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
Notwithstanding his recantation, Smith was never quite rid of
Physiocratic influence. Writing of the Physiocratic system, he described
it as perhaps “the nearest approximation to the truth that has yet been
published.”[144] So indelible was the impression which the Physiocrats
left upon him that both they and their doctrines, even when the latter
are directly opposed to his own, are always spoken of with the greatest
respect. The most important evidence of their power over him is the
thesis just mentioned which he attempted to defend, namely, that between
agriculture and other industries lies an essential distinction, because
in industry and commerce the forces of nature are never brought into
play, whereas in agriculture they always collaborate with man. “No
equal quantity of productive labour employed in manufactures can ever
occasion so great a reproduction. In them nature does nothing; man does
all; and the reproduction must always be in proportion to the strength
of the agents that occasion it.”[145] We almost think we are dreaming
when we read such things in the work of a great economist. Water, wind,
electricity, and steam, are they not natural forces, and do they not
co-operate with man in his task of production?
Considerations such as these were allowed to pass quite unheeded, and
Smith persisted in his error because he believed that this new doctrine
furnished him with an explanation of rent, that strange enigma which
had puzzled English economists for so long. How was it that while other
branches of production gave a return only sufficient to remunerate
the capital and labour employed, agriculture, in addition to these
two revenues, yielded a supplementary income known as rent? It was
because “in agriculture nature labours along with man: and though her
labour costs no expence, its produce has its value as well as that
of the most expensive workman.” Thus “rent may be considered as the
produce of those powers of nature, the use of which the landlord lends
to the farmer.”[146] Had Smith arrived at a true theory of rent this
recourse to the natural powers of the soil to furnish an explanation
of the proprietor’s revenue would have been quite unnecessary, and in
all probability he would not have so easily accepted the idea of the
special productivity of the soil. But this false conception of nature
has persisted in economic theory, and in it Smith thought he saw an
additional reason for adhering to those errors which the Physiocrats had
first induced him to commit.[147]
Apart from his personal attachment to the Physiocrats we must also
remember that Smith more than shared their predilection for agriculture.
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