Munich Personal RePEc Archive

Wealth

Meacci, Ferdinando (2013): Wealth. Forthcoming in:

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Abstract

The notion of wealth appears and reappears in Ricardo’s works within three different sets of arguments. One is concerned with the distinction between wealth and value, another with the causes of the progress of wealth, the third with the consequences of this progress on the trend of natural wages, profit and rent. Ricardo deals with these subjects sometimes in agreement and sometimes in disagreement with Smith. The agreement reaches a climax on the notion of wealth as such as well as on the causes of its progress while the disagreement ramifies into the foundations both of that distinction and of the resulting conclusions on the trend of natural wages, profits and rent. This entry will focus on the details of Ricardo’s agreements and disagreements with Smith on the subject of wealth as distinct from the close subject of value. We will prove that, except for some minor differences, Ricardo’s notion of wealth is the same as Smith’s. As such, it is used by Ricardo as synonymous with the notion of the “annual produce of the land and labour”, or of the “necessaries, conveniences and amusements of human life”, available in a country in a period. This coincidence permeates Ricardo’s theory of wealth in so far as this theory is focused on the progress, as distinct from the distribution, of wealth. Thus, starting from a similar theory of wealth but from a very different theory of value, Ricardo develops some of his criticisms of Adam Smith’s theory on the basis of his distinction between value and riches (wealth) as well as of his exclusive notion of rent as a price paid to the owner of land “for the use of its original and indestructible powers”. These criticisms are consistent with Ricardo’s starting point on value as labour embodied and are in contrast with Smith’s different starting point on value as labour commanded. A draft of this paper has been submittted for publication in the Elgar Companion to David Ricardo, edited by H. Kurz and N. Salvadori, E. Elgar, forthcoming

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