I will add, merely tentatively, that the word objective (whose correlative term is subjective) does not seem to be in place here. Let us, instead, take account, in a society, only of what is properly economic life, i.e. out of the whole society, only of economic society. Let us abstract from this latter all goods which cannot be increased by labour. Let us abstract further all class distinctions, which may be regarded as accidental in reference to the general concept of economic society. Let us leave out of account all modes of distributing the wealth produced, which, as we have said, can only be determined on grounds of convenience or perhaps of justice, but in anycase upon considerations belonging to society as a whole, and never from considerations belonging exclusively to economic society. What is left after these successive abstractions have been made? Nothing but economic society in so far as it is a working society.[23] And in this society without class distinctions, i.e. in an economic society as such and whose only commodities are the products of labour, what can value be? Obviously the sum of the efforts, i.e. the quantity of labour, which the production of the various kinds of commodities demands. And, since we are here speaking of the economic social organism, and not of the individual persons living in it, it follows that this labour cannot be reckoned except by averages, and hence as labour socially (it is with society, I repeat, that we are here dealing) necessary.
Thus labour-value would appear as that determination of value peculiar to economic society as such, when regarded only in so far as it produces commodities capable of being increased by labour.
From this definition the following corollary may be drawn: the determination of labour value will have a positive conformity with facts as long as a society exists, which produces goods by means of labour. It is evident that in the imaginary county of Cocaigne this determination would have no conformity with facts, since all goods would exist in quantities exceeding the demand; similarly it is also evident that the same determination could not take effect in a society in which goods were inadequate to the demand, but could not be increased by labour.
But hitherto history has shown us only societies which, in addition to the enjoyment of goods not increasable by labour, have satisfied their needs by labour. Hence this equivalence between value and labour has hitherto had and will continue for an indefinite time to have, a conformity with facts; but, of what kind is this conformity? Having ruled out (1) that it is a question of a moral ideal, and (2) that it is a question of scientific law; and having nevertheless concluded that this equivalence is a fact (which Marx uses as a type), we are obliged to say, as the only alternative, that it is a fact, but a fact which exists in the midst of other facts; i.e. a fact that appears to us empirically as opposed, limited, distorted by other facts, almost like a force amongst other forces, which produces a resultant different from what it would produce if the other forces ceased to act. It is not a completely dominant fact but neither is it non-existent and merely imaginary.[24]
It is still necessary to remark that in the course of history this fact has undergone various alterations, i.e., has been more or less obscured; and here it is proper to do justice to Engels' remark in reference to Sombart; that as regards the way in which the latter defines the law of value 'he does not bring out the full importance which this law possesses during the stages of economic development in which it is supreme.' Engels makes a digression into the field of economic history to show that Marx's law of value, i.e. the equivalence between value and the labour socially necessary, has been supreme for several thousand years.[25] Supreme is too strong a term; but it is true that the opposed influences of other facts to this law have been fewer in number and less intense under primitive communism and under mediæval and domestic economic conditions, whilst they have reached a maximum in the society based on privately owned capital and more or less free universal competition, i.e. in the society which produces almost exclusively commodities.[26]
Marx, then, in postulating as typical the equivalence between value and labour and in applying it to capitalist society, was, as it were, making a comparison between capitalist society and a part of itself, isolated and raised up to an independent existence: i.e. a comparison between capitalist society and economic society as such (but only in so far as it is a working society). In other words, he was studying the social problem of labour and was showing by the test implicitly established by him, the special way in which this problem is solved in capitalist society. This is the justification, no longer formal but real, of his method.
It was in virtue of this method, and by the light thrown by the type which he postulated, that Marx was able to discover and define the social origin of profit, i.e. of surplus value. Surplus value in pure economics is a meaningless word, as is evident from the term itself; since a surplus value is an extra value, and thus falls outside the sphere of pure economics. But it rightly has meaning and is no absurdity, as a concept of difference, in comparing one economic society with another, one fact with another, or two hypotheses with one another.
It is also in virtue of the same premise that he was able to arrive at the proposition: that the products of labour in a capitalist society do not sell, unless by exception, for their value, but usually for more or less, and sometimes with great deviations from their value; which is to say, to put it shortly, value does not coincide with price. Suppose, by hypothesis the organisation of production were suddenly changed from a capitalist to a communistic system, we should see at once, not only that alteration in the fortunes of men which appeals so much to popular imagination, but also a more remarkable change: a change in the fortunes of things. A scale of valuation of goods would then fashion itself, very different for the most part, from that which now exists. The way in which Marx proves this proposition, by an analysis of the different components of the capital employed in different industries, i.e. of the proportion of fixed capital (machines, etc.) and of floating capital (wages), need not be explained here in detail.
And, in the same way, i.e. by proving that fixed capital increases continually in comparison with floating capital, Marx tries to establish another law of capitalist society, the law of the tendency of the rate of profits to fall. Technical improvement, which in an abstract economic society would show itself in the decreased labour required to produce the same wealth, shows itself in capitalist society in a gradual decline in the rate of profits.[27] But this section of Volume III of Das Kapital is one of the least developed in this little worked-out posthumous book; and it seems to me to be worth a special critical essay, which I hope to write at another time, not wishing to treat the subject here incidentally.[28]