IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/20118.html
   My bibliography  Save this paper

The competition-of-capitals doctrine and the wage-profit relationship

Author

Listed:
  • Meacci, Ferdinando

Abstract

The wage-profit relationship is usually linked up with Ricardo and his notion of “proportional wages” (Principles, Chapters I, VI and passim). This relationship is based on Ricardo’s theory of value and supports his diminishing-returns-to-agriculture theory of the falling rate of profit. A wage-profit relationship, however, exists also in the Wealth of Nations (Book I, Chapter IX and passim). Here it is related to the alternative competition-of-capitals theory of the falling rate of profit which in turn is based on Smith’s different theory of value. The purpose of this chapter is to reconstruct Smith's competition-of-capitals doctrine. This reconstruction, however, is not intended to provide a faithful assembly of what Smith actually wrote or a 'rational' view of what he must have thought in this connection. Rather, it is to extract from his faulty exposition and with the benefit of hindsight what is necessary to make Smith's doctrine consistent with his system of thought and vision of the future in order to determine whether, or to what extent,Ricardo's dissatisfaction is justified. This reconstruction will be based on the fragmentary statements by which the doctrine is presented in the Wealth of Nations and will try to highlight not only some of the ambiguities incorporated in these statements but also the links between these statements and other crucial parts of Smith's system of thought. This purpose will be achieved by considering the Malthus-Ricardo disputes on the falling rate of profit as well as their relevance for understanding the impact of growth on wages and profits in past and modern economies.

Suggested Citation

  • Meacci, Ferdinando, 2004. "The competition-of-capitals doctrine and the wage-profit relationship," MPRA Paper 20118, University Library of Munich, Germany, revised 2006.
  • Handle: RePEc:pra:mprapa:20118
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/20118/1/MPRA_paper_20118.pdf
    File Function: original version
    Download Restriction: no

    File URL: https://mpra.ub.uni-muenchen.de/20124/1/MPRA_paper_20124.pdf
    File Function: revised version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Garegnani, Pierangelo, 1984. "Piero Sraffa," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 8(1), pages 1-2, March.
    2. Garegnani, P, 1982. "On Hollander's Interpretation of Ricardo's Early Theory of Profits," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 6(1), pages 65-77, March.
    3. Peach,Terry, 1993. "Interpreting Ricardo," Cambridge Books, Cambridge University Press, number 9780521260862, July.
    4. Pierangelo Garegnani, 2024. "The Classical Theory of Wages and the Role of Demand Schedules in the Determination of Relative Prices," Springer Studies in the History of Economic Thought, in: Roberto Ciccone (ed.), Capital Theory, the Surplus Approach, and Effective Demand, pages 297-303, Springer.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Meacci, Ferdinando, 2013. "Say's Law," MPRA Paper 55495, University Library of Munich, Germany, revised Mar 2014.
    2. Ferdinando Meacci, 2009. "Different employment of capitals in vertically integrated sectors: Smith after the Austrians," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 22(4), pages 333-348, December.
    3. Meacci, Ferdinando, 2011. "From bounties on exportation to the natural and market price of labour: Smith versus Ricardo," MPRA Paper 31153, University Library of Munich, Germany.
    4. Meacci, Ferdinando, 2010. "On Smith's ambiguities on value and wealth," MPRA Paper 28866, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Meacci, Ferdinando, 2014. "Ricardo's and Malthus's common error in their conflicting theories of the value of labour," MPRA Paper 55948, University Library of Munich, Germany.
    2. Sergio Nistico & Giorgio Rodano, 2005. "Reflections on Sraffa's Legacy in Economics: A review essay," Review of Political Economy, Taylor & Francis Journals, vol. 17(3), pages 471-487.
    3. Duccio Cavalieri, 2009. "Sull'inseparabilit? delle strutture sintattiche nell'analisi classica del valore e della distribuzione," STUDI ECONOMICI, FrancoAngeli Editore, vol. 0(97), pages 5-46.
    4. Gary Mongiovi, 2021. "Pierangelo Garegnani and the revival of the ‘submerged and forgotten’ surplus approach," Bulletin of Political Economy, Bulletin of Political Economy, vol. 15(2), pages 163-184, December.
    5. repec:drm:wpaper:2013-39 is not listed on IDEAS
    6. Bellino, Enrico & Nerozzi, Sebastiano, 2013. "Causality and interdependence in Pasinetti's works and in the modern classical approach," MPRA Paper 52179, University Library of Munich, Germany.
    7. Edwards, Brian K. & Howitt, Richard E. & Flaim, Silvio J., 1996. "Fuel, crop, and water substitution in irrigated agriculture," Resource and Energy Economics, Elsevier, vol. 18(3), pages 311-331, October.
    8. Fabio Ravagnani, 2008. "Classical Theory and Exhaustible Natural Resources: Notes on the Current Debate," Review of Political Economy, Taylor & Francis Journals, vol. 20(1), pages 79-93.
    9. Chumbita, Joan Severo, 2024. "Revisión de los fundamentos del desarrollo económico según Alfred Marshall: rendimientos crecientes a escala, competencia y demanda efectiva," Ensayos de Economía 21275, Universidad Nacional de Colombia Sede Medellín.
    10. Maria Cristina Marcuzzo, 2024. "Ricardo’s Theory of Money Matters," Palgrave Studies in the History of Economic Thought, in: Economic Theories, Protagonists and Facts, chapter 0, pages 81-101, Palgrave Macmillan.
    11. Ciccone, Michele, 2022. "Some notes on Ricardo's analysis of the convergence process of the market rate of interest to the natural rate," MPRA Paper 112887, University Library of Munich, Germany.
    12. Frederic Lee & Tae-Hee Jo, 2011. "Social Surplus Approach and Heterodox Economics," Journal of Economic Issues, Taylor & Francis Journals, vol. 45(4), pages 857-876.
    13. Olivier Rosell, 2013. "L’apport de Robert TORRENS à la théorie Ricardienne du salaire naturel," Working Papers hal-04141164, HAL.
    14. Francisco L. Lopes, 2006. "The Ricardo puzzle," Textos para discussão 526, Department of Economics PUC-Rio (Brazil).
    15. Fabio Ravagnani, 2007. "The classical theory of normal price and the analysis of economic Changes: A comment on D'Orlando," Working Papers in Public Economics 104, Department of Economics and Law, Sapienza University of Roma.
    16. Tsoulfidis, Lefteris, 2017. "Ricardo’s Theory of Value is Alive and Well in Contemporary Capitalism," MPRA Paper 96491, University Library of Munich, Germany, revised 11 Oct 2019.
    17. André Lapidus, 1996. "Introduction à une "Histoire de la Pensée Economique" qui ne verra jamais le jour," Revue Économique, Programme National Persée, vol. 47(4), pages 867-892.
    18. Neri Salvadori & Rodolfo Signorino, 2013. "The Classical Notion of Competition Revisited," History of Political Economy, Duke University Press, vol. 45(1), pages 149-175, Spring.
    19. Neri Salvadori & Rodolfo Signorino, 2014. "Adam Smith on Monopoly Theory. Making good a lacuna," Scottish Journal of Political Economy, Scottish Economic Society, vol. 61(2), pages 178-195, May.
    20. Samuel Hollander, 1998. "Sraffa in historiographical perspective: a provisional statement," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 5(3), pages 430-436.
    21. Ormazabal Sánchez, Kepa Mirena, 2011. "A new look at Marx's refutation of Ricardo's refutation of the labor theory of value," IKERLANAK 2011-53, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.

    More about this item

    Keywords

    Competition of capitals; wage-profit relationship; Smith and Ricardo;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:20118. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.