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On the Priority of Labor Over Capital

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  • Charles M. A. Clark

Abstract

In his encyclical Laborem Exercens, John Paul II asserts the principle of the priority of labor over capital. The purpose of this article is to examine this principle. The conflict between labor and capital is often noted as an essential part of capitalism. There is a long tradition of assigning more significance to labor than to capital. In fact, the classical economists argued that labor determined the “value” of a good. To understand this conflict, we must first review what is capital and its role in capitalism. We will then look at John Paul II’s assertion of the principle of labor over capital, followed by a review of how economists have understood the relationship between labor and capital. Neoclassical economists dismiss labor and capital as classes, so they believe there is no conflict. We examine one neoclassical economist’s claim of a gap in the principle of the priority of labor over capital by not including finance capital in the analysis. We demonstrate that the Church’s teachings on usury answer the objections raised. We conclude with a review of the implications of the priority of labor over capital.

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  • Charles M. A. Clark, 2020. "On the Priority of Labor Over Capital," American Journal of Economics and Sociology, Wiley Blackwell, vol. 79(4), pages 1147-1180, September.
    • Handle: RePEc:bla:ajecsc:v:79:y:2020:i:4:p:1147-1180
    DOI: 10.1111/ajes.12355
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    References listed on IDEAS

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    1. Mill, John Stuart, 1848. "Principles of Political Economy (II): Distribution," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 2, number mill1848-2.
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    3. Mill, John Stuart, 1848. "Principles of Political Economy (III): Exchange," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 3, number mill1848-3.
    4. Joan Robinson, 1953. "The Production Function and the Theory of Capital," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 21(2), pages 81-106.
    5. Ricardo, David, 1821. "On the Principles of Political Economy and Taxation," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, edition 3, number ricardo1821.
    6. Charles M. A. Clark, 2019. "Power, Subsidiarity, and the Economy of Exclusion," American Journal of Economics and Sociology, Wiley Blackwell, vol. 78(4), pages 923-954, September.
    7. Mill, John Stuart, 1848. "Principles of Political Economy (I): Production," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 1, number mill1848-1.
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    1. Martin, Tess & Hervias, Alexandra & Armoiry, Xavier & Martelli, Nicolas, 2024. "Early access programs for medical devices in France: Overview of recent reforms and outcomes (2015-2022)," Health Policy, Elsevier, vol. 148(C).

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