Petty, rather than Smith, is entitled to be regarded as the founder of the classical school of political economy, and Cossa justly calls him "one of the most illustrious forerunners of the science of statistical research."[153] He may indeed fairly be said to have been the father of statistical science, and was the first to apply statistics, or "political arithmetick," as he called it, to the elucidation of economic theory. He boasts that "instead of using only comparative and superlative Words, and intellectual Arguments," his method is to speak "in Terms of Number, Weight, or Measure; to use only Arguments of Sense; and to consider only such Causes, as have visible Foundations in Nature; leaving those that depend upon the mutable Minds, Opinions, Appetites, and Passions of particular Men, to the Consideration of others."[154] The celebrated saying of this sagacious thinker that "labor is the father and active principle of wealth; lands are the mother," is more Marxian than Ricardian. Petty divided the population into two classes, the productive and non-productive, and insisted that the value of all things depends upon the labor it costs to produce them. This is, as we shall see, entirely Ricardian, but not Marxian. But these are the ideas Marx is supposed to have borrowed, without acknowledgment, from comparatively obscure followers of Ricardo, in spite of the fact that he gives abundant credit to the earlier writer. It has been asked with ample justification whether these critics of Marx have read either the works of Marx or his predecessors.
Adam Smith, who accepted the foregoing principles laid down by Petty, followed his example of basing his conclusions largely upon observed facts instead of abstractions. It is not the least of Smith's merits that, despite his many digressions, looseness of phraseology, and other admitted defects, his love for the concrete kept his feet upon the solid ground of fact. With his successors, notably Ricardo and John Stuart Mill, it was far otherwise. They made political economy an isolated study of abstract doctrines. Instead of a study of the meaning and relation of facts, it became a cult of abstractions, and the aim of its teachers seemed to be to render the science as little scientific, and as dull, as possible. They set up an abstraction, an "economic man," and created for it a world of economic abstractions. It is impossible to read either Ricardo or John Stuart Mill, but especially the latter, without feeling the artificiality of the superstructures they created, and the justice of Carlyle's description of such political economy as the "dismal science." With a realism greater even than Adam Smith's, and a more logical method than Ricardo or John Stuart Mill, Marx restored the science of political economy to its old fact foundations.
IV
The superior insight of Marx is shown in the very first sentence of his great work. The careful reader at once perceives that the first paragraph of the book strikes a keynote which distinguishes it from all other economic works comparable to it in importance. Marx was a great master of the art of luminous and exact definition, and nowhere is this more strikingly shown than in this opening sentence of "Capital": "The wealth of those societies in which the capitalist mode of production prevails presents itself as an immense accumulation of commodities, its unit being a single commodity."[155] In this simple, lucid sentence the theory of social evolution is clearly implied. The author repudiates, by implication, the idea that it is possible to lay down universal or eternal laws, and limits himself to the exploration of the phenomena appearing in a certain stage of historical development. We are not to have another abstract economic man with a world of abstractions all his own; lone, shipwrecked mariners upon barren islands, imaginary communities nicely adapted for demonstration purposes in college class rooms, and all the other stage properties of the political economists, are to be entirely discarded. Our author does not propose to give us a set of principles by which we shall be able to understand and explain the phenomena of human society at all times and in all places—the Israel of the Mosaic Age, the nomadic life of Arab tribes, Europe in the Middle Ages, and England in the nineteenth century.
In effect, the passage under consideration says: "Political economy is the study of the principles and laws governing the production and distribution of wealth. Because of the fact that in the progress of society different systems of wealth production and exchange, and different concepts of wealth, prevail at different times, and at various places at the same time, we cannot formulate any laws which will apply to all times and all places. We must choose for examination and study a certain form of production, representing a particular stage of historical development, and be careful not to attempt to apply any of its laws to other forms of production, representing other stages of development. We might have chosen to investigate the laws which governed the production of wealth in the ancient Babylonian Empire, or in Mediæval Europe, had we so desired, but we have chosen instead the period in which we live."
This that we call the capitalist epoch has grown out of the geographical discoveries and the mechanical inventions of the past three hundred years or so, especially of the seventeenth and eighteenth centuries. Its chief characteristic, from an economic point of view, is that of production for sale instead of direct use as in earlier stages of social development. Of course, barter and sale are much older than this epoch which we are discussing. In all ages men have exchanged their surplus products for other things more desirable to them, either directly by barter or through some medium of exchange. In the very nature of things, however, such exchange as this must have been incidental to the life of the people engaging in it, and not its principal aim. Under such conditions of society wealth consists in the possession of useful things. The naked savage, so long as he possessed plenty of weapons, and could get an abundance of fish or game, was, from the viewpoint of the society in which he lived, a wealthy man. In other words, the wealth of pre-capitalist society consisted in the possession of use-values, and not of exchange-values. Robinson Crusoe, for whom the possibility of exchange did not exist, was, from this pre-capitalist viewpoint, a very wealthy man.
In our present society, production is carried on primarily for exchange, for sale. The first and essential characteristic feature of wealth in this stage of social development is that it takes the form of accumulated exchange-values, or commodities. Men are accounted rich or poor according to the exchange-values they can command, and not according to the use-values they can command. To use a favorite example, the man who owns a ton of potatoes is far richer in simple use-values than the man whose only possession is a sack of diamonds, but, because in present society a sack of diamonds will exchange for an almost infinite quantity of potatoes, the owner of the diamonds is much wealthier than the owner of the potatoes. The criterion of wealth in capitalist society is exchangeable value as opposed to use-value, the criterion of wealth in primitive society. The unit of wealth is therefore a commodity, and we must begin our investigation with it. If we can analyze the nature of a commodity so that we can understand how and why it is produced, and how and why it is exchanged, we shall be able to understand the principle governing the production and exchange of wealth in this and every other society where similar conditions prevail, where, that is to say, the unit of wealth is a commodity, and wealth consists in an accumulation of commodities.
V
The visit to America, in 1907, of a distinguished English critic of Socialism, Mr. W. H. Mallock, had the effect of thrusting into prominence a common misconception of Marxian Socialism, and it is highly significant that, except in the Socialist press, none of the numerous comments which the series of university lectures delivered by that gentleman occasioned, called attention to the fact that they were based throughout upon a misstatement of the Marxian position. Briefly, Mr. Mallock insisted that Marx believed and taught that all wealth is produced by manual labor, and that, therefore, it ought to belong to the manual workers. In order that there may be no misstatement of our amiable critic's position, it will be best to quote his own words. He says, in Lecture I: "The practical outcome of the scientific economics of Marx is summed up in the formula which is the watchword of popular Socialism. 'All wealth is due to labor; therefore all wealth ought to go to the laborer'—a doctrine in itself not novel, but presented by Marx as the outcome of an elaborate system of economics"[156] (page 6). The careful reader will notice that Mr. Mallock does not profess to give the exact words of Marx, nor refer to any particular passage, but says that the formula quoted by him is the "practical outcome" of the economic system of Marx, "presented by Marx" as such. But to quote again: "Wealth, says Marx, not only ought to be, but actually can be distributed amongst a certain class of persons, namely, the laborers.... Because these laborers comprise in the acts of labor everything that is involved in the production of it" (page 7). Again: " ... Marx makes of his doctrine that labor alone produces all economic wealth" (page 7). Also: " ... that theory of production which the genius of Karl Marx invested with a semblance, at all events, of sober, scientific truth, and which ascribes all wealth to that ordinary manual labor which brings the sweat to the brow of the ordinary laboring man" (page 12).[157] All the foregoing passages are taken from a single lecture, the first of the series. We will take only a few from the others: " ... the doctrine of Marx that all productive effort is absolutely equal in productivity" (Lecture III, page 46); "Marx based the ethics of distribution on what purported to be an analysis of production" (Lecture IV, page 61); " ... Count Tolstoy, ... like Socialists of the school of Marx, declares that ordinary manual labor is the source of all wealth" (Lecture IV, page 76). "One is the attempt of Marx and his school, which represents ordinary manual labor as the sole producer of wealth" (Lecture IV, page 81); " ... the Marxian doctrine ... that manual labor is the sole producer of wealth" (Lecture V, page 115). It would be easy to add many other quotations very similar to these, but it is unnecessary. From the quotations given we can gather Mr. Mallock's conception of what Marx taught regarding the source of wealth.
It will be seen that Mr. Mallock alleges: (1) That Marx believed and taught that all wealth is produced by ordinary manual labor; (2) that he held, as a consequence, that all wealth ought to belong to the manual laborers, thus basing an ethic of distribution upon production; (3) that he taught that all productive effort is absolutely equal in productive value, in other words, that ten hours' work of one kind is economically as valuable as ten hours' of any other kind, so long as the labor is productive.