It was fortunate for mankind and the Prussian state that the workers were ‘wise’ enough not to overthrow civilisation and preferred to submit to the ‘base demands’ of their ‘former masters’. This, then, is the origin of the capitalist wage system, of the wages law as ‘a kind of slavery’ resulting from an abuse of power on the part of the capitalists, and from the precarious position and the meek acquiescence on the part of the proletariat—if we are to believe the highly original explanations of that very Rodbertus whose theories Marx is reputed to have ‘plagiarised’. Let Rodbertus claim ‘priority’ in this particular theory of value without challenge, seeing that English socialists and other social critics had already given far less crude and primitive analyses of the wage-system. The singular point about it all is that Rodbertus’ display of moral indignation about the origin and the economic laws of the wages system does not lead up to the demand for doing away with this abominable injustice, the ‘dualism stupid beyond words’. Far from it! He frequently reassures his fellow-men that he does not really mean anything very serious by roaring—he is no lion fell, only one Snug the joiner. Indeed, an ethical theory of the wages law is necessary only to achieve a further conclusion:
(3) Since the ‘laws of exchange value’ determine the wage, an advance in labour productivity must bring about an ever declining share in the product for the workers. Here we have arrived at the Archimedean fulcrum of Rodbertus’ system. This ‘declining wage rate’ is his most important ‘original’ discovery on which he harps from his first writings on social problems (probably in 1839) until his death, and which he ‘claims’ as his very own. This conception, for all that, was but a simple corollary of Ricardo’s theory of value and is contained implicit in the wages fund theory which dominated bourgeois economics up to the publication of Marx’s Capital. Rodbertus nevertheless believed that this ‘discovery’ made him a kind of Galileo in economics, and he refers to his ‘declining wage rate’ as explaining every evil and contradiction in capitalist economy. Above all, he derives from the declining wage rate the phenomenon of pauperism which, together with the crises, in his opinion constitutes the social question. It would be as well to draw the attention of contemporaries, ‘out for Marx’s blood’, to the fact that it was not Marx but Rodbertus, a man much nearer their own heart, who set up a whole theory of progressive poverty in a very crude form, and that he, unlike Marx, made it the very pivot, not just a symptom, of the entire social problem. Compare for instance his argument in his first Letter on Social Problems to v. Kirchmann on the absolute impoverishment of the working class. The ‘declining wage rate’ must serve in addition to explain the other fundamental phenomena of the social problem—the crises. In this connection Rodbertus tackles the problem of balancing consumption with production, touching upon the whole lot of cognate controversial issues which had already been fought out between the schools of Sismondi and Ricardo.
Rodbertus’ knowledge of crises was of course based upon far more material evidence than that of Sismondi. In his first Letter on Social Problems he already gives a detailed description of the four crises in 1818-19, 1825, 1837-9 and 1847. Since his observations covered a much longer period, Rodbertus could by and large gain a much deeper insight into the essential character of crises than his predecessors. As early as 1850 he formulated the periodical character of the crises which recur at ever shorter intervals and at the same time with ever increasing severity:
‘Time after time, these crises have become more terrible in proportion with the increase in wealth, engulfing an ever greater number of victims. The crisis of 1818-19, although even this caused panic in commerce and inspired misgivings in economics, was of small importance compared to that of 1825-6. The first crisis had made such inroads on the capital assets of England that the most famous economists doubted whether complete recovery could ever be made. Yet it was eclipsed by the crisis of 1836-7. The crises of 1839-40 and 1846-7 wrought even greater havoc than previous ones.’—‘According to recent experiences, however, the crises recur at ever shorter intervals. There was a lapse of 18 years between the first and the third crisis, of 14 years between the second and the fourth, and of only 12 years between the third and the fifth. Already the signs are multiplying that a new disaster is imminent, though no doubt the events of 1848 put off the catastrophe.’[247]
Rodbertus remarks that an extraordinary boom in production and great progress in industrial technique always are the heralds of a crisis. ‘Every one of them [of the crises] followed upon a period of outstanding industrial prosperity.’[248]
From the crises in history he demonstrates that ‘they occur only after a considerable increase of productivity’.[249] Rodbertus opposes what he terms the vulgar view which conceives of crises as mere disturbances in the monetary and credit system, and he criticises the whole of Peel’s currency legislation as an error of judgment, arguing the point in detail in his essay On Commercial Crises and the Mortgage Problem. There he makes the following comment among others: ‘We would therefore deceive ourselves if we were to regard commercial crises merely as crises of the monetary, banking, or credit system. This is only their outer semblance when they first emerge.’[250]
Rodbertus also shows a remarkably acute grasp of the part played by foreign trade in the problem of crises. Just like Sismondi, he states the necessity of expansion for capitalist production, but he simultaneously emphasises the fact that the periodical crises are bound to grow in volume.
‘Foreign trade’, he says, ‘is related to slumps only as charity is related to poverty. They ultimately only enhance one another.’[251] And further: ‘The only possible means of warding off further outbreaks of crises is the application of the two-edged knife of expanding foreign markets. The violent urge towards such expansion is largely no more but a morbid irritation caused by a sickly organ. Since one factor on the home market, productivity, is ever increasing, and the other factor, purchasing power, remains constant for the overwhelming majority of the population, commerce must endeavour to conjure up a similarly unlimited amount of purchasing power on the foreign market.’[252] In this way, the irritation may be soothed to some extent so that at least there will not be a new outbreak of the calamity right away. Every foreign market opened defers the social problem in a like manner. Colonisation of primitive countries would have similar effects: Europe rears a market for herself in places where none had been before. Yet such a medicine would essentially do no more than appease the ill. As soon as the new markets are supplied, the problem will revert to its former state—a conflict between the two factors: limited purchasing power versus unlimited productivity. The new attack would be warded off the small market only to re-appear, in even wider dimensions and with even more violent incidents, on a larger one. And since the earth is finite and the acquisition of new markets must some time come to an end, the time will come when the question can no longer be simply adjourned. Sooner or later, a definite solution will have to be found.’[253]
Rodbertus also recognises the anarchical character of capitalist private enterprise to be conducive to crises, but only as one factor among many, seeing it as the source of a particular type of crises, not as the real cause of crises in general. About the crises at v. Kirchmann’s Ort, e.g., he says: ‘I maintain that a slump of this kind does not occur in real life. The market of to-day is large, there are countless wants and many branches of production, productivity is considerable and the data of commerce are obscure and misleading. The individual entrepreneur does not know how much others are producing, and so it may easily happen that he over-estimates the demand for a certain commodity with which he will then overstock the market.’
Rodbertus says outright that the only remedy for these crises is the ‘complete reversal’ of contemporary property-relations or a planned economy, concentrating all means of production ‘in the hands of a single social authority’. To set troubled minds at rest, however, he is quick to add that he reserves judgment as to whether there can actually be such a state of affairs—‘yet this would be the only possible way to prevent slumps of this kind’. Thus he expressly regards anarchy in the modern mode of production as responsible for only a specific and partial manifestation of crises.