‘Nothing can prevent that every new discovery in applied mechanics should diminish the working population by that much. To this danger it is constantly exposed, and society provides no remedy for it.’[155]
‘A time will come, no doubt, when our descendants will condemn us as barbarians because we have left the working classes without security, just as we already condemn, as they also will, as barbarian the nations who reduced those same classes to slavery.’[156]
Sismondi’s criticism thus goes right to the root of the matter; for him there can be no compromise or evasion which might try to gloss over the dark aspects of capitalist enrichment he exposed, as merely temporary shortcomings of a transition period. He concludes his investigation with the following rejoinder to Say:
‘For seven years I have indicated this malady of the social organism, and for seven years it has continuously increased. I cannot regard such prolonged suffering as the mere frictions which always accompany a change. Going back to the origin of income, I believe to have shown the ills we experience to be the consequence of a flaw in our organisation, to have shown that they are not likely to come to an end.’[157]
The disproportion between capitalist production and the distribution of incomes determined by the former appears to him the source of all evil. This is the point from which he comes to the problem of accumulation with which we are now concerned.
The main thread of his criticism against classical economics is this: capitalist production is encouraged to expand indefinitely without any regard to consumption; consumption, however, is determined by income.
‘All the modern economists, in fact, have allowed that the fortune of the public, being only the aggregation of private fortunes, has its origin, is augmented, distributed and destroyed by the same means as the fortune of each individual. They all know perfectly well, that in a private fortune, the most important fact to consider is the income, and that by the income must be regulated consumption or expenditure, or the capital will be destroyed. But as, in the fortune of the public, the capital of one becomes the income of another, they have been perplexed to decide what was capital, and what income, and they have therefore found it more simple to leave the latter entirely out of their calculations. By neglecting a quality so essential to be determined, Say and Ricardo have arrived at the conclusion, that consumption is an unlimited power, or at least having no limits but those of production, whilst it is in fact limited by income.... They announced that whatever abundance might be produced, it would always find consumers, and they have encouraged the producers to cause that glut in the markets, which at this time occasions the distress of the civilised world; whereas they should have forewarned the producers that they could only reckon on those consumers who possessed income.’[158]
Sismondi thus grounds his views in a theory of income. What is income, and what is capital? He pays the greatest attention to this distinction which he calls ‘the most abstract and difficult question of political economics’. The fourth chapter of his second book is devoted to this problem. As usual, Sismondi starts his investigation with Robinson Crusoe. For such a one, the distinction between capital and income was still ‘confused’; it becomes ‘essential’ only in society. Yet in society, too, this distinction is very difficult, largely on account of the already familiar myth of bourgeois economics, according to which ‘the capital of one becomes the income of another’, and vice versa. Adam Smith was responsible for this confusion which was then elevated to an axiom by Say in justification of mental inertia and superficiality. It was loyally accepted by Sismondi.
‘The nature of capital and of income are always confused by the mind; we see that what is income for one becomes capital for another, and the same object, in passing from hand to hand, successively acquires different denominations; the value which becomes detached from an object that has been consumed, appears as a metaphysical quantity which one expends and the other exchanges, which for one perishes together with the object itself and which for the other renews itself and lasts for the time of circulation.’[159]
After this promising introduction, Sismondi dives right into the difficult problem and declares: all wealth is a product of labour; income is part of wealth, and must therefore have the same origin. However, it is ‘customary’ to recognise three kinds of income, called rent, profit and wage respectively, which spring from the three sources of ‘land, accumulated capital and labour’. As to the first thesis, he is obviously on the wrong tack. As the wealth of a society, i.e. as the aggregate of useful objects, of use-values, wealth is not merely a product of labour but also of nature who both supplies raw materials and provides the means to support human labour. Income, on the other hand, is a concept of value. It indicates the amount to which an individual or individuals can dispose over part of the wealth of society or of the aggregate social product. In view of Sismondi’s insistence that social income is part of social wealth, we might assume him to understand by social income the actual annual fund for consumption. The remaining part of wealth that has not been consumed, then, is the capital of society. Thus we obtain at least a vague outline of the required distinction between capital and income on a social basis. At the very next moment, however, Sismondi accepts the ‘customary’ distinction between three kinds of income, only one of which derives exclusively from ‘accumulated capital’ while in the other two ‘land’ or ‘labour’ are conjoined with capital. The concept of capital thus at once becomes hazy again. However, let us see what Sismondi has to say about the origin of these three kinds of income which betray a rift in the foundations of society. He is right to take a certain development of labour productivity as his point of departure.