Research on the Nature and Causes of National Wealth [Volume 2]

Author: Smith, Adam, Gordon, Da Li, Wang, Ya Nan
Publisher:
Publishing Date: 1974-06-01
Features: Adam Smith's representative work, "The Wealth of Nations," was published in 1776. At that time, it was the period of the growth of British capitalism, and British handicraft manufacturing was beginning to transition to large-scale industry. The development of British industry was still largely constrained by the remnants of feudalism and the restrictive policies of mercantilism that were once in vogue. The young British bourgeoisie, eager to remove obstacles from its path forward, urgently demanded a free economic theory system to pave the way for its progress. Adam Smith's "The Wealth of Nations" emerged during this historical period, tasked with this class-based historical mission. This book summarized the experiences of capitalist development in various countries during the early modern period and, on the basis of critically absorbing important economic theories of the time, provided a systematic and clear description of the entire process of national economic movement. After its publication, it not only significantly promoted the development of British capitalism but also had a more extensive impact on the development of world capitalism than any other bourgeois economic work. No wonder some bourgeois scholars at the time revered it as a treasure. However, history soon revealed its limitations and flaws. In the late 19th century, around the 1870s and 1880s, capitalist economies had begun to gradually transition from a stage of free competition to one of monopoly. From then on, the free and natural system emphasized by Smith had become ineffective. Less than half a century later, a socialist country emerged on the historical stage, which thoroughly negated the eternal nature of capitalism that Smith had emphasized. Now, in this historical stage where imperialism is increasingly declining and socialist revolutions are continuously advancing toward victory, despite some reactionary bourgeois vulgar economists still emphasizing free-market capitalism in different ways and promoting the reform or rebirth of capitalism, Smith's economic treatise from the era of capitalist growth has long lost its practical significance and only holds historical significance in the history of political economy. Lenin once instructed us: "Judging the merits of history is not based on whether historical figures provided what modern society requires, but on whether they provided something new compared to their predecessors." What contributions did Adam Smith's "The Wealth of Nations" make to the history of political economy, and what new insights did he offer through this work compared to his predecessors? To answer this question, one must first understand the economic questions raised by the era in which he lived. The economic life of modern capitalism began in the mercantilist era. This economic life initially demanded answers to fundamental questions such as what wealth is, what its sources are, and how it can be accumulated rapidly. Mercantilism first provided answers to these questions. British enlightenment economists such as Petty and Locke, as well as French economists like Boisguilbert and Physiocrats like Quesnay and Du Pont de Nemours, held differing views on these answers. For an economist to establish a fundamental theory related to the movement of the entire national economy, it is essential to determine whether the economic development of the society or country he belongs to allows for a comprehensive observation. Smith's predecessors in the field of economics lacked such conditions, but Smith, living in Britain during the period of capitalist growth, had the opportunity to propose new insights on these issues based on the theories of his predecessors. When mercantilists, based on the practical needs of commodity circulation in their societies and relying on intuition, emphasized that wealth consisted solely of money or gold, enlightenment economists like Petty and Locke had to undergo considerable effort to break free from this misconception. However, later physiocrats correctly argued that the products of labor, including means of production and means of subsistence, were wealth, but they did not consider money or gold, which were also products of labor, as wealth. It was only with Adam Smith that, building on these debates, a conclusion was drawn from the realities of economic life that money was a component part of the total wealth, or at most one component part. This conclusion encompassed the sources of social wealth and how wealth accumulated. If wealth was not primarily money or gold, then its sources were not gold mines, wealthy colonies, or trade surpluses. Enlightenment economists like Petty first emphasized that wealth came from nature and labor, but they did not clarify the relationship between the two in production. Physiocrats emphasized use value, arguing that wealth came from agricultural labor, which produced pure products. Adam Smith, however, approached the formation of commodity value and, in the very first sentence of his work, deliberately excluded nature, arguing that "the annual labor of a nation is originally the source of the whole annual produce of its consumption, both of necessaries and of conveniences." The labor he referred to was general, breaking free from the narrow circle of agricultural labor set by the physiocrats. In Smith's view, social wealth came from labor, and the growth of social wealth depended not only on the amount of labor involved but more importantly on the greater labor productivity. For capitalist society, the productivity of labor was reflected in that it not only produced wages as the price of labor power for laborers but also generated profits for capitalists and rent for landlords. These two types of income were deducted from the products or value produced by labor. Here, we see: first, Smith regarded labor as the correct universal measure of commodity value, believing that "only labor can compare the values of commodities in all times and places"; second, he viewed capitalist production as the production of value and surplus value; and third, he saw the production relations of the three major classes in capitalist society as the foundation of circulation and distribution relations, with the theory of value serving as the basis for distribution theory. Among all these fundamental arguments embodying the labor theory of value—surplus value, especially his comprehensive and systematic exposition of the entire capitalist economic movement or its capital accumulation process—Smith did indeed introduce some new elements that his predecessors had not proposed. However, due to the limitations of his class position and the relatively underdeveloped economic conditions of capitalism at the time, Smith could not correctly understand the historical transitional nature of the capitalist system itself. He consistently believed that capitalism was humane and natural, and that as long as some artificial and unnatural socioeconomic measures that hindered its development, such as the abolition of outdated guild systems and mercantilist restrictions, were removed, allowing everyone to participate in free competition with their labor or capital, capitalism would establish itself freely and naturally and continue to develop indefinitely. He also believed that individuals were naturally self-interested and that as long as their free competition was not hindered, the greater the benefits they gained personally, the richer society would become. This bourgeois utilitarian misunderstanding led him to remain within the following limits: "It began by critiquing the remnants of feudal production and exchange forms, proving that they would inevitably be replaced by capitalist forms," thereby establishing the aforementioned relatively correct arguments on value—surplus value in this sense; but when faced with the contradictions of capitalism itself, guided by this bourgeois utilitarian thought, he could no longer advance. This dual methodology, determined by his class perspective—examining both internal connections and external phenomena—made each of his correct arguments appear half-baked, incomplete, and full of contradictions. For example, even regarding the crucial argument that labor determines commodity value, he sometimes argued that the value of commodities is determined by the amount of labor expended in their production, while in other instances, he emphasized that the value of commodities is determined by the amount of labor they can obtain in exchange. He sometimes stated that the value of commodities is decomposed into wages, profits, and rent, a proposition whose error lay only in omitting constant capital; but in other instances, he emphasized that the value of commodities is composed of wages, profits, and rent, which not only omitted constant capital but also made the value determined in the first instance extremely uncertain. This was not only true for the theory of commodity value but also for the theory of the functions and production process of money, as well as the theory of capital accumulation, where correct and incorrect, scientific and vulgar arguments were mixed together. Regarding this point, in addition to explaining it from the perspective of his viewpoints and methods, we must also deeply understand Marx's historical materialist evaluation of Smith's contradictory theory of value. He said, "In Adam Smith's book, we not only see the traces of 'opposing views on value' but not only two but three, or more precisely, even four sharply conflicting perspectives on value, which coexist and interweave peacefully in his work. For the founders of political economy, this was natural, as he had to explore, experiment, and struggle against the chaotic state of newly forming ideas." As for his relatively optimistic and naturally harmonious tendency in discussing distribution, regarding the relationships between the three major classes in society, this was also due to the fact that the struggle between the bourgeoisie and the proletariat was still in its early stages, and the conflict between the capitalist class and the landlord class was not as sharp as it would become after the Industrial Revolution. This was different from the later vulgar economists who blindly promoted the fallacy of class harmony to conceal the already intense class struggle. In short, Smith's economic treatise, in terms of its analysis of capitalist production relations, undoubtedly contained many contradictions and vulgar arguments, but as a representative work of bourgeois classical economics from the era of capitalist growth, it indeed demonstrated many scientific elements and was a scientific research achievement of bourgeois classical economics built on the critique of previous economic theories. Due to the dual characteristics of correctness and error, science and vulgarity in its research methods, its influence on later political economy was also twofold. Shortly after the book's publication, British handicraft manufacturing, driven by the Industrial Revolution, rapidly developed into large-scale industry, while the internal contradictions of the capitalist system also began to emerge. followed Smith and took the labor theory of value and the distribution theory based on it to a level that no bourgeois scholar could surpass. representative work, "Principles of Political Economy and Taxation," was published in 1817. In the 1820s, some utopian socialists used's analysis to promote their social theories. By the 1840s, 1850s, and 1860s, Marx was continuing his efforts to critique and absorb the entire bourgeois classical economics, establishing political economy that served the proletariat. Later, both Engels and Lenin regarded classical economics, as well as Adam Smith's and's labor and surplus value theories, as the source of Marxist political economy. However, as capitalism developed further, its internal contradictions became increasingly apparent, the struggle between the working class and the bourgeoisie intensified, and the spread of Marxist political economy shook the dominance of the capitalist system. As a result, bourgeois economists after the 1820s of the 19th century eagerly avoided the correct arguments in Smith's theory and instead used its vulgar arguments to denigrate Marx's economic theories. After the 1870s of the 19th century, Marxist economics had already gained dominance in the workers' movement, so the Austrian School and its variants in the United States and Britain, which claimed to oppose Marxist economics, used the opposition to classical economics—or more accurately, the opposition to the scientific elements of classical economic theory—as an indirect means to oppose Marx's economic theories. Regarding this point, we need only see how economists from to opposed Adam Smith and. When bourgeois vulgar economists, in their efforts to oppose Marxist economics, fiercely attacked the classical theories of their predecessors, Adam Smith and, we, in order to defend Marxist economics and to enhance our understanding of it from a historical perspective, should scientifically approach and reintroduce the economic theories of Smith and even, which has practical significance. In the late 19th century,, a figure in China's reform movement, presented this book to the Guangxu Emperor, emulating Adam Smith's spirit of enriching both the monarch and the people as state policy, hoping to contribute to the "great cause" of late Qing reforms. However, his translation, titled "," published in 1902, did not receive any significant attention. This was not only due to the overly difficult and classical translation, with many omissions, but primarily because the socio-economic and cultural conditions of late Qing China were far too distant from its requirements. In 1931, my colleague and I re-translated and published it in Chinese, renaming it "." The main motivation behind our decision to re-translate this book, along with other works of bourgeois classical economics, was to prepare for the translation of "" and to promote Marxist political economy. We knew that "" was established on the critique of bourgeois economics, especially the critique of Adam Smith's and's works, as Marxist political economy. Familiarity with and understanding of Adam Smith's and's economic works would greatly enhance our comprehension of "." In fact, during the process of translating "," we deeply felt the help it provided to translate the works of Adam Smith and. After the publication of "," our task of translating Smith's "" was considered complete. After the liberation of the nation, people's publishing endeavors had to be arranged comprehensively based on the current and long-term interests of socialism. The Commercial Press, in order to systematically and selectively translate and introduce philosophical and social science classics from around the world, repeatedly proposed the revision of the "" translation. This translation had been published for thirty-five years. In some places, it did not clearly express the author's original intent, and there were individual errors, as well as many grammatical and lexical issues that needed to be refined and standardized. After revision by and, the translation had improved significantly. However, it still contained errors, for which we, especially I, were responsible. During this revision, the title was changed from "" to the full original title, "The Wealth of Nations." Wang, Ya Nan