Classical Roots of the Criticisms of John Stuart Mill’s Wage-Fund Theory

Abstract

The purpose of this contribution is to discuss the analytical contents of the criticisms levelled at J.S. Mill’s theory of the wage fund and accepted by him in his famous ‘recantation’ of 1869. One reason for the interest in the analytical issues that emerged in the criticisms of the wage-fund theory lies in the fact that they take up and revive many aspects of Smith’s approach to wage determination. In so doing, they show its inconsistency with the wage-fund theory presented by Mill; that is, they show the existence of a conflict between Smith’s views, representative of the theory of wages proper to the classical political economy (from Petty to Ricardo) and the subsequently established theory of the wage fund.