Markets, Productivity, and Happiness in a Historical Perspective


Meacci Ferdinando , University of Padova

The distinction between 'originating' and 'determining' causes is mentioned by Bohm-Bawerk at the end of his Essay XII concerning the origin of interest as distinct from the determination of its rate. Such a distinction, however, is more far-reaching than the role assigned to it in Boh-Bawerk's essay for it can also be singled out, within the classical theory of value, behind the distinction between 'absolute' and 'relative' exchangeable value of commodities, as distinct from goods, as well as between the 'existence' and the 'size' of such a value. The aim of this paper is to highlight the similarities and differences between the arguments supporting these distinctions in the classical and Austrian theories by mostly focusing, for reasons of space, on Smith's and Ricardo's theories of value, on the one hand, and on Menger's and Bohm-Bawerk's different theories, on the other. This will be done by keeping apart, within the classical theory, the concept of labour embodied from the concept of labour command (as distinct from labour commanded, a past participle never used by Smith in this connection); as well as, across the Austrian and classical theories, the concept of 'private' from the concept of 'social' capital in the context of the more general distinction between 'individual' and 'national' wealth. This will be done by dealing, first, with Ricardo's and Smith's diverging concepts of gross and net 'revenue'; and, then, with the diverging concepts of 'value' and 'price' as highlighted by Marx and other authors. The links between individual behaviour and national wealth will be then examined, within the classical theory of value, in the further context of a continuous process of capital accumulation as discussed by Smith in Book II of his "Wealth of Nations". These links have received in the Austrian tradition less attention than they would deserve if only because Bohm-Bawerk (whose most important work is focused on capital and capital accumulation) based his theory of value on the role of individual behaviour as inherited from Menger rather than on the impact that such behaviour will eventually have, on the one hand, on the overall demand for labour and, on the other hand, on the growth and distribution of national wealth.


Keywords: value, private and social capital, individual and national wealth

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