The Accumulation of Capital

Daniel Diatkine ()
Additional contact information
Daniel Diatkine: University of Paris-Saclay, Univ Evry

Chapter Chapter 7 in Adam Smith and the Wealth of Nations, 2021, pp 159-197 from Palgrave Macmillan

Abstract: Abstract A particular use of stocks, for the purpose of profit, defines capital. Capital pays productive labour when income spending pays unproductive labour. The Wealth of Nations seeks to show how monopolies maintain market rate of profit above the natural one. Smith uses the theory of the gravitation of the market price around the natural price for this purpose. Moreover, the natural rate of profit is falling with the progress of accumulation of capital, when rate of rents and rate of wage are growing. This point is crucial to demonstrate the opposition of interest between the class of merchants and common interest. Finally, this chapter studies the “invisible hand” metaphor. Smith wants to explain (against the Physiocrats) why, if the rates of profit are equal, a capitalist prefers to invest “at home” rather than in foreign trade.

Date: 2021
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:pshchp:978-3-030-81600-1_7

Ordering information: This item can be ordered from
http://www.palgrave.com/9783030816001

DOI: 10.1007/978-3-030-81600-1_7

Access Statistics for this chapter

More chapters in Palgrave Studies in the History of Economic Thought from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().