II
MARX'S PROBLEM AND PURE ECONOMICS (GENERAL ECONOMIC SCIENCE)
Marxian economics not general economic science and labour-value not a general concept of value: Engel's rejection of general economic law: abstract concepts used by Marx are concepts of pure economics: relation of economic psychology to pure economics: pure economics does not destroy history or progress.
Marxian economics is thus a study of abstract working society showing the variations which this undergoes in the different social economic organisations. This investigation Marx carried out only in reference to one of these organisations, i.e. the capitalist; contenting himself with mere hints in regard to the slave and serf organisations, primitive communism, the domestic system and to savage conditions.[29]
In this sense he and Engels declared that economics (the economics studied by them), was an historical science.[30] But here, too, their definition has been less happy than the investigation itself; we know that Marx's researches are not historical, but hypothetical and abstract, i.e. theoretical.[31] They might better be called researches into sociological economics, if the word sociological were not one which is employed most variously and arbitrarily.
If Marx's investigation is thus limited, if the law of value postulated by him is the special law of an abstract working society, which only partially takes effect in economic society as given in history, and in other hypothetical or possible economic societies, the following results seem to follow evidently and readily: (1) That Marxian economics is not general economic science; (2) that labour-value is not a general concept of value. Alongside, then, of the Marxian investigation, there can, or rather must, exist and flourish a general economic science, which may determine a concept of value, deducing it from quite different and more comprehensive principles than the special ones of Marx. And, if the pure economists, confined to their own special province, have been wrong to show an ungenerous intellectual dislike for Marx's investigations, his followers, in their turn, have been wrong to regard ungratefully a branch of research which was alien to them, calling it now useless, and now frankly absurd.
Such is, in effect, my opinion, and I freely acknowledge that I have never been able to discover other antithesis or enmity between these two branches of research except the purely accidental one of the mutual antipathy to and mental ignorance of each other, of two groups of students. Some have resorted to a political explanation; but, with no wish to deny that political prepossessions are often the causes of theoretical errors, I do not consider an explanation as adequate and appropriate, which resolves itself into accusing a large number of students of allowing themselves blindly and foolishly to be overcome by passions alien to science; or, what is worse, of knowingly falsifying their thought and constructing a whole economic system from motives of practical opportunism.
Indeed Marx himself had not the time or means to adopt an attitude, so to speak, towards the purists, or the hedonists, or the utilitarians, or the deductive or Austrian school, or whatever else they may call themselves. But he had the greatest contempt for the oeconomia vulgaris, under which term he was wont to include also the researches of general economics, which explain what needs no explanation and is intuitively evident, and leave unexplained what is more difficult and of genuine interest. Nor has Engels discussed the subject; but an indication of his opinion may be found in his attack on Dühring. Dühring was struggling to find a general law of value, which should govern all possible types of economic organisation; and Engels refuted him: 'Anyone who wishes to bring under the same law the political economy of Terra del Fuoco and that of modern England, can produce nothing but the vulgarest commonplaces.' He scorns the truth of ultimate instance, the eternal laws of value, the tautologous and empty axioms which Herr Dühring would have produced by his method.[32] Fixed and eternal laws are non-existent: there is then no possibility of constructing a general science of economics, valid for all times and in all places. If Engels had meant to refer to those who affirm the eternity and inevitability of the laws characteristic of capitalist society, he would have been justified; and would have been aiming his blows at a prejudice which history alone suffices to refute, by showing as it does, how capitalism has appeared at different times, replacing other types of economic organisation, and has also disappeared, replaced by other types. But in Dühring's case the criticism was much beside the mark; since Dühring did not indeed mean to set up the laws of capitalist society as fixed and eternal; but to determine a general concept of value, which is quite another matter: or, in other words, to show how, from a purely economic point of view, capitalist society is explained by the same general concepts as explain the other types of organisation. No effort, not even that of Engels, will suffice to stop such a problem from being stated and solved; unless it were possible to destroy the human intellect, which, in addition to particular facts, recognises universal concepts.
It would be instructive to examine the references which there are in Marx's Das Kapital to unfinished analyses, extraneous to his special method; for in this dependence on analysis the researches of pure economics have their origin. What is, for instance, abstract human labour (abstrakt menschliche Arbeit), a concept which Marx uses like a postulate? By what method is that reduction of complex to simple labour accomplished, to which he refers as to an obvious and ordinary matter? And if, in Marx's hypothesis, commodities appear as congealed labour, or crystalised labour, why by another hypothesis, should not all economic goods and not only commodities, appear as congealed methods of satisfying needs or as crystalised needs? I read at one point in Das Kapital: 'Things which in themselves are not commodities, e.g. knowledge, honour, etc., may be sold by their owners; and thus, by means of their price, acquire the form of commodities. A thing may formally have a price without having a value. The expression of the price here becomes imaginary like certain quantities in mathematics.'[33] Here is yet another difficulty, indicated but not overcome. Where are these formal or imaginary prices to be found? And what are they? By what laws are they governed? Or are they perhaps like the Greek words in Latin prosody, which according to the school rule, per Ausoniae fines sine lege vagantur?—Questions of this kind are answered by the researches of pure economics.
The philosopher Lange also, who rejected Marx's law of value, which he regarded as an extravagant production, a child of sorrow, thinking it unsuitable—and in this he was justified, as a general law of value, arrived at the solutions which have since been given of the latter, a long time before the researches of the purists came into blossom. 'Some years ago,' he wrote in his book on labour problems, 'I too worked at a new theory of value, which should be of such a character as to show the most extreme cases of variation in value as special cases of the same formula.' And, whilst adding that he had not completed it, he intimated that the course which he attempted was the same as that hastily glanced at by Jevons in his Theory of political economy, published in 1871.[34]
To any of the more cautious and moderate Marxians it is plainly evident that the researches of the Hedonists are not merely to be rejected as erroneous or unfounded; and hence an attempt has been made to vindicate them in reference to the Marxian doctrine as an economic psychology, having its place alongside of true economics itself. But this definition contains a curious equivocation. Pure economics is quite apart from psychology. Indeed, to begin with, it is hard to fix the meaning of the words economic psychology. The science of psychology is divided into formal and descriptive. In formal psychology there is no place either for economic fact nor for any other fact which may represent a particular content. In descriptive psychology, it is true, are included representations, sentiments and desires of an economic content, but included as they appear in reality, mixed with the other psychical phenomena of different content, and inseparable from them. Thus descriptive economic psychology can be, at most, an approximate limitation, by which we take as a subject of special description the way in which men (at a given time and place, or even in the mass as hitherto they have appeared in history) think, feel and desire in respect to a certain class of goods which are usually called material or economic, and which, however, stand in need of specification and definition. Subject-matter, in truth, better suited to history than to science, which regards such matters only as empty and unimportant generalisations. This may be seen in the long discussion of the matter by that most weighty of pedants, Wagner, in his manual, which, of all that has been written on the question, I think the most worthy of notice, and which is yet, in itself, a thing very little worthy of notice or conclusive.[35] An enumeration and description of the various tendencies which exist in men as they appear in ordinary life: egoistical and altruistic tendencies, love of self-advantage and fear of disadvantage, fear of punishment and hope of reward, sense of honour and fear of disgrace and public contempt, love of activity and dislike of idleness, feeling of reverence for the moral code, etc., this is what Wagner calls economic psychology; and which might better be called: various observations in descriptive psychology, to be kept in mind whilst studying the practical questions of economics.[36]
But what, pray, has pure economics in common with psychology? The purists start from the hedonistic postulate, i.e. from the economic nature itself of man, and deduce from it the concepts of utility (economic utility which Pareto has proposed to call by a special name, ofelimita, from the Greek ώφἑλιμοϛ) of value, and directly, all the other special laws in accordance with which man behaves in so far as he is an abstract homo oeconomicus. They do exactly what the science of ethics does with the moral nature; and the science of logic with the logical nature; and so on. At this rate then would ethics be a psychology of ethics and logic a psychology of logic? And, since all that we know passes through the human mind, ontology would be a psychology of existence, mathematics a psychology of mathematics, and we should thus have confused the most diverse things, ending in a disorder the aim of which would be no longer comprehensible. Hence we conclude, that with care and the exercise of a little thought, it will necessarily be agreed that pure economics is not a psychology, but is the true and essential general science of economic facts.
Professor Labriola, too, shows a certain ill-humour which does not seem to me entirely justified, towards the pure economists, 'who', he says, 'translate into psychological conceptualism the influence of risk and other analogous considerations of ordinary commercial practice! And they do well—I answer—because the mind desires to give an account even of the influences of risk and of commercial practice, and to explain their mechanism and character. And then, psychological conceptualism; is not this an unfortunate connection between what your intellect shows you that pure economics really is (science which takes as its starting point an irreducible concept), and that hazardous definition of psychology which has been criticised above? Are not the noun and adjective in opposition to one another? And further, Labriola speaks contemptuously of the 'abstract atomism' of the hedonists, in which, 'one no longer knows what history is, and progress is reduced to mere appearance.'[37] Here too, it does not seem to me that his contempt is justified; for Labriola is well aware that in all abstract sciences, concrete and individual things disappear and that their elements alone remain as objects to be considered: hence this cannot be made a ground for special complaint against economic science. But history and progress, even if they are alien to the study of abstract economics, do not therefore cease to exist and to form the subject of other studies of the human mind; and this is what matters.
For my part I hold firmly to the economic notion of the hedonistic guide, to utility-ophelimity, to final utility, and even to the explanation (economic) of interest on capital as arising from the different degrees of utility possessed by present and future goods. But this does not satisfy the desire for a sociological, so to speak, elucidation of interest on capital; and this elucidation, with others of the same kind, can only be obtained from the comparative considerations put before us by Marx.[38]