The Theory of Wages in Classical Economics: A Study of Adam Smith, David Ricardo and Their Contemporaries

This study argues that the wage-fund theory played no part in the theory of wages expounded by Ricardo and his predecessors. It shows classical wage theory to be analytically consistent, but different from, contemporary theory, particularly as it did not envisage an inverse relationship between employment and the real wage level, and hence a spontaneous tendency to full employment of labour. The author bases her approach not only on a reinterpretation of Smith and Ricardo, but also on the writings of Turgot, Necker, Steuart, Hume, Cantillon and other pre-classical economists.