Perhaps the most theoretical and extreme statement of the theory that we are considering is found in the writings of P. J. Proudhon.[231] He maintained that the real value of products was determined by labour time, and that all kinds of labour should be regarded as equally effective in the value-creating process, and he advocated therefore equality of wages and salaries. For the realisation of this ideal he drew the outlines of a semi-anarchic social order, of which the main feature was gratuitous public credit. Neither his theories nor his proposals ever obtained any considerable number of adherents.
A milder and better reasoned form of the theory was set forth by Karl J. Rodbertus.[232] Professor Wagner calls him, "the first, the most original, and the boldest representative of scientific Socialism in Germany." Yet, as Menger points out, Rodbertus derived many of his doctrines from Proudhon and the Saint-Simonians. He admitted that in a capitalist society the value of commodities does not always correspond to the labour embodied in them, and that different kinds of labour are productive in different degrees. Therefore, he had recourse to the concept of a normal, or average, day's labour in any group, and would have the various members of the group remunerated with reference to this standard. This was to be brought about by a centralised organisation of industry in which the whole product would ultimately go to labour, and the share of the individual worker would be determined by his contribution of socially necessary labour.
Although Karl Marx adopted and formulated in his own terms the theory that value is determined by labour, he did not thence deduce the conclusion that labour has a right to the whole product.[233] Being a materialist, he consistently rejected conceptions of abstract justice or injustice, rights or wrongs. In opposition to the methods of his predecessors, he endeavoured to discover the historical and positive forces which determined the actual distribution, and to derive therefrom the laws that were necessarily preparing the way for a new social order. While he contended that rent receivers and interest receivers appropriated the surplus value created by labour, he refrained from stigmatising this process as morally wrong. It was merely a necessary element of the capitalist system. To call it unjust was in Marx' view to use language without meaning. As well might one speak of the injustice of a hurricane or an avalanche. Not the preaching of abstract justice, but the inevitable transformation of the capitalist into the collectivist organisation of industry, would enable labour to obtain its full product.
Nevertheless, it is probably true that a majority of the followers of Marx have drawn from his labour theory of value the inference that all the value of the product belongs by a moral right to the labourer. So deeply fixed in the human conscience is the conception of justice, and so general is the conviction of the labourer's right to his product, that most Socialists have not been able to maintain a position of consistent economic materialism. Indeed, Marx himself did not always succeed in evading the influence and the terminology of idealistic conceptions. He frequently thought and spoke of the Socialist régime as not only inevitable but as morally right, and of the capitalist system as morally wrong. Despite his rigid, materialistic theorising, his writings abound in passionate denunciation of existing industrial evils, and in many sorts of "unscientific" ethical judgments.[234]
In so far as the right to the whole product of labour has been based upon the labour theory of value, it may be summarily dismissed from consideration. The value of products is neither created nor adequately measured by labour; it is determined by utility and scarcity. Labour does, indeed, affect value, inasmuch as it increases utility and diminishes scarcity, but it is not the only factor that influences these categories. Natural resources, the desires and the purchasing power of consumers determine value quite as fundamentally as does labour, and cause it to vary out of proportion to the labour expended upon a commodity.
To-day there are probably not many adherents of the right-to-the-whole-product doctrine who attempt to base it upon any theory of value. The majority appeal to the simple and obvious fact that the labourers, together with the active directors of industry, are the only human beings who expend energy in the productive process. The only labour that the capitalist and the landowner perform in return for the interest and rent that they respectively receive, consists in choosing the particular goods in which their money is to be invested. As capitalist and landowner, they do not participate in the turning out of products. They are owners but not operators of the factors of production. In the sense, therefore, of active agents the labourers and the business men are the only producers. Whether land and capital should be called productive, whether the product should be regarded as produced by land and capital as well as by labour and undertaking activity, is mostly a matter of terminology. Inasmuch as they are instrumental in bringing forth the product, land and capital may properly be designated as productive, but not in the same sense as labour and business energy. The former are passive factors and instrumental causes of the product, while the latter are active factors and original causes. Moreover, the former are non-rational entities, while the latter are attributes of human beings.
As we have seen in former chapters, it is impossible to prove that mere ownership of a productive thing, such as a cow, a piece of land, or a machine, necessarily creates a right to either the concrete or the conventional product. The formula, "res fructificat domino," is not a self evident proposition. Nor are there any premises available from which the formula can be logically and necessarily deduced. On the other hand, we cannot prove conclusively that ownership of productive property does not give a right to the product. Whence it follows that the owners of land and capital have at least a presumptive claim to take rent and interest from their possessions. Moreover, those owners of capital who would not have saved money without the hope of interest have a just claim thereto on account of their sacrifices in saving.
Would the State be justified in abolishing rent and interest, and thus enabling labour to obtain the whole product? Conceivably this result might be brought about under the present system of private ownership, or through the substitution of collectivism. Were the change made by the former method land and capital would no longer be sought or have value on account of their annual revenues, but only as receptacles of saving. They would be desired solely as means of accumulating stores of goods which might be exchanged for articles of consumption some time in the future. While we cannot estimate even approximately the decline that would thus occur in the value of land and capital, we may safely assert that it would be considerable. Unless the proprietors received adequate compensation for this loss, they would be compelled to suffer obvious and grave injustice. Any attempt, however, to carry out such a scheme, either with or without compensation, would inevitably fail. Rent might be terminated through the Single Tax, but interest could not be abolished by any mere legal prohibition. Nor does Socialism afford a way out; for, as we have seen in a former chapter, it is an impracticable system. Consequently the theory of the right to the whole product of labour is confronted by the final objection that its realisation would involve greater evils and injustices than those which it seeks to abolish.
Finally, the theory is radically incomplete. It professes to describe the requirements of justice as between the landowners and capitalists on the one side, and the wage earners on the other; but it provides no rule for determining distributive justice as between different classes of labour. In none of its forms does it provide any comprehensive rule or principle to ascertain the difference between the products of different labourers, and to decide how the product belonging to any group of men as a whole should be divided among the individual members. Does the locomotive engineer produce more than the section hand, the bookkeeper more than the salesman, the ditch digger more than the teamster? These and countless similar questions are, from the nature of the productive process, unanswerable. Even if it were ethically acceptable, the doctrine of the right to the whole product is hopelessly inadequate.
As intimated above, the notion that if the labourer receives compensation according to his product he receives just compensation, is one of the most prevalent and fundamental concepts in the controversy about wage justice. Hence we find it in certain theories which reject the doctrine of the right to the whole product. According to these theories, not only the labourer but all the agents of production should be rewarded in proportion to their productive contributions. Instead of the whole product, the worker ought to receive that portion of it which corresponds to his specific productivity, that is, that portion of the product which represents his productive influence as compared with the productive efficacy of land, capital, and business energy.