Smith And Hegel Agree. Stigler A Hack?
Robert Vienneau
far greater part of those who live by labour, that is, of the great
body of the people, comes to be confined to a few very simple
operations, frequently to one or two, But the understandings of
the greater part of men are necessarily formed by their ordinary
employments. The man whose life is spent in performing a few
simple operations, of which the effects too are, perhaps, always
the same, or very nearly the same, has no occasion to exert his
understanding, or to exercise his invention in finding out
expedients for removing difficulties which never occur. He
naturally loses, therefore the habit of such exertion, and
generally becomes as stupid and ignorant as it is possible for
a human creature to become. The torpor of his mind renders him,
not only incapable of relishing or bearing a part in any rational
conversation, but of conceiving any generous, noble, or tender
sentiment, and consequently of forming any just judgement
concerning many even of the ordinary duties of private life. Of
the great and extensive interests of his country he is altogether
incapable of judging; and unless very particular pains have been
taken to render him otherwise, he is equally incapable of
defending his country in war... His dexterity at his own particular
trade seems, in this manner, to be acquired at the expense of his
intellectual, social, and martial virtues. But in every improved
and civilized society this is the state into which the labouring
poor, that is, the great body of the people, must necessarily
fall, unless government takes some pains to prevent it."
-- Adam Smith, Wealth of Nations. Book V, Chapter I, Part III,
Article II.
"When civil society is in a state of unimpeded activity, it is
engaged in expanding internally in population and industry. The
amassing of wealth is intensified by generalizing (a) the linkage
of men by their needs, and (b) the methods of preparing and
distributing the means to satisfy these needs, because it is
from this double process of generalization that the largest
profits are derived. That is one side of the picture. The other
side is the subdivision and restriction of particular jobs. This
results in the dependence and distress of the class tied to work
of that sort, and these again entail inability to feel and enjoy
the broader benefits of civil society."
-- Hegel, Philosophy of Right. Paragraph 243.
"The version of [Smith] that's given today is just ridiculous... The
University of Chicago, the great bastion of free market economics,
etc., etc., published a bicentennial edition of the hero, a scholarly
edition with all the footnotes and the introduction by a Nobel
Prize winner, George Stigler, a huge index, a real scholarly edition.
That's the one I used. It's the best edition...
But even more interesting in some ways was the index. Adam Smith is
very well known for his advocacy of division of labor. Take a look
at 'division of labor' in the index and there are lots and lots of
things listed. But there's one missing, namely his denunciation of
division of labor, the one I just cited. That's somehow missing
from the index...
I want to be clear about this. There is good Smith scholarship...
On the other hand, if you look at the myth of Adam Smith, which is
the only one we get, the discrepancy between that and the reality
is enormous."
-- Noam Chomsky, _Class Warfare: Interviews with David Barsamian_,
Common Courage Press, 1996, pp. 19-21.
That passage is not listed in the index under "division of labor"
for the Cannan edition, either. It's easy to find in the Cannan
edition with the footnotes in the first chapter.
I think the passage from Smith that Chomsky cites most often is the
"vile maxim":
"But what all the violence of the feudal institutions could never
have effected, the silent and insensible operation of foreign
commerce and manufactures gradually brought about. These gradually
furnished the great proprietors with something for which they
could exchange the whole surplus produce of their lands, and
which they could consume themselves without sharing it either with
tenants or retainers. All for ourselves, and nothing for other
people, seems, in every age of the world, to have been the vile
maxim of the masters of mankind. As soon, therefore, as they
could find a method of consuming the whole value of their rents
themselves, they had no disposition to share them with any other
persons. For a pair of diamond buckles perhaps, or for something
as frivolous and useless, they exchanged the maintenance, or what
is the same thing, the price of the maintenance of a thousand men
for a year, and with it the whole weight and authority which it
could give them. The buckles, however, were to be all their own,
and no other human creature was to have any share of them; whereas
in the more ancient method of expence they must have shared with
a thousand people. With the judges that were to determine the
preference, this difference was perfectly decisive; and thus, for
the gratification of the most childish, the meanest and the most
sordid of all vanities, they gradually bartered their whole
power and authority."
-- Adam Smith, Wealth of Nations. Book III, Chapter IV.
--
Try http://csf.colorado.edu/pkt/pktauthors/Vienneau.Robert/Bukharin.html
To solve Linear Programs: .../LPSolver.html
r c A game: .../Keynes.html
v s a Whether strength of body or of mind, or wisdom, or
i m p virtue, are found in proportion to the power or wealth
e a e of a man is a question fit perhaps to be discussed by
n e . slaves in the hearing of their masters, but highly
@ r c m unbecoming to reasonable and free men in search of
d o the truth. -- Rousseau
Mason Clark
> "The version of [Smith] that's given today is just ridiculous... The
> -- Noam Chomsky, _Class Warfare: Interviews with David Barsamian_,
> Common Courage Press, 1996, pp. 19-21.
Just a comment from one who read Smith: Chomsky often goes
to extremes, so I tend to avoid him. However, I read Smith expecting
a rousing advocacy of capitalism and was surprised to find instead a
tome that both accurately described the capitalism of 1776 and severely
criticized some of its important components. The criticism was
unexpected in light of the usual representation of Smith in the
economics books. Unfortunately its style is not suited to their fast-paced
life and inadequate literacy, otherwise it should be required reading for
economists.
Mason C
Mason Clark
><!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
><html>
><head>
>Just a comment from one who read Smith: Chomsky often goes
>to extremes, so I tend to avoid him. However, I read Smith expecting
>a rousing advocacy of capitalism and was surprised to find instead a
>tome that both accurately described the capitalism of 1776 and severely
>criticized some of its important components. The criticism was
>unexpected in light of the usual representation of Smith in the
>economics books. Unfortunately its style is not suited to their fast-paced
>life and inadequate literacy, otherwise it should be required reading for
>economists.
>
>"Economics" didn't exist then. Smith was a teacher of moral philosphy.<br>
There's a first for everything. First time I've seen a non-sequitor couched in html.
Mason C
David Lloyd-Jones
>On Sat, 08 Feb 2003 22:22:51 -0800, Mason Clark
><masonc...@ix.netcom.com> wrote:
>
>>However, I read Smith expecting
>>a rousing advocacy of capitalism and was surprised to find instead a
>>tome that both accurately described the capitalism of 1776 and severely
>>criticized some of its important components. The criticism was
>>unexpected in light of the usual representation of Smith in the
>>economics books.
>>
>>
VP:
>>Yep. The folks who cite him most have never read him and have little
>>idea of all the issues he cites.
>>
The reason you hear so much about the division of labour in the pin
factory is, it's on page one.
Why don't the damn libertarians and anarchists pay any attention to his
discussion of Philip of Macedon inventing the state bureaucracy? (Smith
was writing before Napoleon, to whom we generally give most of the
credit for rationalizing the standing army and its necessary appendage,
the bureaucratic state.)
'Sobvious: it's on about page 800.
-dlj.
Incidentally, for anybody interested, excellent reproductions of the
original Smith books, including his two-volume "Moral Philosophy" are
available very cheap from The Libertarian Press, of Indianapolis. The
reason they're cheap is that this bastion of free enterprise is heavily
subsidised by its ideological supporters.
Like any other operation not under the whiplash of market discipline,
they make mistakes which would drive normal businesses into bankruptcy:
all their soft cover books have covers printed with ink which fades away
within a couple of years. Their hardcover books, however, are well
bound, and use sensible inks.
For an understanding of the present American right, I strongly recommend
their Diaries of Jennings Bryan of Virginia. That's not the book's
title,which I've forgotten, but it's what it is. Imagine a universe in
which the Federalist Papers are a bunch of left-wing agitators'
rouse-the-mob tracts, mere persiflage and nothing at all to do with the
real reason for the Revolution...
-d.
David Lloyd-Jones
Mason,
The word you're looking for is "non-sequitur." I think it's the ablative
purposive, but whatever it is, the "or" ending plain doesn't exist.
And I didn't write the bit you attribute to me above, except for perhaps
the last line. Like look at it: can you imagine me using the phrase
"rousing advocacy" without destructive intent? Only if I were reviewing
Rumpole of the Bailey, maybe.
-dlj.
David Friedman
<Yrz1a.623587$F2h1....@news01.bloor.is.net.cable.rogers.com>,
David Lloyd-Jones <d...@rogers.com> wrote:
> >>However, I read Smith expecting
> >>a rousing advocacy of capitalism and was surprised to find instead a
> >>tome that both accurately described the capitalism of 1776 and severely
> >>criticized some of its important components. The criticism was
> >>unexpected in light of the usual representation of Smith in the
> >>economics books.
Could you give examples of such economics books? George Stigler, to take
an example from the thread title, knew Smith's work very well, as should
be clear from his preface to the U.of C. press edition of _Wealth of
Nations_.
> >>Yep. The folks who cite him most have never read him and have little
> >>idea of all the issues he cites.
I don't know what particular people who "cite him most" you are
referring to. In my experience, misrepresentations of Smith tend to be
by people hostile to libertarian views--with the notable exception of
Rothbard, who was unreasonably hostile to Smith and badly misrepresented
his views.
Thus, for example, one gets the claim that Smith was in favor of public
schooling, which is a serious misrepresentation of his extensive and
rather complicated discussion of that issue. Or people quote the bit
about people of the same trade conspiring without quoting the passage
that immediately follows it, in order to make it look as though Smith
supported antitrust laws.
...
> Why don't the damn libertarians and anarchists pay any attention to his
> discussion of Philip of Macedon inventing the state bureaucracy? (Smith
> was writing before Napoleon, to whom we generally give most of the
> credit for rationalizing the standing army and its necessary appendage,
> the bureaucratic state.)
>
> 'Sobvious: it's on about page 800.
Perhaps they don't pay attention to it because it doesn't exist? Smith
talks about Philip inventing the standing army in the context of a
discussion of the superiority of standing armies to militias. Not a word
about the invention of a state bureaucracy.
> Incidentally, for anybody interested, excellent reproductions of the
> original Smith books, including his two-volume "Moral Philosophy" are
> available very cheap from The Libertarian Press, of Indianapolis.
I think you are referring to the Liberty Fund. Their publications are
indeed a good value. There is a Libertarian Press but they aren't in
Indianapolis and don't publish the books you mentioned.
John Hall
"Robert Vienneau" <rv...@see.sig.com> wrote in message
news:rvien-0D6948....@news.dreamscape.com...
. . .
> I want to be clear about this. There is good Smith scholarship...
> On the other hand, if you look at the myth of Adam Smith, which is
> the only one we get, the discrepancy between that and the reality
> is enormous."
> -- Noam Chomsky, _Class Warfare: Interviews with David Barsamian_,
> Common Courage Press, 1996, pp. 19-21.
>
> That passage is not listed in the index under "division of labor"
> for the Cannan edition, either. It's easy to find in the Cannan
> edition with the footnotes in the first chapter.
So what's all that really mean? I've got two editions
of the WoN, one published in 1825 and on around 1937,
the date of the copywrite on the Introductions. Neither
of them make reference to the passage under the heading
of Division of Labor. In fact the older one doesn't even
list division of labor in it's index--go figure.
jmh
John Hall
"Mason Clark" <masonc...@ix.netcom.com> wrote in message
news:qcsb4vs5k03q9pq55...@4ax.com...
Perhaps what you were expecting was Smith to
be some mercantilist and learned that he wasn't.
jmh
Mason Clark
>>
>>><!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
>>><html>
>>><head>
>>>
>>>snip lots of html
>>>
>>>"Economics" didn't exist then. Smith was a teacher of moral philosphy.<br>
>>>
>>There's a first for everything. First time I've seen a non-sequitor couched in html.
>>
>> Mason C
>>
>>
>Mason,
>
>The word you're looking for is "non-sequitur." I think it's the ablative
>purposive, but whatever it is, the "or" ending plain doesn't exist.
>
>And I didn't write the bit you attribute to me above, except for perhaps
>the last line. Like look at it: can you imagine me using the phrase
>"rousing advocacy" without destructive intent? Only if I were reviewing
>Rumpole of the Bailey, maybe.
David, you are right on both counts. Somehow (the html?) I got the wrong
number of ">"'s and misattributed my words to you. And my spell-checker
brain and computer only operate manually, so the sequitOr.
But you did make a non-sequitur response in html -- an unusual accomplishment.
Mason C
Mason Clark
>In article
><Yrz1a.623587$F2h1....@news01.bloor.is.net.cable.rogers.com>,
> David Lloyd-Jones <d...@rogers.com> wrote:
>
>> >>However, I read Smith expecting
>> >>a rousing advocacy of capitalism and was surprised to find instead a
>> >>tome that both accurately described the capitalism of 1776 and severely
>> >>criticized some of its important components. The criticism was
>> >>unexpected in light of the usual representation of Smith in the
>> >>economics books.
>
>Could you give examples of such economics books?
I'm a little shocked to see this questioned, even though it proves my
point. I thought it might take me too much time to bother finding such
an example, but look: Paragraph two on Page ONE of my Samuelson:
"As a scholarly discipline, economics is not yet two centuries. Adam Smith wrote
his pathbreaking book *The Wealth of Nations* in 1776, a year notable for
the Declaration of Independence. And the nearness of the timing is hardly a
coincidence: political freedom from the tyranny of monarchy was closely
related to the emancipation of free-market pricing from the interfering hand of
state regulation."
Samuelson immediately associates Smith with free-market pricing and
denigrates state regulation. Smith is universally represented as the god-father
of capitalism.
>> Why don't the damn libertarians and anarchists pay any attention to his
>> discussion of Philip of Macedon inventing the state bureaucracy? (Smith
>> was writing before Napoleon, to whom we generally give most of the
>> credit for rationalizing the standing army and its necessary appendage,
>> the bureaucratic state.)
>>
>> 'Sobvious: it's on about page 800.
>
>Perhaps they don't pay attention to it because it doesn't exist? Smith
>talks about Philip inventing the standing army in the context of a
>discussion of the superiority of standing armies to militias. Not a word
>about the invention of a state bureaucracy.
Well, ok, I had to look. Fortunately I have Smith on my hard disk and
have an excellent searcher. Smith never says "a word" about anything.
He writes numerous paragraphs. Too loquacious for most of us and
certainly so for economists. Fortunately my searcher facilitates scanning
after the search. Smith goes from Philip and standing armies directly to
the need for magistrates. I could easily post those pages of state
bureaucracy and the associated words about *inequality* but damned if
I'm going to try to educate economists here.
>
>> Incidentally, for anybody interested, excellent reproductions of the
>> original Smith books, including his two-volume "Moral Philosophy" are
>> available very cheap from The Libertarian Press, of Indianapolis.
Try the internet. Having such books on your disk is a useful defense
against illiterate economists.
Mason C sorry......I'm just fed up with them
Mason Clark
Hardly. Mercantilism preceded Capitalism. Smith went to
lengths to criticize Mercantilism. I expected him to be whole-
heartedly for capitalism -- the god-father of capitalism. I learned
that I had been misled. But the mythical Adam Smith lives on.
And, by the way, I despise the way economists resort to "authority"
in defense of economics theories -- like religious fundamentalists
quoting from their infallible authorities.
Mason C
David Friedman
Mason Clark <masonc...@ix.netcom.com> wrote:
> >Could you give examples of such economics books?
> I'm a little shocked to see this questioned, even though it proves my
> point. I thought it might take me too much time to bother finding such
> an example, but look: Paragraph two on Page ONE of my Samuelson:
> "As a scholarly discipline, economics is not yet two centuries. Adam Smith
> wrote
> his pathbreaking book *The Wealth of Nations* in 1776, a year notable for
> the Declaration of Independence. And the nearness of the timing is hardly a
> coincidence: political freedom from the tyranny of monarchy was closely
> related to the emancipation of free-market pricing from the interfering hand
> of
> state regulation."
> Samuelson immediately associates Smith with free-market pricing and
> denigrates state regulation. Smith is universally represented as the
> god-father of capitalism.
And Smith in fact argues against various forms of government regulation
and in favor of the free market. Samuelson doesn't claim to be giving a
complete account of a thousand pages of Smith in one sentence.
> >> Why don't the damn libertarians and anarchists pay any attention to his
> >> discussion of Philip of Macedon inventing the state bureaucracy? (Smith
> >> was writing before Napoleon, to whom we generally give most of the
> >> credit for rationalizing the standing army and its necessary appendage,
> >> the bureaucratic state.)
> >> 'Sobvious: it's on about page 800.
> >Perhaps they don't pay attention to it because it doesn't exist? Smith
> >talks about Philip inventing the standing army in the context of a
> >discussion of the superiority of standing armies to militias. Not a word
> >about the invention of a state bureaucracy.
> Well, ok, I had to look. Fortunately I have Smith on my hard disk and
> have an excellent searcher. Smith never says "a word" about anything.
> He writes numerous paragraphs. Too loquacious for most of us and
> certainly so for economists. Fortunately my searcher facilitates scanning
> after the search. Smith goes from Philip and standing armies directly to
> the need for magistrates. I could easily post those pages of state
> bureaucracy and the associated words about *inequality* but damned if
> I'm going to try to educate economists here.
Or in other words, you found no references to a "discussion of Philip of
Macedon inventing the state bureaucracy," so couldn't quote any. What
you think inequality has to do with that subject I have no idea
The passage is in Book V Ch 1 Pt 1. Precisely one paragraph is on the
subject of Philip of Macedon. It reads as follows:
---
One of the first standing armies of which we have any distinct
account, in any well authenticated history, is that of Philip of
Macedon. His frequent wars with the Thracians, Illyrians, Thessalians,
and some of the Greek cities in the neighbourhood of Macedon,
gradually formed his troops, which in the beginning were probably
militia, to the exact discipline of a standing army. When he was at
peace, which he was very seldom, and never for any long time together,
he was careful not to disband that army. It vanquished and subdued,
after a long and violent struggle, indeed, the gallant and well
exercised militias of the principal republics of ancient Greece, and
afterwards, with very little struggle, the effeminate and
ill-exercised militia of the great Persian empire. The fall of the
Greek republics and of the Persian empire was the effect of the
irresistible superiority which a standing army has over every sort
of militia. It is the first great revolution in the affairs of mankind
of which history has preserved any distinct or circumstantial account.
---
He goes on to talk about the fall of Carthage and the issue of standing
armies vs militias in other contexts. The marginal note to the paragraph
reads:
"History shows the superiority of the standing army. That of Macedon
defeated the Greek militias."
The title of the section is "Expense of Defense." No reference to a
state bureaucracy.
The next reference to "magistrate" is:
"Where the security of the magistrate, though
supported by the principal people of the country, is endangered by
every popular discontent; where a small tumult is capable of
bringing about in a few hours a great revolution, the whole
authority of government must be employed to suppress and punish
every murmur and complaint against it."
If you can get a bureacratic state out of that, you have a vivid
imagination. He is discussing arguments for and against a standing army,
and concluding that it is not necessarily unfavorable to liberty.
The next reference to "Magistrate" is in Part 2, on the Expense of
Justice. That isn't a bureaucratic state either--he's talking about a
court system.
If you want to understand Smith you have to actually read him. A search
engine is not an adequate substitute.
Robert Vienneau
<d...@rogers.com> wrote:
> For a generation after Smith, "economist" was a term of disgust: it did
> not mean an economist in today's terms: it meant a person who took
> Smith's frame of reference seriously. It was as though you spit on the
> Strand if somebody said "input/output analyst."
The word "economist" meant physiocrat. As many know, the physiocrats
were a school of thought preceding Adam Smith.
The term "political economy" became widely used in 19th century
Britain. For example, consider Oliver Twist, which in large part
is mockery of today's U.S. Republican party. The spokesperson for
the idea that orphanages ought to be able to sell children as
human chimney sweeps complains that others don't have his
great understanding of "political economy".
Robert Vienneau
Friedman <dd...@daviddfriedman.com> wrote:
> George Stigler, to take
> an example from the thread title, knew Smith's work very well, as should
> be clear from his preface to the U.of C. press edition of _Wealth of
> Nations_.
There seem to be divergent assessments of Stigler.
"The version of [Smith] that's given today is just ridiculous. But I
don't have to do any research to find this out. All you have to do
is read. If you're literate, you'll find it out. I did a little
research in the way it's treated, and that's interesting. For
example, the University of Chicago, the great bastion of free market
economics, etc., etc., published a bicentennial edition of the hero,
a scholarly edition with all the footnotes and the introduction by a
Nobel Prize winner, George Stigler, a huge index, a real scholarly
edition. That's the one I used. It's the best edition. The scholarly
framework was very interesting, including Stigler's introduction.
It's likely he never opened _The Wealth of Nations_. Just about
everything he said about the book was completely false. I went
through a bunch of examples in writing about it, in _Year 501_ and
elsewhere."
-- Noam Chomsky
"For someone who used Smith's name to argue in favour of mercantile
rule, see Stigler (1988). This truly disheartening misuse of Smith's
name by someone who clearly knew better was peddled to the
apparently unsuspecting philistines in the National Association of
Business Economists. As Galbraith (1992) has pointed out, Smith
was 'deeply averse to joint stock companies, now called
corporations... Modern advocates of free enterprise would find
Smith's attack on corporations deeply disconcerting.'"
-- Spencer J. Pack (1995)
Do you think that David Friedman will acknowledge this time that
it is fair to say Smith explained the source of profits in the
exploitation of labor, that is, in paying workers less than the
value added by labor?
"As soon as stock has accumulated in the hands of particular persons,
some of them will naturally employ it in setting to work industrious
people, whom they will supply with materials and subsistence, in order
to make a profit by the sale of their work, or by what their labour
adds to the value of the materials... The value which the workmen add
to the materials, therefore, resolves itself in this case into two
parts, of which one pays their wages, the other the profits of their
employer upon the whole stock of materials and wages which he
advanced."
-- Adam Smith 1776, Book I, Chapter VI
I like that Adam Smith says the intended effects of tariffs are
desirable:
"As every individual, therefore, endeavors as much as he can to
employ his capital in the support of domestic industry, and so
to direct that industry that its produce may be of the greatest
value; every individual necessarily labours to render the
annual revenue of the society as great as he can. He generally,
indeed, neither intends to promote the public interest, nor
knows how much he is promoting it. By preferring the support of
domestic to that of foreign industry, he intends only his own
security; and by directing that industry in such a manner as
its produce may be of greatest value, he intends only his own
gain, and he is in this, as in many other cases, led by an
invisible hand to promote an end which was no part of his
intention."
-- Adam Smith
Tim Worstall
I note that Smith did not use the word exploit or any derivative of it
in the passage you quote.
And your contention above I find deeply suspect. If value were being
added solely by labour, then those labourers could receive more income
( ie the value of their labour without that capitalist愀 rake off ) by
working for themselves.
In the pin factory on the one page everyone has actually read, the
workers are earning more by their labour than if they were working
independently, and it is the additional capital employed which makes
them so. So one can just as easily state that the workers are
exploiting the capitalist, as the capitalist is not receiving the full
value added of his capital, as some of it is going in those higher
workers incomes.
> "As soon as stock has accumulated in the hands of particular persons,
> some of them will naturally employ it in setting to work industrious
> people, whom they will supply with materials and subsistence, in order
> to make a profit by the sale of their work, or by what their labour
> adds to the value of the materials... The value which the workmen add
> to the materials, therefore, resolves itself in this case into two
> parts, of which one pays their wages, the other the profits of their
> employer upon the whole stock of materials and wages which he
> advanced."
> -- Adam Smith 1776, Book I, Chapter VI
>
> I like that Adam Smith says the intended effects of tariffs are
> desirable:
This isn愒 about tariffs......you may notice that the word is not used
in the passage.
And further, of course the intended effects of tariffs are desirable.
You have to look a long way to find someone proposing a course of
economic or political action with the phrase " the effects of this
will be disaster, let愀 do it !".
The question is the effects of tariffs in reality, their actual
results. Which are dire, whatever the original intent.
Tim Worstall
susupply
news:<rvien-B23D8E....@news.dreamscape.com>...
> > Do you think that David Friedman will acknowledge this time that
> > it is fair to say Smith explained the source of profits in the
> > exploitation of labor, that is, in paying workers less than the
> > value added by labor?
A timely antidote to the above from Professor DeLong today:
http://www.j-bradford-delong.net/movable_type/archives/001582.html
>>...there are the dangers of promoting dead and dry texts to the status of
unquestionable authorities. Karl Marx saw misery in industrial England in
the 1840s, jumped to the conclusion that market economies could never
deliver persistent, sustained, significant improvements in real wages to the
working class, jumped to the conclusion that markets had no place in any
truly human mode of social organization, and--because his words became Holy
Writ, the sacred gospel that was never to be questioned of a Millennarian
World Religion--more than a billion people were doomed to even deeper
poverty for more than a generation. Third, there is the danger that one will
read texts one has placed high on a pedestal and discover in them a secret
message, a crucial form of knowledge that is desperately important and that
only you have the wit to decode as it exists in hidden form beneath the
surface of the "apparent meaning" of the text.<<
David Friedman
Robert Vienneau <rv...@see.sig.com> wrote:
> In article <ddfr-881255.1...@sea-read.news.verio.net>, David
> Friedman <dd...@daviddfriedman.com> wrote:
>
> > George Stigler, to take
> > an example from the thread title, knew Smith's work very well, as should
> > be clear from his preface to the U.of C. press edition of _Wealth of
> > Nations_.
> There seem to be divergent assessments of Stigler.
> "The version of [Smith] that's given today is just ridiculous. But I
> don't have to do any research to find this out. All you have to do
> is read. If you're literate, you'll find it out. I did a little
> research in the way it's treated, and that's interesting. For
> example, the University of Chicago, the great bastion of free market
> economics, etc., etc., published a bicentennial edition of the hero,
> a scholarly edition with all the footnotes and the introduction by a
> Nobel Prize winner, George Stigler, a huge index, a real scholarly
> edition. That's the one I used. It's the best edition. The scholarly
> framework was very interesting, including Stigler's introduction.
> It's likely he never opened _The Wealth of Nations_. Just about
> everything he said about the book was completely false. I went
> through a bunch of examples in writing about it, in _Year 501_ and
> elsewhere."
> -- Noam Chomsky
Thank you for the quote. The fact that Chomsky says it is likely Stigler
never opened _The Wealth of Nations_ is almost as damning as Chomsky's
apologetics for the Khmer Rouge.
> "For someone who used Smith's name to argue in favour of mercantile
> rule, see Stigler (1988). This truly disheartening misuse of Smith's
> name by someone who clearly knew better was peddled to the
> apparently unsuspecting philistines in the National Association of
> Business Economists. As Galbraith (1992) has pointed out, Smith
> was 'deeply averse to joint stock companies, now called
> corporations... Modern advocates of free enterprise would find
> Smith's attack on corporations deeply disconcerting.'"
> -- Spencer J. Pack (1995)
I doubt it. Certainly Stigler was aware of Smith's discussion of hte
problems of joint stock companies. And you can find a description of
Smith's argument and what I thought was wrong with it in Chapter 9 of my
_Price Theory_ webbed on my site.
I notice that at this point you offer no examples either of Stigler
misstating Smith or of anyone else doing so--merely a quote showing that
Chomsky says so.
> Do you think that David Friedman will acknowledge this time that
> it is fair to say Smith explained the source of profits in the
> exploitation of labor, that is, in paying workers less than the
> value added by labor?
> "As soon as stock has accumulated in the hands of particular persons,
> some of them will naturally employ it in setting to work industrious
> people, whom they will supply with materials and subsistence, in order
> to make a profit by the sale of their work, or by what their labour
> adds to the value of the materials... The value which the workmen add
> to the materials, therefore, resolves itself in this case into two
> parts, of which one pays their wages, the other the profits of their
> employer upon the whole stock of materials and wages which he
> advanced."
> -- Adam Smith 1776, Book I, Chapter VI
And you deliberately replace by ... the part of the quote that makes it
clear that he does not regard it as exploitation:
" In exchanging
the complete manufacture either for money, for labour, or for other
goods, over and above what may be sufficient to pay the price of the
materials, and the wages of the workmen, something must be given for
the profits of the undertaker of the work who hazards his stock in
this adventure."
and the part immediately following:
"He could have no
interest to employ them, unless he expected from the sale of their
work something more than what was sufficient to replace his stock to
him; and he could have no interest to employ a great stock rather than
a small one, unless his profits were to bear some proportion to the
extent of his stock."
Assuming you have read Smith--and, unlike the other people I am arguing
with on this thread, you probably have--you surely know that he uses
"value" in several different ways, none of which implies that the
capitalist is somehow cheating the worker out of something the worker is
entitled to.
> I like that Adam Smith says the intended effects of tariffs are
> desirable:
>
> "As every individual, therefore, endeavors as much as he can to
> employ his capital in the support of domestic industry, and so
> to direct that industry that its produce may be of the greatest
> value; every individual necessarily labours to render the
> annual revenue of the society as great as he can. He generally,
> indeed, neither intends to promote the public interest, nor
> knows how much he is promoting it. By preferring the support of
> domestic to that of foreign industry, he intends only his own
> security; and by directing that industry in such a manner as
> its produce may be of greatest value, he intends only his own
> gain, and he is in this, as in many other cases, led by an
> invisible hand to promote an end which was no part of his
> intention."
> -- Adam Smith
"Intended effect?" The effect claimed by the supporters of tariffs is to
make the country putting on the tariff richer, which Smith would indeed
regard as a good thing. But Smith argues, correctly that that is not the
actual effect--as you surely know. You are quoting from a discussion of
the capital market, where Smith argues that self-interest gives
investors the right incentives with regard to foreign vs domestic
investment. Not a very satisfactory analysis, but support for tariffs it
isn't.
I generally avoid arguing with you, since although I'm happy to argue
with people who disagree with me arguing with people who passionately
dislike me isn't much fun. But I thought it was worth making an
exception in this case.
Mason Clark
>In article <psne4vc3f2sn41nam...@4ax.com>,
> Mason Clark <masonc...@ix.netcom.com> wrote:
>
>> >Could you give examples of such economics books?
>
>> I'm a little shocked to see this questioned, even though it proves my
>> point. I thought it might take me too much time to bother finding such
>> an example, but look: Paragraph two on Page ONE of my Samuelson:
>
>> "As a scholarly discipline, economics is not yet two centuries. Adam Smith
>> wrote
>> his pathbreaking book *The Wealth of Nations* in 1776, a year notable for
>> the Declaration of Independence. And the nearness of the timing is hardly a
>> coincidence: political freedom from the tyranny of monarchy was closely
>> related to the emancipation of free-market pricing from the interfering hand
>> of
>> state regulation."
>
>> Samuelson immediately associates Smith with free-market pricing and
>> denigrates state regulation. Smith is universally represented as the
>> god-father of capitalism.
>
>And Smith in fact argues against various forms of government regulation
>and in favor of the free market. Samuelson doesn't claim to be giving a
>complete account of a thousand pages of Smith in one sentence.
>
This misses the whole point: Is Adam Smith, the god-father of capitalism,
correctly used as an authority in the defense of capitalism -- where his
criticisms are omitted?
I for one expected a god-father and found instead an astute critic.
I charge the economics profession with misrepresentation in favor of
the Republican Conservative Anarchic scheme of things.
Mason C the end
David Friedman
Mason Clark <masonc...@ix.netcom.com> wrote:
> >> Samuelson immediately associates Smith with free-market pricing and
> >> denigrates state regulation. Smith is universally represented as the
> >> god-father of capitalism.
> >
> >And Smith in fact argues against various forms of government regulation
> >and in favor of the free market. Samuelson doesn't claim to be giving a
> >complete account of a thousand pages of Smith in one sentence.
> >
> This misses the whole point: Is Adam Smith, the god-father of capitalism,
> correctly used as an authority in the defense of capitalism -- where his
> criticisms are omitted?
In one sentence you expect Samuelson to repeat everything Smith said?
> I for one expected a god-father and found instead an astute critic.
That reflects the weakness of your education--for which Paul Samuelson
cannot be blamed. Although it is true that, if you had read my text
instead of his, you would at least know about Smith's views on joint
stock companies and the backward bending supply curve for labor.
DLJ posted a factual assertion about the contents of the Wealth of
Nations--that Smith talked about Philip of Macedon creating a state
bureaucracy. I pointed out that it wasn't there. You said it was. I
again pointed out that it wasn't there. I'm still waiting for you (or
DLJ) to quote the passage where Smith talks about Philip's creation of a
state bureaucracy.
Since you found the book webbed and prefer to let your computer do the
reading, you could try a search for "Philip." References to Philip and
Mary or Philip of France don't count.
Alternatively, you could concede that you don't actually know what is in
the book, not having read it.
Mason Clark
Bullshit, David. You do yourself a disservice by posting like that.
Reading Adam Smith is probably impossible for youngsters like you.
You expect the answer in the next sentence. Why not look at the
next *Section* after the Philip of Macedon reference?
Mason C this is futile -- I'm swearing off right now/////
Robert Vienneau
t...@2xtreme.net (Tim Worstall) wrote:
> Robert Vienneau <rv...@see.sig.com> wrote in message
> news:<rvien-B23D8E....@news.dreamscape.com>...
> > "As soon as stock has accumulated in the hands of particular persons,
> > some of them will naturally employ it in setting to work industrious
> > people, whom they will supply with materials and subsistence, in
> > order
> > to make a profit by the sale of their work, or by what their labour
> > adds to the value of the materials... The value which the workmen add
> > to the materials, therefore, resolves itself in this case into two
> > parts, of which one pays their wages, the other the profits of their
> > employer upon the whole stock of materials and wages which he
> > advanced."
> > -- Adam Smith 1776, Book I, Chapter VI
> > Do you think that David Friedman will acknowledge this time that
> > it is fair to say Smith explained the source of profits in the
> > exploitation of labor, that is, in paying workers less than the
> > value added by labor?
> I note that Smith did not use the word exploit or any derivative of it
> in the passage you quote.
I immediately followed the phrase "exploitation of labor" by
a phrase clarifying its meaning. Thus, whether Smith used the word
"exploitation" is irrelevant.
> And your contention above I find deeply suspect. If value were being
> added solely by labour,
Mr. Worstall is being stupid. My contention is not:
o Value is added solely by labor.
My (completely unoriginal) claim is that
o Smith says the source of profits is in value added by labor
not paid out in wages.
I presented some empirical evidence for this claim in the post
that Mr. Worstall is misrepresenting. Mr. Worstall ignores that
evidence.
> then those labourers could receive more income
> ( ie the value of their labour without that capitalist愀 rake off ) by
> working for themselves.
I don't see how this follows. I nowhere see where Smith claims that
the labor would add the same value no matter how production was
organized (or that this added value represents the same amount of
conveniences and necessities).
> In the pin factory on the one page everyone has actually read, the
> workers are earning more by their labour than if they were working
> independently, and it is the additional capital employed which makes
> them so.
I don't think Mr. Worstall has shown that Smith contradicts himself
here.
> > "As every individual, therefore, endeavors as much as he can to
> > employ his capital in the support of domestic industry, and so
> > to direct that industry that its produce may be of the greatest
> > value; every individual necessarily labours to render the
> > annual revenue of the society as great as he can. He generally,
> > indeed, neither intends to promote the public interest, nor
> > knows how much he is promoting it. By preferring the support of
> > domestic to that of foreign industry, he intends only his own
> > security; and by directing that industry in such a manner as
> > its produce may be of greatest value, he intends only his own
> > gain, and he is in this, as in many other cases, led by an
> > invisible hand to promote an end which was no part of his
> > intention."
> > -- Adam Smith
> > I like that Adam Smith says the intended effects of tariffs are
> > desirable.
> This isn愒 about tariffs......you may notice that the word is not used
> in the passage.
Mr. Worstall doesn't know what he is talking about. The passage is near
the start of a chapter entitled, "Of Restraints Upon The Importation
From Foreign Countries Of Such Goods As Can Be Produced At Home". The
first sentence of this chapter:
"By restraining, either by high duties, or by absolute prohibitions,
the importation of such goods from foreign countries as can be
produced at home, the monopoly of the home market is more or less
secured to the domestic industry employed in producing them."
> And further, of course the intended effects of tariffs are desirable.
> You have to look a long way to find someone proposing a course of
> economic or political action with the phrase " the effects of this
> will be disaster, let愀 do it !".
More incoherence from Mr. Worstall. Adam Smith is generally AGAINST
tariffs. I am not asserting that Smith is
(1) proposing tariffs, and
(2) simultaneously saying that their effects are terrible.
I am claiming that Smith is AGREEING with the general intent of
such tariffs, that of preferring the support of domestic to that of
foreign industry.
And this is a disputed goal. Think about agriculture in the European
Union (e.g., France), steel and autos in the United State, or, at
a more parochial level, Walmart versus locally owned markets throughout
the United States.
> The question is the effects of tariffs in reality, their actual
> results. Which are dire, whatever the original intent.
And I have pointed out to Mr. Worstall before that his empirical
claim is disputed by some economists who have looked at the
evidence put up by history.
Robert Vienneau
Friedman <dd...@daviddfriedman.com> wrote:
David Friedman opens with character assassination.
I know of Chomsky's examination of the Western press' treatment of
Cambodia. I do not know of any Chomsky apologetics for the Khmer
Rouge.
> I notice that at this point you offer no examples either of Stigler
> misstating Smith or of anyone else doing so--merely a quote showing that
> Chomsky says so.
And Spencer J. Pack - I snipped my quote of him above. I merely
pointed out, truthfully, that there seem to be divergent assessments
of Stigler.
I notice that David Friedman offers no defense of Stigler's excluding
that passage about education and the division of labor from his
index entry on the division of labor.
The other week, I started to look at what passages in Smith Chomsky
points out in _Year 501_. They seemed to be what I would expect. So
I did not bother to continue.
> > Do you think that David Friedman will acknowledge this time that
> > it is fair to say Smith explained the source of profits in the
> > exploitation of labor, that is, in paying workers less than the
> > value added by labor?
> > "As soon as stock has accumulated in the hands of particular persons,
> > some of them will naturally employ it in setting to work industrious
> > people, whom they will supply with materials and subsistence, in
> > order
> > to make a profit by the sale of their work, or by what their labour
> > adds to the value of the materials... The value which the workmen add
> > to the materials, therefore, resolves itself in this case into two
> > parts, of which one pays their wages, the other the profits of their
> > employer upon the whole stock of materials and wages which he
> > advanced."
> > -- Adam Smith 1776, Book I, Chapter VI
> And you deliberately replace by ... the part of the quote that makes it
> clear that he does not regard it as exploitation:
Whatever.
> " In exchanging
> the complete manufacture either for money, for labour, or for other
> goods, over and above what may be sufficient to pay the price of the
> materials, and the wages of the workmen, something must be given for
> the profits of the undertaker of the work who hazards his stock in
> this adventure."
>
> and the part immediately following:
>
> "He could have no
> interest to employ them, unless he expected from the sale of their
> work something more than what was sufficient to replace his stock to
> him; and he could have no interest to employ a great stock rather than
> a small one, unless his profits were to bear some proportion to the
> extent of his stock."
I don't see what the capitalist's motives have to do with anything. Just
because he wants more, why should he be able to get it?
> Assuming you have read Smith--and, unlike the other people I am arguing
> with on this thread,
Mason Clark says the popular representation of Smith is misleading. He
is correct.
> you probably have--you surely know that he uses
> "value" in several different ways,
I find Ricardo's emphasis of an analytical framework more congenial to
my way of thinking. But I don't think he was ultimately entirely
consistent - and he knew he wasn't. Naturally, I find even more
diversity in Smith.
> none of which implies that the
> capitalist is somehow cheating the worker out of something the worker is
> entitled to.
And I've read enough to know that some of those who think Smith describes
the source of profits as the exploitation of workers do NOT thereby
say this is a matter of "cheating". I've pointed this out many
times before.
Perhaps David Friedman will this time acknowledge that Smith says the
source of profits is in paying workers less than the value added by
labor, that is, in the exploitation of workers, by one important
technical definition of "exploitation".
> > I like that Adam Smith says the intended effects of tariffs are
> > desirable:
> > "As every individual, therefore, endeavors as much as he can to
> > employ his capital in the support of domestic industry, and so
> > to direct that industry that its produce may be of the greatest
> > value; every individual necessarily labours to render the
> > annual revenue of the society as great as he can. He generally,
> > indeed, neither intends to promote the public interest, nor
> > knows how much he is promoting it. By preferring the support of
> > domestic to that of foreign industry, he intends only his own
> > security; and by directing that industry in such a manner as
> > its produce may be of greatest value, he intends only his own
> > gain, and he is in this, as in many other cases, led by an
> > invisible hand to promote an end which was no part of his
> > intention."
> > -- Adam Smith
> "Intended effect?" The effect claimed by the supporters of tariffs is to
> make the country putting on the tariff richer, which Smith would indeed
> regard as a good thing.
Not my point. Supporters of tariffs generally directly intend to support
domestic industry at the expense of foreign industry.
> But Smith argues, correctly that that is not the
> actual effect--as you surely know.
I do not know that Smith is necessarily correct. I know that he
argues that.
> You are quoting from a discussion of
> the capital market, where Smith argues that self-interest gives
> investors the right incentives with regard to foreign vs domestic
> investment. Not a very satisfactory analysis, but support for tariffs it
> isn't.
And I don't say that Smith is supporting tariffs.
> I generally avoid arguing with you, since although I'm happy to argue
> with people who disagree with me arguing with people who passionately
> dislike me isn't much fun. But I thought it was worth making an
> exception in this case.
It's not personal.
There's no reason, for instance, that you cannot explain to Patrick
Sullivan that, as Ricardo argues in the last section of the first
chapter of the third edition of his Principles, that the Value of
wages can decline while workers become better off in an absolute
sense. And this might be Marx's point, on odd days of the week, no
matter what Brad DeLong says. But you won't.
David Friedman
Mason Clark <masonc...@ix.netcom.com> wrote:
I have. Bk V ChI part II "Of the Expense of Justice."
Not a word about Philip of Macedon. You do remember that DLJ's claim was
that Smith commented on Philip's establishment of a state bureaucracy,
don't you?
If you think that there is a passage there, or elsewhere, that supports
his claim by all means cite it.
Dan Clore
> In article <ddfr-F81352.1...@sea-read.news.verio.net>, David
> Friedman <dd...@daviddfriedman.com> wrote:
> > In article <rvien-B23D8E....@news.dreamscape.com>,
> > Robert Vienneau <rv...@see.sig.com> wrote:
> > > In article <ddfr-881255.1...@sea-read.news.verio.net>, David
> > > Friedman <dd...@daviddfriedman.com> wrote:
[snip]
> > Thank you for the quote. The fact that Chomsky says it is likely Stigler
> > never opened _The Wealth of Nations_ is almost as damning as Chomsky's
> > apologetics for the Khmer Rouge.
>
> David Friedman opens with character assassination.
>
> I know of Chomsky's examination of the Western press' treatment of
> Cambodia. I do not know of any Chomsky apologetics for the Khmer
> Rouge.
These "apologetics" appear in PEHR II, _After the
Cataclysm_. You may have mistaken them for something else,
since you don't the special David Friedman Decoder Ring that
translates things like "there can be little doubt that the
war was followed by an outbreak of violence, massacre and
repression, and it seems that bloody purges continued
throughout the period under review" and "in the case of
Cambodia, there is no difficulty in documenting major
atrocities and oppression" and "The record of atrocities in
Cambodia is substantial and often gruesome" and the
statement that all accounts "assume substantial atrocities
and thousands or more killed" into "apologetics for the
Khmer Rouge".
--
Dan Clore
Now available: _The Unspeakable and Others_
All my fiction through 2001 and more. Intro by S.T. Joshi.
http://www.wildsidepress.com/index2.htm
http://www.amazon.com/exec/obidos/ASIN/1587154838/thedanclorenecro
Lord We˙rdgliffe and Necronomicon Page:
http://www.geocities.com/SoHo/9879/
News for Anarchists & Activists:
http://groups.yahoo.com/group/smygo
Said Smygo, the iconoclast of Zothique: "Bear a hammer with
thee always, and break down any terminus on which is
written: 'So far shalt thou pass, but no further go.'"
--Clark Ashton Smith
Robert Vienneau
> Bk V ChI part II "Of the Expense of Justice."
>
> Not a word about Philip of Macedon. You do remember that DLJ's claim was
> that Smith commented on Philip's establishment of a state bureaucracy,
> don't you?
>
> If you think that there is a passage there, or elsewhere, that supports
> his claim by all means cite it.
"One of the first standing armies of which we have any distinct
account, in any well authenticated history, is that of Philip
of Macedon. His frequent wars with the Thracians, Illyrians,
Thessalians, and some of the Greek cities in the neighborhood
of Macedon, gradually formed his troops, which in the
beginning were probably militia, to the exact discipline of a
standing army. When he was at peace, which was very seldom,
and never for any long time together, he was careful not to
disband that army. It vanquished and subdued, after a long and
violent struggle, indeed, the gallant and well-exercised militias
of the principal republics of ancient Greece; and afterwards,
with very little struggle, the effeminate and ill-exercised
militia of the great Persian empire. The fall of the Greek
republics and of the Persian empire, was the effect of the
irresistible superiority which a standing army has over
every sort of militia. It is the first great revolution in the
affairs of mankind, of which history has preserved any distinct
or circumstantial account.
[snip several pages]
As it is only by means of a well-regulated standing army that a
civilized country can be defended; so it is only by means of it,
that a barbarous country can be suddenly and tolerably civilized.
A standing army establishes, with an irresistible force, the law
of the sovereign through the remotest provinces of the empire,
and maintains some degree of regular government in countries
which could not otherwise admit of any. Whoever examines, with
attention, the improvements which Peter the Great introduced into
the Russian empire, will find that they almost all resolve
themselves into the establishment of a well-regulated standing
army. It is the instrument which executes and maintains all his
other regulations. That degree of order and internal peace, which
that empire has ever enjoyed, is altogether owing to the influence
of that army."
-- Adam Smith, Bk V Ch I part I, "Of the Expence of Defence"
David Friedman
Robert Vienneau <rv...@see.sig.com> wrote:
I already quoted that.
> [snip several pages]
>
> As it is only by means of a well-regulated standing army that a
> civilized country can be defended; so it is only by means of it,
> that a barbarous country can be suddenly and tolerably civilized.
> A standing army establishes, with an irresistible force, the law
> of the sovereign through the remotest provinces of the empire,
> and maintains some degree of regular government in countries
> which could not otherwise admit of any. Whoever examines, with
> attention, the improvements which Peter the Great introduced into
> the Russian empire, will find that they almost all resolve
> themselves into the establishment of a well-regulated standing
> army. It is the instrument which executes and maintains all his
> other regulations. That degree of order and internal peace, which
> that empire has ever enjoyed, is altogether owing to the influence
> of that army."
> -- Adam Smith, Bk V Ch I part I, "Of the Expence of Defence"
And you think DLJ has difficulty distinguishing Peter the Great from
Philip of Macedon--who is the person about whose state bureaucracy the
claim was made?
That's aside from the fact that the passage says nothing about Peter's
state bureaucracy--merely his ability to maintain his control over the
Rusian Empire.
David Friedman
Dan Clore <cl...@columbia-center.org> wrote:
We at least agree about the source. It is certainly possibly, by
selective quotation, to make it look as though Chomsky and Herman were
giving an accurate picture of the KR, as you have just demonstrated. You
of course left out the suggestion that the killing under the KR might
best be compared to the killing of collaborationists when France was
liberated from the Nazis, and quite a lot more.
Anyone who is actually interested should read the chapter on Cambodia
for himself. If, after doing so and being reasonably familiar with the
facts of the KR rule, he can still respect the authors, he is certainly
free to do so.
James A. Donald
On Tue, 11 Feb 2003 17:01:42 GMT, David Friedman
<dd...@daviddfriedman.com> wrote:
> Anyone who is actually interested should read the chapter on
> Cambodia for himself. If, after doing so and being reasonably
> familiar with the facts of the KR rule, he can still respect
> the authors, he is certainly free to do so.
A more accessible document than "After the Cataclysm" is
Chomsky and Herman's Nation artiicle, quoted in full in
"Chomsky lies" www.jim.com/chomsdis.htm
--digsig
James A. Donald
6YeGpsZR+nOTh/cGwvITnSR3TdzclVpR0+pr3YYQdkG
GZpH2X67x2f2dA1NMXrw+ofNatYLI3Kov1Ign6wi
44mw+b53T6+itfDE4r/SH+HqxU+jD6sKKkMYX/XuK
Robert Vienneau
Friedman <dd...@daviddfriedman.com> wrote:
> It is certainly possibly, by
> selective quotation, to make it look as though Chomsky and Herman...
But I still haven't received a honest and correct answer from
David Friedman to the following question:
Is it fair to say Smith explained the source of profits in
paying workers less than the value added by labor, that is,
in the exploitation of labor?
Some empirical evidence for the obvious and correct answer is
provided as [1].
David Friedman's unwillingness to give a honest and correct
answer seems to be connected with his ignorance and fear of
Marx. Marx did have a concept of exploitation. But, arguably,
that concept did NOT entail that capitalists were cheating
the workers or engaged in an unjust transaction [2].
FOOTNOTES
[1]
"As soon as stock has accumulated in the hands of particular persons,
some of them will naturally employ it in setting to work industrious
people, whom they will supply with materials and subsistence, in order
to make a profit by the sale of their work, or by what their labour
adds to the value of the materials... The value which the workmen add
to the materials, therefore, resolves itself in this case into two
parts, of which one pays their wages, the other the profits of their
employer upon the whole stock of materials and wages which he
advanced."
-- Adam Smith 1776, Book I, Chapter VI
"The produce of labour constitutes the natural recompence or wages
of labour.
In that original state of things, which precedes both the
appropriation of land and the accumulation of stock, the whole
produce of labour belongs to the labourer. He has neither
landlord nor master to share with him...
But this original state of things, in which the labourer enjoyed
the whole produce of his own labour, could not last beyond the
first introduction of the appropriation of land and the
accumulation of stock...
As soon as land becomes private property, the landlord demands a
share of almost all the produce which the labourer can either
raise, or collect from it. His rent makes the first deduction
from the produce of the labour which is employed upon land.
It seldom happens that the person who tills the ground has
wherewithal to maintain himself till he reaps the harvest. His
maintenance is generally advanced to him from the stock of a
master, the farmer who employs him, and who would have no
interest to employ him, unless he was to share in the produce
of his labour, or unless his stock was to be replaced to him
with a profit. This profit makes a second deduction from the
produce of the labour which is employed upon land.
The produce of almost all other labour is liable to the like
deduction of profit. In all the arts and manufactures the
greater part of the workmen stand in need of a master to advance
them the materials of their work, and their wages and maintenance
till it be compleated. He shares in the produce of their
labour, or in the value which it adds to the materials upon
which it is bestowed; and in this share consists his profit."
-- Adam Smith 1776, Book I, Chapter VIII
[2]
"...we must understand the importance which Marx attached to his
distinction between 'labour' and 'labour-power': an importance
essential for the context of exploitation as a key to understanding
the bourgeois (or capitalist) mode of production. The role of the
labour theory of value in relation to the theory of surplus value
is frequently misunderstood. Often this is interpreted as embodying
a Lockean 'natural right' principle, to the effect that the product
of a man's labour belongs 'of right' to the labourer; whence it is
held that the appropriation of part of this product by the capitalist
is 'unnatural' and unethical. Hence exploitation is interpreted as a
quasi-legal or ethical concept rather than a realistic economic
description. If what we have said about labour and the labour process
has been appreciated, it should be clear that this is an incorrect
interpretation. What could be said, of course, is that the notion of
labour as productive *activity* implicitly afforded the definition
of exploitation as an appropriation of the fruits of activity by
*others* - appropriation of those fruits by those who provided no
productive activity of their own. But far from being an arbitrary
or unusual definition of 'productive' and 'unproductive', this would
surely meet with general aggreement as normal usage of these words.
The problem for Marx was not to prove the existence of surplus value
and exploitation by *means* of a theory of value: it was, indeed, to
*reconcile* the existence of surplus value with the reign of market
competition and of exchange of value equivalents. As he himself
expressed it: 'To explain the *general nature of profits*, you must
start from the theorem that, on an average, commodities are *sold at
their real values*, and that *profits are derived from selling them at
their values*...If you cannot explain profit upon this supposition,
you cannot explain it at all.'
The point of this can the better be appreciated if it is remembered
that the school of writers to whom the name of the Ricardian
Socialists has been given (such as Thomas Hodgskin, William Thompson
and John Bray), who can be said to have held a 'primitive' theory of
exploitation, explained profit on capital as the product of the
superior bargaining power, lack of competition and 'unequal exchanges
between Capital and Labour' (this bearing analogy with Duhring's
'force theory' which was castigated by Engels). This was the kind of
explanation that Marx was avoiding rather than seeking. It did *not*
make exploitation *consistent* with the law of value and with market
competition, but explained it by departures from, or imperfections in,
the latter. To it there was an easy answer from the liberal economists
and free traders: namely, 'join with us in demanding *really* free
trade and then there can be no "unequal exchanges" and exploitation.'"
-- Maurice Dobb, "Introduction" in K. Marx, _A Contibution to the
Critique of Political Economy_, Progress Publishers, 1970, pp.
12-13.
"The above application of the Ricardian theory, that the entire
social product belongs to the workers as THEIR, because they
are the sole real producers, leads directly to communism. But,
as Marx indicates too in the above-quoted passage, formally
it is economically incorrect, for it is simply an application
of morality to economics. According to the laws of bourgeois
economics, the greatest part of the product does NOT belong
to the workers who have produced it. If we now say: that is
unjust, that ought not to be so, then that has nothing
immediately to do with economics. We are merely saying that
this economic fact is in contradiction to our sense of
morality. Marx, therefore, never based his communist demands
upon this, but upon the inevitable collapse of the capitalist
mode of production which is daily taking place before our eyes
to an ever greater degree; he says only that surplus value
consists of unpaid labour, which is a simple fact."
-- Frederick Engels, Preface to the First German Edition,
The Poverty of Philosophy.
...Let us recall the gist of Marx's notion of exploitation:
exploitation is not simply opposed to justice - Marx's point is
not that workers are exploited because they are not paid the full
value of their work. The central thesis of Marx's notion of
'surplus-value' is that A WORKER IS EXPLOITED EVEN WHEN HE IS
'FULLY PAID'; exploitation is thus not opposed to the 'just'
equivalent exchange; it functions, rather, as its point of
inherent exception - there is one commodity (the workforce)
which is exploited precisely when it is 'paid its full value'.
(The further point not to be missed is that the production of
this EXCESS is strictly equivalent to the UNIVERSALIZATION of
the exchange-function: the moment the exchange-function is
universalized - that is, the moment it becomes the structuring
principle of whole of economic life - the exception emerges,
since at this point the workforce itself becomes a commodity
exchanged on the market. Marx in effect announces here the
Lacanian notion of the Universal which involves a constitutive
exception.) The basic premiss of symptomal reading is thus that
every ideological universality necessarily gives rise to a
particular 'extimate' element, to an element which - precisely
as an inherent, necessary product of the process designated by
the universality - simultaneously undermines it: the symptom is
an example which subverts the Universal whose example it is."
-- Slavoj Zizek, _The Ticklish Subject: The Absent Centre of
Political Ontology_ (1999), p 180.