The Spaniards of the fifteenth and sixteenth century such as Molina specialised in justifying trade and their theories of the “just price” (justified by the idea that the trader works, i.e. inputs labour into the product) link them up with the Mercantilists. The Spaniard Pedro Fernandez Navarette also came close to formulating a Labour Theory of Value, as did Carafa. So much for the influence of Catholic or Protestant religion as a deciding factor in the formulation of theory.
“Those who measure the just price by the labour, costs, and risk incurred by the person who deals in the merchandise or produces it, or by the cost of transport or the expense of traveling...or by what he has to pay the factors for their industry, risk, and labour, are greatly in error.... For the just price arises from the abundance or scarcity of goods, merchants, and money...and not from costs, labour, and risk....” (ibid)
But Calle fails to notice that the abundance or scarcity of a commodity is directly related to the amount of labour required for its production. Calle, of course, does not make any reference to the commodities value deriving from its utility here. He also specifically rules out risk as contributing anything to the value of the commodity and, therefore, the capitalists profit. All in all he speaks more against the idea of value deriving from utility than for it.
“.... Why should a bale of linen brought overland from Brittany at great expense be worth more than one which is transported cheaply by sea?... Why should a book written out by hand be worth more than one which is printed, when the latter is better though it costs less to produce?... The just price is found not by counting the cost but by the common estimation”(ibid)
Calle here falls into the same trap as those who, having not read or understood the Labour Theory of Value, make this argument. In his last sentence he comes close to answering his own question. The social value, or market value of a commodity is not determined by the least efficient means of producing it, but by the average socially necessary labour required for the production of commodities of that type. Clearly, labour employed to write a book when it can be printed is not socially necessary labour and is not the basis for assessment. The measure would be the average used by the different printers to print the book. And when he mentions the common estimation what was the common estimation at the time he was writing? The labour actually required for the production of any particular commodity, or collection of commodities, constitutes its individual value, and it is precisely the difference between this individual value, and the market value, which determines whether a particular producer makes surplus profits, or less than average profits.
“He (the medieval artisan) has to produce, in accordance with fixed conditions, cloth which is ‘not personal but official, municipal’; his labour, one might say is expressly objective not subjective.” Georges Espinas “Les Origines du Capitalisme” Vol 1. p40.
“The corporations of Antiquity and in those of China and Byzantium and in the European and Arab Middle Ages fixed rules, known to all, laid down alike the labour time to be devoted to the making of each object, the length of apprenticeship, its cost and the equivalent normally to be asked for each commodity.” Georges Espinas “Les Origines du Capitalisme” pp 118, 140-2.
Whilst Calle can be forgiven his confusion writing 450 years ago because he did not have the benefit of Adam Smith’s writings, and many more, to correct this misapprehension, the Austrians have no such excuse.
“Robertson and others have pointed out, for example, that capitalism really began flourishing, not in Britain, but in 14th-century Italian cities, i.e., in decidedly Catholic areas” (Murray Rothbard)
I have also stated previously that this development was not of capitalism but of petty commodity production within the existing natural economy. This development laid the basis through the accumulation of money capital for the later development of capitalism which can only be said to commence when petty commodity production is replaced by generalised commodity production. This woolly thinking is typical of Libertarians who seem incapable of drawing important distinctions between one social phenomena and another. In fact, it was the actions of the merchant capitalists in those Mediterranean City States, in expropriating the surplus value, and even part of the subsistence of the petty producers, that killed the development of capitalist production in those areas, before it could get properly started.
“Kauder, in fact, turns the Weber thesis on its own followers by attacking Smith and Ricardo for being influenced by Protestantism to develop the "labor theory of value." (ibid)
But the Labour Theory of Value was already being developed as a proto theory by the scholastics. One of the big leaps forward came precisely from Thomas Aquinas.
“The brunt of this important new thesis is this: rather than saying that Hume and Smith developed economic theory almost de novo, economics had actually been developed, slowly but surely, over the centuries by the Scholastics and by Italian and French Catholics influenced by the Scholastics; that their economics was generally individualist methodologically, and stressed utility theory, consumers' sovereignty and market pricing,” (ibid)
But it is not true that the scholastics stressed utility theory, and later I will let Thomas Aquinas speak for himself to show it is untrue.
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