Adam Smith and David Ricardo: the giants of political economy
by Geoff Pilling
It seems hardly necessary to stress the fact that Marx was among the warmest admirers as well as the keenest students of that trend in economic thinking for which he invented the term ‘classical political economy’. It is important to remember that Marx used this term in a way radically different from that of many later writers, in particular Keynes. By classical political economy Marx meant to designate that strand in economic theory originating in France with Boisguillebert (1646-1714) and in Britain with William Petty (1623-87) and reaching its high point with the work of Smith and Ricardo (1772-1823) who ‘gave to classical political economy its final shape’ (Marx, Critique of Political Economy). It is important to keep this definition in view because the term ‘classical economics’ has often been used in a much broader sense – for Keynes it was a school embracing all those who, following Ricardo, subscribed to one version or another of Say’s Law, who believed, that is to say, in the self-regulating nature of capitalist economy.
On such a definition, classical economics culminated with Marshall and Pigou. (For Marx’s characterisation of classical economy, see Marx, 1, footnote.) Marx was always conscious of the enduring achievements of this school when contrasted with the work of the ‘vulgar school’, which emerged in the period following Ricardo’s death. In Marx’s estimation, classical political economy constituted a decisive stage in the investigation of the capitalist mode of production; around 1830 this phase begins to draw to a close, a close intimately bound up, for Marx, with the appearance of a new social and political force increasingly conscious of itself, the working class. Marx did not, of course, mean to imply that in a somewhat mystical manner the modern working class ‘killed’ political economy. Rather he wished to stress that the methodological limitations of classical political economy increasingly paralysed it in the face of this new phenomenon.
The ahistorical nature of political economy
The fact that political economy was unable to grasp the significance of the emergence of the working class and the implications of its struggle against capital only underscored, for Marx, the grave methodological and philosophical weakness which he detected in the work of Ricardo. For Marx’s considerable respect for the classical economists should not blind us to the fact that he saw in them a series of weaknesses which were to prove fatal. It is, of course, the case that the attack upon Ricardianism after 1830 was increasingly inspired by narrow ideological and political considerations, a point rightly stressed by Meek (1967). And such attacks were sharpened by the fact that a trend within the emerging working-class movement (‘Ricardian Socialism’) tried consciously to deploy Ricardian theory as a weapon against the capitalist order. But this is by no means the end of the story. For it is also undoubtedly the case that the opponents of Ricardo (Bailey is a good example) were able to seize upon real, unresolved, contradictions Read the rest of this entry »