William Petty (1623–1687)

British economist, statistician; founder of English bourgeois classical political economy.

Petty was born on May 26, 1623, in Romsey, Hampshire, England, into a craftsman’s family. He worked as a sailor in his youth and studied medicine at Leiden, Paris and Oxford. He was a successful doctor, professor of anatomy at Oxford, professor of music at the University of London, and an inventor, surveyor, Irish landowner, and member of Parliament. He was a founder of the Royal Society and a proponent of its principles of empirical research, and a founder of political arithmetic (i.e., statistics).

His main works include A Treatise of Taxes (1662, full title: A Treatise of Taxes & Contributions), Verbum Sapienti (1664), Political Arithmetic (1672), Political Anatomy of Ireland (1674), Quantulumcunque Concerning Money (written in 1682, published in 1695), among which A Treatise of Taxes is the representative work of Petty. In A Treatise of Taxes, Petty got rid of the influence of mercantilism, transferred the study of political economy from the sphere of circulation to the sphere of social production, investigated the inner connections of capitalist production, and expounded for the first time the basic point of view that labor determines value. Petty held that the value of commodities is not formed in the process of exchange, but in the production process, that the natural price of commodities (actually refers to the value) is determined by the labor time spent in the production of the commodity, and that labor is the source for the formation of value. “Labor is the father of wealth, and land is the mother of wealth” is his famous saying. The founding of the labor theory of value by Petty marked the emergence of classical English political economy, and therefore, Marx called Wiliam Petty as “the father of English political economy” and held that A Treatise of Taxes gives a perfectly clear and correct analysis of the magnitude of value of commodities. However, Petty’s work failed to correctly distinguish the twofold character of labor and erroneously confused the value and price of commodities.

On the basis of labor theory of value, Petty examined the important economic categories such as wages, rent, interest, surplus, etc. and held that money is a general equivalent with three basic functions, i.e., measure of value, means of exchange, and store of value, and inquired into the relationship between the quantity of money and the velocity of circulation of money, forming a relatively complete theory of money. In the theory of distribution, the important economic concept of “surplus” put forth by Petty held that wages ought to be equal to the value of the labor-power and that the surplus would be the quantity of products exceeding the necessary means of production. Petty regarded ground-rent as the basic form of surplus-value and held that wages were determined by the means of subsistence required by the laborer, while rent was the excess of the total product of the land after deducting wages and seeds, and that the surplus was transformed into the landowner’s rent and the capitalist’s interest. Thus, he initially inquired into the source of rent, and on the basis of the source of rent, into the source of surplus-value. Petty’s labor theory of value and thought of surplus had an important impact on Marxist political economy, and Marx’s spoke highly of William Petty, pointing out that the modern political economy began at the end of the 17th century with Petty and Boisguillebert.