Wages fund doctrine

A precept held by the classical school of economists, wages fund doctrine states that an employer uses a fund of money, or fixed amount of capital, to pay workers; so, if employees demand higher wages, unemployment of some workers will be necessary. Wages fund doctrine was also extended to a macroeconomic scale, but was

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Wagner’s law

Named after German economist ADOLPH WAGNER (1835-1917), Wagner’s law states that the development of an industrial economy will be accompanied by an increased share of public expenditure in GNP. Wagner’s law of state , is known as the law of increasing state spending, is a principle named after the German economist Adolph Wagner (1835–1917).[1] He first observed it for his

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Walras’s stability

Named after French- born economist Leon Walras (1834-1910), who laid the groundwork for a unified model which included theories of exchange, production, formation and theory. Walras asserted that if there are n markets and n-1 markets are in equilibrium, then the last market must be in equilibrium as well. Also see: general equilibrium theory, partial equilibrium theory Source: L

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Walter Heller

Walter Heller served as President of the Council of Economic Advisors under the Kennedy and Johnson Administrations. The famous Kennedy Tax Cut of 1964 is attributed to Heller. Contrary to the concerns of opponents, the tax cut succeeded in causing a boom in the US economy. After his tenure as President of the Council

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Wassily Leontief

Wassily Leontief’s name has been associated with a particular type of quantitative economics: input-output analysis. Input-output was partly inspired by the Marxian and Walrasian analysis of general equilibrium via interindustry flows – which in turn were inspired by Francois Quesnay’s Tableau Economique, and was the outgrowth of the ‘multi-sectoral’ approach followed by the Kiel School.

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Book One – Chapter 01: Of the division of labour

Source: Smith Adam (1776), The Wealth of Nations, W. Strahan and T. Cadell, London. The greatest improvement in the productive powers of labour, and the greater part of the skill, dexterity, and judgment with which it is anywhere directed, or applied, seem to have been the effects of the division of labour. The effects

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Book One – Chapter 02: Of the principle which gives occation to the division of labour

Source: Smith Adam (1776), The Wealth of Nations, W. Strahan and T. Cadell, London. This division of labour, from which so many advantages are derived, is not originally the effect of any human wisdom, which foresees and intends that general opulence to which it gives occasion. It is the necessary, though very slow and

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Book One – Chapter 03: That division of labor is limited by the extent of the market

Source: Smith Adam (1776), The Wealth of Nations, W. Strahan and T. Cadell, London. As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division must always be limited by the extent of that power, or, in other words, by the extent of the

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Book One – Chapter 04: Of the Origin and Use of Money

Source: Smith Adam (1776), The Wealth of Nations, W. Strahan and T. Cadell, London. When the division of labour has been once thoroughly established, it is but a very small part of a man’s wants which the produce of his own labour can supply. He supplies the far greater part of them by exchanging

Book One – Chapter 05: Of the real and nominal price of commodities, or of their price in labour, and their price in money

Source: Smith Adam (1776), The Wealth of Nations, W. Strahan and T. Cadell, London. Every man is rich or poor according to the degree in which he can afford to enjoy the necessaries, conveniences, and amusements of human life. But after the division of labour has once thoroughly taken place, it is but a

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Book One – Chapter 06: Of the component parts of the price of commodities

Source: Smith Adam (1776), The Wealth of Nations, W. Strahan and T. Cadell, London. In that early and rude state of society which precedes both the accumulation of stock and the appropriation of land, the proportion between the quantities of labour necessary for acquiring different objects seems to be the only circumstance which can

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Book One – Chapter 07: Of the natural and market price of commodities

Source: Smith Adam (1776), The Wealth of Nations, W. Strahan and T. Cadell, London. There is in every society or neighbourhood an ordinary or average rate both of wages and profit in every different employment of labour and stock. This rate is naturally regulated, as I shall show hereafter, partly by the general circumstances

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Book One – Chapter 08: Of the wages of labour

Source: Smith Adam (1776), The Wealth of Nations, W. Strahan and T. Cadell, London. The produce of labour constitutes the natural recompense or wages of labour. In that original state of things, which precedes both the appropriation of land and the accumulation of stock, the whole produce of labour belongs to the labourer. He

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Book One – Chapter 09: Of the profits of stock

Source: Smith Adam (1776), The Wealth of Nations, W. Strahan and T. Cadell, London. The rise and fall in the profits of stock depend upon the same causes with the rise and fall in the wages of labour, the increasing or declining state of the wealth of the society; but those causes affect the

Book One – Chapter 10: Of wages and profit in the different employments of labour and stock

Source: Smith Adam (1776), The Wealth of Nations, W. Strahan and T. Cadell, London. The whole of the advantages and disadvantages of the different employments of labour and stock must, in the same neighbourhood, be either perfectly equal or continually tending to equality. If in the same neighbourhood, there was any employment evidently either

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Book One – Chapter 11: Of the rent of land

Source: Smith Adam (1776), The Wealth of Nations, W. Strahan and T. Cadell, London. Rent, considered as the price paid for the use of land, is naturally the highest which the tenant can afford to pay in the actual circumstances of the land. In adjusting the terms of the lease, the landlord endeavours to

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Book Two – Introduction: Of nature, accumulation, and employment of stock

Source: Smith Adam (1776), The Wealth of Nations, W. Strahan and T. Cadell, London. In that rude state of society in which there is no division of labour, in which exchanges are seldom made, and in which every man provides everything for himself, it is not necessary that any stock should be accumulated or

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Book Two – Chapter 01: Of the division of stock

Source: Smith Adam (1776), The Wealth of Nations, W. Strahan and T. Cadell, London. When the stock which a man possesses is no more than sufficient to maintain him for a few days or a few weeks, he seldom thinks of deriving any revenue from it. He consumes it as sparingly as he can,

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Book Two – Chapter 02: Of money considered as a particlar branch of the general stock of the society, or…

Source: Smith Adam (1776), The Wealth of Nations, W. Strahan and T. Cadell, London. It has been shown in the first book, that the price of the greater part of commodities resolves itself into three parts, of which one pays the wages of the labour, another the profits of the stock, and a third

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Book Two – Chapter 03: Of the accumulation of capital, or of productive and unproductive labour

Source: Smith Adam (1776), The Wealth of Nations, W. Strahan and T. Cadell, London. There is one sort of labour which adds to the value of the subject upon which it is bestowed: there is another which has no such effect. The former, as it produces a value, may be called productive; the latter,

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