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Cambridge Journal of Economics

1984 , 8 , 403-405

NOTE

On Dobb s interpretation of Jevons on

Ricardo

Peter Kriesler*

Polemics against the earlier Ricardian tradition and still more against the Marxian system to which

the former was blamedforopeningthedoor, werenotconfined toJevons' dismissalingeneral

terms

.. .

[T]here is particular accusation

. . .

which perhaps deserves to be repeated here because

of its apparent sophistication and the fact thatitcame from no less person than Walras as wellas

from Jevons. Thiswas that Ricardo's systemhadtried tomake one equation determinetwo

unknowns'bysuggesting that priceisdeterminedbywages

plus

profits (when rentisexcluded)

while at the same time treating profit sthe surplus or excess of value produced over wages.

*. . . Jevons [1871,p.258,criticises] the 'radically fallacious' attempt to drive twounknown

quantities from one equa tion', and the reference to Ricardo is clearer (Dobb,1973,pp. 177-178).

In this quotation fromhisTheoriesofValue

and

Distribution Since

Adam Smith

1

Dobb

is stressing theimportanceof alogical criticismof the Ricardian system attributedby

him

to

both Walras

and

Jevons.

In

TheoriesDobb argues that before Sraffa s Introduc-

tion

to

Ricardo s Principles

the

main response

to

this strange charge

was

given

by

Dmitriev.It is the contentionofthis note that Dobb s argument, while being correct

with respecttoWalras, is more dubious with respectto the interpretationofJevons.

After consideringthe theoryofdistributionofthe English economists , Walras, in his

Elements of Pure Economics

concluded that :

It

is

clear

now

that

the

English economists

are

completely baffled

by the

problem

of

price

determination; forit isimpossibleforI[interest charges] to determineP[aggregate price received

fortheproducts

of

an enterprise]

at

thesame time that

P

determines

I. In

thelanguage

of

math-

ematics, one equation cannot be used to determ ine two unknowns (W alras, 1977, p. 425).

This passage confirms the validityofDob b ' s in terpre ta tion ofWalra s' crit icism ofthe

'Engl ish econom ists '. How ever, when J evon s ' crit icism

of

Ricardo is examined closely,it

is found that

its

similarity with W alras ' crit ique

is

slight, and thatitgoes beyond W alras '

charge

of

insufficient equ ation s

to

determine

the

unknowns

of

the problem (despite

the

fact that Jevons italicised that part of his criticism).

2

Jevons' crit ique (cited in the

quotat ion from Dobb

at

the beginning

of

this note) is, therefore, worth quo ting

in

full:

*St. John s College , C ambridge.

I

should like

to

thank

P. D.

Groenewegen,

G. C.

Harcourt,

B.

McFarlane and an anonymo us refereefortheir helpful com men ts.Theusual disclaimers apply.

Hereafter cited

as

Theories

2

The emphasis given

to the

Walrasian criticismmayhave distracted D obb from

the

remainder

of

the

paragraph.

flVW-l *ftY /S4/n404fnJ-01 803.00/0

I QR Aradr mir Prr;

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404

P.Kriesler

Th e whole product of industry m ust be divided into the portions paid as rent, taxes, profits, and

wages. We may exclude taxes ... Rent also may be eliminated ... We thus arrive at the simple

equation

Produce = profit

4-

w ges

A very simple result is also drawn from the formula; for we are told that ifw gesrise, profits must

fall andviceversa.But such doctrine is radically fallacious;

i t

involves the attempt to determine two

unknown

quantities from

one

equation.

I grant that if produce be a

fixed

amount, then if wages rise

profits must fall, andvice versa. Something might perhaps be made of this doctrine if Ricardo's

theory of a natural rate of wages, that is just sufficient to support the labourer, held true. But I

altogether question the existence of any such rate (Jevons,

1871,

pp. 257-258).'

This quotation shows that Jevons' conclusion that Ricardo's doctrine was 'radically

fallacious' is based on his argument that

both

wages and produ ct are variables. How ever,

Jevons also admits that this is not the case in Ricardo's analysis, in which,

given both

product and wages

profits are determined.

2

In short, Jevons' crit icism concerns what he

felt to be Ricardo's incorrect theory of wages. It is in terms of the division of product and

not, as Dobb states, in terms of the determination of value (or price) via the cost of

product ion.

The basis of Jevons' critique of Ricardo lies in an attack on the labour theory of value,

on th e grou nds that the value of labour is

essentiallyvariable so thatits value must be determined by the value

of

theproduct not the value

of

the

productb ythato flabour(Jevons,

1871,

pp.160-161).

As a result, wages will vary between occupations owing to the differing marginal utility

of each occupation. Each w orker produ ces un til the marginal utili ty of the extra labour is

equal to the marginal utili ty of the extra w ages earned. T herefo re outp ut ( prod uct) is not

seen as being fixed. For Jevons,

The wages of a working man are ultimately coincident widi what he produces after the

deduction of rent, taxes, and the interest of

c pit l

(Jevons,

1871,p.

259).

In Je von s' arg um ent, wages are, therefore, clearly a variable.

In this way, in the light of Jevons' criticism of Ricardo's theory of wages (discussed

above), it can be seen that this criticism goes beyond the interpretation given to it by

D o b b .

If, as Jevons believed, neither wages nor product can be taken as given, then his

criticism that Ric ard o's system is insufficiently dete rm ined is corre ct. Ho we ver , wh ere

both can be taken as fixed, as Jevons himself admitted was the case with Ricardo, then

Ric ardo 's system is fully determ ined.

3

Finally, i t may be pointed out that Dmitriev, who (as Dobb noted) provided the first

important reply to and defence of Ricardo, did not include Jevons among the originators

of the claim that Ricardo's theory was indeterminate. Apart from Walras, the only other

'Emphasis in the original. This text does not change in essence in subsequent editions of Theory of

Political Economy

2

That Jevons recognised the importance for Ricardo of taking output as given, is abundantly clear from

the second and third last sentences in the first quotation from Jevons.

3

The fact that Jevons realised that Ricardo s theory required wages to be fixed, for a determinate solution

to the determin ation of the rate of profit, is not irrelevant in the current debates o n this qu estion betw een

S. Hollander (1983A) and P. Garegnani (1982 , 1983A.B), S. Hollander and K. Bharadwaj (19 83),

S. H ollander (1982) and A. R oncaglia (1982).

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r1,2014

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Dobb s interpretation of Jevons on Ricardo

405

author identified with that position is Yu. Zhukovsky (Dmitriev, 1974, pp. 50-52) and

this is not because of Dmitriev s lack of familiarity with Jevons or with his Theory of

Political Economy.

Both are quoted in his

Economic Essays

(e.g. pp. 182, 193, 196,

199-200). In short, Dobb s position on Jevons critique of Ricardo, quoted at the start of

this note, must be regarded as incomplete, if not incorrect.

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Journal of Economics vol.

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Garegnani , P. 1983A. Ricardo's early theory of profits and its 'rational foundation': a reply to

Professor Hollander,

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Jaffe,

W.

(trans.), Fairfield,

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Augustus M. Kelley

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er1,2014

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/

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