CHAPTER IIIONE of the manifold results of the "Keynesian revolution" is
a revaluation of the history of economic thought. It has
been suggested that economic theory might have been better served
if the Ricardians had not triumphed so completely, as they did,
over Malthus in the famous Glut controversy (cf. Keynes, Essays in
Biography, pp. 139-47; General Theory, pp. 362-4). This newly
found enthusiasm is, however, not without its dangers. It frequently
leads to an attempt to draw a sharp contrast between the Malthus
and the Ricardo stem of thought, almost to the exclusion of the fact
that both stems of thought have grown out of the common parent
trunk of Smith Wealth of Nations.In this chapter we hope to show that the Glut controversy instead
of being a disturbance caused by an alien element outside the main
stream of classical thought is in fact closely related to the question
of the correct measure of value; and that the process of thought
which led Malthus to the Glut theory cannot be fully appreciated
without reference to the "labour-commanded" measure of value
which he took over from Smith. It is true that Malthus introduced
many changes into Smith's measure of value and these will be
considered in detail. But he retained enough of Smith's essential
premises to justify saying that the continuity of thought had not
THE MEASURING ROD AND THE GLUT THEORY
IThe changes which Malthus introduced into the "quantity of
labour commanded" measure of value when he took it over from Smith may be grouped under three heads:
|i. || Smith had not made any special effort to tighten the relation
between his measure of value and his normal cost of production
theory of price. He had been content to state merely that although
in a developed economy the price of a commodity would be made
up of normal wages, rent and profit, labour could measure not
only that part of price paid out as wages, but also those parts of
price paid out as rent and profit ( Smith, op. cit., Vol. I, p. 52). Malthus, on the other hand, seems to give special twists to his theory
of value to fit it in with the "labour-commanded" measure of value.|
Questia, a part of Gale, Cengage Learning. www.questia.com
Book title: Theories of Welfare Economics.
Contributors: Hla Myint - Author.
Publisher: Harvard University Press.
Place of publication: Cambridge, MA.
Publication year: 1948.
Page number: 34.
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