What are the limits of Marx's ideal construction, and in what do his hypotheses consist? I have said that the concept of labour-value is true for an ideal society, whose only goods consist in the products of labour, and in which there are no class distinctions. Sorel does not think it necessary to eliminate as I have done, the divisions of classes. But, since he writes: 'Marx, like Ricardo, conceived a mechanical society, perfectly automatic, in which competition is always at its maximum efficiency, and exchanges are effected by means of universal information; and he supposed that the various sociological conditions are measurable in intensity, and that the numbers resulting can be connected by mathematical formulæ; hence in such a society, utility, demand, and commerce in commodities are results of the divisions of classes; value will not in consequence be a function of this condition, although it is truly a function of the conditions of production; utility, demand, can only appear in the forms of the function, in the parameters referring to the social divisions.' Since he, I repeat, does not in his hypothesis, make labour-value dependent on the division of classes, it seems to me that this is practically to leave out the fact of the division. And it is perhaps clearer to omit it explicitly.
We should have then: (1) a working economic society without differences of classes, law of labour-value; (2) Social divisions of classes, origin of profit, which, but only in comparison with the preceding type and in so far as the concepts of the former are carried over into the latter, may be defined as surplus-value; (3) Technical distinction between the different industries requiring different combinations of capital (different proportions of fixed and floating capital). Origin of the average rate of profits, which in relation to the preceding type, may be regarded as a change in, and equalisation of, surplus-values; (4) Appropriation of the land by part of a social class. Pure rent; (5) Qualitative differences in land. Differential rent. Which rents, pure and differential, present themselves, but only in comparison with the preceding types, as cut off from the amounts of surplus-value and of profits. Sorel agrees with me that the concept of labour-value, obtained in the manner described, is not only not a law in the same sense as a physical law, but is also not a law in the ethical sense, i.e. one that could be understood as a rule of what ought to exist. It is a law, he says, in an entirely Marxian sense. This I too tried to express when I wrote in my essay: 'It is a law in Marx's conception, but not in economic reality. It is clear that we may conceive the divergencies in relation to a standard as the rebellion of reality in opposition to that standard, to which we have given the dignity of law.'
It seems to me that the jurist Professor Stammler in his book Wirthschaft und Recht nach der materialistischen Geschichtsauffassung,[84] has also made the mistake of interpreting Marx's concept as an ideal law. He is absolutely correct when, in rejecting Kautsky's comparison between the concept of labour-value and the law of gravity—which takes effect fully on a vacuum—whilst the resistance made by air leads to special results, he maintains that this has nothing analogous to a physical law. For him, on the other hand, Marx's law is justified (at least formally) as an attempt at investigation into what in the judgment of economists, granted the capitalist organisation of society, may be objectively accurate. Subjective judgments may differ, but that does not affect what ought to be an objective criterion, to divide the true from the false. But can an objective criterion ever be found within the sphere of economics? Anyone who has rightly understood the principle of hedonistic economics must answer no. And if Stammler brings forward such an idea, it is because in his work he expressly intends to deny the originality of economic material and the independence of economics as a science.[85]
Sorel believes that Marx's method has rendered all the assistance of which it is capable, and cannot aid the study, which it is needful to make, of modern economic conditions. If I am not mistaken he means that the hopes of the Marxians in regard to the fruitfulness of Marx's method are futile, and that the pages which he has written in the history of economics are practically all that can be produced by it. A good part of the third volume, in which Marx shows himself a simple classical economist, and the miserable and scanty output of Marxian economic writings subsequent to Marx, would suggest that Stammler's opinion is justified by the facts.
But, whilst Sorel's book seems to me welcome in the endeavour to understand and define the score of Marx's economic inquiries, I cannot form the same judgment of another attempt made to reform the basis of Marx's system by rejecting his method, and a part of his results. I refer to a recent book by Dr Antonio Graziadei,[86] which has been much discussed during these last months. Graziadei's object is to examine profits independently of the theory of value: a course already indicated by Professor Loria, and the fallacy of which ought to be clearly evident at a glance, without its being necessary to wait for proof from the results of the attempt. A system of economics from which value is omitted, is like logic without the concept, ethics without duty, æsthetics without expression. It is economics ... cut off from its proper sphere. But let us see for a moment how Graziadei manages the working out of his idea.
In the first place he tries to prove that in Marx's own work the theory of profits is in itself independent of that of value. Profits he says, consist in surplus-value, i.e. in the difference between total labour and necessary labour. Hence it can be made to originate in surplus-value without starting from the form value itself. But he himself destroys the argument when further on (p. 10) he objects that if labour is not productive labour it does not give rise to profits. Precisely for that reason—we answer—in order to be in a position to speak of labour which is productive, Marx must start from value, and precisely for that reason, in Marx's thought, the theory of profits and the theory of value are inseparably connected.
As to the construction, on his own account, of a theory of profits which is independent of that of value, Graziadei accomplishes this in a very curious way: viz. by carefully avoiding the words value and labour, and by speaking instead only of product. Profits, according to him, do not arise out of surplus-labour or surplus-value, but out of surplus-product; hence we can, and ought, in theory, to start from the concept of product and not concern ourselves with value, which is a superficial growth of the final stage of the market.
Surplus product! But surplus-product, in so far as it is an economic surplus-product, is value. Certainly, the capitalist who pays wages in kind, and in getting back again the goods advanced by him, also appropriates the other part of the product (surplus-product), can, instead of taking this to market, consume it himself directly (as in Graziadei's hypothesis). But this does not alter the matter at all, because the fact that the product is not taken to market does not mean that it has no value in exchange: since it is true that the capitalist has obtained it by means of an exchange between himself and the labourer; which means that he has always assessed its value in some manner.
And here we are again at the theory of value, from which we have vainly attempted to escape. Moreover, since Graziadei is essentially concerned with the economics of labour, here we are again at Marx's exact concept of labour value. Tamen usque recurrit![87]
Graziadei's book includes also some corrections of Marx's special theories on profits and wages. But I may be allowed to remark that the corrections to be called such ought to refer to the governing principles. New facts do not weaken a theory firmly established on fundamentals; and it is natural that, with a change in the actual conditions, a new casuistry will arise which Marx could not discuss. Whatever forecasts he may have made in his long career as author and politician, which the event has proved fallacious—I do not believe he ever pretended: