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August 27, 2006



Seems like Smith was talking about consumer surplus.

tom s

Nice. Dillow 1, DeLong 0.

Stephen Gordon

Perhaps because the fundamental insight of Adam Smith's analysis survived the Marginalist Revolution more or less intact, while Marx' didn't.


I see your point but cannot agree with your conclusion. For a start, Smith was not the first to draw the use-exchange value distinction. It goes back millennia, as a glance at the notes to the Glasgow Edition of Wealth of Nations would show. The diamonds –water ‘paradox is mentioned by Plato, it was covered by Pufendorf and before him Grotius, and John Law, Harris, Mandeville (1724) and Cantillon (1734) also wrote about it.

On the wider question of the labour theory of value and Smith’s alleged ‘naïve version of the theory’, careful reading of his chapters on value show he did not subscribe to such a theory for society once people moved from a ‘Rude’ society to agriculture and beyond. I discuss this in detail in my forthcoming work on Adam Smith (Palgrave Macmillan, 2007). That Ricardo and Marx tried to take it further had nothing to do with Smith’s work on the subject.

I cannot agree that ‘what they actually wrote isn’t the point, is it?” It is very much the point. If ideas are attributed to someone, we are entitled to challenge them for what they wrote.

In Rude Society (Smith’s first age of hunters – roughly corresponding to what in Smith’s time was described as ‘savage’, or North American ‘Indians’) the product belonged to the labourer, unambiguously. With agriculture a necessary component of that mode of production is that land becomes property, it being difficult to farm when anybody or their flocks and herds could wander in and eat their fill. Inescapably, property changed the mode of production (shepherding had changed it too too, whomsoever owned them).

This was the change that Smith worked on to show how the revenue from the sale of produce was divided among the landlord’s rent (a licence to use his land for farming), the labourer’s wage (for his subsistence) and the undertaker’s profit from providing the seed and implements.

Now whether, from this distance looking back you condemn the arrangement as ‘theft’ or whatever, there is no doubt that without private or public property in land (in both cases the ‘owners’ were no the labourers), protected by law, there would have been no development of agriculture, and from that the development of commerce. We know this because, in all cases in the history of humankind, over several millennia, no other system of organisation without property was selected by human societies to arrange for the production and distribution of produce.

But once Smith went down this road, he abandoned a labour theory of value.

james higham

So, having digested that, I'm intrigued by people such as your good self and Norm are 'ex-Marxists'. Why 'ex' if his theories hold good?

emmanuel goldstein

[We know this because, in all cases in the history of humankind, over several millennia, no other system of organisation without property was selected by human societies to arrange for the production and distribution of produce.]

Rubbish. Counterexamples: medieval monasticism, early christian communities, etc.

chris y

In what universe did mediaeval monasteries not own property. The monks as individuals may not have, but that's completely beside the point. There's a strand of opinion which holds that the Carthusians were catalytic in transforming primitive accumulation into systematic capitalism.


Gav: "whosoever", surely?
E.G.: chris y must be right mustn't he? The monks would not only punish you in this world if you used their land, they'd condemn you to Hell in the next. Ownership Plus, I'd say.

tom s.

james higham - I can't speak for these particular ex-Marxists, and I'm a never-was-a-Marxist, but other X-M's I know say something like this.

"I'm an X-M because I can't hold to Marxist prescriptions as to what to do and how to move society forward. But there is a seriousness and depth to Marxist thinking, and a concern with internal consistency and cohesion - that is too often lacking elsewhere on the left, or in other critiques of society. When I see sloppy or ad-hoc thinking (especially with New Age leanings) it makes me sentimental for the days when I thought Marxism had it all right, and it makes me wish more current critics had a grounding in Marxism before spouting off."

Well, something like that anyway.

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