Wednesday, 28 March 2018

Theories of Surplus Value, Part II, Chapter 14 - Part 24

[5. Adam Smith’s Views on the Movements of Rent and His Estimation of the Interests of the Various Social Classes]

Ricardo similarly explains the increase in the proportion of rent, on the basis of a higher price for corn grown on the more fertile land. But, for Ricardo, this higher price is not the result of social development and rising productivity, but the consequence of less fertile soil being brought into cultivation to meet rising demand. 

For Smith, the landlord also benefits from rising productivity, in manufacture, because, ““Whatever reduces the real price of the latter” [i.e., manufactured goods] “raises that of the former” [i.e., of agricultural produce]. Furthermore, with every increase of the real wealth of the society, the population increases; with the population increases the demand for agricultural produce and consequently the capital employed in agriculture; “and the rent increases with the produce”. On the other hand all circumstances which hinder the growth of general wealth, will have the opposite effect and lead to a fall in rent and hence a decrease in the real wealth of the landowners ([O.U.P., Vol. I, pp. 286-87; Garnier,] Vol. II, pp. 159-60).” (p 372)

Smith concludes that the landlords interests are in harmony with the “general interest of society”, which is an indication of Smith's integrity given that he was an ideologist of the rising bourgeoisie. And, Smith's honesty is also indicated by the fact that, although he includes the interests of the labourers in this “general interest of society”, he stresses that it is the proprietors who gain much more than the workers. And, although the workers gain the least from this improvement in society, they suffer the most from any decline of society. 

“The interests of the capitalists (manufacturers and merchants), on the other hand, are not identical with the 

“general interest of the society… ” “The interest of the dealers, however, in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public.” [The dealers are]… an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it” ([O.U.P., Vol. I, pp. 289-90; Garnier,] Vol. II, pp. 163-65).” (p 372) 

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