“THE MERCHANTS OF CADIZ AND LISBON”: PARSIMONY, THE RATE OF PROFIT, AND ACCUMULATION IN WEALTH OF NATIONS

In Wealth of Nations, a high rate of profit is associated with sluggish or even negative growth, and vice versa. This is because capital accumulation (and therefore population growth) is driven by parsimony of the masters; and the incentive to self-denial is eroded by a high income too easily obtain...

Full description

Saved in:
Bibliographic Details
Published in:Journal of the History of Economic Thought 2013-03, Vol.35 (1), p.63-76
Main Author: WATERMAN, A.M.C.
Format: Article
Language:English
Subjects:
18th century
Accumulation
Capital accumulation
Capital formation
Classical economics
Consumption
Economic growth
Economic history
Economic theory
Employment
Growth models
Merchants
National wealth
Political economy
Population growth
Portugal
Profit rate
Profits
Smith, Adam
Spain
Wages & salaries
Wealth
Workforce
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:In Wealth of Nations, a high rate of profit is associated with sluggish or even negative growth, and vice versa. This is because capital accumulation (and therefore population growth) is driven by parsimony of the masters; and the incentive to self-denial is eroded by a high income too easily obtained. The causal relation between parsimony, the rate of profit, and accumulation is explicated in this article; Adam Smith’s observations concerning “the merchants of Cadiz and Lisbon” examined critically; and some conjectures offered as to why Smith’s successors should have rejected parsimony as a useful concept.
ISSN:1053-8372
0142-7716
1469-9656
DOI:10.1017/S1053837212000636