as Dr. Böhm-Bawerk. 'It was the development and popularising of the Ricardian theory of value which supplied the scientific soil, out of which the Exploitation theory could naturally spring and grow.'[1]
In order that Ricardo should be altogether freed from the reproach of giving any countenance to Socialist doctrines, it is necessary to go further, and to argue that he did not-teach 'the iron law of wages.' This Professor Marshall does in the following passage:
Ricardo's language was even more unguarded than that of Adam Smith and Malthus. It is true, indeed, that he said distinctly:—'It is not to be understood that the natural price of labour estimated in food and necessaries is absolutely fixed and constant.... It essentially depends on the habits and customs of the people.' But, having said this once, he did not take the trouble to repeat it constantly; and most of his readers forget that he ever said it. In the course of his argument he frequently adopted a mode of speaking similar to that of the Physiocrats; and seemed to imply that the tendency of population to increase rapidly as soon as wages rise above the bare necessaries of life, causes wages to be fixed by 'a natural law' to the level of those bare necessaries. This law has been called, especially in Germany, Ricardo's 'iron' or 'brazen' law: many German Socialists believe that this law is in operation now... and they claim Ricardo as an authority on their side.
In fact, however, Ricardo was not only aware that the necessary or natural limit of wages was fixed by no iron law, but is determined by the local conditions and habits of each place and time: he was further keenly sensitive to the importance of a higher 'standard of living,' and
called on the friends of humanity to exert themselves to encourage the growth of a resolve among the working classes not to allow their wages to fall anywhere near the bare necessaries of life (my italics).
[2]
This very strong assertion is supported in a footnote by the quotation of a certain passage from Ricardo's fifth chapter. Professor Marshall evidently attaches great weight to this particular passage; in a note on the next page he expresses his surprise that it should have escaped the attention of J. S. Mill. But, on examining the passage in question, it will be found that it does not appear in Ricardo's first edition, and that it is by no means certain that it means quite all Professor Marshall gets out
- ↑ Capital and Interest, Eng. trans. p. 317. Cf. pp. 316, 829, 366, et passim.
- ↑ P. 553
