The Role of Surplus in Classical Political Economy
What is Classical Political Economy and who were the classical economists? Different students have provided different answers. Thus, Marx ( 1954, 85, note 1), who seems to have coined the term, distinguished between "classical" and "vulgar" political economy, the latter "dealing with appearances only" whereas the former is theory that "since the time of W. Petty, has investigated the real relations of production in Bourgeois society." Keynes ( 1936, 3, note 1) used the term "classical" to denote those economists that adhered to Say's Law; that is, including even writers of the twentieth century such as Pigou but excluding the "underconsumptionists" such as Malthus, Lauderdale and Chalmers.
The most common definition of Classical Political Economy, however, seems to be that used in many recent text books on economic doctrines: Classical Political Economy is that body of theory that starts with Adam Smith (or possibly with the Physiocrats), culminates with the writings of David Ricardo (and possibly Karl Marx) and eventually was replaced by the emerging marginalist theories of the late nineteenth century. Including the Physiocrats, the period of classical theory, then, comprises approximately 115 years, from about 1756, the year of Quesnay's first article in economics, to 1871, when Menger and Jevons published their works ( Walras' Elements was published in 1874). Although it would be possible to claim that Classical Political Economy ceased to be important long before the advent of marginalism (cf. Roll 1992, 289-310), that question need not be a concern here. The important thing for the purposes of this book is that all important theorizing in the classical period shared a number of features, in particular that the existence of "surplus" was a necessary precondition for economic growth and that only some activities (productive activities) were capable of generating surplus.
Although the discussion shall be limited to some of the most important writings of the classical period, it should be noted that the concept of surplus was part and parcel of economic theorizing long before the Physiocrats made