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Elements of Risk in Classical Political Economy and Marx

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  • Michel S. Zouboulakis

    (University of Thessaly)

Abstract

As against the established view in HET text books, elements of risk decision making were present in economic theory, long before Frank Knight’s great contribution. Smith announced the importance of risk premium and analysed thoroughly the different kinds of “chances of profit†between lotteries, insurances, sea trade etc. Mill also recognised risk as a distinct element of profits of capital and distinguished two different sources of risk. Risky behaviour, although subordinated, is also investigated in Marx’s work. Therefore, even if the distinction between insurable risks and non-insurable uncertainty is equivocal before 1921, substantial evidence of it is indeed perceptible long before.

Suggested Citation

  • Michel S. Zouboulakis, 2022. "Elements of Risk in Classical Political Economy and Marx," Bulletin of Political Economy, Bulletin of Political Economy, vol. 16(2), pages 147-159, December.
    • Handle: RePEc:awu:journl:v:16:y:2022:i:2:p:147-159
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    References listed on IDEAS

    as
    1. Phil Faulkner & Alberto Feduzi & Jochen Runde, 2017. "Unknowns, Black Swans and the risk/uncertainty distinction," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 41(5), pages 1279-1302.
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    4. Lawson, Tony, 1985. "Uncertainty and Economic Analysis," Economic Journal, Royal Economic Society, vol. 95(380), pages 909-927, December.
    5. Philippe Fontaine, 1999. "Classical Political Economy between Two Fires: Jean-Baptiste Say and Frank H. Knight on the Enterprise Economy," History of Political Economy, Duke University Press, vol. 31(1), pages 1-28, Spring.
    6. Tony Aspromourgos, 2014. "Entrepreneurship, risk and income distribution in Adam Smith," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 21(1), pages 21-40, February.
    7. Runde, Jochen, 1990. "Keynesian Uncertainty and the Weight of Arguments," Economics and Philosophy, Cambridge University Press, vol. 6(2), pages 275-292, October.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    risk; uncertainty; Adam Smith; Nassau William Senior; John Stuart Mill; Karl Marx.;
    All these keywords.

    JEL classification:

    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
    • B14 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Socialist; Marxist
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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