Ricardo's and Malthus's common error in their conflicting theories of the value of labour

Meacci, Ferdinando (2014): Ricardo's and Malthus's common error in their conflicting theories of the value of labour.

Abstract

ABSTRACT The controversies between Ricardo and Malthus reached a new peak when Malthus published his pamphlet The Measure of Value Stated and Illustrated and Ricardo responded by his critical Notes on Malthus’s ‘Measure of Value’ (1823 [1992]) and by a further round of correspondence with Malthus (Works, IX). The new (and final) stage of these controversies was concerned with the two authors’ conflicting theories of value and, within these theories, with the excruciating issue of the invariable measure of value. Starting from some insights provided by Malthus and Ricardo in their major or final contributions, this paper deals with a rather neglected component of their controversies, i.e. with the theory of the value of labour as distinct from the value of its products. This will be done by highlighting two sets of ambiguities which affect both Ricardo’s and Malthus’s arguments. One of these hinges on the ambiguity conveyed by the word labour in so far as this reflects the three different concepts of labour power, living labour and dead labour. The other set hinges on the different ambiguity conveyed by the word value especially when it comes to the value of labour. For this word was used in those controversies (as well as in other parts of classical theory) to convey not only the two elementary concepts of use-value and exchangeable-value but also, within the former concept, the two further concepts of the (positive) use-value of labour from the standpoint of its employer, and of the (negative) use-value (disutility) of labour from the standpoint of the labourer. The latter is the sense in which Smith’s ambiguous notion of the “value of labour to the labourer” and his related corollary of the constant “price” of labour (WN, I,V,7-8) must be understood if his system of thought (including its crucial notion of value as labour command) is to stand against Malthus’s misleading attempt to protect it from Ricardo’s criticisms. In this sense, Malthus’s attempt and Ricardo’s criticisms may be jointly regarded as a result of their common error of understanding the value of labour exclusively in the sense of its exchangeable value (which is rightly regarded by Ricardo as –normally- varying and wrongly assumed in Malthus’s Measure of Value as –strangely- constant).

• Item Type: MPRA Paper
• Language: English
• Keywords: Smith, Ricardo, Malthus, value of labour
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B12 - Classical (includes Adam Smith); B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925; B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925 > B22 - Macroeconomics

References

Aspromourgos, T. 2010a. The Science of Wealth. Adam Smith and the framing of political economy, London and New York: Routledge

Aspromourgos, T. 2010b. “Adam Smith and the Labour Contract: Is Labour Exchange Analogous to Commodity Exchange?”, The Economic and Labour Relations Review, 20, 39-48

Bailey, S. (1825) 1967. A Critical Dissertation on the Nature, Measure and Causes of Value, New York: Kelley

Blaug, M. 1985. Economic Theory in Retrospect, Cambridge: Cambridge University Press

Bonar, J. 1966. Malthus and his work, London, F. Cass

Costabile, L. 1983. “Natural prices, market prices and effective demand in Malthus”, Australian Economic Papers, 144-170

De Quincey, T. (1823) 1970. “Malthus on the Measure of Value”, in D. Masson (ed.), The Collected Writings of Thomas De Quincey, New York: A. M. Kelley, Vol. IX

De Quincey, T. (1824) 1970. Dialogues of Three Templars on Political Economy, in D. Masson (ed.), The Collected Writings of Thomas De Quincey,, New York: A. M. Kelley, Vol. IX

De Quincey, T. (1844) 1970. The Logic of Political Economy, in D. Masson (ed.), The Collected Writings of Thomas De Quincey, New York: A. M. Kelley, Vol. IX

De Vivo, G. 2012. “Malthus’s Theory of the ‘Constant Value of Labour’”, Contributions to Political Economy, 31, 103-120

Dobb, M. 1973. Theories of Value and Distribution since Adam Smith, Cambridge: Cambridge University Press

Dooley, P. C. 2005. The Labour Theory of Value, London and New York: Routledge

Dorfman, R. 1989. “Thomas Robert Malthus and David Ricardo”, The Journal of Economic Perspectives, 3, 153-164

Garegnani, P. 1983. “The Classical theory of wages and the role of demand schedules in the determination of relative prices”, The American Economic Review, 73, 309-313

Glyn, A. 2006. “The corn model, gluts and surplus value”, Cambridge Journal of Economics, 30, 307-312

Hollander S. 1979. The economics of David Ricardo, Toronto: University of Toronto Press

Hollander S. 1987. Classical Economics, Oxford: Basil Blackwell

Hollander S. 1997. The economics of Thomas Robert Malthus, Toronto: University of Toronto Press

Hollander S. 2010. “Samuel Bailey and the question of his ‘influence’”: a skeptical view. Research in the History of Economic Thought and Methodology, 28, 153-198

Hueckel, G. 1998. “Smith’s Uniform Toil and Trouble: A ‘Vain Subtlety’?”, Journal of the History of Economic Thought, 20, 215-33

Hueckel, G. 2000. “On the ‘Insurmountable Difficulties, Obscurity, and Embarrassment’ in Smith’s Fifth Chapter”, History of Political Economy, 32, 317-45

Hueckel, G. 2002. “Malthus v. Bailey on the measure of value: a lesson in methodological humility”, Working paper, Claremont Institute for Economic Policy Studies

Malthus, T. R. 1986. The Works of Thomas Robert Malthus, edited by Wrigley E. A. and D. Souden, London: Pickering, 8 Vols.

Malthus, T. R. (1820-1836) 1986. Principles of Political Economy, in Wrigley E. A. and D. Souden (eds.), The Works of Thomas Robert Malthus, London: Pickering, Vols. 5-6

Malthus, T. R. (1823) 1992. The Measure of Value Stated and Illustrated, in Notes on Malthus’s ‘Measure of Value’, edited by P. L. Porta, Cambridge: Cambridge University Press

Marx, K. (1859) 1970. A Contribution to the Critique of Political Economy, London: Lawrence and Wishart

Marx, K. (1862-63) 1969. Theories of Surplus Value, Pts. 1-2, London: Lawrence & Wishart

Meacci, F. 2012. “On Adam Smith’s Ambiguities on Value and Wealth”, History of Political Economy, 44:4, 663-689

Meacci, F. 2014. “From Bounties on Exportation to the Natural and Market Price of Labour: Smith versus Ricardo”, European Journal for the History of Economic Thought, forthcoming

Meek, R. L. 1973. Studies in the Labour Theory of Value, London: Lawrence & Wishart

Mill, J. S. (1871) 1976. Principles of Political Economy, New York: A. M. Kelley

Mill, J. S. (1823) 1965-1991. “Malthus’s Measure of Value”, in Collected Works of John Stuart Mill, edited by J. M. Robson et al., Toronto: Toronto University Press, Vol. 12

Myint, H. 1965. Theories of Welfare Economics, New York: A. M. Kelley

Naldi, N. 2003. “Labour employed in production and labour commanded: a Ricardian conjecture”, Cambridge Journal of Economics, 27, 547-562

Naldi, N. 2013. “Adam Smith on Value and Prices”, in C. J. Berry, M. P. Paganelli and C. Smith (eds.), The Oxford Handbook of Adam Smith, Oxford: Oxford University Press

Napoleoni, C. 1976. Smith, Ricardo, Marx, Oxford: Basil Blackwell

Peach, T. 1993. Interpreting Ricardo, Cambridge: Cambridge University Press

Peach, T. 2009. “Adam Smith and the Labor Theory of (Real) Value: A Reconsideration”, History of Political Economy, 41, 383-406

Rankin, S. C. 1980. “Supply and Demand in Ricardian Price Theory: A Re-Interpretation”, Oxford Economic Papers, 32, 241-262

Rashid, S. 1981. “Malthus’s Principles and British economic thought, 1820-1835”, History of Political Economy, 13, 55-79

Ricardo, D. 1951-1973. The Works and Correspondence of David Ricardo, edited by Sraffa P. and M. H. Dobb, Cambridge: Cambridge University Press, 11 Vols.

Ricardo, D. (1821) 1951-1973. On the Principles of Political Economy and Taxation, in Sraffa P. and M. H. Dobb (eds.), The Works and Correspondence of David Ricardo, Cambridge: Cambridge University Press, Vol. I

Ricardo, D. (1823) 1992. Notes on Malthus’s ‘Measure of Value’, edited by P. L. Porta, Cambridge: Cambridge University Press

Smith, A. (1776) 1976. An Inquiry into the Nature and Causes of the Wealth of Nations, Oxford: Oxford University Press, 2 Vols.

Stirati, A. 1994. The theory of wages in classical economics, Aldershot: E. Elgar

Stirati, A. 1995. “Smith’s legacy and the definition of natural wages in Ricardo”, Journal of the History of Economic Thought, 17, 106-32

Waterman A. M. C. 2009. “Adam Smith’s Macrodynamic Conception of the Natural Wage”, History of Economics Review, 49, 45-60

Waterman A. M. C. 2012. “Adam Smith and Malthus on high wages”, The European Journal of the History of Economic Thought, 19, 409-429