and Labriola reproaches me for not being able 'to say exactly what I
understand by these words.' And yet I am not in the habit of speaking
or writing when I do not exactly know what I want to say; and here I
believe that I have clearly expressed a thought which I had
exceedingly clearly in my mind. Let us take two types of society: type
A consisting of 100 persons, who, with capital held in common and
equal labour, produce goods which are divided in equal proportions;
type B consisting of 100 persons, 50 of whom own the land and the
means of production, _i.e._ are capitalists, and 50 are shut out from
this ownership, _i.e._ are proletarians and workmen; in the
distribution, the former receive, in proportion to the capital which
they employ, a share in the products of the labour of the latter. It
is evident that in type A there is no place for _surplus value_. But
neither in type B are you justified in giving the name _surplus-value_
to that portion of the products which is swallowed up by the
capitalists, except when _you are comparing_ type B with type A, and
_are considering the former as a contrast to the latter_. If type B is
considered by itself, which is precisely what the pure economists do
and ought to do, the product which the 50 capitalists appropriate,
_i.e._ their profits, is a result of mutual agreement, arising out of
different comparative degrees of utility. Turn in every direction and
in pure economics you will find nothing more. The expropriatory
character of profit can be asserted only when to the second society,
we apply, almost like a chemical reagent, the standard, which, on the
other hand, is characteristic of a type of society founded on human
equality, a type 'which has attained the solidity of a popular
conviction' (Marx). Profit 'is surplus-labour _not paid for_', says
Marx, and it may be so; but _not paid for_ in reference to what? In
existing society it is certainly paid for, by the price which it
actually secures. It is a question then, of determining in what
society _it would have that price_ which in existing society _is
denied it_. And then, indeed, it is a question of _comparison_.
The following of Labriola's assertions is not original, but is
nevertheless quite gratuitous: 'Pure economics is so little
extra-historical, that it has borrowed the data from real history, of
which it makes two absolute postulates: the freedom of labour and the
freedom of competition, pushed to their extreme by hypothesis.' If I
open Pantaleoni's well-known treatise, I read in the very first
paragraph of the _Teoria del valore_, Ferrara's fundamental theory
that: 'value is above all a phenomenon of the _economics of the
individual or isolated person_.' So little do the legal conditions of
society enter into the necessary postulates of pure economics.
After which, Labriola ought not to be horrified if I have written:
'that Marx has taken his celebrated equivalence[77] "between value and
labour from outside the field of pure economics." He will ask me:
from whence then has he taken it? And I reply: _from a special and
definite type of society_, in which the legal organisation and the
pre-supposed conditions of fact make value correspond to the quantity
of labour.
Labriola does not consider justified the comparison which I have
drawn, (metaphor for metaphor), between the commodities which in
Marxian economics are presented as the _crystallisations of labour_
and the goods which in pure economics might well be called _quantities
of possible satisfactions for crystallised wants_. 'Hitherto--he
exclaims--only sorcerers have been able to believe, or to cause it to
be believed, that by desires alone a part of ourselves might be
glutinised into any goods whatsoever.' But what does _glutinise_ mean?
To obtain the commodity _a_ costs us _x_ labour of a given kind, this
is Marx's _congealed labour_. Pure economics, using a more general
formula, states that it costs us that body of wants which we must
leave unsatisfied: this is the form of _congealment_ which pure
economics might supply. There is no question, in the one case, of an
objective reality, as Labriola seems to think, or in the other of an
imagined sorcery; but in both cases it is a matter of the literary use
of imaginative expressions to denote mental attitudes and
elaborations. In this connection Labriola, as if to limit their range,
says that Marx, as an author, belonged to the seventeenth century. May
I be allowed, as a humble student of literature, and the author of
several investigations into the character and origin of seventeenth
century style,[78] to protest. Seventeenth century style consists in
ingenuity, _i.e._ in putting cold intellectuality into an æsthetic
form; hence the forced comparison, the lengthy metaphor, the play on
words and the equivocations. But Marx, on the contrary, misuses poetic
expressions, which give the content of his thought with unrestrained
vigour. We find in him just the opposite of seventeenth century style:
not a lack of connection between the form and the thought, but such a
violent embrace of the former by the latter that the unlucky form
sometimes runs the risk of being left suffocated.[79]
The reader will be tired of these replies to a negative criticism; but
negative criticism is nevertheless all that Labriola offers us. What
is his interpretation of Marx's thought? Or which does he accept, out
of those offered? Here Labriola is silent. It is true that on another
occasion I believed that I discerned in his statement that
'labour-value is the _typical premiss_ in Marx, without which all the
rest would be unthinkable,' an agreement with my thesis. But I see now
that I must have been deceived, and that the words must have another
meaning; which, however, warned by the unlucky attempt already made, I
shall not attempt further to specify. In the meantime Sombart has
_built castles in the air_; Sorel has made _hasty_ or _premature
elaborations_; the present writer _has not understood_ (see p. 224).
Are we then faced by a mystery? Our friend, Labriola, relates (p. 50)
a story of Hegel who is said to have declared that _one only of his
pupils had understood him_. (The anecdote, I may add, is recounted by
Heinrich Heine in a much wittier manner).[80] Is the same thing to be
repeated with regard to Marx's theory of value?
In truth, though without wishing to deny the difficulty of Marx's
thought and of the form in which he expresses it, I think that the
mystery may be at length cleared up. And I say this, not only on
account of my inward conviction of the truth of my own interpretation,
but also on account of the agreement in which I find myself with
several critics, who, almost at the same moment, and by independent
methods, have arrived at results nearly similar to my own.
'Or, se im mostra la mia carta il vero,
Non è lontano a discoprirsi il porto....'[81]
A similar tendency shows itself in what has been written on the
subject by Sombart, in 1894, by Engels in 1895, by myself in 1896, by
Sorel in 1897, by myself more at length in 1897, and again by Sorel in
June of last year (1898).[82] Certainly truth and falsehood cannot be
decided by external signs, the intellect being the only judge of them,
and a judge who allows scope for infinite appeals. But nevertheless it
is natural that under the circumstances pointed out above, a feeling
of hope and confidence must arise that the discussion is about to be
closed, that the problem is at length _ripe for solution_.
II
_Meaning of phrase crisis In Marxianism: Sorel's view of
equivalence of value and labour mostly in agreement with
view put forward above: An attempt to examine profits
independently of theory of value: Is not possible:
Surplus product same as surplus value._
I think it opportune, however, to return to those _elaborations_ of
Sorel, which Labriola summarily judges with such severity, in order
to make some remarks about them, not in refutation but in support, and
to explain a certain point where there may seem to be disagreement
between us, which perhaps has no reason to exist.
But here I may be allowed to make a remark. Labriola is also waging
war with Sorel: his book _Discorrendo_, etc., arising out of a series
of friendly letters to Sorel, which I undertook to edit in Italy, is
published in French with an appendix directed against me, and a
preface directed against Sorel. The ground of the quarrel is
especially in connection with the so-called _crisis in Marxism_.
Now if the _crisis in Marxism_ be understood as the assertion of the
need for a revision and correction of the scientific ideas, of the
historical beliefs, of the material of observed facts, which are
current in Marxian literature, well and good: in such a crisis I too
believe. If it means also a change in the programmes and practical
methods, I neither agree nor disagree, having never concerned myself
with the subject in dispute. If the danger is really existent the
apprehension of which seems to obsess and disturb Labriola, that a
crisis in Marxism of whatever kind, or the commencement of it, may be
neutralised by those to whose interest it is to lead astray and
scatter the labour movement, then _provideant consules_. But whether
there be crisis or no crisis, whether purely scientific or also
practical, whether apprehensions are well-founded or imagined and
exaggerated, all these things have no connection with the questions
raised by me, which relate to the erroneousness of this or that
theoretical or historical statement of Marxism, and the way in which
this or that must be understood in order to be regarded as true. This
is my standpoint and on this ground alone I admit discussion. I may be
mistaken, but this must be proved to me. But if, on the contrary, the
only answer vouchsafed to me is that the crisis in Marxism results
from the international reaction, of which ingenious critics are taking
advantage, I shall be left it is true, somewhat bewildered; but I
shall not on this account be convinced that the theory of value is
true, in the burlesque sense, for example, in which it is expounded by
Stern in his well-known propagandist booklet.
Sorel at first supposes,[83] wittily enough, that Marx had built up
different economic spheres, the first of which (that of labour-value)
is the simplest; the second, including the phenomenon of an average
rate of profit, and the creation of cost of production, is more
complex, and the third, in which is observed the effect of rent of
land, is still more complex. In passing from the simple to the more
complex sphere, we should find again the laws of the preceding one,
modified by the new data introduced, which would have given rise to
new phenomena.
In his second article he abandons this interpretation, being convinced
that Marx's ideal construction does not aim at supplying a complete
explanation of the phenomena of economics by means of the increasing
complexity of his combinations. And, in my opinion, he did well to
abandon it; not only for the excellent reason stated by him, that
Marx's inquiry does not include an entire system of economics, but
also because the process suggested by him does not explain why Marx,
in analysing the economic phenomena of the second or third sphere,
ever _used concepts whose place was only in the first one_. It does
not explain what I have called the _eliptical comparison_, and herein
lies the difficulty of Marx's work, or rather of the literary
statement of his thought. If the correspondence between labour and
value is only realized in the simplified society of the first sphere,
why insist on translating the phenomena of the second _into terms of
the first_? Why give the name transformation of surplus value to what
makes its appearance as the natural economic result of capital which
must have (from its very nature as capital) a profit? Does Marx offer
an explanation connecting ground and consequence, or does he not
rather draw a _parallel between two different phenomena_, by which the
diversities illuminating the origins of society are set in relief?
But Sorel now advances to precisely this conclusion, borrowing a happy
phrase from his first article: that Marx's work is not intended to
explain by means of laws analogous to physical laws, but only to throw
partial and indirect light on economic reality.
The method which Marx employs in his inquiry, says Sorel, is a
_metaphysical instrument_; he makes a _metaphysics of economics_. This
expression may be satisfactory or not, according to the different
meanings given to the word _metaphysics_; but the idea is accurate and
true. Marx builds an ideal construction which helps him to explain the
conditions of labour in capitalist society.
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:
'Sguaiato Giosué ...
Fermare il sole.'[88]
_April, 1899._
FOOTNOTES:
[74] _Socialisme et philosophie_ by ANTONIO LABRIOLA. Paris, Giard et
Brière, 1899, see pp. 207-224. Postscript to the French edition.
[75] See chap. III.
[76] Like an impenitent sinner I shall come back to this distinction,
which is essential for the solid foundation of the principles of
economics, and the evil effects of whose neglect are apparent in the
discourses of economists.
[77] I write _equivalence_ because Marx writes thus, and because for
the present question this other is quite irrelevant: viz. whether the
relation of value can be expressed in the mathematical form of a
relation of equivalence. But, for my part, and I follow the hedonists
in this; I deny entirely that the relation of value is a relation of
equivalence. The proof of this has already been supplied by others,
and there is no occasion to repeat it.
[78] See CROCE _Giambattista Basile e il 'Cunto de li Cunti_,' Naples,
1891; _Ricerche ispano-italiane_, series I, last paragraph, (_Atti
dell' Acc. Pontan_; vol. xxviii, 1898); _I predicatori italiani del
seicento e il gusto spagnuolo_, Naples, Pierro, 1899; _I trattatisti
italiani del 'concettismo' e Baltasar Gracian_ (_Atti dell' Acc.
Pontan_; vol. xxix, 1899).
[79] LABRIOLA--who reproduces Marx's style very well here and there in
his own--writes in his essay on '_Das Kommunistische Manifest_,' 2nd
Ed., p. 79. 'The _Manifesto_ ... does not shed tears over nothing. The
tears of things have already risen on their feet of themselves, like a
spontaneously vengeful force.' The _tears_ which rise _on their feet_
may make the hair rise _on the head_ of a man of moderate taste; but
the expression, although violently imaginative, is not in seventeenth
century style.
[80] Als Hegel auf dem Todbette lag, sagte er:--Nur einer hat mich
verstanden! Aber gleich darauf fügte er verdriesslich hinzu. Und der
hat mich auch nicht verstanden!' (_Heine. Zur Geschichte der Religion
und Philosophie in Deutschland._ Bk. III).
[81] 'Now, if my map shows me true, we are not far from the sight of
our haven....' (Ariosto, _Orlando Furioso_.)
[82] SOMBART, in the _Archiv für soziale Gesetzgebung und Statistik_,
vol. vii., 1894, pp. 555-594; ENGELS in _Neue Zeit_ xiv., vol. i.,
4-11, 37-44; CROCE, _Le teorie storiche del prof. Loria_; SOREL in the
_Journal des économistes_, no. for May 15th, 1897; CROCE, _Per la
interpretazione e la critica di alcuni concetti del marxism_, see in
this volume chap. III.; SOREL, _Nuovi contributi alla teoria
marxistica del valore_, in the _Giornale degli economisti_, June 1898.
[83] In the article referred to, in the _Journal des Economistes_.
[84] See pp. 266-8, 658-9.
[85] See chap. II.
[86] _La produzione capitalistica_, Turin, Bocca, 1899.
[87] Graziadei will allow me to point out to him that it is not the
first time that he has made discoveries that turn out to be equivocal.
Some years ago when carrying on a controversy, in the review _Critica
sociale_, on the theory of the origin of profits in Marx's system,
Graziadei (vol. IV., n. 22, 16th Nov. 1894, p. 348) wrote; 'We can
very readily imagine a society, in which profits exist, not indeed
with surplus-labour, but with _no labour_. If, in fact, for all _the
labour_ now accomplished by man was substituted the work of machines,
these latter, with a relatively small quantity of commodities would
produce an enormously greater quantity. Now, given a capitalist
organisation of society, this technical phenomenon would afford a
basis for a social phenomenon, viz.: that the ruling class being able
to enjoy by itself alone the difference between the product and the
consumption of the machine, would see at their disposal an excess of
products over the consumption of the _labourers_, _i.e._, a
surplus-product, much larger than when the feeble muscular force of
man still co-operated in production.' But here Graziadei neglects to
explain how _labourers_ could ever exist, and _profits_ of labour, in
a hypothetical society, based on _non-labour_, and in which _all the
labour_ actually done by man would be done by machines. What would the
labourers be doing there? The work of Sisyphus or the Danaides? In his
hypothesis the proletariat would either be maintained by the charity
of the ruling class, or would end by rapidly disappearing, destroyed
by starvation. For if he supposed that the machines would produce
automatically a superfluity of goods for the whole of that society,
then he was simply constructing by hypothesis a land of _Cocaigne_.
[88] 'As follower of Joshua ... to stop the sun.'
_CHAPTER V._ A CRITICISM OF THE MARXIAN LAW OF THE FALL IN THE RATE OF
PROFITS
_Interpretation here given assumes acceptance of Marx's main
principles: Necessary decline in rate of profit on
hypothesis of technical improvement: Two successive
stages confused by Marx: More accurately a decline in
amount of profit: Marx assumes that would be an increase
of capital: Would be same capital and increase in rate of
profits: Decline in rate of profits due to other
reasons._
This law is set forth in the third section of the third book
(posthumous) of _Das Kapital_. A few criticisms have been made of it,
which vary from that of Sombart, who says that it is developed _in the
most striking manner_ (in glänzendster Weise), to that of Loria, who
defines it as 'a metaphysical pistol shot (_sic_) from beyond the
Rhine,' and thinks that he refutes it by an objection which is in fact
quite inappropriate. Others have thought the law certainly true, but
that it explained only partially the fact of the decline in the rate
of profits and required to be combined with other laws already known
to classical economics. But most of those who have studied Marx's
economic theories have not examined it at all; his opponents (like
Böhm Bawerk) reject it by implication, when they reject Marx's
fundamental principles; the Marxians welcome it, German fashion,
humbly and submissively, without discussion, with that lack of freedom
and intellectual originality which is noticeable in all their
writings.
The examination of it attempted here, rests on the same basis as
Marx's theories, _i.e._ it is made from the standpoint of those who
accept the essentials of these theories, and hence the premiss of
_labour-value_, the distinction between _fixed_ and _floating_
capital, the view of profits as arising from _surplus-value_, and of
the _average rate_ of profits as arising from the equalisation, owing
to competition, of the various rates of surplus-value. It is true that
I accept all these things _in a certain sense_, which is not the sense
of the ordinary Marxian, inasmuch as they are not looked upon as _laws
actually working in the economic world_, but as _the results of
comparative investigations into different possible forms of economic
society_. But such a reservation, which relates to a question
discussed by me at length elsewhere,[89] has practically no effect on
the present study, whose results would be almost the same, even if
these theories of Marx were interpreted in the sense which I consider
erroneous. The object here is no longer to determine and define
accurately Marx's fundamental concepts, but to see whether, from these
concepts, even when interpreted in the current manner, it is ever
possible in any way to deduce the _law of the fall in the rate of
profits_. This task I think impossible.
The law was derived by Marx from the study of the effects of technical
improvement. Marx states that technical improvement increases the
amount and changes the form of the total capital, increasing the
proportion of fixed as compared with floating capital, so that by this
means the rate of profit is decreased; the latter arises, as is
well-known, out of the surplus-value, the product of the floating
capital divided by the total capital. He illustrates the matter thus.
Some technical improvement occurs; new machines are made, which
formerly did not exist. The capital employed in production has been
hitherto, we will suppose, a total of 1,000, divided into 500 fixed
and 500 floating, and employing 100 labourers: the surplus-value =
500, _i.e._ the rate of it is 100 per cent.; and hence the rate of
profit is 500/1000 = 50 per cent. In consequence of the technical
improvement, and of the construction of new machines, the 100
labourers who are maintained by the variable capital of 500, continue
still to be employed in production; but, in order that this may be
possible, it is necessary to use a larger fixed capital, which we may
suppose 200 larger than before. Hence, as the result of the technical
improvement, there will now be a total capital of 1,200, _i.e._ 700
fixed and 500 floating; and the rate of surplus-value remaining
unchanged at 100 per cent., the rate of profit will be 500/1200 =
about 41 per cent., _i.e._ will have decreased from 50 per cent. to 41
per cent. Hence the necessary decline in the rate of profit on the
_hypothesis_ of technical improvement. But this _hypothesis_ is an
actual everyday _fact_ in modern capitalist society. Hence, the
_actual_ decline of the average rate of profits in modern capitalist
society. But this law is more or less counteracted by other facts,
which act in a contrary sense more or less transitorily. Thus the fall
is only _a tendency_.
In order that our study may be clear, it is above all necessary to
distinguish the two groups of facts, or the two stages in the same
capitalist society which Marx confused and embraced in a single
somewhat obscure view.
The first stage is marked by the fact, pure and simple, of a technical
improvement. Now technical improvement, among its logical, or what is
the same thing, its necessary effects, in no way includes that of an
increase in the amount of total capital employed, nor that of leaving
the quantity of total capital unchanged. It has rather exactly the
opposite as its necessary and immediate effect: _i.e._ that of
_limiting the capital employed_. It is unnecessary to warn the reader
that we are here treating of economic science and that increase and
decrease refer always to _economic values_. In its simplest form,
supposing the quantity of objects produced to be constant (200 shoes
are required, and there is no reason to increase the production),
technical progress will consist, purely and simply, in a saving of
social expense: the same production at less expense. And since all
cost, in Marx's hypothesis resolves itself into social labour, there
will be the same production with less social labour. If it were not
so, it would not be worth while to introduce this technical
innovation; there would be, economically, no improvement but either
the _status quo ante_ or a regression. We must not take into account
the other effects which would arise to increase production, greater
consumption, increase of population, etc: additional and extraneous
facts which are not considered here, since we are concerned with the
single fact of technical improvement, all other conditions remaining
unchanged. And, in such a case, we cannot represent technical
improvement with the increasing series of total capital which Marx
employs, viz. 150, 200, 300, 400, 500, etc., but with this decreasing
one, 150, 140, 130, 120, 110, etc. And to keep to the illustration
used above, if we suppose that the given technical improvement has
caused a decrease of 1/10 in the total social labour required, we
shall have in place of the original capital of 1,000 a capital of 900,
no longer made up of 500 fixed and 500 floating, but of 450 fixed and
450 floating. The decrease must affect proportionally every part of
the capital since all of it is, in the final analysis, a product of
labour. Of the 100 original labourers, 1/10, _i.e._ 10 of them will
remain unemployed: a fraction of the original capital will remain
unemployed; the quantity (or utility) of the goods produced will
remain the same.[90]
When the description of the facts is thus corrected, there is no doubt
that the smaller total capital employed, supposing on the one hand,
the rate of surplus-value to remain unchanged, and, on the other, 10
of the original labourers to be working no longer, would absorb an
amount of surplus-value of 450. But the rate of profit would not on
this account be changed; or rather, just for this reason the rate of
profit could not be altered and would be expressed by 450/900 (as at
first 500/1000), _i.e._ it would be as at first, 50 per cent.
This simplest case does not then give us Marx's law, but this other
law; 'Technical improvement, supposing all the other conditions remain
unchanged, causes a decrease in the _amount_ (not the _rate_) of
surplus-value and of profits.' This law assumes that the 1/10 of the
labourers left unemployed become entirely superfluous. These ten
labourers are henceforth to be a dead weight supported by the charity
of others, or to die of starvation, or to emigrate--to a new world.
Let them be left to their fate. Social production will remain at its
former level, thanks to the technical improvement, but accomplished
without their help. This is the hypothesis; but given this hypothesis,
of what importance is the law? To see this clearly it will suffice to
push the hypothesis yet further, as we are entitled to do, and suppose
that the technical improvements continuing, the employment gradually
becomes superfluous, not only of 1/10, but of 1/4, 1/3, 1/2 of the
labourers, _i.e._ that the employment of labourers tends to become =
0. In this case capitalist society as such would come entirely to an
end, since the utility of labour, on which it is based, would come to
an end. Where there is nothing the King loses his rights; and where
labour has no utility the capitalist loses his. The ex-capitalists
would have no more workmen to impoverish, but would be changed into
the owners of automatic fountains of wealth; like those fortunate
mortals in the fable enriched by charmed knives, by wonderful lamps,
by gardens producing with instantaneous and spontaneous energy all
God's gifts. In other words the law here resolves itself into a
_truism_.
But Marx did not think of this _truism_. He wished to determine
exactly the organic law of the variations in the rate of profits. In
fact--as is seen in the illustration given--he does not at all suppose
that the energy of labour may become superfluous; but rather that the
labourers will find fresh employment with an increase in the original
fixed capital. Given technical improvement and production also will be
increased; this is the second stage which he considers. The 100
labourers are still all working, the fixed capital with which they
work must be increased from 500 to 700, and the total has hence become
1200. The law which he deduces, of the fall in the rate of profits
(in the illustration, from 50 per cent. to 41 per cent.) is not a
_truism_; on the contrary it presents itself with all the importance
and originality of a scientific discovery. All den ends on seeing
whether in the scientific discovery we have indeed--the truth.
The crux of Marx's proof lies in the statement; that the labourers who
would have had to remain unemployed, find on the contrary employment,
but with a capital _increased by so much_ (= 200) over the original.
Is this statement correct? On what does Marx base it?
To this fundamental proposition my _criticism_ refers, itself equally
fundamental. If it is admitted it amounts to _a most complete denial
of the truth of the Marxian law_. Nevertheless I state my idea in the
form of a _criticism_ and _doubtfully_, because, in dealing with a
thinker of Marx's rank, it is necessary to proceed cautiously, and to
remember (which I do not forget) that several times errors ascribed to
him have been explained as mistakes of his opponents.
For what reason, I ask myself, do the ten un-occupied labourers, in
order to be employed afresh, require a constant capital larger than
the original?
The technical improvement has not diminished the natural _utility_ of
the production (also in our hypothesis it has not increased it either,
but has left it unchanged); but it has only diminished its _value_.
There will be then, with the improved technical organisation, raw
materials, tools, clothing, foodstuffs, etc., of the same total
natural utility as at first. The economic value of all these products
is diminished, because in them (to employ the metaphor chosen by
Marx), is congealed a smaller quantity of labour, _i.e._ less by the
work of ten labourers. But from the point of view of power to satisfy
wants, the raw materials, the tools, the clothing, the means of
sustenance, etc., remain, in virtue of the technical improvement, of
the same rank as at first. If then capitalists and workpeople have
remained as temperate as before, and their standard of life has not
risen (and this is in the hypothesis), the production will offer as at
first means of employment and means of sustenance for the ten
labourers left unoccupied. By re-employing them, _i.e._ maintaining
them with the original means of subsistence, and setting them to work
on the original raw materials or their new products, the capitalists
will increase their production, or--what is the same thing--will
improve its quality. But since we know that, economically, the value
of that capital has _diminished_, it will come about that a capital
_economically smaller_ will absorb the same energy of labour as
formerly, _i.e._ _the same amount of profits_; and an equal amount of
profits with a smaller total capital means an _increased rate of
profits_. Exactly the opposite to what Marx thought it possible to
prove.
Turning to our illustration, the ten labourers will find employment
with a capital which, like the utility, has remained the same, but
economically has decreased to 900. This means that the rate of
profits has increased from 500/1000 to 500/900, _i.e._ from 50 per
cent. to about 55 per cent. As to the rate of surplus-value, since the
entire value of the total capital is reduced, it must no longer be
calculated, as before the technical improvement, as 500/500, nor as in
the first stage we considered (in which the technical improvement had
made a portion of the labour entirely superfluous) as 450/450, but as
500/450, _i.e._ it will no longer be 100 per cent., but will have
risen to about 111 per cent.
To this criticism of mine I have found no answer, either explicit or
implicit, in Marx's work. Only in one passage, where he speaks of the
counteracting causes, and in particular of surplus population (Chap,
XIV., § iv.), he hints at the case where labour power may be
re-employed with a minimum capital. It may be said that here Marx
passed close to the difficulty, without striking upon it, _i.e._
without becoming aware of its importance. And, if he had struck on it,
I doubt whether he would have overcome it and passed on; I think
rather that his theory would have gone to pieces.
I foresee that it may be said: you have assumed that, owing to the
technical improvement, not only would a number of labourers remain
unemployed, but also a fraction of the original total capital, _i.e._
of means of production and means of subsistence; and when the
labourers are re-employed, it is true that during the new cycle of
production, other fractions of unoccupied capital will not unite with
the original fractions, but precisely for this reason the quantity of
production which will result will be increased, and in the next cycle
of production a still greater fraction of unoccupied capital will add
itself, unless the ten labourers do not continue to be re-employed, in
which case the un-occupied fraction will be smaller, but the increase
will become constant. Now all these means of production and of
sustenance will not be consumed (or will be partially consumed and
partially saved), by the capitalist class, and hence there will be an
increasing accumulation. The quantities of goods saved, owing to the
impulsion of economic interest will not remain un-used in warehouses
or strong boxes, but will be thrown on the market as capital seeking
employment. This will increase the rate of wages, and hence will have
a depressing effect on the rate of profits. Very good, but in such a
case we are outside the Marxian law. The _factor_ here considered, is
no longer technical improvement taken by itself, but _saving_, which
may be, as stated, encouraged by technical progress, but cannot be
_inferred_ from it. For it is true that, if we suppose the case of
extravagant capitalists, saving, in spite of technical improvement
will not take place. And as technical improvement encourages saving,
so the latter, in its turn, by increasing wages, encourages the
increase of population, and hence the reduction of wages, and once
again a rise in the rate of profits. But, when saving and the increase
of population come upon the scene we are already within the sphere of
the law of demand and supply, _i.e._ of ordinary, accredited
economics, which Marx despised as vulgar, and out of dislike of which
he devised his law of the fall in the rate of profits yielded by the
above combination of capital owing to the effect of technical
improvement. I, indeed, believe that only the ordinary law of demand
and supply can explain the variations in the rate of profit: but to
return to it is not indeed to defend Marx's thesis, but rather to
ratify its condemnation.
However it is regarded, this thesis seems to me indefensible; and even
more indefensible if, leaving aside for a moment logical trains of
reasoning and arithmetical calculations, we look at it with the clear
intuition of common sense. See here--to follow the strict hypothesis
set forth by Marx--on one side a capitalist class, and on the other a
proletarian class. What effect does technical improvement have? It
increases the wealth in the hands of the capitalist class. Is it not
intuitively evident that, as a result of technical improvement, the
capitalists can, by anticipating commodities _whose value is
continually decreasing_, obtain _the same services_ which they
obtained at first from the proletariat? And that hence the relation
between value of services and value of capital will change in favour
of the former, _i.e._ that the rate of profits will increase? When
commodities (capital) are anticipated, which formerly were reproduced
by five hours of labour and now are reproduced by four, the workman
will continue to work ten hours. Formerly with five there were ten;
now with four there is similarly ten. The sponge costs less, but the
quantity of water with which it is saturated is the same. How could
Marx suppose that after technical improvement, the expenses of the
capitalists would always increase, so that proportionally profits
would be in a state of perpetual decline, and would end by making, in
face of the total costs, a most wretched figure?
Marx's mistake has been that he has inadvertently attributed a
_greater value_ to the fixed capital, which after the technical
improvement is worked by the same labourers as before. Certainly
anyone who looks at a society in two successive stages of technical
development, will find in the second stage a greater number of
machines and of tools of every kind. _This is a question of
statistics, not of economics._ Capital (and Marx appears to have
neglected this point for the moment) is not estimated by its physical
extension, but by its economic value. And economically that capital
(supposing all the other conditions remain constant) _must be worth
less_; otherwise no technical improvement would have taken place.
An external circumstance which might serve to explain Marx's error is
the fact that the third book of _Das Kapital_ is a posthumous work,
some parts of which are hardly sketched out, and amongst these that of
the _law of the rate of profits_, which, moreover, does not relate to
the _establishment of principles_, but, being a consequence and an
application or these, was perhaps not worked out to the same extent
as the fundamental or central part of the theory.[91] It is probable
that the author, if he could have gone over his rough draft again,
would have materially modified it or entirely discarded it. But
perhaps some internal reason could also be found for this strange
mistake, in that Marx always misused the comparative method without
disclosing any distinct knowledge of his procedure. And it might be
that, as already in his earlier investigations, he perpetually
transferred labour-value from a hypothetical society to the actual
capitalist society, so in this new problem he has been led to estimate
the worth of the technical capital in a more advanced society at the
rate of value of that in a less advanced society. In this impossible
attempt his method has here broken in his hands.
As we have disputed the actual basis of the Marxian law, it seems
indeed superfluous to follow out its further developments, which are
advanced in a form worked out with but little care. It is enough to
remark that in these developments, as in general, throughout _Das
Kapital_, there is a continuous medley of theoretical deductions and
historical descriptions, of logical and of material connections. The
defect, however, becomes in this instance an advantage, because many
of the observations made by Marx, understood as historical
descriptions of what usually happens in modern society, will be found
to be true and can be saved from the shipwreck, as regards the theory
of the law, with which by chance they are feebly connected. And it
would even be possible to make such an investigation in respect to
that very portion which we have disputed, _i.e._ to enquire what
_facts_, actually observed by him, could have impelled Marx to
construct his law, _i.e._ to give of these facts an explanation which
is theoretically unjustifiable.
Marx attributed the greatest importance to the discovery of the _law
of the fall in the rate of profits_. Herein lay for him 'the mystery
over which all economists from Adam Smith onwards have toiled'; and in
the different attempts to solve the problem he saw the explanation of
the divergence between the various schools of economists. Ricardo's
bewilderment in face of the phenomenon of the progressive decrease in
the rate of profits seemed to him fresh evidence of the earnestness of
mind of that writer, who discerned the vital importance of the problem
for capitalist society. That the solution had not been found before
his, Marx's, time, appeared to him easily explicable, when it was
remembered that until then political economy had sought gropingly for
the distinction between fixed and floating capital without succeeding
in formulating it, and had not been able to explain surplus-value in
distinction from profits, nor profit itself in its purity,
independently of the separate fractions of it in competition amongst
themselves; and that, in the end, it had been unable to analyse
completely the difference in the organic composition of capital, and
much less, the formation of the general rate of profits.
His explanation being now rejected, a double problem presents itself.
The first question relates to fact. It is needful to ask: does the
fact spoken of actually exist, and how does it exist? Has a gradual
decline in the rate of profits been ascertained? And in which
countries, and in what circumstances? The second question relates to
the cause: since, whilst we have seen that there could only be one
economic reason for the phenomenon, (the law of demand and supply),
there may be several historical causes, and these may vary in
different cases. The decline in the rate of profits may happen owing
to a nominal increase in wages due to an increase in the rent of land,
or it may happen owing to a real increase in wages due to stronger
organisation among the workpeople, or it may happen owing to an
increase, also real, in wages resulting from saving and from growing
accumulations, which increase the capital in search of employment.
This investigation must be made without prejudices, whether optimistic
or pessimistic, apologetic or controversial; and economists have
sinned but too often in all these ways. The listeners have seized upon
the result of limited and qualified investigations, now in order to
sing a hymn to the spontaneous force of progress, which will gradually
cause the disappearance of capitalists or reduce interest to 1/2 per
cent.; now in order to terrify their audience by a spectacle no less
fantastic, of landed proprietors as the sole owners of all the goods
of society![92]
May 1899.
FOOTNOTES:
[89] See chaps. III. and IV.
[90] We here suppose a series of productive periods already rapidly
passed through, which may suffice to replace the whole of the total
capital by the new technical processes. It is evident however, that as
fixed capital is replaced in successive portions, in a first stage,
goods are used as capital, whose cost of _reproduction_ no longer
corresponds to their original cost of _production_, _i.e._ whose
actual social value no longer corresponds to the original one. But to
consider the separate stages would here cause a useless complication.
[91] The explanation of the way in which the average rate of profit
arises belongs to the fundamental part of the third book of _Das
Kapital_, and Marx must have thought it out together with the
fundamental chapters in the first book.
[92] This is the case contemplated by Ricardo in the celebrated § 44
of chapter vi, _On Profits_: Marx appears to attach little importance
to this case, having complete faith in the continued technical
progress of agriculture, not to speak of other counteracting causes.
It is necessary to add that Marx in conformity with his law, maintains
that the rent of land also has a tendency to fall, although it may
increase its total amount, or its proportion in reference to
industrial profits: see vol. iii, 223-4.
_CHAPTER VI._ ON THE ECONOMIC PRINCIPLE
TWO LETTERS TO PROFESSOR V. PARETO
I
_Need for more comprehensive definition of the economic
principle: Reasons why the mechanical conception
erroneous, economic fact capable of appraisement: Cannot
be scale of values for particular action: Economic datum
a fact of human activity: Distinction and connection
between pleasure and choice: Economic datum a fact of
will: Knowledge a necessary presupposition of will:
Distinction between technical and economic: Analogy of
logic and æsthetic: Complete definition of economic
datum._
_Esteemed Friend_,
On reading the little paper, which you were courteous enough to send
me, on how to state the problem of pure economics,[93] I at once felt
a desire to discuss the subject with you. Other occupations have
obliged me to defer the satisfaction of this wish until now; and this
has been fortunate. The extracts from your new and still unpublished
treatise on pure economics, which came out in the March number of this
Review,[94] have obliged me to abandon in part the scheme of thought
which I had in mind; for I saw from them that you had modified some of
those points in your thesis, which seemed to me most open to dispute.
I have on several occasions heard something like a feeling of distaste
expressed for the endless discussions about value and the economic
principle which absorb the energies of economic science. It is said
that if this splitting of hairs over the scholastic accuracy of its
principle were abandoned, the science might throw light on historical
and practical questions which concern the welfare of human society.
Apparently you have not allowed yourself to be alarmed by the
threatened distaste of readers; nor indeed am I. Can we silence the
doubts which disturb us? Could we have assurance whilst silencing
these doubts that we were not endangering just those _practical_
issues which the majority have at heart? Issues which we ourselves
have at heart since we are certainly not able, like the monks of old,
to free ourselves from interest in _the affairs of the age_. May not
science be, as Leibniz said, _quo magis speculativa, magis practica_?
We must then go our way, and endeavour to satisfy our doubts, with all
the caution and self-criticism of which we are capable; since they
cannot be suppressed. On the other hand we should endeavour also not
to offer our solutions to the public except when our knowledge,--wide
if it may be so (yet necessarily imperfect)--of the literature on the
subject, gives us some confidence that we are not repeating things
already stated. Unless indeed, other considerations make us think it
opportune to repeat and to impress things which have been stated, but
without sufficient emphasis.
The new school of economic thought, of which you are such a worthy
representative, has a merit of no small significance. It has reacted
against the anti-scientific tendencies of the historical and empirical
schools, and has restored the concept of a science of _pure_
economics. This means indeed nothing more than a science which is
science; the word pure, unless tautologous, is an explanation added
for those who are ignorant or unmindful of what a science is.
Economics is neither history nor discussion of practical issues: it is
a science possessing its own principle, which is indeed called the
_economic principle_.
But, as I had occasion to remark at another time,[95] I do not
consider that this principle whose fundamental character is asserted,
has hitherto been grasped in its individuality, nor conveniently
defined in relation to other groups of facts, that is to the
principles of other sciences. Of those conceptions of it which seem to
me _erroneous_, the chief ones can be reduced to four which I will
call the _mechanical_, the _hedonistic_, the _technological_ and the
_egoistic_.
You have now rejected the first two, because you think that mechanical
and hedonistic considerations belong to metaphysics and psychology.
But I acknowledge that I am dissatisfied with your method of arriving
at this praiseworthy rejection.
You no longer say, indeed, as in your previous essay: 'L'économie pure
n'est pas seulement semblable à la méchanique: c'est, à proprement
parler, un genre de méchanique.' But you still say that 'Pure
economics employs the same methods as rational mechanics, and has many
points of contact with this science.' Although you do not pause over
the mechanical considerations, it is not from a clear conviction that
a datum in economics, as such, is quite different from a datum in
mechanics; but merely because it seems to you _convenient_ to omit
such considerations, of which you do not deny, but rather admit, the
possibility.
Now I on the contrary, say decisively that the data of economics is
not that of mechanics, or that there is no transition from the
mechanical aspect of a fact to the economic aspect; and that the very
possibility of the mechanical point of view is excluded, not as a
thing which may or may not be abstracted from, but as a contradiction
in terms, which it is needful to shun.
Do you wish for the simplest and clearest proof of the non-mechanical
nature of the economic principle? Note, then, that in the data of
economics a quality appears which is on the contrary repugnant to that
of mechanics. _To an economic fact words can be applied which express
approval or disapproval._ Man behaves economically _well_ or _ill_,
with _gain_ or _loss_, _suitably_ or _unsuitably_: he behaves, in
short, _economically_ or _uneconomically_. A fact in economics is,
therefore, capable of _appraisement_ (positive or negative); whilst a
fact in mechanics is a mere fact, to which praise or blame can only be
attached metaphorically.
It seems to me that on this point we ought easily to be agreed. To
ascertain it, it is sufficient to appeal to internal observation. This
shows us the fundamental distinction between the mechanical and the
teleological, between mere fact and value. If I am not mistaken, you
assign to metaphysics the problem of reducing the teleological to the
mechanical, value to mere fact. But observe that metaphysics cannot
get rid of the distinction; and will only labour, with greater or less
good luck, at its old business of _reconciling_ opposites, or of
_deriving two contraries from one unity_.
I foresee what may be advanced against this assertion of the
non-mechanical nature of the economic principle. It may be said: What
is not mechanical, is not measurable; and economic values, on the
contrary, _are measured_. Although hitherto the unit of measurement
has not been found, it is yet a fact that we distinguish very readily
_larger_ and _smaller_, _greater_ and least _values_ and construct
scales of values. This suffices to establish the _measurability_ and
hence the essentially mechanical nature of economic value. Look at the
_economic man_, who has before him a series of possible actions _a_,
_b_, _c_, _d_, _e_, _f_, ...; which have for him a decreasing value,
indicated by the numbers 10, 9, 8, 7, 6 ... just because he _measures_
value, he decides on the action a=10, and not on c=8 or f=6.
And there is no fault in the deduction granted the existence of the
_scale of values_, which we have just illustrated by an example.
_Granted the existence_: but, supposing this to be an _illusion_ of
ours? If the man in the example, instead of being the _homo
oeconomicus_ were the _homo utopicus_ or _heterocosmicus_, not to be
found even in imaginative constructions?
This is precisely my opinion. The supposed _scale of values_ is an
absurdity. When the _homo oeconomicus_ in the given example, selects
_a_, all the other actions (_b_, _c_, _d_, _e_, _f_, ...) are not for
him _values smaller than a_; they are merely _non-a_; they are what he
rejects; they are _non-values_.
If then the _homo oeconomicus_ could not have _a_, he would be acting
_under different conditions_: under conditions without _a_. Change the
conditions and the economic action--as is well known--changes also.
And let us suppose that the conditions are such that, for the
individual acting, _b_ represents the action selected by him; and _c_,
_d_, _e_, _f_, ... those which he omits to do, and which are all
_non-b_, _i.e._ have no value.
If the conditions change again and it is supposed that the individual
decides on _c_, and then on _d_, and then on _e_, and so on. These
different economic actions, each _arising under particular
conditions_, are _incommensurable_ amongst themselves. They are
_different_; but each is perfectly adapted to the given conditions,
and can only be judged _in reference to these conditions_.
But then what are these numbers, 10, 9, 8, 7, 6 ...? They are
_symbols_, symbols of what? What is the _reality_ beneath the
numerical symbol? The reality is the _alteration in the actual
conditions_; and these numbers show a succession of changes: neither
more nor less than is indicated by the alphabetic series, for which
they are substituted.
The absurdity involved in the notion of greater or smaller values is,
in short, the assumption that an individual may be _at the same
moment_ under different conditions. The _homo oeconomicus_ is not at
the same moment in _a_, _b_, _c_, _d_, _e_, _f_ ... but when he is in
_b_, he is no longer in _a_; when he is in _c_ he is no longer in _b_.
He has before him only one action, approved by him; this action rules
out all the others which are infinite, and which for him are only
_actions not preferred_ (non-values).
Certainly physical objects form part of the data of economics; and
these, just because they are _physical_, are _measurable_. But
economics does not consider physical things and objects, but
_actions_. The physical object is merely the brute matter of an
economic act: in measuring it we remain in the physical world, we do
not pass over to that of economics, or else, when measured, the
economic fact has become volatile. You say that 'political economy
only concerns itself with choices, which fall on things that are
variable in quantity and capable of measurement'; but pardon me, dear
friend, you would be much perplexed if you had to justify this wholly
arbitrary limitation; and if you had to show that the attribute
measurabilility influences in any way the attribute of belonging to
economics.
I think that I have explained, shortly, but adequately for a wise man
like yourself, the reasons why the mechanical conception of the
economic principle is untenable. If calculations and measurements come
into problems that are called economic they do so just in so far as
these are not problems in _pure_ economics.
This non-mechanical datum, which is an economic datum, you call
_choice_. And this is all right. But _to choose_ means to _choose
consciously_. A choice made unconsciously, is either not a choice or
not unconscious. You speak of the _unconscious actions_ of man; but
these cannot be the _actions_ of the man _in so far as he is man_ but
movements of man _in so far as he is also animal_. They are
_instinctive_ movements; and instinct is not choice _except
metaphorically_. Hence the examples you bring forward of dogs, of
cats, of sparrows, of rats, and of asses from _Buridano_, are not
facts of _choice_; and hence are not economic facts. You consider
animal economics as an unfruitful science, which exhausts itself in
descriptions. Look more closely and you will see that this science
does not exist. An economics of the animals, understood in the sense
of the naturalists, has not been written, not because it is not worth
while, but because _it is impossible to write it_. Whence could it be
obtained unless from books such as the _Roman de Renart_ and the
_Animali parlanti_?
This analysis ought to lead us to conceive of an economic datum as an
act of man; _i.e._ as a _fact of human activity_.
And from this recognition is inferred in its turn the true criticism
of the _hedonistic_ conception of the economic principle. You say that
'the equations of pure economics express merely the fact of a choice,
and can be drawn up independently of the ideas of pleasure and pain,'
but you admit at the same time that the fact of the _choice_ 'can be
expressed equally well as a fact of _pleasure_.'
It is true that every case of economic choice is at the same time, a
case of _feeling_: of agreeable feeling if the economic choice is
rightly made, of disagreeable feeling, if it is ill made. Man's
activity develops itself in the human mind, not under a pneumatic
bell, and an activity which develops rightly, brings as its reflex, a
feeling of pleasure, that which develops badly, one of displeasure.
What is economically useful, is, at the same time _pleasurable_.
But this judgment cannot be converted. The pleasurable is not always
economically useful. The mistake in the hedonist theory consists in
making this conversion. Pleasure may appear unaccompanied by man's
activity, or may be accompanied by a human activity which is not
economic. Herein lies the fundamental distinction between _pleasure_
and _choice_. A choice, is in the concrete, inseparable from the
feeling of pleasure and displeasure; but this feeling is separable
from _choice_, and may in fact exist independently of it.
If psychology be understood (as it is usually understood) as the
science of psychical mechanism, economics is not a psychological
science; this Herr von Ehrenfels fails to grasp. I do not know whether
you have read the two volumes hitherto published on the _System der
Werttheorie_.[96] After devoting some hundred pages to psychological
disquisitions--which I do not mean to discuss here--he wishes,
finally, to prove that his definitions of value remain sound, from
whatever theory of psychology you start. He does this as he asserts (§
87), not because he is doubtful of himself, but to safeguard his
economic conclusions, which are so important for the practical
problems of life, from unjustified attacks based on the standpoints of
schools of psychology other than his own, the method of the barrister,
who composes an apparent conclusion, and makes several demands that
are connected therewith _subordinately_. It is true that there is no
need for economists to spend their time on details of theoretical
psychology; so true that Professor Ehrenfels might spare us his: but
is it not true that economics remains the same _whatever psychological
theory is accepted_. The unity of science means that a modification
at one point is never without some reaction on the others; and the
reaction is greatest when it is a question of the way of conceiving
two facts, distinct but inseparable, like the economic and the
psychical fact.
An economic datum is not then a hedonistic datum, nor, in general, a
mechanical datum. But as the fact of man's _activity_, it still
remains to determine whether it is a fact of _knowledge_ or of _will_:
whether it is theoretical or practical.
You, who conceive it as choice, can have no doubt that it is a fact of
practical activity, _i.e._ of _will_. This is also my own conclusion.
_To choose_ something can only mean _to will it_.
But you somewhat obscure the conclusion now indicated when you speak
of _logical_ and _illogical_ actions, and place actions properly
economic amongst the former. Logical and illogical bring us back to
theoretical activity. A _logical_ or _illogical_ action is a common
way of speaking; but it is not a way of speaking exactly or
accurately. The logical work of thought is quite distinct from the
action of the will. To reason is not to will.
Nor is to will to reason; but the will _presupposes_ thought and hence
logic. He who does not think, cannot even will. I mean by willing,
what is known to us by the evidence of our consciousness; not
Schopenhauer's metaphysical _will_.
In _knowledge_, in so far as it is a necessary presupposition of
economic action, is found, if not a justification, an explanation of
your phrases about _logical and illogical actions_. Economic actions
are always (we say so, at any rate) _logical_ actions, _i.e._ preceded
by logical acts. But it is necessary to distinguish carefully the two
stages: the phenomenon and its presupposition, since _from lack of
distinction between the two stages has arisen the erroneous conception
of the economic principle as a technological fact_. I have criticised
at length in other essays this confusion between _technical_ and
_economic_, and I may be allowed to refer both to what I have written
in my review of Stammler's book _Wirthschaft und Recht_, and to the
more exact analyses in my recent memorandum on the _Estetica_.
Stammler maintains precisely that the economic principle can be
nothing but a technical concept. I would advise anyone who wishes to
see at a glance, the difference between the technical and the economic
to consider carefully in what a _technical error_ and in what an
_economic error_ respectively consist. A technical error is ignorance
of the laws of the material on which we wish to work: for instance the
belief that it is possible to put very heavy beams of iron on a
delicate wall, without the latter falling into ruins. An _economic_
error is the not aiming directly at one's own object; to wish this and
that, _i.e._ not really to wish either this or that. A technical error
is an error of knowledge: an economic error is an error of will. He
who makes a technical mistake will be called, if the mistake is a
stupid one, an ignoramus; he who makes an economic mistake, is a man
who does not know how to behave in life: a weak and inconclusive
person. And, as is well known and proverbial, people can be _learned_
without being _men_ (_practical_ or _complete_).
Thus an economic fact is a fact of _practical activity_. Have we
attained our object in this definition? Not yet. The definition is
still incomplete and to complete it we must not only cross another
expanse of sea, but avoid another rock: viz. that of the conception of
economic data as _egoistic_ data.
This error arises as follows: if an economic fact is a practical
activity, it is still necessary to say how this activity is
distinguished from moral activity. But moral activity is defined as
_altruistic_; then, it is inferred, economic data will be _egoistic_.
Into this mistake has fallen, amongst others, our able Professor
Pantaleoni, in his _Principî d'economia pura_, and in other writings.
The _egoistic_ is not something merely _different_ from a moral fact;
it is the _antithesis_ of it; it is the _immoral_. In this way, by
making the economic principle equivalent to an egoistic fact, instead
of distinguishing economics from morality, we should be subordinating
the former to the latter, or rather should deny it any right to exist,
recognising it as something merely negative, as a deviation from moral
activity.
A datum in economics is quite different. It does not form an
antithesis to a moral datum; but is in the peaceable relation of
condition to conditioned. It is the general condition which makes the
rise of ethical activity possible. In the concrete, every action
(volition) of man is either moral or immoral, since no actions are
_morally indifferent_. But both the moral and the immoral are economic
actions; which means that the economic action, taken by itself, is
neither moral nor immoral. Strength of character, for example, is
needed both by the honest man and by the cheat.
It seems to me that you approach gropingly to this conception of the
economic principle, as relating to practical actions, which taken in
the abstract, are neither moral nor immoral; when at one point in your
last essay, you exclude from economic consideration _choices_, which
have an _altruistic motive_; and further on, exclude also those which
are _immoral_. Now, since choices are necessarily either altruistic or
egoistic, either moral or immoral, you have no way of escaping from
the difficulty except the one which I suggest; to regard economics as
concerned with practical activity in so far as it is (abstractly)
_emptied_ of all _content, moral or immoral_.
I might enlarge further on this distinction and show how it has an
analogy in the sphere of theoretical activity, where the relation of
economics to ethics is repeated in the relation of æsthetics to logic.
And I might point out the reason why scientific and æsthetic
productions cannot be subjects of economic science, _i.e._ are not
economic products. The reason given, in this connection, by Professor
Ehrenfels, is, to say the least of it, curious: he remarks that: 'the
relations of value upon which the data of logic and æsthetics rest,
are so simple that they do not demand a special economic theory.' It
should not be difficult to see that logical and æsthetic values are
theoretical and not practical values, whereas economic value is a
practical value, and that it is impossible to unite an _economics_ of
the _theoretical_ as such. When, some years ago, the lamented Mazzola
sent me the introduction in which he had discussed _Economics_ and
_Art_, I had occasion to write to him and afterwards to say to him by
word of mouth, that much more fundamental relations might be
discovered between the two groups of phenomena; and he urged me to
expound my observations and inquiries. This I have done in the essay
on _Estetica_, referred to above. I am sorry to be obliged to _refer_
so many times in writing to you and to the public. But here the need
for brevity and clearness constrains me.
This, then, is a rapid statement of how I arrive at the definition of
the data of economics, which I should like to see at the beginning of
every economic treatise. _The data of economics are the practical
activities of men in so far as they are considered as such,
independent of any moral or immoral determination._
Granted this definition, and it will be seen also that the concept of
_utility_, or of _value_ or of _ofelimity_, is nothing but the
economic action itself, _in so far as it is rightly managed_, _i.e._
in so far as it is really economic. In the same way as _the true_ is
_thinking_ activity itself, and _the good_ is _moral_ activity itself.
And to speak of things (physical objects) as having or not having
value, will appear simply a metaphorical usage to express those
_causes which we think efficacious to produce the effects_ which we
_desire_, and which are therefore our _ends_. _A_ is worth _b_, the
value of _a_ is _b_, does not mean (the economists of the new school
knew it well) _a=b_; nor even as is said _a>b_; but that _a_ has
_value_ for us, and _b_ has not. And value--as you know--exists only
at _the moment of exchange_, _i.e._ of _choice_.
To connect with these general propositions the different problems
which are said to belong to economic science, is the task of the
writer of a special treatise on economics. It is your task, esteemed
friend, if after having studied these general propositions, they seem
to you acceptable. To me it seems that they alone are able to
safeguard the independence of economics, not only as distinct from
_History_ and _Practice_ but as distinct from _Mechanics_,
_Psychology_, _Theory of Knowledge_, and _Ethics_.
Naples, 15th May 1900.[97]
II
_Disagreement (1) about method (2) postulates: (1) Nothing
arbitrary in economic method, analogy of classificatory
sciences erroneous: (2) Metaphysical postulate that facts
of human activity same as physical facts erroneous:
Definition of practical activity in so far as admits of
definition: Moral and economic activity and approval:
Economic and moral remorse: Economic scale of values._
_Esteemed Friend_,
Our disagreement concerning the nature of economic data has two chief
sources: disagreement on a question of _method_ and disagreement on a
question of _postulates_. I acknowledge that one object of my first
letter was to obtain from you such explanations as might set clearly
in relief our disagreement on the two points indicated.--To reduce
controversies to their simplest terms, to expose ultimate oppositions,
is, you will agree, an approach to truth. I will explain briefly the
two points at issue. In regard to that of method, although I agree
with you in upholding the claims of a procedure that is logical,
abstract and scientific, as compared with one that is historical (or
synthetic, as you say), I cannot in addition allow that the former
procedure involves something of the nature of an arbitrary choice, or
that it can be worked out equally well in either of two ways. You talk
of _cutting away_ a _slice_ from a concrete phenomenon, and examining
this by itself; but I inquire how you manage to cut away that slice?
for it is no question here of a piece of bread or of cheese into which
we can actually put the knife, but of a series of representations
which we have in our consciousness, and into which we can insert
nothing except the light of our mental analysis. In order to cut off
your slice you would thus have to carry out a logical analysis; _i.e._
to do at the outset what you propose to do subsequently. Your _cutting
off of the slice_ is indeed an answer to the problem of the _quid_ in
which an economic fact consists. You assume the existence of a test to
distinguish what you take for the subject of your exposition from what
you leave aside. But the test or guiding concept must be supplied by
the very nature of the theory, and must be in conformity with it.
Would it for instance be in conformity with the nature of the thing,
to cut away, as you wish to do, only that group of economic facts
which relates to objects capable of measurement? What intrinsic
connection is there between this merely accidental attribute,
measurability, of the objects which enter into an economic action, and
the economic action itself? Does measurability lead to a modification
in the economic fact by changing its nature, _i.e._ by giving rise to
_another_ fact? If so, you must prove it. I, for my part, cannot see
that an economic action changes its nature whether it relates to a
sack of potatoes, or consists in an exchange of protestations of
affection!
In your reply you refer to the need of avoiding waste of time over
matters that are too simple, for which 'it is not worth while to set
in motion the great machine of mathematical reasoning.' But this need
relates to the pedagogy of the professional chair or of the book, not
to the science in itself, which alone we are now discussing. It is
quite evident that anybody who speaks or writes lays more stress on
those portions which he thinks harder for his hearers and readers to
grasp, or more useful to be told. But he who thinks, _i.e._ speaks
with himself, pays attention to all portions without preferences and
without omissions. We are now concerned with thought, that is with the
_growth_ of science; not with the manner of _communicating_ it. And
in thought, we cannot admit arbitrary judgments.
Nor need we be turned aside by an analogy with the _classes_ of facts,
made by zoology and other natural sciences. The classifications of
zoology and botany are not scientific operations, but merely views in
perspective; and, considered in relation to really scientific
knowledge, they are arbitrary. He who investigates the nature of
economic data, does not, however, aim at putting together, in
perspective and roughly, groups of economic cases, as the zoologist or
the botanist do, mutilating and manipulating the inexhaustible,
infinite varieties of living creatures.
Upon the confusion between _a science_ and the _exposition of a
science_ is based also the belief that we can follow different paths
in order to arrive at a demonstration of the same truth. Unless in
your case, since you are a mathematician, it arose from a false
analogy with calculation. Now, calculation is not a science, because
it does not give us the reasons of things; and hence _mathematical_
logic is logic in a manner of speaking, a variety of formal logic, and
has nothing to do with _scientific_ or inventive logic.
When we pass to the question of the postulates, you will certainly be
surprised if I tell you that the disagreement between us consists in
your wish to introduce a _metaphysical_ postulate into economic
science; whereas I wish here to rule out every metaphysical postulate
and to confine myself entirely to the analysis of the given facts. The
accusation of being _metaphysical_ will seem to you the last that
could ever be brought against you. Your implied metaphysical postulate
is, however, this; that the facts of man's activity are of the same
nature as physical facts; that in the one case as in the other we can
only observe regularity and deduce consequences therefrom, without
ever penetrating into the inner nature of the facts; that these facts
are all alike _phenomena_ (meaning that they would presuppose a
_noumena_, which evades us, and of which they are manifestations).
Hence whereas I have called my essay 'On the economic _principle_,'
yours is entitled 'On the economic _phenomenon_.'
How could you defend this postulate of yours except by a
_metaphysical_ monism; for example that of Spencer? But, whilst
Spencer was anti-metaphysical and positivist in words, I claim the
necessity of being so in deeds; and hence I cannot accept either _his_
metaphysics or _his_ monism, and I hold to experience. This testifies
to me the fundamental distinction between external and internal,
between physical and mental, between mechanics and teleology, between
passivity and activity, and secondary distinctions involved in this
fundamental one. What metaphysics unites philosophy distinguishes (and
joins together); the abstract contemplation of unity is the death of
philosophy. Let us confine ourselves to the distinction between
physical and mental. Whilst the external facts of nature, admitted by
empirical physical science, are always phenomena, since their source
is by definition outside themselves, the internal facts or activities
of man, cannot be called phenomena, since they are their own source.
By this appeal to experience and by this rejection of all metaphysical
intrusion, I place myself in a position to meet the objection which
you bring forward to my conception of economic data. You think that
the ambiguity of the term _value_ comes from this, that it denotes a
very complex fact, a collection of facts included under a single word.
For me, on the contrary, the difficulty in it arises from its denoting
a very simple fact, a _summum genus_, _i.e._ the fact of the very
_activity_ of man. Activity is value. For us nothing is valuable
except what is an effort of imagination, of thought, of will, of our
activity in any of its forms. As Kant said that there was nothing in
the universe that could be called _good_ except the _good will_; so,
if we generalise, it may be said that there is nothing in the universe
that is valuable, except the _value of human activity_. Of value as of
activity you cannot demand a so-called genetic definition. The simple
and the original is genetically indefinable. Value is observed
immediately in ourselves, in our consciousness.[98]
This observation shows us also that the _summum genus_ 'value,' or
'mental activity' gives place to irreducible forms, which are in the
first instance those of theoretical activity and practical activity,
of theoretical values and practical values. But what does _practical_
mean?--you now ask me. I believe that I have already answered by
explaining that the theoretical is everything which is a work of
_contemplation_, and the practical everything that is the work of
_will_. Is will an obscure term? We may rather call the terms _light_,
_warmth_ and so on, obscure; not that of _will_. What will is, I know
well. I find myself face to face with it throughout my life as a man.
Even in writing this letter, today, in a room in an inn, and in
shaking off the laziness of country life, I have _willed_; and if I
have delayed the answer for two months, it is because I have been so
feeble as not to know how to _will_.
You see from this that the question raised by me, whether by _choice_
you meant _conscious_ or _unconscious_ choice, is not a _careless_
question. It is equivalent to this other one; whether the economic
fact is or is not a fact of _will_. 'This does not alter the fact of
the choice,' you say. But indeed it does alter it! If we speak of
_conscious_ choice, we have before us a mental fact, if of
_unconscious_ choice, a natural fact; and the laws of the former are
not those of the latter. I welcome your discovery that economic fact
is the fact of choice; but I am _forced_ to mean by _choice_,
_voluntary_ choice. Otherwise we should end by talking not only of the
_choices_ of a man who is _asleep_ (when he moves from side to side)
but of those of _animals_, and why not? of _plants_ and why not again?
of _minerals_; passing rapidly along the steep slope down which my
friend Professor C. Trivero has slipped in his recently published
_Teoria dei bisogni_, for which may he be forgiven![99]
When I defined economic data as 'the practical activities of man, in
so far as they are considered as such, independently of any moral or
immoral determination,' I did not make an arbitrary judgment, which
might authorise others to do likewise, in a science which does not
tolerate arbitrary judgments; but I merely _distinguished_ further
within the species _practical activity_, two _sub-species_ or grades:
_pure_ practical activity, (economic), and _moral_ practical activity,
(ethical); will that is merely economic, and moral will. There is
ambiguity in your reproach that when I speak of approval or
disapproval as aroused by economic activity, I am considering the
matter from a _synthetic_ instead of an analytic point of view, and
that approval or disapproval are _extraneous_ factors. I did not
however speak (and I believed that I had explained myself clearly), of
_moral_, _intellectual_ or _æsthetic_ approval or disapproval. No, I
said, and I repeat, that a judgment of approval or reprobation was
necessarily bound up with economic activity: but a _merely_ ECONOMIC
judgment of approval or reprobation. '_By saying_ that Rhenish wine is
_useful_ to me, has a _value_ for me, is _ofelimo_ to me, I mean only
to say that I like it; and I do not see how this simplest of relations
can be well or ill-managed.' You will forgive me if in this sentence
of yours I have italicised the words _by saying_. Here is the point.
Certainly the mere _saying_ does not give rise to an internal judgment
of economic approval or disapproval. It will give rise to a
grammatical or linguistic, _i.e._ æsthetic, approval or disapproval,
according to whether the saying is clear or confused, well or ill
expressed. But it is no question of _saying_: it is a question of
_doing_, _i.e._ of the action willed carried out by the movement that
is willed, of a _choice_ of movement. And do you think that the
acquisition and consumption of a bottle of Rhenish wine involves no
judgment of approval or disapproval? If I am very rich, if my aim in
life is to obtain momentary sensual pleasures, and I know that Rhenish
wine will secure me one of them, I buy and drink Rhenish wine and
approve my act. I am satisfied with myself. But if I do not _wish_ to
indulge in gluttony, and if my money is all devoted to other purposes,
for which I _wish_ as preferable, and if, in spite of this, yielding
to the temptation of the moment, I buy and drink Rhenish wine, I have
put myself into contradiction with myself, and the sensual pleasure
will be followed by a judgment of disapproval, by a legitimate and
fitting ECONOMIC REMORSE.
To prove to you how, in all this, I omit every _moral_ consideration,
I will give you another example: that of a knave who thinks it
_ofelimo_ to himself to murder a man in order to rob him of a sum of
money. At the moment of assassination, and although remaining a knave
at heart, he yields to an emotion of fear or to a pathological feeling
of compassion, and does not kill the man. Note carefully the terms of
the hypothesis. The knave will call himself an ass and an imbecile,
and will feel _remorse_ for his contradictory and inconclusive
conduct; but not indeed a _moral_ remorse (of that he is, by
hypothesis, incapable), but, precisely, a remorse that is merely
_economic_.
It seems to me that there is another confusion, easy to dispel, in
your counter criticism to my criticism of the _scale of values_
(economic) you say that 'there is no need for one person to find
himself at the same moment under different conditions; it is enough
that he can _picture to himself_ these different conditions.' Can you
in truth _picture yourself_ being _at the same moment_ under
_different_ conditions? Fancy has its laws; and does not allow the
imagination of what is unimaginable. You can easily say that you
_picture_ it to yourself: words are docile; but, to picture it _in
reality_, is, pardon me, another matter altogether. You will not
succeed in it any more than I. Ask me to imagine a lion with the head
of a donkey, and I will comply at once; but ask me to imagine a lion
standing _at the same moment_ in two different places, and I cannot
succeed. I will picture to myself, if you like, two similar lions, two
exactly alike, but not the same in two different positions. Fancy
reconstructs reality, but possible reality, not the impossible or what
is contradictory. Thus my demonstration of the absurdity of the _scale
of values_ applies both to actual and to possible reality. Nay, in
discussing science in the abstract it was framed precisely on the mere
consideration of the possible.
I do not know whether I have answered all your objections, but I have
endeavoured to answer all those which seem to me fundamental. A
dispute, in which questions of method and of principle are at stake
need not be carried on pedantically into minute details; we must
depend to some extent on the assistance of the readers, who, putting
themselves mentally in the position of the two disputants, work out
for themselves the final application. I wish merely to add that it is
my strongest conviction that the reaction against metaphysics (a
far-sighted reaction in that it has freed scientific procedure from
admixture with the arbitrary judgments of feeling and belief) has been
pushed forward by many so far as to destroy science itself. The
mathematicians who have a quick feeling for scientific procedure, have
done much for economic science by reviving in it the dignity of
abstract analysis, darkened and overwhelmed by the mass of anecdotes
of the historical school. But, as it happens, they have also
introduced into it the prejudice of their profession, and, being
themselves students of the general conditions of the physical world,
the particular prejudice that mathematics can take up in relation to
economics--which is the science of _man_, of a form of the conscious
activity of man--the same attitude which it rightly takes up in
relation to the empirical natural sciences.
From what I have now stated you will easily discover exactly how far
we are in agreement in the establishment of the principles of
_Economics_ and how far we disagree. If my new observations should
assist in further reducing the extent of the disagreement, I shall
indeed be glad.
Perugia, _20th October, 1900_.[100]
FOOTNOTES:
[93] _Comment se pose le problème de l'economie pure._ Paper read in
December 1898 to the _Societé Stella_.
[94] _Giornale degli economisti_, March 1900, pp. 216-235.
[95] _Rivista di sociologia_, III. no. vi., pp. 746-8, see
_Materialismo Storico_, pp. 193-208.
[96] DR CHRISTIAN V. EHRENFELS (Professor at Prague University):
_System der Werttheorie_, vol. I, _Allgemeine Werttheorie, Psychologie
des Begehrens_, Leipzig, Reisland, 1897; vol. II, _Grundzüge einer
Ethik_, the same, 1898.
[97] PARETO answered this letter in the same journal, _Giornale degli
economisti_, August, 1900, pp. 139-162.
[98] I have before me Professor A. GRAZIADEI's article _Intorno alla
teoria edonistica del valore_. (In _Riforma Sociale_, September 15th,
1900); in which A. fails to see how the purist theory of value
dovetails in with the doctrines of Psychophysics and Psychology. I can
well believe it! Psychophysics and Psychology are natural sciences and
cannot throw light on economic fact which is mental and of value. I
may be allowed to point out, that, even three years ago, I gave a
warning against the confusion of economics with psychology. (See in
this volume pp. 72-75.) He who appeals to psychology (naturalistic) in
order to understand economic fact, will always meet with the delusion,
opportunely shown up by Graziadei. I have stated the reasons owing to
which economics cannot dwell where the psychologists and hedonists
say; now Graziedei has questioned the door-keepers (Fechner, Wundt,
etc.), and has learnt that it does not dwell there. Well and good!
[99] CAMILLO TRIVERO, _La teoria dei bisogni_, Turin, Bocca, 1900, pp.
198. Trivero means by _need_ 'the condition of a being, either
conscious or unconscious (man, animal, plant, thing), in which it
cannot remain': so that it can be said 'that all needs are ultimately
condensed into the supreme _need_ or _end_ of being or becoming.'
_Need_ for him is hence actual reality itself. But since, on the other
hand, he declares that he does not wish to solve nor even to consider
the philosophical problem, it is hard to understand what a _theory of
needs_ (_i.e._ of reality) can be, and for what reason he goes back to
such generalities.
It is true that Trivero believes that, by going back to the general
concept of _need_, he can establish the _parent theory_ on which rest
the particular doctrines of needs; and amongst them economics, which
concerns itself with _economic_ needs. If there are _species_--he
says--we ought to determine of what _genus_ they are species. But he
will allow me to remark that the genus to look for is, as logic
teaches, the _proximate_ genus. To jump to such a great distance as to
reality or to fact, would only lead to the noble discovery: that
economic needs are part of reality, are a group of facts.
And what he does is to make an equally valuable discovery: that the
true theory of history is the theory of needs, which, granted his
definition of _needs_, is as much as to say that history is history of
reality and the theory of it is--the theory.
I have then no objection to make to the meaning which Trivero wishes
to give to the word _need_; but I must assert that, having given it
this meaning, he has not afterwards constructed the theory of
anything, nor thrown light on any special group of facts.
For real economic theory his book is quite useless. Economists do not
recognise the needs of things and plants and animals, but only human
needs, or those of man in so far as he is _homo oeconomicus_ and hence
a conscious being. I too believe that it is right to work out
philosophically the principle of economics; but in order to do this,
Trivero should have studied economic science. He declares that 'he
does not want to hold fast to anyone's petticoats.' This statement is
superfluous if it means that each individual ought to base his own
scientific convictions on reason and not on authority. It is dangerous
if it signifies, on the contrary, an intention to spare himself the
trouble of studying other people's books, and of reconstructing
everything from the beginning by his own personal efforts and by the
aid of general culture alone. The result obtained--being far from
satisfactory--should deter the author (who will not grumble at my
plain speaking), from returning to this unfruitful method in the
future.
[100] PARETO answers this second letter in the _Giornale degli
economisti_, February, 1901, pp. 131-138.
INDEX OF NAMES*
*Marx's name is omitted. The Asterisks indicate notes.
Aristotle, 18
Aveling, E., 66*
Bauer, B., 102
Bernstein, E., 119
Bertolini, A., 96
Böhm-Bawerk, 54, 76,* 142
Bray, 103
Coletti, F., 115*
Croce, B., 129,* 131*
Dühring, E. 69, 79,* 84, 103, 114
Durckheim, E., 118
Ehrenfels, Christian Von, 168, 172
Engels, F., 7, 11, 14, 18, 19, 25, 26, 28, 41, 55, 63, 67, 69, 78-81,
83, 84, 89, 95,* 103, 114-116, 124, 131*
Fechner, 180
Ferrara, F., 127
Gentile, G., 80,* 83,* 86,* 104,* 115*
Gray, A., 103
Graziadei, A., 138-140, 179*
Grosse, E., 90*
Hegel, G.F., 6, 11, 81-82, 102, 122, 130
Heine, H., 130
Helvetius, 8
Herbart, 24, 25
Holbach, 8
Kant, E., 24, 25, 43, 113-114, 179
Kautsky, K., 119, 137
Ingram, 95*
Jevons, 72
Labriola, Antonio, 1, 5, 9, 10-15, 18, 21-26, 51,* 55, 76, 84,* 86-93,
106, 109,* 110, 111, 114, 119, 120-132
Lange, A.F., 8, 41, 71, 72*
Leibniz, 160
Loria, A., 49, 91, 138, 142
Machiavelli, N., 110,* 118
Manzoni, A., 19
Mommsen, T., 122
Morgan, 89
More, Thomas, 19*
Pantaleoni, M., 76,* 96, 127, 171
Parrto, V., 74, 76,* 96-101, 159-186
Plechanow, G., 8
Proudhon, P.G., 103
Rabelais, 105
Ricardo, D., 53, 135, 156, 157*
Ricca, Salermo G., 77*
Richter, G.P., 18
Rodbertus, K., 103*
Rosmini, 102
Rümalin, 36
Sanctis (de), F., 110*
Schiller, 25*
Schmidt, C., 54
Schopenhauer, A., 102
Simmel, G., 5, 24, 118
Smith, A., 74*
Sombart, W., 54,* 55, 60, 63, 131,* 142
Sorel, G., 55, 86,* 119, 131-138
Spencer, H., 36, 178
Stammler, R., 27-47, 118, 137,* 138, 170
Stein, L., 18
Stern, G., 133
Trivero, C, 181,* 182
Villari, P., 110*
Wagner, A., 73*
Westermarck, E., 90*
Witte, 78
Wundt, 180*
EDINBURGH; J.C. THOMSON
AT THE MERCAT PRESS
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| Typographical errors corrected in text: |
| |
| Page ix: philosopy replaced with philosophy |
| Page xxiii: knowlege replaced with knowledge |
| Page 53: manifestions replaced with manifestations |
| Page 55: acknowleges replaced with acknowledges |
| Page 60: necesary replaced with necessary |
| Page 61: corrollary replaced with corollary |
| Page 85: schutzt replaced with schützt |
| Page 86: contigent replaced with contingent |
| Page 86: idealogical replaced with ideological |
| Page 104: abreviated replaced with abbreviated |
| Page 122: empirical-dialetic replaced with |
| empirical-dialectic |
| Page 124: sytems replaced with systems |
| Page 149: Mark's replaced with Marx's |
| Page 187: Duhring replaced with Dühring |
| Page 187: Colatti replaced with Coletti |
| Page 187: Kantsky replaced with Kautsky |
| Page 187: Leibnitz replaced with Leibniz |
| Page 188: Parrto replaced with Pareto |
| Page 188: Plechanov replaced with Plechanow |
| Page 188: Rümalin replaced with Rümelin |
| Footnote 15: oekonomischer replaced with oekonomischen |
| Footnote 15: Bohm replaced with Böhm |
| Footnote 15: fur replaced with für |
| Footnote 22: verzehbaren replaced with verzehrbaren |
| Footnote 42: aüssere replaced with äussere |
| Footnote 59: entrepeneurs replaced with entrepreneurs |
| Footnote 74: Briere replaced with Brière |
| Footnote 80: fugte replaced with fügte |
| Footnote 82: fur replaced with für |
| Footnote 92: ittle replaced with little |
| Footnote 95: "Materialismio Storico" replaced with |
| "Materialismo Storico" |
| |
| Note that on page 166 that the word 'measurabilility' |
| is likely to be a typo either for 'measurability' or |
| 'measurably' |
| |
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