The Classical Theory of Wages and its Interpretations: A Critique of the Canonical Classical Model


This paper aims to clarify the broad social and historical factors that determine income distribution according to Smith and Ricardo and show that the socalled “Canonical Classical Model” fails to interpret the Classical theory of wages both with regard to logic and on the basis of textual analysis. After reconstructing the circumstances determining the subsistence and surplus wage rates according to Smith and Ricardo, the paper critically analyses the idea that they determine the price of labour by means of the wage fund theory in the short run and functional relationships between the wage rate and the growth rates of capital and population in the long run.

Volume :- No.12 (2018)

Issue No :- 1 (2018)

Pages :- 55-76

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