ON INTEREST AND PROFIT: THOMAS TOOKE'S MAJOR LEGACY TO ECONOMICS

Author: Smith, Matthew

Source: Contributions to Political Economy, Volume 25, Number 1, 1 August 2006 , pp. 1-34(34)

Buy & download fulltext article:

Price: $42.29 plus tax (Refund Policy)

Abstract:

This paper argues that Thomas Tooke's (1773-1858) most important legacy to economics is not his conception of “endogenous money”, however important, but is instead his original proposition that the long-run “average” rate of interest entered into the normal cost of production and, therefore, the normal prices of commodities, reflecting the notion that the interest rate systematically governs the normal rate of profit. The paper shows that this conception of an “autonomous” rate of interest advanced by Tooke contributes to overcoming the long-run neutrality of monetary forces which has traditionally characterized economic theory within the framework of “modern” classical analysis.

Document Type: Research article

DOI: http://dx.doi.org/10.1093/cpe/bzl003

Publication date: 2006-08-01

More about this publication?

Contributions to Political Economy provides a forum for the academic discussion of original ideas and arguments drawn from important critical traditions in economic analysis. Articles fall broadly within the lines of thought associated with the work of the Classical political economists: Marx, Keynes, and Sraffa. While the majority of articles are theoretical and historical in emphasis, the journal welcomes articles of a more applied character. It also reviews noteworthy books recently published.