In the eighteenth century the development of modern industrial capitalism was greatly accelerated. Its theory,embodied in the works of the classical economists, comes to maturity in the period of forty years that separatesSmith's
Wealth of Nations
. But its roots reach back almost two centuries.
According to this view, the development of economic liberalism, advanced most clearly by Adam Smith, was a theoretical expressionof developments in the economic and social spheres—the rise of industrial captialism—and an intellectual justification for theactivities and practices of that class most closely associated with this process, the industrial bourgeoisie. Indeed, one moderncommentator has begun a study of Smith on the "axiomatic premise" that "capitalism is an embodiment of Smithian principles."
The present study takes issue with this argument. In the chapters which follow I shall argue not only that classical political economy prior to Ricardo did not represent the interests of industrial capitalists but also that the classical political economists up to andincluding Smith were strongly critical of the values and practices associated with merchants and manufacturers.
Much as they mayhave approved of certain important economic effects of division of labour and market exchange, the greatest classical economists didnot seek to ground political life in the activities of self-seeking individuals. Nor did they seek to advance a justification for industrialcapitalism. On the contrary, the pre-Ricardian economists betrayed a definite bias in favour of the agrarian, not commercial or industrial, classes and a profound fear that the "commercial spirit" of their age might undermine the agrarian foundations of societyand corrupt political life by replacing the classical goal of a state operating according to public interest and public virtue with a polityravaged by the pursuit of private interest.On the basis of these concerns and of their analysis of those processes which were transforming traditional rural economy, the political economists examined in this study developed a theory of agrarian capitalism. At one level, their investigations constitutedimportant attempts to comprehend the most significant social and economic changes of their age. The industrial revolution was not afact of life before the publication of Smith's
Wealth of Nations
. The primary focus for these writers was thus agrarian, not industrial,change. At another level, their theories of agrarian capitalism contained an important element of prescription. Concerned to reap the beneficial effects of economic growth while resisting moral and intellectual corruption and the decline of civic virtues, they lookedforward to the development of a capitalist agriculture which could sustain a state uncontaminated by private interests. Their economictheory of agrarian capitalism thus served both a moral and political purpose—which is to say that it was
economy in thefullest sense.There were, however, profound differences between the conceptions of the relationship of the state and agrarian capitalism whichcharacterized British and French political economy. As I shall demonstrate, British political economy developed from theCommonwealth tradition of political thought, which conceived of the state largely in terms of the self-government of landedgentlemen. By contrast, French political economists—especially the Physiocrats—thought in terms of a centralized absolutemonarchy constituted over and above civil society as a bulwark against the influence of particular interests upon the state. Thesedifferences, as I shall show, correspond to the quite different paths of social and economic development taken by Britain and Francein the early modern period.Despite these differences with respect to the nature of the state, the British and French political economists alike advanced a theory of and program for agrarian capitalism. They sought to direct the processes of capitalist development to preserve the agrarian basis of society and, in so doing, prevent excessive influence upon economic development and political policy by commercial and industrialinterests. For the Physiocrats, such an objective required that the state shape social and economic development. For Adam Smith,however, such development required merely that the state break the manipulative activities of merchants and manufacturers andguarantee an institutional order in which no section of society would have any form of monopoly power. But such a state could not be based upon commercial or industrial interests, since these were incompatible with those of the public; instead it would have to restlargely upon enlightened, public-spirited representatives of the landowning class.Eighteenth-century Britain and France were—albeit with major divergences—societies in transition from feudalism to industrialcapitalism. The characteristics of the transitional society of eighteenth-century Britain we will describe as agrarian capitalism. France,labouring under the creaking structures of feudal absolutism, had not experienced the breakthrough to agricultural improvement andeconomic growth which had occurred in England. Yet the frame of reference for her most important political economists was withoutdoubt the system of agrarian capitalism which had emerged in Britain. No major thinker in Britain or France had yet grasped thateconomic development based on capitalist farming (which largely separated the direct producers from the land and transformed theminto wage labourers) led in the direction of industrial capitalism. Subsequent attempts to depict these earlier theorists as prophets of nineteenth- and twentieth-century capitalism have seriously distorted our understanding of their theoretical efforts and of the societythey attempted to understand and influence. As I shall show in the course of this work, the classical political economists of theseventeenth and eighteenth centuries developed an agrarian-based model of the emerging capitalist economy, adhered to valuesmarkedly different from those generally associated with industrial capitalism, and accorded priority to the formulation of just and benevolent policies which could guide civic-minded statesmen in the pursuit of wealth, power, prosperity, and justice. I shallconclude by arguing, however, that their acceptance of the basic social relations of capitalism undermines any attempt to employ thework of these theorists as the basis of a concrete and comprehensive critique of modern industrial capitalism.
From Feudalism to Capitalism: The Historical Context of Classical Political Economy
Classical political economy, wrote Karl Marx, "begins at the end of the seventeenth century with Petty and Boisguillebert."
Inmaking this statement, Marx not only identified the historical period of the emergence of classical political economy, he also