isaac ilych rubin, a history of economic thought (1929)

part III: adam smith

(153): birth of classical school circa 1750 as science of industrial capitalism (this was their watchword and 'cause')

(155): seeing subordination of crafstman, rise of the putter-out and buyer-up. in short, the birth of the manufactory (1600s/1700s)

(156): important--but, at the end of the 1700s, the domestic system still competes with the manufactories (because they had not yet systematically begun to implement mechanization), and the former still had the advantage of no fixed-capital costs, and workers could have subsidiary income. more co-existence, than 'elimination'

(157-158): the manufactory did, however, signify the appearence of industrial capitalism and formaiton of an industrial proletariat, though it retained continuities with handicrafts in terms of technology

1. division of society into capitalists and laborers
2. comination of production based on division of labor

(160-161): protectionism/guilds were unable to stand in its way

(164): scotland was relatively advanced, economically, in the mid-18th century

(166): smith wasn't at all absent from the great practical debates of his day (rubin emphasizes this--mercantilists had been practitioners of economics, not theoreticians), even as he could be considered the forerunner of economics as a theoretical discipline. [he inveighed against protectionism, for example]

(167): importance of natural right to his doctrine (his moral doctrine, but also his economics)

(167-169): imp, natural right re: economics--economic progress will assert itself due to capitalist man being written in to the nature of things. Quesnay had a different conception, for which institutions were very important. but Smith was infused with optimism of his liberalism, in this sense. (this is the bedrock of Brenner's critique of neo-smithian marxists, remember)

(170): for Smith, economic intercourse is intercourse between commodity-owners. exchange, in short.

(171): an obvious tautology--Smith attributes to abstract man motives and aspirations that are in fact the result of institutions and history; he uses the motives and aspirations to 'prove' the necessity of these same institutions.

(173): Smith's optimism, for all his reservations, makes him the father of economic liberalism (ie, no state interference in ec. policy, free trade). but Rubin is arguing that this could only be unproblematic in the period of the 'revolutionary bourgeoisie'--his aim was not to defend the interests of capitalists.

(178): smith's assertion that division of labour is main source of productivity puts him squarely in the manufactory period.

(179-181): important--smith misses the distinction between the social division of labour (between occupations) and the technical divison of labour (within a firm). this represents a failure to distinguish between an economy of simple commodity exchange, and a capitalist economy.

(179): Rubin here speaks about two features of the classical school

1. not understanding the social forms of division of labour, because you are concerned with its material-technical aspects.
2. individuals enjoy a harmony of interests--spinner and weaver complement each other.
   

(181-182): apprehending the social division of labour did allow Smith to see our mutual interdependence, which was a 'great service'

(183): against mercantilists, Smith understood that money was merely a facilitator--it did not represent value, itself

(186-196): in short, Smith arrives at two conceptions of value. Rubin has a very lengthy argument re: why, having to do with Smith's 'methodological dualism'. but the main point is simple--this confusion is masked Smith is looking at a simple commodity economy; but when he looks at capitalism, he is unable to understand the 'exchange' of non-equivalents between capitalist and worker.

1. quantity of labour expended on production
2. quantity of labour which a given commodity can acquire or purchasee.
   

(198-201): important, Smith made a serious advance over the Physiocrats re: the concept of social classes, replacing a concpetion rooted in a conceptual division based on 'branches of industry' with a conceptual division based on revenue (profit, wages, and land rent). this meant he took a major step towards formulating the problem of surplus value, viz-a-viz the mercantilists (for whom it was commercial profit), and the physiocrats (for whom it was rooted in the nat. properties of the land)

(202): Smith 's picture of primitive accumulation is very benign; opposite of Marx's. root of capital is relative 'parsimony'

(202-204): important, Smith recognizes labour as the source of value of the product, which would mean wages is deduction. BUT he can't carry this through to its conclusion--he confuses 'theory of distribution' with 'theory of value', and begins to deduce value from profit/wages/rent. in other words, he starts with an understanding that profits and wages are exclusive, but then arrives at a position that sees higher profits mean more value.

(203-204): Smith's theory of general accumulation--doesn't accept the 'iron law of wages'/instead a confused position on the 'wage fund', Rubin is arguing. marked by an optimism about rising workers' wages, in contrast to Ricardo.

(206): unions not useful--for Rubin, this is because he predates the union movement

(209): theory of capital, 'private economy' (a private house rented out is capital) + 'national economy' (total productive stock in economy). BUT, according to Rubin, Smith is unable to reconcile these two definitions because of baseline confusions in his theory of surplus value.

(210-212): leaves out 'circulating capital' in his discussion of total reproduction (as does Ricardo, as does Say, as does Mill)

(214-215): Smith also misunderstands the distinction between unproductive and productive labour--for Rubin (Marx), it is about the relation of the labour to the production/expansion of surplus-value; for Smith, it is about the creation of a material object.