A history of economic doctrines : $b from the time of the physiocrats to the present dayGide, Charles
History
A history of economic doctrines : $b from the time of the physiocrats to the present day
Gide, Charles
Economics -- History
The real struggle lies between capitalist and worker. Once the value
of corn has been determined by the cost of producing it on the least
favoured land, the proprietor seizes whatever is over and above this,
saying to both worker and capitalist, “You can divide the rest between
you.” This clearly is Ricardo’s view.[350] “Whatever raises the wages of
labour lowers the profits of stock.” Wages can only rise at the expense
of profits, and _vice versa_—a terrible prophecy that has been abundantly
illustrated by the fortunes of the labour movement, but never more
clearly than at the present moment.
But the mere statement of the fatal antagonism between capitalist and
workman must have caused both grief and surprise to those economists who
had endeavoured to demonstrate the solidarity of interests between them
as between brothers. Bastiat was one of these, and he tried to show that
in the course of economic evolution the share of each factor tends to
grow, but that labour’s shows the greatest increase.
There can be no objection to Ricardo’s method of stating the law. The
whole thing is so evident that it is almost a truism. A cake is being
shared between two persons. If one gets more than his due share is it
not evident that the other must get less? It may be pointed out, on the
other hand, that the amount available for distribution is continually on
the increase, so that the share which each participant gets may really
be growing bigger. But that is hardly the problem to be solved.[351]
Increase the cake tenfold, even a hundredfold, but if one person gets
more than half of it the other must have less. Ricardo’s implication is
just that. His law deals with proportions and not with quantities.
Admitting that the proportion which one of the two factors receives can
be increased only if the other is lessened, the problem is to discover
which of the two, capital or labour, has the bigger portion. It really
seems as if it were labour, for Ricardo speaks of another law of profits,
namely, “the tendency of profits to a minimum.” Here is another thesis
which has had a long career in the history of economics, but what are the
reasons that can be adduced in support of it? The natural tendency of
profits, then, is to fall; “for in the progress of society and wealth the
additional quantity of food required is obtained by the sacrifice of more
labour.” It is determined by the same cause as determined rent—the system
is a solid piece of work at any rate.
Public-domain text, read in full here on John Shaqi.
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