Taxation in classical theories of value, distribution and accumulation

Theories of taxation have played an important role in the development of classical theories of value, distribution and accumulation, yet this history has been largely neglected in the literature of the history of economic thought. The historical review presented here fills this gap in economic scholarship by providing a critical review of the major classical writings on taxation. As such, this study demonstrates that theories of taxation and the treatment of fiscal questions constitute crucial elements in the development of classical political economy. The analysis of the role of taxation in theories of value, distribution and accumulation also contributes to the current debate among historians of economic thought over whether the ascendancy of neoclassical economics over classical political economy constituted scientific progress. The neoclassical view holds that classical theories of taxation constitute, at best, no more than an embryonic stage of modern neoclassical public finance, with little or no relevance to modern capitalism. In contrast, this dissertation shows: First, that the classical approach to taxation represents a distinct theoretical tradition that is not part of a continuum leading to the development of current neoclassical orthodoxy. Second, that classical political economy is relevant to contemporary capitalism. The critical analysis of the public finance writings of the mercantilists, Physiocrats, Adam Smith, David Ricardo, Karl Marx and Piero Sraffa reveals a direct relationship between the existing stage of capitalist economic development and the fiscal practices of the state. Such an analysis also shows that this relationship influenced the development of classical political economy. The classical analysis of taxation centers on the historically specific form of state extraction of economic surplus in the capitalist mode of production. The emphasis on the historical and political context of the development of the theory of taxation does not preclude, however, an analysis of the development of its internal logical structure. Scientific progress in the classical theory of taxation is shown to be tied fundamentally to analytical advancements in the theories of value, distribution, and accumulation.