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The Classical Theory of Wages and its Interpretations: A Critique of the Canonical Classical Model

Author

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  • Enrico Sergio Levrero

    (Roma Tre University)

Abstract

This paper aims to clarify the broad social and historical factors that determine income distribution according to Smith and Ricardo and show that the socalled “Canonical Classical Model†fails to interpret the Classical theory of wages both with regard to logic and on the basis of textual analysis. After reconstructing the circumstances determining the subsistence and surplus wage rates according to Smith and Ricardo, the paper critically analyses the idea that they determine the price of labour by means of the wage fund theory in the short run and functional relationships between the wage rate and the growth rates of capital and population in the long run.

Suggested Citation

  • Enrico Sergio Levrero, 2018. "The Classical Theory of Wages and its Interpretations: A Critique of the Canonical Classical Model," Bulletin of Political Economy, Bulletin of Political Economy, vol. 12(1-2), pages 55-76, June.
    • Handle: RePEc:awu:journl:v:12:y:2018:i:1-2:p:55-76
    as

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    References listed on IDEAS

    as
    1. Torrens, Robert, 1834. "On Wages and Combination," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number torrens1834.
    2. Peach, Terry, 1990. "Samuel Hollander's 'Ricardian Growth Theory': A Critique," Oxford Economic Papers, Oxford University Press, vol. 42(4), pages 751-764, October.
    3. Antonella Stirati, 1994. "THE THEORY OF WAGES IN CLASSICAL ECONOmiCS," Books, Edward Elgar Publishing, number 417.
    4. E S Levrero, 2018. "Sraffa on taxable income and its implications for fiscal policy [Rescuing the minimum wage as a tool for development in Brazil]," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 42(4), pages 1087-1106.
    5. Samuelson, Paul A, 1978. "The Canonical Classical Model of Political Economy," Journal of Economic Literature, American Economic Association, vol. 16(4), pages 1415-1434, December.
    6. Enrico Sergio Levrero, 2013. "Marx on Absolute and Relative Wages and the Modern Theory of Distribution," Review of Political Economy, Taylor & Francis Journals, vol. 25(1), pages 91-116, January.
    7. Pierangelo Garegnani, 2007. "Professor Samuelson on Sraffa and the classical economists," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 14(2), pages 181-242.
    8. Casarosa, Carlo, 1978. "A New Formulation of the Ricardian System," Oxford Economic Papers, Oxford University Press, vol. 30(1), pages 38-63, March.
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    More about this item

    Keywords

    Classical theory of wages; Subsistence and surplus wages; Natural and market prices of labour; Canonical classical model; Principle of population;
    All these keywords.

    JEL classification:

    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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