Historical Economic Theories on Value and Surplus Discussed in Quesnay, Mill, and Sraffa

Quesnay’s Idea What Quesnay wrote, in his entry for “man” in Diderot’s Encyclopedia of 1750, was “Those who make manufactured commodities do not produce wealth...they spend their receipts in order to obtain their subsistence. Thus they consume as much as they produce...and no surplus of wealth results from it.” Quesnay, like Petty a century before, came to economics from medicine. He was personal physician to Madame de Pompadour, and then to the royal family. His argument was that value is added in agriculture alone, not in manufactures. His conclusion that only landowners can afford to pay taxes did not enchant the landed aristocracy of Versailles. Mill’s Essays! includes “as much as is necessary to keep the productive worker in perfect health and fitness for his employment, may be said to be consumed productivity. To this should be added what he expends in rearing children to the age at which they become capable of productive industry.” Mill’s Principles of 1848, which I quoted earlier, said the same: “What they consume in keeping up their health, strength and capacities of work, or in rearing the productive laborers to succeed them, is productive consumption.” Sraffa’s parallel idea is expressed in his 1960 paper Production of Commodities by Means of Commodities. My impression is that Quesnay’s “surplus of wealth” means value added, and that he thought maintenance consumption should be deducted from revenue in finding it. Mill can’t have meant what I think Quesnay did, in view of Mill’s evident belief that output is investment plus consumption. Rather, when I like Quesnay argued that 1 Essays on Some Unsettled Questions of Political Economy (1844). Chapter 6: Parallels with the Firm 2/4/16 15 HOUSE_OVERSIGHT_011049