Comments: "J. B. Say and the Return from Capital"

Forum Comments:

J. B. Say and the Return from Capital

Dr. Mohammad Omar Farooq
Associate Professor of Economics and Finance
Upper Iowa University

IBF-Net; 2/9/07; Message #6173

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Salam and greetings.

Recently, in some other threads, we discussed about the contribution of JB Say in recognizing the independent contribution of capital.

Unless studied at the upper level, an introductory text of economics may not deal with JB Say beyond the Say's Law. As Mr. Shakespeare reminded us of the contribution of Say in the context of BE's focus on reducing all factors to only two - thus, binary, it also gave me another occasion as a student of history of economic thought to revisit Say and remove some of the dust from my collection.

While reading up about this, there is something that I came across that drew my attention. In the context of history of economic thought, Say considered himself a disciple of Adam Smith. "His ideas were founded on an unquestioned acceptance of capitalist property relationships." [E.K. Hunt, History of Economic Thought, 2nd ed., Harper-Collins, 1992, p. 167]

He regarded property ownership as "sacred and indisputable." The part that drew my attention is the following:"The origin or the justice of the right of property, it is unnecessary to investigate, in the study of the nature, and progress of human wealth. Whether the actual owner of the soil, or the person from whom he derived its possession, have obtained it by prior occupancy, by violence, or by fraud, can make no difference whatever in the business of the production and distribution of its product or revenue.' " [Say, A Treatise on Political Economy, Book II: On Distribution; The Sources of Revenue, Batoche Books, 2001, p. 160]

At the level of real economy, one can understand its relevance, but morally? Why is it "unnecessary to investigate'? Of course, this exculpates all the colonial powers for colonial exploitation and injustice. Most likely the illegitimate ruling structure in most parts of the Muslim world, and especially those that have monopolized oil as family wealth, have not educated themselves about what JB Say said in this regard. These monopolizing agents and entities could find this as a powerful statement to legitimize and rationalize concentration of capital ownership.

Did Say correct some of the errings of Smith on the economic side, but himself erred on the moral side? Of course, it is quite possible that he was right about his views about capital, but wrong about the view about morally-neutral ownership.

Best regards.

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Dr. Mohammad Omar Farooq

http://www.globalwebpost.com/farooqm