The terms of trade, class conflict and classical political economy

Abstract

The terms of trade between agriculture and industry is an issue of central importance for countries beginning to step out of the fetters of colonialism and feudalism, be it via capitalism or socialism: an issue, moreover, which can only be analysed adequately if rooted in underlying production and property relations. It was a problem which came to preoccupy the classical economists and their treatment of it, posed in terms of class analysis, constitutes one of the grand themes of classical political economy. In this article the manner in which the analysis develops in the writings of Smith, Ricardo, Malthus and Marx is considered. The problem was implicit in Smith's formulations, but was not pursued by Smith; was debated rigorously by Ricardo and Malthus (and we give particular attention to the class biases of these two); and was recognised, however obliquely, by Marx.