost endless. However, the need for a consistent definition of capital is based not only on purely terminological, but also operational considerations. Developing a theory using loosely defined terms is problematic in many ways. There are numerous cases in which researchers use the same term to refer to different things, without counting here the many popular meanings of the term capital. Studying the origin and meaning of the concept of capital is of paramount importance for any systematic theory which aims at explaining economic phenomena. Key words: capital theory, factors of production, subjective theory of value, objective theory of value, monetary value JEL Classification: B12, B13, D24, E22 Introduction Capital theory is probably one of the most interesting and most debated topics related to political economy. Every renowned economist practically introduced his own concept of capital, differentiating himself more or less in this respect. I believe that despite the many superficial differences, all capital concepts can be grouped into two broad categories, a subjective and an objective one. The objective view regarding capital was promoted by Adam Smith.
    [Show full text]
  • On Working and Circulating Capital
    Munich Personal RePEc Archive On Working and Circulating Capital Meacci, Ferdinando University of Padova October 1997 Online at https://mpra.ub.uni-muenchen.de/11763/ MPRA Paper No. 11763, posted 23 Dec 2008 14:04 UTC 1 ON WORKING AND CIRCULATING CAPITAL by FERDINANDO MEACCI Dipartimento di Scienze Economiche Università di Padova Via del Santo 33, 35123 Padova Fax: +39-049-8274270. E-mail: [email protected]. "Every capital is circulating capital" (Marx, Grundrisse, p.620) INTRODUCTION The purpose of this paper is to investigate whether the terms “working” and “circulating” capital are two different terms for the same concept; or whether they should be considered two different terms for two different concepts. This purpose will be carried out in two steps. The first is devoted to an investigation of the use of the term “working” by the German economist Lowe (The Path of Economic Growth) and by some Austrian economists (Menger, Böhm-Bawerk, Hayek). The second is devoted to Keynes (A Treatise on Money). At the end of each step an assessment is made of the use of this term by these economists with an extension to the relationship between Lowe’s and Keynes’s treatment of their notion of working capital and two preceding streams of thought. These relationships run between Lowe and the Austrians, in the first case; and between Keynes and the classics (in Marx's sense), in the second. These assessments will eventually converge towards the conclusion that the terms “circulating” and “working” capital are not two different terms for the same notion; and that these two notions are different because they belong to two different theories and require two different methods.
    [Show full text]
  • Slavery in the Roman Economy
    Princeton/Stanford Working Papers in Classics Slavery in the Roman economy Version 1.0 September 2010 Walter Scheidel Stanford University Abstract: This paper discusses the location of slavery in the Roman economy. It deals with the size and distribution of the slave population and the economics of slave labor and offers a chronological sketch of the development of Roman slavery. © Walter Scheidel. [email protected] Building on Greek and Hellenistic institutions, ancient Rome created the largest slave society in history. 1 There are several reasons for defining the Roman Empire as a slave society, above all in its Italian core but also to varying degrees in its subject territories. Slaves, numbering in the millions and widely dispersed, accounted for a non-trivial share of its total population. In key areas, slaves were not merely present but supported what has been termed a ‘slave mode of production,’ a mode that rested both on an integrated system of enslavement, slave trade, and slave employment in production, and on “the systematic subjection of slaves to the control of their masters in the process of production and reproduction.” 2 Most importantly, Rome counts as a slave society in terms of the structural location of slavery: dominant groups, once again above all at the core, relied to a significant degree of slave labor to generate surplus and maintain their position of dominance. 3 Since the role of slavery in central productive processes turned Rome into a ‘slave economy’ just as the widespread domination of slaves as a primary social relationship made it a ‘slave society,’ these two terms may be used interchangeably, especially in those strata where slaves and ex-slaves continuously enveloped owners and patrons and mediated their interaction with the freeborn population.
    [Show full text]
  • Bhm-Bawerk Centenary, I Time and Interest : Circulating Versus Fixed
    ST ! BEBR FACULTY WORKING PAPER NO. 1377 <^ . Bohm-Hawerk Centenary, I Time and Interest: Circulating Versus Fixed Capital Hans B rents College of Commerce and Business Administration Bureau of Economic and Business Research University of Illinois, Urbana-Champaign BEBR FACULTY WORKING PAPER NO. 1377 College of Commerce and Business Administration University of Illinois at Urbana-Champaign July 1987 Bohm-Bawerk Centenary, I Time and Interest: Circulating Versus Fixed Capital Hans Brems, Professor Department of Economics b8hm-bawerk CENTENARY, I TIME AND INTEREST: CIRCULATING VERSUS FIXED CAPITAL Hans Brems ABSTRACT The Austrian tradition related the length of the time span of capitalist production to the rate of interest. In Bohm-Bawerk's case of circulating capital that time span was the period of production. In the Akerman-Wicksell case of fixed capital the time span was the useful life of durable producers 1 goods. The two cases were similar: a lower rate of interest would always lengthen the time span of capitalist production. In elementary mathematical form the paper develops the microeconomics and the macroeconomics of the two cases. Digitized by the Internet Archive in 2011 with funding from University of Illinois Urbana-Champaign http://www.archive.org/details/bhmbawerkcentena1377brem B0HM-BAWERK CENTENARY, I TIME AND INTEREST: CIRCULATING VERSUS FIXED CAPITAL Hans Brems I. CIRCULATING CAPITAL 1. Circulating Capital Interest is the price of time, and capitalist production takes time. What it is that takes time differs between circulating and fixed capital. Since Smith, English classicists made a distinction between circu- lating and fixed capital. Ricardo [1821 (1951, I: 31)] saw circulat- ing capital as "capital ..
    [Show full text]
  • The Historical Transience of Capital: the Downward Trend in the Rate of Profit Since XIX Century
    Munich Personal RePEc Archive The historical transience of capital: the downward trend in the rate of profit since XIX century Maito, Esteban Ezequiel Universidad de Buenos Aires 2014 Online at https://mpra.ub.uni-muenchen.de/55894/ MPRA Paper No. 55894, posted 11 May 2014 13:03 UTC The historical transience of capital The downward trend in the rate of profit since XIX century Esteban Ezequiel Maito1 ABSTRACT This paper presents estimates of the rate of profit on fourteen countries in the long run. The performance shows a clear downward trend, although there are periods of partial recovery in both core and peripheral countries. The behavior of the profit rate confirms the predictions made by Marx, about the historical trend of the mode of production. Finally, an estimate of the global rate of profit for the last six decades is done, also highlighting the particular role of China in systemic profitability. Keywords: rate of profit - Marx - mode of production – core/periphery. 1 Universidad de Buenos Aires - Argentina. Introduction There is, in the origins of classical political economy, a concern about the downward trend in the rate of profit. Adam Smith and David Ricardo, among others, have argued in their own way the existence of this trend2. The systemic tendency to crisis and insufficient profit generation has also been reflected by other exponents of different economic schools, expressing, on one hand, the eminently real character of the trend, and on the other, the theoretical particularities of these economic schools3. Marx established, as the most important law of political economy, the law of the falling tendency of the rate of profit.
    [Show full text]
  • Economic Values and Resource Use
    sustainability Article Economic Values and Resource Use Jan Mikael Malmaeus IVL Swedish Environmental Research Institute, P.O. Box 210 60, SE-100 31 Stockholm, Sweden; [email protected]; Tel.: +46-10-788-6580; Fax: +46-10-788-6590 Academic Editor: Francesca Montevecchi Received: 11 January 2016; Accepted: 13 May 2016; Published: 18 May 2016 Abstract: Absolute decoupling of GDP growth from resource use implies that economic output can be increased without simultaneously increasing input. The essential meaning of this proposition is that the economic values that represent the GDP can be realized by increasing resource efficiency. Given that the GDP is first and foremost a measure of economic activity rather than welfare the possibility of absolute decoupling is theoretically limited. This paper demonstrates theoretically and empirically that economic values at the macroeconomic level are fundamentally determined by the use of production factors, primarily labor and physical capital. Technical innovations or efficiency gains increasing utility without raising the costs of production do not add to the GDP unless they stimulate investments in physical capital. Hence the neoclassical notion of productivity is only found to be relevant as a microeconomic concept. In practice, GDP growth is mostly explained by capital accumulation and a key question is whether or not capital accumulation can be decoupled from the use of materials and energy. This will determine the possibility of decoupling of GDP growth from resource use and environmental impact. Alternative measures of progress focusing on welfare rather than economic activity are more likely to achieve absolute decoupling. Keywords: decoupling; economic values; GDP growth; aggregate production; productivity From no source do so many errors, and so much difference of opinion in that science proceed, as from the vague ideas which are attached to the word value.
    [Show full text]
  • Capitalism : Concept, Idea, Image
    Zurich Open Repository and Archive University of Zurich Main Library Strickhofstrasse 39 CH-8057 Zurich www.zora.uzh.ch Year: 2019 Form Analysis and Critique. Marx‘s Social Labour Theory of Value Lange, Elena L Posted at the Zurich Open Repository and Archive, University of Zurich ZORA URL: https://doi.org/10.5167/uzh-184019 Book Section Published Version Originally published at: Lange, Elena L (2019). Form Analysis and Critique. Marx‘s Social Labour Theory of Value. In: Osborne, Peter; Alliez, Éric; Russell, Eric-John. Capitalism : concept, idea, image. Aspects of Marx’s Capital today. London: CRMEP BOOKS, 21-37. Capitalism: concept, idea, image Aspects of Marx’s Capital today edited by PETER OSBORNE ÉRIC ALLIEZ ERIC-JOHN RUSSELL Capitalism: concept, idea, image Aspects of Marx’s Capital today edited by PETER OSBORNE ÉRIC ALLIEZ ERIC-JOHN RUSSELL Published in 2019 by CRMEP Books Centre for Research in Modern European Philosophy Penrhyn Road campus, Kingston University, Kingston upon Thames, kt1 2ee, London, UK www.kingston.ac.uk/crmep isbn 978-1-9993337-0-6 (pbk) isbn 978-1-9993337-1-3 (ebook) The electronic version of this work is licensed under a Creative Commons Attribution-NonCommercial- NoDerivatives 4.0 International License (CC-BYNC-ND). For more information, please visit creativecommons.org. The right of the contributors to be identified as authors of this work has been asserted by them in accordance with the Copyright, Designs and Patents Act, 1988 Designed and typeset in Calluna by illuminati, Grosmont Cover design by Lucy Morton
    [Show full text]
  • Carl Menger's Contribution to Capital Theory
    A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Braun, Eduard Working Paper Carl Menger’s Contribution to Capital Theory TUC Working Papers in Economics, No. 11 Provided in Cooperation with: Clausthal University of Technology, Department of Economics Suggested Citation: Braun, Eduard (2013) : Carl Menger’s Contribution to Capital Theory, TUC Working Papers in Economics, No. 11, Technische Universität Clausthal, Abteilung für Volkswirtschaftslehre, Clausthal-Zellerfeld, http://dx.doi.org/10.21268/20161213-142330 This Version is available at: http://hdl.handle.net/10419/107452 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der
    [Show full text]