CROCE: HISTORICAL MATERIALISM

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Benedetto Croce (died 1952) 

Italian critic, philosopher, politician, historian. Croce deeply influenced aesthetic
thought in the first half of the 20th century, including Robin C. Collingwood’s
Principles of Art
(1934) and John Dewey’s Art as Experience (1934), although in

the latter the philosophical background is totally different. Croce’s main thesis was that
art is intuition. His best-known work in the English-speaking world is Aesthetic as
Science of Expression and General Linguistic
(1902).

“It is deeply ironic that Croce, defender of the autonomy of art, aesthetician, a
man endowed with a great sensibility, good taste, and judgment, was finally unable to
develop a theoretical and analytical scheme of criticism and had to be content (like many
other critics) with defining his own taste, selecting his canon of classics, and
persuading others that he was right. He was successful only for a time.” (René
Wellek in A History of Modern Criticism 1750-1950, vol. 8, 1992)

Benedetto Croce was born in Pescasseroli, Abruzzi, into a moderately wealthy
land-owning family. He was educated at a Catholic boarding school – his parents were both
pious Catholics. In 1883 Croce lost his parents and his sisters in an earthquake on the
island of Ischia – he was buried for several hours and severely injured. He went to live
with his uncle in Rome and studied law at the university. Croce left without taking a
degree and returned to Naples, where he lived the life of a gentleman-scholar, writing
about every issue of contemporary concern. He never held a university position.

During the next years Croce travelled in Spain, Germany, France, and England. He became
interested in history after reading the literary historian Francesco De Sanctis. Under the influence of Gianbattista Vico’s (1668-1744) thoughts about art and history he turned to philosophy in 1893. Croce also purchased the house in
which Vico had lived.
His friend, the philosopher Giovanni Gentile
encouraged him to read Hegel. Croce’s famous commentary on Hegel, What is Living and
What is Dead in the Philosophy of Hegel
, appeared in 1907.

Croce, Antonio Labriola (1843-1904), and Georges Sorel (1847-1922) were known as the
Holy Trinity of Latin Marxist studies, but Croce rejected Marx’s determinism. In art
nothing can determine in advance the direction our expression will take. In Historical
Materialism and the Economics of Karl Marx
(1900) Croce stated that “the

capitalist society studied by Marx is not any society that ever existed or does
exist.”

Croce entered the cultural scene in 1896 with his book about the concept of history in
its relationship to the concept of art. He noticed that the philosophical foundations of
aesthetics did not yet exist and in the following works he attempted to demonstrate the
superiority of arts over the natural sciences, which Croce considered as a system of
“pseudo-concepts.” In 1903 he founded with Gentile the magazine La Critica,
which appeared until 1943. However, when Gentile started to support fascism and signed the
‘Manifesto of Fascist Intellectuals,’ in the 1920s, Croce denounced the paper. From 1906
Croce worked as an adviser with his publisher, Laterza and Sons, Bari, to produce three
highly influential literature series – ‘Writers of Italy,’ ‘Classics of Philosophy,’ and
‘The Library of Modern Culture.’

In 1910 Croce was made senator for life. He married Adela Rossi in 1914; they had four
daughters. In 1920-21 he was Minister of Public Instruction and planned school reform. During the reign of Mussolini and World War II, Croce supported democratic principles, although he was skeptical about democracy:
“Sound political sense has never regarded the masses as the directing focus of
society…” During the Fascist period Croce lived in isolation as one of the major
anti-fascist thinkers in Italy. After the war he was Minister without Portofilio of the
new democratic government and member of the Constituent Assembly.
From 1943 to 1947 he was President of the reconstituted Liberal party. In 1947 he resigned from politics. On his retirement Croce established the
Institute for Historical Studies in his Naples home, where he had a magnificent collection
of books. Croce died in Naples on
November 20, 1952.

Croce believed that there is no physical reality, nothing exists except the activity of
spirit in history. Like Hegel, he identified philosophy with the history of philosophy.
History moves on with no final stage: it is the only reality, and the only conceptual and
genuine form of knowledge. The physical is solely a construction of mind. Croce
distinguished two basic aspects of experience – the theoretical, which included among
others intuition, and the practical. In this category he placed all economic, political
and utilitarian activities. The categories are dialectical – there is no action without
thought. In normal experience intuition and concept combine, but in aesthetic experience
we hold the two apart. In a work of art, form and content are inseparable. Intuition is
free from concepts, it “is blind: the intellect lends its eyes to it.” Criticism
cannot be founded on rules or theories. “It is said that there are certain truths of
which definitions cannot be given; that cannot be demonstrated by syllogistic reasoning;
that must be grasped intuitively… The critic holds himself honour bound to set aside,
when confronted by a work of art, all theories and abstractions and to judge it by
intuiting it directly. “

(from: The Aesthetic as the Science of Expression and of the Linguistic in General,

trans. by Colin Lyas).

As a critic he started from the widely used assumption that analysis of texts
themselves must precede other analysis. Works of art must be viewed in the light of their
own, entire context. The intentional world of the poet is one thing and, and poetry
is another – “what matters is not what the poet proposes or believes to make, but
only what he has actually made.” Croce distinguished expression from representation.
Representational works of art tell a story, and if our interest is merely in the story,
then the work has for us instrumental value. But when we are interested in expression, we
are interested in the unique experience expressed by this special work of art.

“The artist is always morally blameless and philosophically irreproachable, even
though his art may have for subject matter a low morality and philosophy: insofar he is an
artist, he does not act and does not reason, but composes poetry, paints, sings, and in
short, expresses himself.” (from Nuovi saggi di estetica, 3th ed., 1948)

Croce believed in intuition as the main source of artistic creation – art is based on
intuition which exists before it is apprehended by an individual artist. A poet realizes
his intuition verbally, through the process of writing. According to Croce, poetry is
emotion, an expression of the soul at the moment of intuition. The task of an art critic
is to characterize the image of the work, an unified mental picture of a particular thing,
define its emotional aspects and evaluate how faithful the image is to emotion. Image
consists of smaller parts, plot, setting, language.

Croce’s conservative, classical taste led him to view with suspicion French symbolist
poetry and experimental movements. According to Croce, Rimbaud’s ‘Bal des pendus’ showed
“stupid inhumanity,” he ridiculed Valéry for his poetic theory, and D’Annunzio did not have inner clarity. He disliked Pirandello and finally gave up writing on contemporary poetry,
novels and plays.

For further reading: Bededetto Croce by Rafaello Piccoli (1922); Benedetto
Croce
by C. Sprigge (1952); The Philosophy of Benedetto Croce by by A. De

Gennaro (1961); Benedetto Croce by G.N.G. Orsini (1961); Le origini del pensiero
di Benedetto Croce
by Mario Corsi (1974); Benedetto Croce’s Aesthetic by B.

Bosanquet (1977); Croce and Literary Criticism by O.K. Struckmayer (1978); The
Romantic Theory of Poetry
by A.E.P. Dodds (1979); Benedetto Croce’s Poetry and
Literature
by G. Gullace (1981); Introduzione a Croce by Paolo Bonetti (1984); Benedetto
Croce Reconsidered
by M.E. Moss (1987); Croce and Marxism by E.G. Caserta

(1987); Benedetto Croce and the Uses of Historicism by D.D. Roberts (1987); A
History of Modern Criticism 1750-1950
, vol. 8, by René Wellek (1992); Antifascisms:
Cultural Politics in Italy, 1943-46: Benedetto Croce and the Liberals, Carlo Levi and the
‘Actionists
by David Ward (1996); The Legacy of Benedetto Croce: Contemporary
Critical Views
, ed. by Jack D’Amico et al (1999); Benedetto Croce and Italian
Fascism
by Fabio Fernando Rizi (2003)

Selected works:

  • IL CONCETTO DELLA STORIA NELLE SUE RELAZIONI COL CONCETTO DELL’ARTE, 1896
  • MATERIALISMO STORICO ED ECONIMICA MARXISTA, 1900 – Historical Materialism and the
    Economics of Karl Marx
  • ESTETICA COME SCIENZA DEL”ESPRESSIONE E LINGUISTICA GENERALE, 1902 – Aesthetics as
    Science of Expression and General Linguistic
  • LETTERATURA E CRITICA DELLA LETTERATURA CONTEMPORANEA IN ITALIA, 1908
  • LOGICA COME SCIENZA DEL CONCETTO PURO, 1909 – Logic as the Science of Pure Concept
  • PROBLEMI DI ESTETICA, 1910
  • LA FILOSOFIA DI GIAMBATTISTA VICO, 1911 – The Philosophy of Giambattista Vico
  • SAGGI SULLA LETTERATURA ITALIANA DEL SEICENTO, 1911
  • FILOSOFIA DELLA PRACTICA, 1913 – Philosophy of the Practical, Economic and Ethic
  • BREVIARIO DI ESTETICA, 1913 – The Breviary of Aesthetics
  • SAGGIO SULLO HEGEL, 1913 – part as What is Living and What is Dead in the Philosophy of
    Hegel
  • DIE LETTERATURA DELLA NUOVA ITAALIA, 1914-1940 (6 vols.)
  • ANEDDOTI E PROFILI SETTE CENTESCHI, 1914
  • CULTURA E VITA MORALE, 1914
  • GOETHE, 1917 – transl.
  • TEORIA E STORIA DELLA STORIOGRAFIA, 1917 – History: Its Theory and Practice
  • CONVERSAZIONI CRITICHE, 1918-1939 (5 vols.)
  • PRIMI SAGGI, 1919
  • CERIOSITÀ STORICHE, 1919
  • STORIE E LEGGENDE NAPOLETANE, 1919
  • UNA FAMIGLIA DI PATRIOTI, 1919
  • PAGINE SPARSE, 1919-1926 (3 vols.)
  • GOETHE, 1919 – trans.
  • ARIOSTO, SHAKESPEARE E CORNEILLE, 1920 – Ariosto, Shakespeare, and Corneille
  • BREVIARI DI ESTETICA, 1920 – The Essence of Aesthetics
  • NUOVI SAGGI DI ESTETICA, 1920
  • GIOSUÈ CARDUCCI, 1920
  • GIOVANNI PASCOLI, 1920
  • STORIA DELLA STORIOGRAFIA ITALIANA NEL SECOLO DECIMONONO, 1921 (2 vols.)
  • LA POESIA DI DANTE, 1921 – Poetry of Dante
  • NUOVE CURIOSITÀ STORICHE, 1922
  • FRAMMENTI DI ETICA, 1922 – The Conduct of Life
  • POESIA E NON POESIA, 1923 – European Literature in the Nineteenth Century
  • CONVERSAZIONI CRITICHE, 1924
  • ELEMENTI DI POLITICA, 1925 – Politics and Morals
  • STORIA DEL REGNO DI NAAPOLI, 1925 – History of the Kingdom of Naples
  • PAGINE SPARSE, 1927
  • UOMINI E COSE DELLA VECCHIA ITALIA, 1927
  • PAGINE SULLA GUERRA, 1928
  • STORIA D’ITALIA DAL 1871 AL 1915 – A History of Italy 1871-1915
  • STORIA DELL’ETÀ BAROCCA IN ITALIA, 1929
  • ALESSANDRO MANZONI, 1930
  • ETERNITÀ E STORICITÀ DELLA FILOSOFIA, 1930
  • NUOVI SAGGI SULLA LETTERATURA ITALIANA DEL SEICENTO, 1931
  • ETICA E POLITICA, 1931
  • STORIA D’EUROPA NEL SECOLO DECIMONONO, 1932 – History of Europe in the Nineteenth
    Century
  • POESIA “POPOLARE” E POESIA D’ARTE, 1933
  • NUOVI SAGGI SUL GOETHE, 1934
  • ORIENTAMENTI, 1934
  • LA CRITICA E LA STORIA DELLA ARTI FIGURATIVA, 1934
  • ULTIMI SAGGI, 1935
  • LA POESIA, 1936 – Benedetto Croce’s Poetry and Literature
  • CULTURA E VITA MORALE, 1936
  • VITE DI AVVENTURE, DI FEDE E DI PASSIONE, 1936
  • LA STORIA COME PENSIERO E COME AZIONE, 1938 – History as the Story of Liberty
  • POESIA ANTICA E MODERNA, 1941
  • STORIA DELL’ESTETICA PER SAGGI, 1942
  • ANEDDOTI DI VARIA LETTERATURA, 1942 (3 vols., enlarged edition 1953-54)
  • PAGINE SPARSE, 1943 (3 vols.)
  • CONSIDERAZIONI SUL PROBLEMA MORALE DEL TEMPO NOSTRO, 1945
  • PENSIERO POLITICO E POLITICA ATTUALE, 1945
  • IL CARATTERE DELLA FILOSOFIA MODERNA, 1945
  • DISCORSI DE VARIA FILOSOFIA, 1945 (2 vols.) – My Philosophy
  • POETI E SCRITTORI DEL PIENO E DEL TARDO RINASCIMENTO, 1945-52 (3 vols.)
  • NUOVE PAGINE SPARSE, 1948-49
  • FOLOSOFIA E STORIOGRAFIA, 1949 – My Philosophy and Other Essays
  • LA LETTERATURA ITALIANA DEL SETTECENTO, 1949
  • LETTURA DI POETI E RIFLESSIONI SULLA TEORIA E LA CRITICA DELLA POESIA, 1950
  • FILOSOFIA, POESIA, STORIA, 1951 – Poetry, Philosophy, History
  • INDAGINI SU HEGEL, 1952
  • TERZE PAGINE SPARSE, 1955 (2 vols.)
  • SCRITTI E DISCORSI POLITICI, 1963
  • Essays on Marx and Russia, 1966
  • Essays on Literature and Literature Criticism, 1990

Historical Materialism and the Economics of Karl Marx
by Benedetto Croce
translated by C.M. Meredith
and with an introduction by A.D. Lindsay
1914

INTRODUCTION

The Essays in this volume, as will be apparent, have all of them had an occasional
origin. They bear evident traces of particular controversy and contain much criticism of
authors who are hardly, if at all, known in this country. Their author thought it worth
while to collect them in one volume and it has been, I am sure, worth while to have them
translated into English, because though written on different occasions and in different
controversies they have all the same purpose. They are an attempt to make clear by
philosophical criticism the real purpose and value of Marx’s work.

It is often said that it is the business of philosophy to examine and criticise the
assumptions of the sciences and philosophy claims that in this work it is not an
unnecessary meddler stepping in where it is not wanted. For time and again for want of
philosophical criticism the sciences have overstepped their bounds and produced confusion
and contradiction. The distinction between the proper spheres of science and history and
moral judgment is not the work of either science or history or moral judgment but can only
be accomplished by philosophical reflection, and the philosopher will justify his work, if
he can show the various contending parties that his distinctions will disentangle the
puzzles into which they have fallen and help them to understand one another.

The present state of the controversy about the value of the writings of Karl Marx
obviously calls for some such work of disentangling. No honest student can deny that his
work has been of great historic importance and it is hard to believe that a book like Das
Kapital which has been the inspiration of a great movement can be nothing but a tissue of
false reasoning as some of its critics have affirmed. The doctrine of the economic
interpretation of history has revivified and influenced almost all modern historical
research. In a great part of his analysis of the nature and natural development of a
capitalist society Marx has shown himself a prophet of extraordinary insight. The more
debatable doctrine of the class war has at least shown the sterility of the earlier
political theory which thought only in terms of the individual and his state. The
wonderful vitality of the Marxian theory of labour value in spite of all the apparent
refutations it has suffered at the hands of orthodox political economists is an insoluble
puzzle if it had no more in it than the obvious fallacy which these refutations expose.
Only a great book could become ‘ the Bible of the working classes.’

But the process of becoming a Bible is a fatal process. No one can read much current
Marxian literature or discuss politics or economics with those who style themselves
orthodox Marxians without coming to the conclusion that the spirit of ecclesiastical
dogmatism daily growing weaker in its own home has been transplanted into the religion of
revolutionary socialism. Many of those whose eyes have been opened to the truth as
expounded by Marx seem to have been thereby granted that faith which is the faculty of
believing what we should otherwise know to be untrue, and with them the economic
interpretation of history is transformed into a metaphysical dogma of deterministic
materialism. The philosopher naturally finds a stumbling-block in a doctrine which is
proclaimed but not argued. The historian however grateful he may be for the light which
economic interpretation has given him, is up in arms against a theory which denies the
individuality and uniqueness of history and reduces it to an automatic repetition of
abstract formulae. The politician when he is told of the universal nature of the class war
points triumphantly to the fact that it is a war which those who should be the chief
combatants are slow to recognise or we should not find the working classes more ready to
vote for a Liberal or a Conservative than for a Socialist. The Socialist must on
consideration become impatient with a doctrine that by its fatalistic determinism makes
all effort unnecessary. If Socialism must come inevitably by the automatic working out of
economic law, why all this striving to bring it about ? The answer that political efforts
can make no difference, but may bring about the revolution sooner, is too transparently
inadequate a solution of the difficulty to deceive anyone for long. Lastly the economist
can hardly tolerate a theory of value that seems to ignore entirely the law of supply and
demand, and concludes with some justice that either the theory of labour value is nonsense
or that Marx was talking about something quite apart in its nature from the value which
economics discusses. All these objections are continually being made to Marxianism, and
are met by no adequate answer. And just as the sceptical lecturer of the street corner
argues that a religion which can make men believe in the story of Balaam’s ass must be as
nonsensical as that story, so with as little justice the academic critic or the
anti-socialist politician concludes that Socialism or at least Marxianism is a tissue of
nonsensical statements if these ridiculous dogmas are its fruit.

A disentangles of true and false in so-called Marxianism is obviously needed, and
Senatore Croce is eminently fitted for the work. Much of the difficulty of Marx comes from
his relation to Hegel. He was greatly influenced by and yet had reacted from Hegel’s
philosophy without making clear to others or possibly to himself what his final position
in regard to Hegel really was. Senatore Croce is a Hegelian, but a critical one. His chief
criticism of Hegel is that his philosophy tends to obscure the individuality and
uniqueness of history, and Croce seeks to avoid that obscurity by distinguishing clearly
the methods of history, of science and of philosophy. He holds that all science deals with
abstractions, with what he has elsewhere called pseudo-concepts. These abstractions have
no real existence, and it is fatal to confuse the system of abstraction which science
builds up with the concrete living reality. ‘All scientific laws are abstract laws,’ as he
says in one of these essays, (III p. 57), ‘and there is no bridge over which to pass from
the concrete to the abstract; just because the abstract is not a reality but a form of
thought, one of our, so to speak, abbreviated ways of thinking. And although a knowledge
of the laws may light up our perception of reality, it cannot become that perception
itself.’

The application to the doctrine of historic materialism is obvious. It calls attention
to one of the factors of the historical process, the economic. This factor it quite
rightly treats in abstraction and isolation. A knowledge of the laws of economic forces so
obtained may ‘light up our perception ‘ of the real historical process, but only darkness
and confusion can result from mistaking the abstraction for reality and from the
production of those a priori histories of the stages of civilisation or the development of
the family which have discredited Marxianism in the eyes of historians. In the first essay
and the third part of the third Croce explains this distinction between economic science
and history and their proper relation to one another. The second essay reinforces the
distinction by criticism of another attempt to construct a science which shall take the
place of history. A science in the strict sense history is not and never can be.

Once this is clearly understood it is possible to appreciate the services rendered to
history by Marx. For Croce holds that economics is a real science. The economic factors in
history can be isolated and treated by themselves. Without such isolated treatment they
cannot be understood, and if they are not understood, our view of history is bound to be
unnecessarily narrow and one-sided. On the relative importance of the economic and the
political and the religious factors in history he has nothing to say. There is no a priori
answer to the question whether any school of writers has unduly diminished or exaggerated
the importance of any one of these factors. Their importance has varied at different
times, and can at any time only be estimated empirically. It remains a service of great
value to have distinguished a factor of such importance which had been previously
neglected.

If then the economic factor in history should be isolated and treated separately, how
is it to be distinguished? For it is essential to Croce’s view of science that each
science has its own concepts it.’ which can be distinguished clearly from those of other
sciences. This question is discussed in Essay III Q. 5 and more specifically in Essay VI.
Croce is specially anxious to distinguish between the spheres of economics and ethics.
Much confusion has been caused in political economy in the past by the assumption that
economics takes for granted that men behave egoistically, i.e. in an immoral way. As a
result of this assumption men have had to choose between the condemnation of economics or
of mankind. The believer in humanity has been full of denunciation of that monstrosity the
economic man, while the thorough-going believer in economics has assumed that the success
of the economic interpretation of history proves that men are always selfish. The only
alternative view seemed to be the rather cynical compromise that though men were sometimes
unselfish, their actions were so prevailingly selfish that for political purposes the
unselfish actions might be ignored. Croce insists, and surely with justice, that economic
actions are not moral or immoral, but in so far as they are economic, non-moral. The moral
worth of actions cannot be determined by their success or failure in giving men
satisfaction. For there are some things in which men find satisfaction which they yet
judge to be bad. We must distinguish therefore the moral question whether such and such an
action is good or bad from the economic whether it is or is not useful, whether it is a
way by which men get what they, rightly or wrongly want.In economics then we are merely
discussing the efficiency or utility of actions. We can ask of any action whether it ought
or ought not to be done at all. That is a moral question. We may also ask whether it is
done competently or efficiently: that is an economic question. It might be contended that
it is immoral to keep a public house, but it would also have to be allowed that the
discussion of the most efficient way by keeping a public house was outside the scope of
the moral enquiry. Mrs Weir of Hermiston was confusing economics with ethics when she
answered Lord Braxfield’s complaints of his ill-cooked dinner by saying that the cook was
a very pious woman. Economic action according to Croce is the condition of moral action.
If action has no economic value, it is merely aimless, but it may have economic value
without being moral, and the consideration of economic value must therefore be independent
of ethics.

Marx, Croce holds was an economist and not a moralist, and the moral judgments of
socialists are not and cannot be derived from any scientific examination of economic
processes.

So much for criticisms of Marx or rather of exaggerated developments of Marxianism,
which though just and important, are comparatively obvious. The most interesting part of
Signor Croce’s criticism is his interpretation of the shibboleth of orthodox Marxians and
the stumbling block of economists, the Marxian theory of labour-value with its corollary
of surplus value. Marx’s exposition of the doctrine in Das Kapital is the extreme of
abstract reasoning. Yet it is found in a book full of concrete descriptions of the evils
of the factory system and of moral denunciation and satire. If Marx’s theory be taken as
an account of what determines the actual value of concrete things it is obviously untrue.
The very use of the term surplus value is sufficient to show that it might be and
sometimes is taken to be the value which commodities ought to have, but none can read
Marx’s arguments and think that he was concerned with a value which should but did not
exist. He is clearly engaged on a scientific not a Utopian question.

Croce attempts to find a solution by pointing out that the society which Marx is
describing is not this or that actual society, but an ideal, in the sense of a
hypothetical society, capitalist society as such. Marx has much to say of the development
of capitalism in England, but he is not primarily concerned to give an industrial history
of England or of any other existing society. He is a scientist and deals with abstractions
or types and considers England only in so far as in it the characteristics of the abstract
capitalist society are manifested. The capitalism which he is analysing does not exist
because no society is completely capitalist. Further it is to be noticed that in his
analysis of value Marx is dealing with objects only in so far as they are commodities
produced by labour. This is evident enough in his argument. The basis of his contention
that all value is ‘congealed labour time’ is that all things which have economic value
have in common only the fact that labour has been expended on them, and yet afterwards he
admits that there are things in which no labour has been expended which yet have economic
value. He seems to regard this as an incidental unimportant fact. Yet obviously it is a
contradiction which vitiates his whole argument. If all things which have economic value
have not had labour expended on them, we must look elsewhere for their common
characteristic. We should probably say that they all have in common the fact that they are
desired and that there is not an unlimited supply of them. The pure economist finds the
key to this analysis of value in the consideration of the laws of supply and demand, which
alone affect all things that have economic value, and finds little difficulty in refuting
Marx’s theory, on the basis which his investigation assumes.

A consideration of Marx’s own argument forces us therefore to the conclusion that
either Marx was an incapable bungler or that he thought the fact that some things have
economic value and are yet not the product of labour irrelevant to his argument because he
was talking of economic value in two senses, firstly in the sense of price, and secondly
in a peculiar sense of his own. This indeed is borne out by his distinction of value and
price. Croce developing this hint, suggests that the importance of Marx’s theory lies in a
comparison between a capitalist society and another abstract economic society in which
there are no commodities on which labour is not expended, and no monopoly. We thus have
two abstract societies, the capitalist society which though abstract is very largely
actualised in modern civilisation, and another quite imaginary economic society of
unfettered competition, which is continually assumed by the classical economist, but
which, as Marx said, could only exist where there was no private property in capital, i.e.
in the collectivist state.

Now in a society of that kind in which there was no monopoly and capital was at
everyone’s disposal equally, the value of commodities would represent the value of the
labour put into them, and that value might be represented in Wits of socially necessary
labour time. It would still have to be admitted that an hour of one man’s labour might be
of much greater value to the community than two hours of another man, but that Marx has
already allowed for. The unit of socially necessary labour time is an abstraction, and the
hour of one man might contain two or any number of such abstract units of labour time.
What Marx has done is to take the individualist economist at his word: he has accepted the
notion of an economic society as a number of competing individuals. Only he has insisted
that they shall start fair and therefore that they shall have nothing to buy or sell but
their labour. The discrepancy between the values which would exist in such a society and
actual prices represent the disturbance created by the fact that actual society is not a
society of equal competitors, but one in which certain competitors start with some kind of
advantage or monopoly.

If this is really the kernel of Marx’s doctrine, it bears a close relation to a simpler
and more familiar contention, that in a society where free economic competition holds
sway, each man gets what he deserves, for his income represents the sum that society is
prepared to pay for his services, the social value of his work. In this form the hours
worked are supposed to be uniform, and the differences in value are taken to represent
different amounts of social service. In Marx’s argument the social necessity is taken as
uniform, and the difference in value taken to represent differences in hours of work.
While the main abstract contention remains the same, most of those who argue that in a
system of unfettered economic competition most men get what they deserve, rather readily
ignore the existence of monopoly, and assume that this argument justifies the existing
distribution of wealth. The chief purpose of Marx’s argument is to emphasise the
difference between such an economic system and a capitalist society. He is here, as so
often, turning the logic of the classical economists against themselves, and arguing that
the conditions under which a purely economic distribution of wealth could take place,
could only exist in a community where monopoly had been completely abolished and all
capital collectivised.

Croce maintains that Marx’s theory of value is economic and not moral. Yet it is hard
to read Marx and certainly Marxians without finding in them the implication that the
values produced in such an economic society would be just. If that implication be
examined, we come on an important difficulty still remaining in this theory. The
contention that in a system of unfettered economic competition, men get the reward they
deserve, assumes that it is just that if one man has a greater power of serving society
than another he should be more highly rewarded for his work. This the individualist
argument with which we compared Marx’s assumes without question. But the Marxian theory of
value is frequently interpreted to imply that amount of work is the only claim to reward.
For differences in value it is held are created by differences in the amount of labour.
But the word amount may here be used in two senses. When men say that the amount of work a
man does should determine a man’s reward; they commonly mean that if one man works two
hours and another one, the first ought to get twice the reward of the second. ‘Amount ‘
here means the actual time spent in labour. But in Marx’s theory of value amount means
something quite different, for an hour of one man’s work may, he admits, be equal to two
of another man’s. He means by amount a sum of abstract labour time units. Marx’s
scientific theory of value is quite consistent with different abilities getting different
rewards, the moral contention that men should get more reward if they work more and for no
other reason is not. The equation of work done by men of different abilities by expressing
them in abstract labour time units is essential to Marx’s theory but fatal to the moral
claim sometimes founded upon it.

Further the great difficulty in allowing that it is just that men of different
abilities should have different rewards, comes from the fact that differences of ability
are of the nature of monopolies. In a pure economic society high rewards would be given to
rare ability and although it is possible to equate work of rare ability with work of
ordinary ability by expressing both as amounts of abstract labour time units, it surely
remains true that the value is determined not by the amount of abstract labour time
congealed in it but by the law of supply and demand. Where there are differences of
ability there is some kind of monopoly, and where there is monopoly, you cannot eliminate
the influence of the relation of supply and demand in the determination of value. What you
imagine you have eliminated by the elimination of capital, which you can collectivise,
remains obstinately in individual differences of ability which cannot be collectivised.

But here I have entered beyond the limits of Croce’s argument. His critical
appraisement of Marx’s work must be left to others to judge who have more knowledge of
Marx and of economics than I can lay claim to. I am confident only that all students of
Marx whether they be disciples or critics, will find in these essays illumination in a
field where much bitter controversy has resulted in little but confusion and obscurity.

A. D. LINDSAY.

CHAPTER 1. CONCERNING THE SCIENTIFIC FORM OF HISTORICAL MATERIALISM

Historical materialism is what is called a fashionable subject. The theory came into
being fifty years ago, and for a time remained obscure and limited; but during the last
six or seven years it has rapidly attained great fame and an extensive literature, which
is daily increasing, has grown up around it. It is not my intention to write once again
the account, already given many times, of the origin of this doctrine; nor to restate and
criticise the now well-known passages in which Marx and Engels asserted the theory, nor
the different views of its opponents, its supporters, its exponents, and its correctors
and corruptors. My object is merely to submit to my colleagues some few remarks concerning
the doctrine, taking it in the form in which it appears in a recent book by Professor
Antonio Labriola, of the University of Rome.(1*)

For many reasons, it does not come within my province to praise Labriola’s book. But I
cannot help saying as a needful explanation, that it appears to me to be the fullest and
most adequate treatment of the question. The book is free from pedantry and learned
tattle, whilst it shows in every line signs of the author’s complete knowledge of all that
has been written on the subject: a book, in short, which saves the annoyance of
controversy with erroneous and exaggerated opinions, which in it appear as superseded. It
has a grand opportunity in Italy, where the materialistic theory of history is known
almost solely in the spurious form bestowed on it by an ingenious professor of economics,
who even pretends to be its inventor.(2*)

I

Any reader of Labriola’s book who tries to obtain from it a precise concept of the new
theory of history, will reach in the first instance a conclusion which must appear to him
evident and incontestable, and which I sum up in the following statement: ‘historical
materialism, so-called, is not a philosophy of history.’ Labriola does not state this
denial explicitly; it may even be granted that, in words, he sometimes says exactly the
opposite.(3*) But, if I am not mistaken, the denial is contained implicitly in the
restrictions which he places on the meaning of the theory.

The philosophical reaction of realism overthrew the systems built up by teleology and
metaphysical dogmatism, which had limited the field of the historian. The old philosophy
of history was destroyed. And, as if in contempt and depreciation, the phrase, ‘to
construct a philosophy of history,’ came to be used with the meaning: ‘to construct a
fanciful and artificial and perhaps prejudiced history.’

It is true that of late books have begun to reappear actually having as their title the
‘philosophy of history.’ This might seem to be a revival, but it is not. In fact their
subject is a very different one. These recent productions do not aim at supplying a new
philosophy of history, they simply offer some philosophizing about history. The
distinction deserves to be explained.

The possibility of a philosophy of history presupposes the possibility of reducing the
sequence of history to general concepts. Now, whilst it is possible to reduce to general
concepts the particular factors of reality which appear in history and hence to construct
a philosophy of morality or of law, of science or of art, and a general philosophy, it is
not possible to work up into general concepts the single complex whole formed by these
factors, i.e. the concrete fact, in which the historical sequence consists. To divide it
into its factors is to destroy it, to annihilate it. In its complex totality, historical
change is incapable of reduction except to one concept, that of development: a concept
empty of everything that forms the peculiar content of history. The old philosophy of
history regarded a conceptual working out of history as possible; either because by
introducing the idea of God or of Providence, it read into the facts the aims of a divine
intelligence; or because it treated the formal concept of development as including within
itself, logically, the contingent determinations. The case of positivism is strange in
that, being neither so boldly imaginative as to yield to the conceptions of teleology and
rational philosophy, nor so strictly realistic and intellectually disciplined as to attack
the error at its roots, it has halted half way, i.e. at the actual concept of development
and of evolution, and has announced the philosophy of evolution as the true philosophy of
history: development itself — as the law which explains development! Were this tautology
only in question little harm would result; but the misfortune is that, by a too easy
confusion, the concept of evolution often emerges, in the hands of the positivists, from
the formal emptiness which belongs to it in truth, and acquires a meaning or rather a
pretended meaning, very like the meanings of teleology and metaphysics. The almost
religious unction and reverence with which one hears the sacred mystery of evolution
spoken of gives sufficient proof of this.

From such realistic standpoints, now as always, any and every philosophy of history has
been criticised. But the very reservations and criticisms of the old mistaken
constructions demand a discussion of concepts, that is a process of philosophising:
although it may be a philosophising which leads properly to the denial of a philosophy of
history. Disputes about method, arising out of the needs of the historian, are added. The
works published in recent years embody different investigations of this kind, and in a
plainly realistic sense, under the title of philosophy of history. Amongst these I will
mention as an example a German pamphlet by Simmel, and, amongst ourselves a compendious
introduction by Labriola himself. There are, undoubtedly, still philosophies of history
which continue to be produced in the old way: voices clamantium in deserto, to whom may be
granted the consolation of believing themselves the only apostles of an unrecognised
truth.

Now the materialistic theory of history, in the form in which Labriola states it,
involves an entire abandonment of all attempt to establish a law of history, to discover a
general concept under which all the complex facts of history can be included.

I say ‘in the form in which he states it,’ because Labriola is aware that several
sections of the materialistic school of history tend to approximate to these obsolete
ideas.

One of these sections, which might be called that of the monists, or abstract
materialists, is characterised by the introduction of metaphysical materialism into the
conception of history.

As the reader knows, Marx, when discussing the relation between his opinions and
Hegelianism employed a pointed phrase which has been taken too often beside the point. He
said that with Hegel history was standing on its head and that it must be turned right
side up again in order to replace it on its feet. For Hegel the idea is the real world,
whereas for him (Marx) ‘the ideal is nothing else than the material world’ reflected and
translated by the human mind. Hence the statement so often repeated, that the
materialistic view of history is the negation or antithesis of the idealistic view. It
would perhaps be convenient to study once again, accurately and critically, these asserted
relations between scientific socialism and Hegelianism. To state the opinion which I have
formed on the matter; the link between the two views seems to me to be, in the main,
simply psychological. Hegelianism was the early inspiration of the youthful Marx, and it
is natural that everyone should link up the new ideas with the old as a development, an
amendment, an antithesis. In fact, Hegel’s Ideas and Marx knew this perfectly well — are
not human ideas, and to turn the Hegelian philosophy of history upside down cannot give us
the statement that ideas arise as reflections of material conditions. The inverted form
would logically be this: history is not a process of the Idea, i.e. of a rational reality,
but a system of forces: to the rational view is opposed the dynamic view. As to the
Hegelian dialectic of concepts it seems to me to bear a purely external and approximate
resemblance to the historical notion of economic eras and of the antithetical conditions
of society. Whatever may be the value of this suggestion, which I express with hesitation,
recognising the difficulty of the problems connected with the interpretation and origin of
history; — this much is evident, that metaphysical materialism, at which Marx and Engels,
starting from the extreme Hegelian left, easily arrived, supplied the name and some of the
components of their view of history. But both the name and these components are really
extraneous to the true character of their conception. This can be neither materialistic
nor spiritualistic, nor dualistic nor monadistic: within its limited field the elements of
things are not presented in such a way as to admit of a philosophical discussion whether
they are reducible one to another, and are united in one ultimate source. What we have
before us are concrete objects, the earth, natural production, animals; we have before us
man, in whom the so-called psychical processes appear as differentiated from the so-called
physiological processes. To talk in this case of monism and materialism is to talk
nonsense. Some socialist writers have expressed surprise because Lange, in his classic
History of Materialism, does not discuss historical materialism. It is needless to remark
that Lange was familiar with Marxian socialism. He was, how ever, too cautious to confuse
the metaphysical materialism with which he was concerned, with historical materialism
which has no essential connection with it, and is merely a way of speaking.

But the metaphysical materialism of the authors of the new historical doctrine, and the
name given to the latter, have been not a little misleading. I will refer as an example to
a recent and bad little book, which seems to me symptomatic, by a sufficiently accredited
socialist writer, Plechanow.(4*) The author, designing to study historical materialism,
thinks it needful to go back to Holbach and Helvetius. And he waxes indignant at
metaphysical dualism and pluralism, declaring that ‘the most important philosophical
systems were always monistic, that is they interpreted matter and spirit as merely two
classes of phenomena having a single and indivisible cause.’ And in reference to those who
maintain the distinction between the factors in history, he exclaims: ‘We see here the old
story, always recurring, of the struggle between eclecticism and monism, the story of the
dividing walls; here nature, there spirit, etc.’ Many will be amazed at this unexpected
leap from the materialistic study of history into the arms of monism, in which they were
unaware that they ought to have such confidence.

Labriola is most careful to avoid this confusion: ‘Society is a datum,’ he says,
‘history is nothing more than the history of society.’ And he controverts with equal
energy and success the naturalists, who wish to reduce the history of man to the history
of nature, and the verbalists, who claim to deduce from the name materialism the real
nature of the new view of history. But it must appear, even to him, that the name might
have been more happily chosen, and that the confusion lies, so to speak, inherent in it.
It is true that old words can be bent to new meanings, but within limits and after due
consideration.

In regard to the tendency to reconstruct a materialistic philosophy of history,
substituting an omnipresent Matter for an omnipresent idea, it suffices to re-assert the
impossibility of any such construction, which must become merely superfluous and
tautologous unless it abandoned itself to dogmatism. But there is another error, which is
remarked among the followers of the materialistic school of history, and which is
connected with the former, viz., to anticipate harm not only in the interpretation of
history but also in the guidance of practical activities. I refer to the teleological
tendencies (abstract teleology), which also Labriola opposes with a cutting attack. The
very idea of progress, which has seemed to many the only law of history worth saving out
of the many devised by philosophical and non-philosophical thinkers, is by him deprived of
the dignity of a law, and reduced to a sufficiently narrow significance. The idea of it,
says Labriola, is ‘not only empirical, but always incidental and hence limited’: progress
‘does not influence the sequence of human affairs like destiny or fate, nor like the
command of a law.’ History teaches us that man is capable of progress; and we can look at
all the different series of events from this point of view: that is all. No less
incidental and empirical is the idea of historical necessity, which must be freed from all
remnants of rationalism and of transcendentalism, so that we see in it the mere
recognition of the very small share left in the sequence of events, to individuals and
personal free will.

It must be admitted that a little of the blame for the teleological and fatalistic
misunderstandings fall on Marx himself. Marx, as he once had to explain, liked to
‘coquette’ with the Hegelian terminology: a dangerous weapon, with which it would have
been better not to trifle. Hence it is now thought necessary to give to several of his
statements a somewhat broad interpretation in agreement with the general trend of his
theories.(5*) Another excuse lies in the impetuous confidence which, as in the case of any
practical work, accompanies the practical activities of socialism, and engenders beliefs
and expectations which do not always agree with prudent critical and scientific thought.
It is strange to see how the positivists, newly converted to socialism, exceed all the
others (see the effect of a good school!) in their teleological beliefs, and their facile
predeterminations. They swallow again what is worst in Hegelianism, which they once so
violently opposed without recognising it. Labriola has finely said that the very forecasts
of socialism are merely morphological in nature; and, in fact, neither Marx nor Engels
would ever have asserted in the abstract that communism must come about by an unavoidable
necessity, in the manner in which they foresaw it. If history is always accidental, why in
this western Europe of ours, might not a new barbarism arise owing to the effect of
incalculable circumstances? Why should not the coming of communism be either rendered
superfluous or hastened by some of those technical discoveries, which, as Marx himself has
proved, have hitherto produced the greatest revolutions in the course of history?

I think then that better homage would be rendered to the materialistic view of history,
not by calling it the final and definite philosophy of history but rather by declaring
that properly speaking it is not a philosophy of history. This intrinsic nature which is
evident to those who understand it properly, explains the difficulty which exists in
finding for it a satisfactory theoretical statement; and why to Labriola it appears to be
only in its beginnings and yet to need much development. It explains too why Engels said
(and Labriola accepts the remark), that it is nothing more than a new method; which means
a denial that it is a new theory. But is it indeed a new method? I must acknowledge that
this name method does not seem to me altogether accurate. When the philosophical idealists
tried to arrive at the facts of history by inference, this was truly a new method; and
there may still exist some fossil of those blessed times, who makes such attempts at
history. But the historians of the materialistic school employ the same intellectual
weapons and follow the same paths as, let us say, the philological historians. They only
introduce into their work some new data, some new experiences. The content is different,
not the nature of the method.

II

I have now reached the point which for me is fundamental. Historical materialism is not
and cannot be a new philosophy of history or a new method; but it is properly this; a mass
of new data, of new experiences, of which the historian becomes conscious.

It is hardly necessary to mention the overthrow a short time ago of the naive opinion
of the ordinary man regarding the objectivity of history; almost as though events spoke,
and the historian was there to hear and to record their statements. Anyone who sets out to
write history has before him documents and narratives, i.e. small fragments and traces of
what has actually happened. In order to attempt to reconstruct the complete process, he
must fall back on a series of assumptions, which are in fact the ideas and information
which he possesses concerning the affairs of nature, of man, of society. The pieces needed
to complete the whole, of which he has only the fragments before him, he must find within
himself. His worth and skill as a historian is shown by the accuracy of his adaptation.
Whence it clearly follows that the enrichment of these views and experiences is essential
to progress in historical narration.

What are these points of view and experiences which are offered by the materialistic
theory of history?

That section of Labriola’s book which discusses this appears to me excellent and
sufficient. Labriola points out how historical narration in the course of its development,
might have arrived at the theory of historical-factors; i.e., the notion that the sequence
of history is the result of a number of forces, known as physical conditions, social
organizations, political institutions, personal influences. Historical materialism goes
beyond, to investigate the interaction of these factors; or rather it studies them all
together as parts of a single process. According to this theory — as is now well known,
and as Marx expressed it in a classical passage — the foundations of history are the
methods of production, i.e. the economic conditions which give rise to class distinctions,
to the constitution of rank and of law, and to those beliefs which make up social and
moral customs and sentiments, the reflection whereof is found in art, science and
religion.

To understand this point of view accurately is not easy, and it is misunderstood by all
those who, rather than take it in the concrete, state it absolutely after the manner of an
absolute philosophical truth. The theory cannot be maintained in the abstract without
destroying it, i.e. without turning it into the theory of the factors, which is according
to my view, the final word in abstract analysis.(6*) Some have supposed that historical
materialism asserts that history is nothing more than economic history, and all the rest
is simply a mask, an appearance without reality. And then they labour to discover the true
god of history, whether it be the productive tool or the earth, using arguments which call
to mind the proverbial discussion about the egg and the hen. Friedrich Engels was attacked
by someone who applied to him to ask how the influence of such and such other historical
factors ought to be understood in reference to the economic factor. In the numerous
letters which he wrote in reply, and which now, since his death, are coming out in the
reviews, he let it be understood that, when together with Marx, upon the prompting of the
facts, he conceived this new view of history, he had not meant to state an exact theory.
In one of these letters he apologists for whatever exaggeration he and Marx may have put
into the controversial statements of their ideas, and begs that attention may be paid to
the practical applications made of them rather than to the theoretical expressions
employed. It would be a fine thing, he exclaims, if a formula could be given for the
interpretation of all the facts of history! By applying this formula, it would be as easy
to understand any period of history as to solve a simple equation.(7*)

Labriola grants that the supposed reduction of history to the economic factor is a
ridiculous notion, which may have occurred to one of the too hasty defenders of the
theory, or to one of its no less hasty opponents.(8*) He acknowledges the complexity of
history, how the products of the first degree first establish themselves, and then isolate
themselves and become independent; the ideals which harden into traditions, the persistent
survivals, the elasticity of the psychical mechanism which makes the individual
irreducible to a type of his class or social position, the unconsciousness and ignorance
of their own situations often observed in men, the stupidity and unintelligibility of the
beliefs and superstitions arising out of unusual accidents and complexities. And since man
lives a natural as well as a social existence, he admits the influence of race, of
temperament and of the promptings of nature. And, finally, he does not overlook the
influence of the individual, i.e. of the work of those who are called great men, who if
they are not the creators, are certainly collaborators of history.

With all these concessions he realises, if I am not mistaken, that it is useless to
look for a theory, in any strict sense of the word, in historical materialism; and even
that it is not what can properly be called a theory at all. He confirms us in this view by
his fine account of its origin, under the stimulus of the French Revolution, that great
school of sociology — as he calls it. The materialistic view of history arose out of the
need to account for a definite social phenomenon, not from an abstract inquiry into the
factors of historical life. It was created in the minds of politicians and revolutionists,
not of cold and calculating savants of the library.

At this stage someone will say: — But if the theory, in the strict sense, is not true,
wherein then lies the discovery? In what does the novelty consist? To speak in this way is
to betray a belief that intellectual progress consists solely in the perfecting of the
forms and abstract categories of thought.

Have approximate observations no value in addition to theories? The knowledge of what
has usually happened, everything in short that is called experience of life, and which can
be expressed in general but not in strictly accurate terms? Granting this limitation and
understanding always an almost and an about, there are discoveries to be made which are
fruitful in the interpretation of life and of history. Such are the assertions of the
dependence of all parts of life upon each other, and of their origin in the economic
subsoil, so that it can be said that there is but one single history; the discovery of the
true nature of the State (as it appears in the empirical world), regarded as an
institution for the defence of the ruling class; the proved dependence of ideals upon
class interests; the coincidence of the great epochs of history with the great economic
eras; and the many other observations by which the school of historical materialism is
enriched. Always with the aforesaid limitations, it may be said with Engels: ‘that men
make their history themselves, but within a given limited range, on a basis of conditions
actually pre-existent, amongst which the economic conditions, although they may be
influenced by the others, the political and ideal, are yet, in the final analysis,
decisive, and form the red thread which runs through the whole of history and guides us to
an understanding thereof.

From this point of view too, I entirely agree with Labriola in regarding as somewhat
strange the inquiries made concerning the supposed forerunners and remote authors of
historical materialism, and as quite mistaken the inferences that these inquiries will
detract from the importance and originality of the theory. The Italian professor of
economics to whom I referred at the beginning, when convicted of a plagiarism, thought to
defend himself by saying that, at bottom, Marx’s idea was not peculiar to Marx; hence, at
worst, he had robbed a thief. He gave a list of forerunners, reaching back as far as
Aristotle. Just lately, another Italian professor reproved a colleague with much less
justice for having forgotten that the economic interpretation had been explained by
Lorenzo Stein before Marx. I could multiply such examples. All this reminds me of one of
Jean Paul Richter’s sayings: that we hoard our thoughts as a miser does his money; and
only slowly do we exchange the money for possessions, and thoughts for experiences and
feelings. Mental observations attain real importance through the realisation in thought
and an insight into the fulness of their possibilities. This realisation and insight have
been granted to the modern socialist movement and to its intellectual leaders Marx and
Engels. We may read even in Thomas More that the State is a conspiracy of the rich who
make plots for their own convenience: gunedam conspiratio divitum, de suds commodis
reipublicae nomine tituloque tractantium, and call their intrigues laws: machinamenta jam
leges fiunt.(9*) And, leaving Sir Thomas More — who, after all, it will be said, was a
communist — who does not know by heart Marzoni’s lines: Un’ odiosa Forza il mondo
possiede e fa nomarsi Dritto….(10*) But the materialist and socialist interpretation of
the State is not therefore any the less new. The common proverb, indeed, tells us that
interest is the most powerful motive for human actions and conceals itself under the most
varied forms; but it is none the less true that the student of history who has previously
examined the teachings of socialist criticism, is like a short-sighted man who has
provided himself with a good pair of spectacles: he sees quite differently and many
mysterious shadows reveal their exact shape.

In regard to historical narrative then, the materialistic view of history resolves
itself into a warning to keep its observations in mind as a new aid to the understanding
of history. Few problems are harder than that which the historian has to solve. In one
particular it resembles the problem of the statesman, and consists in understanding the
conditions of a given nation at a given time in respect to their causes and functioning;
but with this difference: the historian confines himself to exposition, the statesman
proceeds further to modification; the former pays no penalty for misunderstanding, whereas
the latter is subjected to the severe correction of facts. Confronted by such a problem,
the majority of historians — I refer in particular to the conditions of the study in
Italy — proceed at a disadvantage, almost like the savants of the old school who
constructed philology and researched into etymology. Aids to a closer and deeper
understanding, have come at length from different sides, and frequently. But the one which
is now offered by the materialistic view of history is great, and suited to the importance
of the modern socialist movement. It is true that the historian must render exact and
definite in each particular instance, that co-ordination and subordination of factors
which is indicated by historical materialism, in general, for the greater number of cases,
and approximately; herein lies his task and his difficulties, which may sometimes be
insurmountable. But now the road has been pointed out, along which the solution must be
sought, of some of the greatest problems of history apart from those which have been
already elucidated.

I will say nothing of the recent attempts at an historical application of the
materialistic conception, because it is not a subject to hurry over in passing, and I
intend to deal with it on another occasion. I will content myself with echoing Labriola,
who gives a warning against a mistake, common to many of these attempts. This consists in
retranslating, as he says, into economic phraseology, the old historical perspective which
of late has so often been translated into Darwinian phraseology. Certainly it would not be
worth while to create a new movement in historical studies in order to attain such a
result.

III

Two things seem to me to deserve some further explanation. What is the relation between
historical materialism and socialism? Labriola, if I am not mistaken, is inclined to
connect closely and almost to identify the two things. The whole of socialism lies in the
materialistic interpretation of history, which is the truth itself of socialism; to accept
one and reject the other is to understand neither. I consider this statement to be
somewhat exaggerated, or, at least, to need explanation. If historical materialism is
stripped of every survival of finality and of the benignities of providence, it can afford
no apology for either socialism or any other practical guidance for life. On the other
hand, in its special historical application, in the assertion which can be made by its
means, its real and close connection with socialism is to be found. This assertion is as
follows: — Society is now so constituted that socialism is the only possible solution
which it contains within itself. An assertion and forecast of this kind moreover will need
to be filled out before it can be a basis for practical action. It must be completed by
motives of interest, or by ethical and sentimental motives, moral judgments and the
enthusiasms of faith. The assertion in itself is cold and powerless. It will be
insufficient to move the cynic, the sceptic, the pessimist. But it will suffice to put on
their guard all those classes of society who see their ruin in the sequence of history and
to pledge them to a long struggle, although the final outcome may be useless. Amongst
these classes is the proletariat, which indeed aims at the extinction of its class. Moral
conviction and the force of sentiment must be added to give positive guidance and to
supply an imperative ideal for those who neither feel the blind impulse of class interest,
nor allow themselves to be swept along by the whirling current of the times.

The final point which I think demands explanation, although in this case also the
difference between myself and Labriola does not appear to be serious, is this: to what
conclusions does historical materialism lead in regard to the ideal values of man, in
regard that is to intellectual truth and to what is called moral truth?

The history of the origin of intellectual truth is undoubtedly made clearer by
historical materialism, which aims at showing the influence of actual material conditions
upon the opening out, and the very development of the human intellect. Thus the history of
opinions, like that of science, needs to be for the most part re-written from this point
of view. But those who, on account of such considerations concerning historical origins,
return in triumph to the old relativity and scepticism, are confusing two quite distinct
classes of problem. Geometry owes its origin no doubt to given conditions which are worth
determining; but it does not follow that geometrical truth is something merely historical
and relative. The warning seems superfluous, but even here misunderstandings are frequent
and remarkable. Have I not read in some socialist author that Marx’s discoveries
themselves are of merely historical importance and must necessarily be disowned. I do not
know what meaning this can have unless it has the very trivial one of a recognition of the
limitation of all human work, or unless it resolves itself into the no less idle remark
that Marx’s thought is the offspring of his age. This one-sided history is still more
dangerous in reference to moral truth. The science of morality is evidently now In a
transformation stage. The ethical imperative, whose classics are Kant’s Kritik der reinen
Vernunft, and Herbart’s Allgemeine praktische Philosophie, appears no longer adequate. In
addition to it an historical and a formal science of morality are making their appearance,
which regard morality as a fact, and study its universal nature apart from all
preoccupations as to creeds and rules. This tendency shows itself not only in socialistic
circles, but also elsewhere, and it will be sufficient for me to refer to Simmel’s clever
writings. Labriola is thus justified in his defence of new methods of regarding morality.
‘Ethics, he says, for us resolves itself into an historical study of the subjective and
objective conditions according to which morality develops or finds hindrances to its
development.’ But he adds cautiously, ‘in this way alone, i.e., within these limits, is
there value in the statement that morality corresponds to the social situation, i.e., in
the Anal analysis to the economic conditions.’ The question of the intrinsic and absolute
worth of the moral ideal, of its reducibility or irreducibility to intellectual truth,
remains untouched.

It would perhaps have been well if Labriola had dwelt a little more on this point. A
strong tendency is found in socialistic literature towards a moral relativity, not indeed
historical, but substantial, which regards morality as a vain imagination. This tendency
is chiefly due to the necessity in which Marx and Engels found themselves, in face of the
various types of Utopians, of asserting that the so-called social question is not a moral
question,i.e. as this must be interpreted, it cannot be solved by sermons and so-called
moral methods and to their bitter criticism of class ideals and hypocrisies.(11*) This
result was helped on, as it seems to me, by the Hegelian source of the views of Marx and
Engels; it being obvious that in the Hegelian philosophy ethics loses the rigidity given
to it by Kant and preserved by Herbart. And lastly the name materialism is perhaps not
without influence here, since it brings to mind at once well-understood interests and the
calculating comparison of pleasures. It is, however, evident that idealism or absolute
morality is a necessary postulate of socialism. Is not the interest which prompts the
formation of a concept of surplus-value a moral interest, or social if it is preferred?
Can surplus value be spoken of in pure economics? Does not the labourer sell his
labour-power for exactly what it is worth, given his position in existing society? And,
without the moral postulate, how could we ever explain Marx’s political activity, and that
note of violent indignation and bitter satire which is felt in every page of Das Kapital?
But enough of this, for I find myself making quite elementary statements such as can only
be overlooked owing to ambiguous or exaggerated phraseology.

And in conclusion, I repeat my regret, already expressed, concerning this name
materialism, which is not justified in this case, gives rise to numerous
misunderstandings, and is a cause of derision to opponents. So far as history is
concerned, I would gladly keep to the name realistic view of history, which denotes the
opposition to all teleology and metaphysics within the sphere of history, and combines
both the contribution made by socialism to historical knowledge and those contributions
which may subsequently be brought from elsewhere. Hence my friend Labriola ought not to
attach too much importance, in his serious thoughts, to the adjectives final and definite,
which have slipped from his pen. Did he not once tell me himself that Engels still hoped
for other discoveries which might help us to understand that mystery, made by ourselves,
and which is History?

May, 1896.

NOTES:

1. Del materialismo storico, dilacidazione prefiminare, Rome, E. Loescher, 1896. See
the earlier work by the same author: In memoria del ‘Manifesto dei communisti,’ and ed.
Rome, E. Loescher, 1895.

2. I refer to the works of Professor Achille Loria.

3. He calls it on one occasion: ‘the final and definite philosophy of history.’

4. Beiträge zur Geschichte des Materialismus, Stuttgart, 1896.

5. See, for example, the comments upon some of Marx’s statements, in the article
Progrés et dévelopment in the Devenir Social for March, 1896.

6. For this reason I do not, like Labriola, call the theory of the factors a
half-theory; nor do I like the comparison with the ancient doctrine, now abandoned in
physics, physiology and psychology, of physical forces, vital forces and mental faculties.

7. See a letter dated 21st September 1890, published in the Berlin review, Der
Socialistische Akademiker, No 19, 1st October 1895. Another, dated 25th January 1894, is
printed in No 20, 16th October, of the same review.

8. He even distinguishes between the economic interpretation and the materialistic view
of history. By the first term he means ‘those attempts at analysis, which taking
separately on the one hand the economic forms and categories, and on the other for
example, law, legislation, politics, custom, proceed to study the mutual influences of the
different sides of life, thus abstractly and subjectively distinguished.’ By the second,
on the contrary, ‘the organic view of history’ of the ‘totality and unity of social life,’
where economics itself ‘is melted into the tide of a process to appear afterwards in so
many morphological stages, in each of which it forms the basis relatively to the rest
which corresponds to and agrees with it.’

9. Utopia, L. II (THOMAE MORI angli Opera, Louvain 1566, 18.)

10. ‘Hateful Force rules the world and calls itself Justice.’

11. From this point of view it is worth while to note the antipathy which leaks out in
socialist writings towards Schiller, the poet of the Kantian morality aesthetically
modified, who has become the favourite poet of the German middle classes.

CHAPTER II. CONCERNING HISTORICAL MATERIALISM VIEWED AS A SCIENCE
OF SOCIAL ECONOMICS

The attentive reader of Professor Stammler’s book,(1*) realises at the outset that it
treats of the materialistic theory of history not as a fruitful guide to the
interpretation of historical fact, but as a science or philosophy of society.

A number of attempts have been made, based in the first instance on Marx’s statements,
to build up on these statements a general theory of history or of society. It is on these
attempts then, and not on the least bold amongst them, that Stammler bases his work,
making them the starting point of his criticism and reconstruction. It may be precisely on
this account that he chooses to discuss historical materialism in the form given to it by
Engels, — which he calls the most complete, the authentic(!) statement of the principles
of social materialism. He prefers this form to that of Marx, which he thinks too
disconnected; and which is, indeed, less easily reduced to abstract generalities; whereas
Engels was one of the first to give to historical materialism a meaning more important
than its original one. To Engels, also, as is well known, is due the very name materialism
as applied to this view of history.

We cannot, indeed, deny that the materialistic view of history has in fact developed in
two directions, distinct in kind if not in practice, viz.: (1) a movement relating to the
writing of history, and (2) a science and philosophy of society. Hence there is no ground
for objecting to Stammler’s procedure, when he confines himself to this second problem,
and takes it up at the point to which he thinks that the followers of historical
materialism have brought it. But it should be clearly pointed out that he does not concern
himself at all with the problems of historical method. He leaves out of account that is,
what, for some people — and for me amongst them — is the side of this movement of
thought which is of living and scientific interest.

Professor Stammler remarks how in the propositions employed by the believers in
historical materialism: ‘the economic factor dominates the other factors of social life,’
‘the economic factor is fundamental and the others are dependent,’ and the like, the
concept economic has never been defined. He is justified in making this remark, and in
attaching the greatest importance to it, if he regards and interprets those propositions
as assertions of laws, as strict propositions of social science. To use as essential in
statements of this kind, a concept which could neither be defined nor explained, and which
therefore remained a mere word, would indeed be somewhat odd. But his remark is entirely
irrelevant when these propositions are understood as: ‘summaries of empirical
observations, by the help of which concrete social facts may be explained.’ I do not think
that any sensible person has ever expected to find in those expressions an accurate and
philosophical definition of concepts; yet all sensible people readily understand to what
class of facts they refer. The word economic here, as in ordinary language, corresponds,
not to a concept, but to a group of rather diverse representations, some of which are not
even qualitative in content, but quantitative. When it is asserted, that in interpreting
history we must look chiefly at the economic factors, we think at once of technical
conditions, of the distribution of wealth, of classes and sub-classes bound together by
definite common interests, and so on. It is true these different representations cannot be
reduced to a single concept, but no matter, there is no question of that: here we are in
an entirely different sphere from that in which abstract questions are discussed.

This point is not without interest and may be explained more in detail. If economic be
understood in its strict sense, for example, in the sense in which it is employed in pure
economics, i.e., if by it be meant the axiom according to which all men seek the greatest
satisfaction with the least possible effort, it is plain that to say that this factor
plays a part (essential, dominant, or equal to that of the others) in social life, would
tell us nothing concrete. The economic axiom is a very general and purely a formal
principle of conduct. It is inconceivable that anyone should act without applying, well or
ill, the very principle of every action, i.e., the economic principle. Worse still if
economic be taken in the sense which, as we shall see, Professor Stammler gives to it. He
understands by this word: ‘all concrete social facts’; in which sense it would at once
become absurd to assert that the economic factor, i.e., all social-facts in the concrete
dominated, a part of these facts! Thus in order to give a meaning to the word economic in
this proposition, it is necessary to leave the abstract and formal; to assign definite
ends to human action; to have in mind an ‘historical man,’ or rather the average man of
history, or of a longer or shorter period of history; to think, for example, of the need
for bread, for clothes, for sexual relations, for the so-called moral satisfactions,
esteem, vanity, power and so on. The phrase economic factor now refers to groups of
concrete facts, which are built up in common speech, and which have been better defined
from the actual application made of the above-mentioned propositions in historical
narrative and in the practical programmes of Marx and his followers.

In the main, this is recognised by Professor Stammler himself when he gives an
admirable explanation of the current meaning of the expressions: economic facts and
political facts, revolutions more political than economic and vice versa. Such
distinctions, he says, can only be understood in the concrete, in reference to the aims
pursued by the different sections of society, and to the special problems of social life.
According to him, however, Marx’s work does not deal with such trifling matters: as, for
instance, that so-called economic life influences ideas, science, art and so on: old
lumber of little consequence. Just as philosophical materialism does not consist in the
assertion that bodily facts have an influence over spiritual, but rather in the making of
these latter a mere appearance, without reality, of the former: so historical materialism
must consist in asserting that economics is the true reality and that law is a fallacious
appearance.

But, with all deference to Professor Stammler, we believe that these trifling matters,
to which he contemptuously refers, are precisely what are dealt with in Marx’s
propositions; and, moreover, we think them neither so trifling nor of such little
consequence. Hence Professor Stammler’s book does not appear to us a criticism of the most
vital part of historical materialism, viz., of a movement or school of historians. The
criticism of history is made by history; and historical materialism is history made or in
the making.

Nor does it provide the starting point for a criticism of socialism, as the programme
of a definite social movement. Stammler deceives himself when he thinks that socialism is
based on the materialistic philosophy of history as he expounds it: on which philosophy
are based, on the contrary, the illusions and caprices of some or of many socialists.
Socialism cannot depend on an abstract sociological theory, since the basis would be
inadequate precisely because it was abstract; nor can it depend on a philosophy of history
as rhythmical or of little stability, because the basis would be transitory. On the
contrary, it is a complex fact and results from different elements; and, so tar as
concerns history, socialism does not presuppose a philosophy of history, but an historical
conception determined by the existing conditions of society and the manner in which this
has come about. If we put on one side the doctrines superimposed subsequently, and read
again Marx s pages without prejudice, we shall then see that he had, at bottom, no other
meaning when he referred to history as one of the factors justifying socialism.

‘The necessity for the socialization of the means of production is not proved
scientifically.’ Stammler means that the concept of necessity as employed by many
Marxians, is erroneous; that the denial of teleology is absurd, and that hence the
assertion of the socialization of the means of production as the social programme is not
logically accounted for. This does not hinder this assertion from being possibly quite
true. Either because, in addition to logical demonstrations there are fortunate
intuitions, or because a conclusion can be true although derived from a false premise: it
suffices, obviously, that there should be two errors which cancel one another. And this
would be so in our case. The denial of teleology; the tacit acceptance of this same
teleology: here is a method scientifically in. correct with a conclusion that may be
valid. It remains to examine the whole tissue of experiences, deductions, aspirations and
forecasts in which socialism really consists; and over which Stammler passes
indifferently, content to have brought to light an error in the philosophical statement of
a remote postulate, an error which some, or it may be many, of the supporters and
politicians of socialism commit.

All these reservations are needed in order to fix the scope of Stammler’s
investigation; but it would be a mistake to infer from them that we reject the starting
point of the inquiry itself. Historical materialism says Professor Stammler has proved
unable to give us a valid science of society: we, however, believe that this was not its
main or original object. The two statements come practically to the same thing: the
science of society is not contained in the literature of the materialistic theory.
Professor Stammler adds that although historical materialism does not offer an acceptable
social theory, it nevertheless gives a stimulus of the utmost intensity towards the
formation of such a theory. This seems to us a matter of merely individual psychology:
suggestions and stimuli, as everyone knows, differ according to the mind that receives
them. The literature of historical materialism has always aroused in us a desire to study
history in the concrete, i.e., to reconstruct the actual historical process. In Professor
Stammler, on the contrary, it arouses a desire to throw aside this meagre empirical
history, and to work with abstractions in order to establish concepts and general points
of view. The problems which he sets before himself, might be arrived at psychologically by
many other paths.

There is a tendency, at present, to enlarge unduly the boundaries of social studies.
But Stammler rightly claims a definite and special subject for what ought to be called
social science; that is definite social data. Social science must include nothing which
has not sociability as its determining cause. How can ethics ever be social science, since
it is based on cases of conscience which evade all social rules? Custom is the social
fact, not morality’. How can pure economics or technology ever be social science, since
those concepts are equally applicable to the isolated individual and to societies? Thus in
studying social data we shall see that, considered in general, they give rise to two
distinct theories. The first theory regards the concept society from the causal
standpoint; the second regards it from the teleological standpoint. Causality and
teleology cannot be substituted the one for the other; but one forms the complement of the
other.

If, then, we pass from the general and abstract to the concrete, we have society as
existing in history. The study of the facts which develop in concrete society Stammler
consigns to a science which he calls social (or political, or national) economics. From
such facts may still be abstracted the mere form, i.e., the collection of rules supplied
by history by which they are governed; and this may be studied independently of the
matter. Thus we get jurisprudence, or the technical science of law; which is always bound
up inseparably with a given actual historical material, which it works up by scientific
method, endeavouring to give it unity and coherence. Finally, amongst social studies are
also included those investigations which aim at judging and determining whether a given
social order is as it ought to be; and whether attempts to preserve or change it are
objectively justified. This section may be called that of practical social problems. By
such definitions and divisions Professor Stammler exhausts every possible form of social
study. Thus we should have the following scheme:

SOCIAL SCIENCE.
1. General Study of Society.
a. Causal.
b. Teleological.
2. Study of Concrete Society.
a. of the form (technical science of law).
b. of the matter (social economics).
c. of the possible (practical problems).

We believe that this table correctly represents his views, although given in our own
way, and in words somewhat different from those used by him. A new treatment of the social
sciences, the work of serious and keen ability, such as Stammler seems to possess, cannot
fail to receive the earnest attention of all students of a subject which is still so vague
and controversial. Let us examine it then section by section.

The first investigation relating to society, that concerned with causality, would be
directed to solving the problem of the nature of society. Many definitions have been given
of this up to the present: and none of them can be said to be generally accepted, or even
to claim wide support. Stammler indeed, rejects, after criticism, the definitions of
Spencer or Rümelin, which appear to him to be the most important and to be representative
of all the others. Society is not an organism (Spencer), nor is it merely something
opposed to legalised society (Rümelin): Society, says Stammler, is ‘life lived by men in
common, subject to rules which are externally binding.’ These rules must be understood in
a very wide sense, as all those which bind men living together to something which is
satisfied by outward performance. They are divided, however, into two large classes: rules
properly speaking legal, and rules of convention. The second class includes the precepts
of propriety and of custom, the code of knightly honour, and so on. The distinctive test
lies in the fact that the latter class are merely hypothetical, while the former are
imposed without being desired by those subjected to them. The whole assemblage of rules,
legal and conventional, Stammler calls social form. Under these rules, obeying them,
limiting them and even breaking them men act in order to satisfy their desires; in this,
and in this alone, human life consists. The assemblage of concrete facts which men produce
when working together in society, i.e., under the assumption of social rules, Stammler
calls social matter, or social economics. Rules, and actions under rules; these are the
two elements of which every social datum consists. If the rules were lacking, we should be
outside society; we should be animals or gods, as says the old proverb: if the actions
were lacking there would remain only an empty form, built up hypothetically by thought,
and no portion of which was actually real. Thus social life appears as a single fact: to
separate its two constituent factors means either to destroy it, or to reduce it to empty
form. The law governing changes within society cannot be found in something which is extra
social; not in technique and discovery, nor in the workings of supposed natural laws, nor
in the influence of great men, of mysterious racial and national spirit; but it must be
sought in the very centre of the social fact itself. Hence it is wrong to speak of a
causal bond between law and economics or vice versa: the relation between law and
economics is that between the rule and the things ruled, not one of cause and effect. The
determining cause of social movements and changes is then ultimately to be found in the
actual working out of social rules, which precede such changes. This concrete working out,
these actions accomplished wider rules, may produce (1) social mutations which are
entirely quantitative (in the number of social facts of one or another kind); (2)
mutations which are also qualitative, consisting that is in changes in the rules
themselves. Hence the circle of social life: rules, social facts arising under them;
ideas, opinions, desires, efforts resulting from the facts; changes in the rules. When and
how this circle originated, that is to say when and how social life arose on the earth, is
a question for history, which does not concern the theorist. Between social life and
non-social life there are no gradations, theoretically there is a gulf. But as long as
social life exists, there is no escape from the circle described above.

The form and matter of social life thus come into conflict, and from this conflict
arises change. By what test can the issue of the conflict be decided? To appeal to facts,
to invent a causal necessity which may agree with some ideal necessity is absurd. In
addition to the law of social causality, which has been expounded, there must be a law of
ends and ideals, i.e., a social teleologic. According to Stammler, historical materialism
identifies, nor would it be the only theory to attempt such an identification, causality
and teleology; but it, too, cannot escape from the logical contradictions which such
assertions contain. Much praise has been given to that section of Professor Stammler’s
book in which he shows how teleological assumptions are constantly implied by historical
materialism in all its assertions of a practical nature. But we confess that the discovery
seems to us exceedingly easy, not to be compared to that of Columbus about the egg. Here
again we must point out that the pivot of the Marxian doctrine lies in the practical
problem and not in the abstract theory. The denial of finality is, at bottom, the denial
of a merely subjective and peculiar finality. And here, too, although the criticism as
applied to historical materialism seems to us hardly accurate, we agree with Stammler’s
conclusion, i.e., that it is necessary to construct, or better to reconstruct, with fresh
material, a theory of social teleology.

Let us omit, for the present, an examination of Stammler’s construction of teleology,
which includes some very fine passages (e.g. the criticism of the anarchist doctrine) and
ask instead: What is this social science of Stammler, of which we have stated the striking
and characteristic features? The reader will have little difficulty in discovering that
the second investigation, that concerning social teleology, is nothing but a modernised
philosophy of law. And the first? Is it that long desired and hitherto vainly sought
general sociology? Does it give us a new and acceptable concept of society? To us it
appears evident that the first investigation is nothing but a formal science of law. In it
Professor Stammler studies law as a fact, and hence he cannot find it except in societal
subjected to rules imposed from without. In the second, he studies law as an ideal and
constructs the philosophy (imperative) of law. We are not here questioning the value of
the investigation, but its nature. The present writer is convinced that social data leave
no place for en abstract independent science. Society is a living together; the kind of
phenomena which appear in this life together is the concern of descriptive history. But it
is perfectly possible to study this life together from a given point of view, e.g., from
the legal point of view, or, in general, from that of the legal and nonlegal rules to
which it can be subjected; and this Stammler has done. And, in so doing, he has examined
the nature of law, separating the concrete individual laws and the ideal type of law;
which he has then studied apart. This is the reason why Stammler’s investigation seems to
us a truly scientific investigation and very well carried out, but not an abstract end
general science of society. Such a science is for us inconceivable, just as a formal
science of law is, on the contrary, perfectly conceivable.

As to the second investigation, that concerning teleology, there would be some
difficulty in including it in the number of sciences if it be admitted that ideals are not
subjects for science. But here Professor Stammler himself comes to our assistance by
assigning the foundation of social teleology to philosophy, which he defines as the
science of the True and of the Good, the science of the Absolute, and understands in a
non-formal sense.

Professor Stammler speaks readily of a monism of the social life, and accepts as
suitable and accurate the name materialism as applied to Marx’s conception of history, and
connects this materialism with metaphysical materialism, applying to it also Lange’s
statement, viz., that ‘materialism may be the first and lowest step of philosophy, but it
is also the most substantial and solid.’ For him historical materialism offers truth, but
not the whole truth, since it regards as real the matter only and not the form of social
life; hence the necessity of completing it by restoring the form to its place, and fixing
the relation between form and matter, combining the two in the unity of social life. We
doubt whether Engels and his followers ever understood the phrase social materialism in
the sense which Stammler assigns to it. The parallel drawn between it and metaphysical
materialism seems to us somewhat arbitrary.

We come to the group of concrete sciences, i.e., those which have for their subject
society as given in history. No one who has had occasion to consider the problem of the
classification of the sciences, will be inclined to give the character of independent and
autonomous sciences to studies of the practical problems of this or that society, and to
jurisprudence, and the technical study of law. This latter is only an interpretation or
explanation of a given existing legal system, made either for practical reasons, or as
simple historical knowledge. But what we think merits attention more than these questions
of terminology and classification, is the conception of social economics, advanced by
Stammler; of the second, that is, of the concrete social sciences, enumerated above. The
difficulties arising out of this conception are more serious, and centre on the following
points; whether it is a new and valid conception, or whether it should be reduced to
something already known; or finally whether it is not actually erroneous.

Stammler holds forth at length against economics regarded as a science in itself, which
has its own laws and which has its source in an original and irreducible economic
principle. It is a mistake, he says, to put forward an abstract economic science and
subdivide it into economic science relating to the individual and social economic science.
There is no ground of union between these two sciences, because the economics of the
isolated individual offers us only concepts which are dealt with by the natural sciences
and by technology, and is nothing but an assemblage of simple natural observations,
explained by means of physiology and individual psychology. Social economics, on the other
hand, offers the peculiar and characteristic conditions of the externally binding rules,
wider which activities develop. And what can an economic principle be if not a
hypothetical maxim: the man who wishes to secure this or that object of subjective
satisfaction must employ these or those means, ‘a maxim which is more or less generally
obeyed, and sometimes violated’? The dilemma lies then between the natural and
technological consideration and the social one: there is no third thing. ‘Ein Drittes ist
nicht da!’ This Stammler frequently reiterates, and always in the same words. But the
dilemma (whose unfortunate inspiration he owes to Kant) does not hold, it is a case of a
trilemma. Besides the concrete social facts, and besides the technological and natural
knowledge, there is a third thing, viz., the economic principle, or hedonistic postulate,
as it is preferred to call it. Stammler asserts that this third thing is not equal in
value to the two first ones, that it comes as a secondary consideration, and we confess
that we do not clearly understand what this means. What he ought to prove is that this
principle can be reduced to the two former ones, viz., to the technical or to the social
conditions. This he has not done, and indeed we do not know how it could be done. That
economics, thus understood, is not social science, we are so much the more inclined to
agree since he himself says as much in calling it pure economics, i.e., something built up
by abstraction from particular facts and hence also from the social fact. But this does
not mean that it is not applicable to society, and cannot give rise to inferences in
social economics. The social factor is then assumed as a medium through which the economic
principle displays its influence and produces definite results. Granted the economic
principle, and granted, for example, the legal regulation of private property in land, and
the existence of land differing in quality, and granted other conditions, then the fact of
rent of land arises of necessity. In this and other like examples, which could easily be
brought forward, we have laws of social and political economics, i.e., deductions from the
economic principle acting under given legal conditions. It is true that, under other legal
conditions, the effects would be different; but none of the effects would occur were it
not for the economic nature of man, which is a necessary postulate, and not to be
identified with the postulate of technical knowledge, or with any other of the social
rules. To know is not to will; and to will in accordance with objective rules is not to
will in accordance with ideals which are merely subjective and individual (economic).

Stammler might say that if the science of economics thus interpreted is not properly a
social science, he leaves it on one side, because his object is to construct a science
which may be fully entitled to the name of social economics. But — let us, too, construct
a dilemma! — this social economics, to which he aspires, will either be just economic
science applied to definite social conditions, in the sense now indicated, or it will be a
form of historical knowledge. No third thing exists. Ein Drittes ist nicht da!

And indeed, for Stammler an economic phenomenon is not any single social fact whatever,
but a group of homogeneous facts, which offer the marks of necessity. The number of
economic facts required to form the group and give rise to an economic phenomenon cannot
be determined in general; but can be seen in each case. By the formation of these groups,
he says, social economics does not degenerate into a register of data concerning fact, nor
does it become purely mechanical statistics of material already given which it has merely
to enumerate. Social economics should not merely examine into the change in the actual
working out of one and the same social order, but remains, now as formerly, the seat of
all knowledge of actual social life. It must start from the knowledge of a given social
existence, both in regard to its form and in regard to its content; and enlarge and deepen
it up to the most minute peculiarity of its actual working out, with the accuracy of a
technical science, the conditions and concrete objects of which are clearly indicated; and
thus free the reality of social life from every obscurity. Hence it must make for itself a
series of concepts, which will serve the purpose of such an explanation.

Now this account of the concept of social economics is capable of two interpretations.
The first is that it is intended to describe a science, which has indeed for its object
(as is proper for sciences) necessary connections, in the strict sense of the word. But
how establish this necessity? How make the concepts suitable to social economics?
Evidently by allowing ourselves to be guided by a principle, by abstracting a single side
from concrete reality; and if it is to be for economics this principle can be none other
than the economic principle, and social economics will consider only the economic side of
a given social life. Profits, rent, interest, labour value, usury, wages, crises, will
then appear as economic phenomena necessary under given conditions of the social order,
through which the economic principle exerts its influence.

The other interpretation is that Stammler’s social economics does not indeed accomplish
the dissolving work of analysis but considers this or that social life in the concrete. In
this case it could do nothing but describe a given society. To describe does not mean to
describe in externals and superficially; but, more accurately, to free that group of facts
from every obscurity, showing what it actually is, and describing it, as far as possible
in its naked reality. But this is, in fact, historical knowledge, which may assume varied
forms, or rather may define in various ways its own subject. It may study a society in all
its aspects during a given period of fume, or at a given moment of its existence, or it
may even take up one or more aspects of social life and study them as they present
themselves in different societies and at different times, and so on. It is history always,
even when it avails itself of comparison as an instrument of research. And such a study
will not have to make concepts, but will take them as it needs them from those sciences,
which do, in fact, elaborate concepts.

Thus it would have been of great interest to see the working out of this new social
economics of Stammler a little more clearly, so that we might determine exactly in which
of the aforesaid two classes it ought to be placed. Whether it is merely political economy
in the ordinary sense, or whether it is the concrete study of single societies and of
groups of them. In the latter case Stammler has added another name or rather two names;
science of the matter of social life and social economics, to the many phrases by which of
late the old History has been disguised (social history, history of civilization, concrete
sociology, comparative sociology, psychology of the populace and of the classes, etc.).
And the gain, if we may be allowed to say so, will not be great.

September 1898.

NOTES:

1. Wirthschaft und Recht nach der materialistischen Geschichtsauffassung, eine
socialphilosophische Untersuchung, DR RUDOLPH STAMMLER, Professor at the University of
Halle, A.S., Leipzig, Veit U.C., 1896, pp. viii-668.

CHAPTER III. CONCERNING THE INTERPRETATION AND CRITICISM OF SOME CONCEPTS OF MARXISM

I. OF THE SCIENTIFIC PROBLEM IN MARX’S DAS KAPITAL

Notwithstanding the many expositions, criticisms, summaries and even abbreviated
extracts in little works of popular propaganda, which have been made of Karl Marx s work,
it is far from easy, and demands no small effort of philosophical and abstract thought, to
understand the exact nature of the investigation which Marx carried out. In addition to
the intrinsic difficulty of the subject, it does not appear that the author himself always
realised fully the peculiar character of his investigation, that is to say its theoretical
distinctness from all other investigations which may be made with his economic material;
and, throughout, he despised and neglected all such preliminary and exact explanations as
might have made his task plain. Then, moreover, account must be taken of the strange
composition of the book, a mixture of general theory, of bitter controversy and satire,
and of historical illustrations or digressions, and so arranged that only Loria,
(fortunate man!), can declare Das Kapital to be the finest and most symmetrical of
existing books; it being, in reality, unsymmetrical, badly arranged and out of proportion,
sinning against all the laws of good taste; resembling in some particulars Vico’s Scienza nueva. Then too there is the
Hegelian phraseology beloved by Marx, of which the tradition is now lost, and which, even
within that tradition he adapted with a freedom that at times seems not to lack an element
of mockery. Hence it is not surprising that
Das
Kapital
has been regarded, at one time or another, as an
economic treatise, as a philosophy of history, as a collection of sociological laws,
so-called, as a moral and political book of reference, and even, by some, as a bit of
narrative history.

Nevertheless the inquirer who asks himself what is the method and what the scope of
Marx’s investigation, and puts on one side, of course, all the historical, controversial
and descriptive portions (which certainly form an organic part of the book but not of the
fundamental investigation), can at once reject most of the above-mentioned definitions,
and decide clearly these two points:

(1) As regards method, Das Kapital is without doubt an abstract investigation; the
capitalist society studied by Marx, is not this or that society, historically existing, in
France or in England, nor the modern society of the most civilised nations, that of
Western Europe and America. It is an ideal and formal society, deduced from certain
hypotheses, which could indeed never have occurred as actual facts in the course of
history. It is true that these hypotheses correspond to a great extent to the historical
conditions of the modern civilised world; but this, although it may establish the
importance and interest of Marx’s investigation because the latter helps us to an
understanding of the workings of the social organisms which closely concern us, does not
alter its nature. Nowhere in the world will Marx’s categories be met with as living and
real existences, simply because they are abstract categories, which, in order to live must
lose some of their qualities and acquire others.

(a) As regards scope, Marx’s investigation does not cover the whole field of economic
fact, nor even that one ultimate and dominant portion, whence all economic facts have
their source, like rivers flowing from a mountain. It limits itself, on the contrary, to
one special economic system, that which occurs in a society with private property in
capital, or, as Marx says, in the phrase peculiar to him, capitalist. There remained
untouched, not only the other systems which have existed in history and are possible in
theory, such as monopolist society, or society with collective capital, but also the
series of economic phenomena common to the different societies and to individual
economics. To sum up, as regards method, Das Kapital is not an historical description, and
as regards scope, it is not an economic treatise, much less an encyclopedia.

But, even when these two points are settled, the real essence of Marx’s investigation
is not yet explained. Were Das Kapital nothing but
what we have so far defined, it would be merely an economic monograph on the laws of
capitalist society.(1*) Such a monograph Marx could only have made in one way: by deciding
on these laws, and explaining them by general laws, or by the fundamental concepts of
economics; by reducing, in short, the complex to the simple, or passing, by deductive
reasoning, and with the addition of fresh hypotheses, from the simple to the complex. He
would thus have shown, by precise exposition, how the apparently most diverse facts of the
economic world are ultimately governed by one and the same law; or, what is the same
thing, how this law is differently refracted as it takes effect through different
organizations, without changing itself, since otherwise the means and indeed the test of
the explanation would be lacking. Work of this nature had been already carried out, to a
great extent, in Marx’s time, and since then it has been developed yet further by
economists, and has attained a high degree of perfection, as may be seen, for instance, in
the economic treatises of our Italian writers, Pantaleoni and Pareto. But I much doubt
whether Marx would have become an economist in order to devote himself to a species of
research of almost solely theoretical, or even scholastic, interest. His whole personality
as a practical man and a revolutionist, impatient of abstract investigation which had no
close connection with the interests of actual life, would have recoiled from such a
course. If Das Kapital was to have been merely an economic monograph, it would be safe to
wager that it would never have come into existence.

What then did Marx accomplish, and to what treatment did he subject the phenomena of
capitalist society, if not to that of pure economic theory? Marx assumed, outside the
field of pure economic theory, a proposition; the famous equivalence between value and
labour; i.e. the proposition that the value of the commodities produced by labour is equal
to the quantity of labour socially necessary to produce them. It is only with this
assumption that his special investigation begins.

But what connection has this proposition with the laws of capitalist society? or what
part does it play in the investigation? This Marx never explicitly states; and it is on
this point that the greatest confusions have arisen, and that the interpreters and critics
have been most at a loss.

Some of them have explained the law of labour-value as an historical law, peculiar to
capitalist society, all of whose manifestions it determines;(2*) others rightly seeing
that the manifestations of capitalist society are by no means determined by such a law,
but comply with the general economic motives characteristic of the economic nature of man,
have rejected the law as an absurdity at which Marx arrived by pressing to its extreme
consequences an unfortunate concept of Ricardo.

Criticism was thus bewildered between entire acceptance, combined with a clearly
erroneous interpretation, and entire and summary rejection of Marx’s treatment; until, in
recent years, and especially after the appearance of the third and posthumous volume of
Das Kapital, it began to seek out and follow a better path. In truth, despite its eager
defenders, the Marxian doctrine has always remained obscure; and, despite contemptuous and
summary condemnation, it has always displayed also an obstinate vitality not usually
possessed by nonsense and sophistry. For this reason it is to the credit of Professor
Werner Sombart, of Breslau University, that he has declared, in one of his lucid writings,
that Marx’s practical conclusions may be refuted from a political standpoint, but that,
scientifically, it is above all important to understand his ideas.(3*)

Sombart, then, breaking openly with the interpretation of Marx’s law of value as a real
law of economic phenomena, and giving a fuller, and I may say, a bolder expression to the
timid opinions already stated by another (C. Schmidt), says, that Marx’s law of value is
not an empirical but a conceptual fact (Keine empirische, sondern eine gedankliche
Thatsache); that Marx’s value is a logical fact (eine logische Thatsache), which aids our
thought in understanding the actual realities of economic life.(4*)

This interpretation, in its general sense, was accepted by Engels, in an article
written some months before his death and published posthumously. To Engels it appeared
that ‘it could not be condemned as inaccurate, but that, nevertheless, it was too vague
and might be expressed with greater precision.”(5*)

The acute and courteous remarks on the theory of value, published lately in an article
in the Journal des Economistes by an able French Marxian, Sorel, indicate a movement in
the same direction. In these remarks he acknowledges that there is no way of passing from
Marx’s theory to actual phenomena of economic life, and that, although it may offer
elucidation, in a somewhat limited sense, it does not appear further that it could ever
explain, in the scientific meaning of the word.(6*)

And now too Professor Labriola, in a hasty glance at the same subject, referring
clearly to Sombart, and partly agreeing and partly criticising, writes: ‘the theory of
value does not denote an empirical factum nor does it express a merely logical
proposition, as some have imagined; but it is the typical premise without which all the
rest would be unthinkable.'(7*)

Labriola’s phrase appears to me, in fact, somewhat more accurate than Sombart’s; who,
moreover, shows himself dissatisfied with his own term, like someone who has not yet a
quite definite concept in view, and hence cannot find a satisfactory phrase.

‘Conceptual fact,’ ‘logical fact’ expresses much too little since it is evident that
all sciences are interwoven from logical facts, that is from concepts. Marx’s labour-value
is not only a logical generalisation, it is also a fact conceived and postulated as
typical, i.e. something more than a mere logical concept. Indeed it has not the inertia of
the abstract but the force of a concrete fact,(8*) which has in regard to capitalist
society, in Marx’s investigation, the function of a term of comparison, of a standard, of
a type.(9*)

This standard or type being postulated, the investigation, for Marx, takes the
following form. Granted that value is equal to the labour socially necessary, it is
required to show with what divergencies from this standard the prices of commodities are
fixed in capitalist society, and how labour-power itself acquires a price and becomes a
commodity. To speak plainly, Marx stated the problem in unappropriate language; he
represented this typical value itself, postulated by him as a standard, as being the law
governing the economic phenomena of capitalist society. And it is the law, if he likes,
but in the sphere of his conceptions, not in economic reality. We may conceive the
divergencies from a standard as the revolt of reality when confronted by this standard
which we have endowed with the dignity of law.

From a formal point of view there is nothing absurd about the investigation undertaken
by Marx. It is a usual method of scientific analysis to regard a phenomenon not only as it
exists, but also as it would be if one of its factors were altered, and, in comparing the
hypothetical with the real phenomenon, to conceive the first as diverging from the second,
which is postulated as fundamental, or the second as diverging from the first, which is
postulated in the same manner. If I build up by deductive reasoning the moral rules which
develop in two social groups which are at war one against another, and if I show how they
differ from the moral rules which develop in a state of peace, I should be making
something analogous to the comparison worked out by Marx. Nor would there be great harm
(although the expression would be neither fortunate nor accurate) in saying, in a
figurative sense, that the law of the moral rules in time of war is the same as that of
the rules in time of peace, modified to the new conditions, and altered in a way which
seems, ultimately, inconsistent with itself. As long as he confines himself to the limits
of his hypothesis Marx proceeds quite correctly. Error could come in only when he or
others confuse the hypothetical with the real, and the manner of conceiving and of judging
with that of existing. As long as this mistake is avoided, the method is unassailable.

But the formal justification is insufficient: we need another. With a formally correct
method results may be obtained which are meaningless and unimportant, or mere mental
tricks may be performed. To set up an arbitrary standard of comparison, to compare, and
deduce, and to end by establishing a series of divergencies from this standard; to what
will this lead? It is then, the standard itself which needs justification: i.e. we need to
decide what meaning and importance it may have for us.

This question too, although not stated exactly in this way, has occurred to Marx’s
critics; and an answer to it has been already given some time ago and by many, by saying
that the equivalence of value and labour is an ideal of social ethics, a moral ideal. But
nothing could be imagined more mistaken in itself and farther from Marx’s thought than
this interpretation. What moral inference can ever be drawn from the premise that value is
equal to the labour socially necessary? If we reflect a little, absolutely none. The
establishment of this fact tells us nothing about the needs of the society, which needs
will make necessary one or another ethical-legal system of property and of methods of
distribution. Value may certainly equal labour, nevertheless special historical conditions
will make necessary society organised in castes or in classes, divided into governing and
governed, rulers and ruled; with a resulting unequal distribution of the products of
labour. Value may certainly equal labour; but even supposing that fresh historical
conditions ever make possible the disappearance of society organised in classes and the
advent of a communistic society, and even supposing that in this society distribution
could take place according to the quantity of labour contributed by each person, this
distribution would still not be a deduction from the established equivalence between value
and labour, but a standard adopted for special reasons of social convenience.(10*) Nor can
it be said that such an equivalence supplies in itself an idea of perfect justice (even
though unrealizable), since the criterion of justice has no relation to the difference
often due to purely natural causes, in the ability to do more or less social labour and to
produce a greater or smaller value. Thus neither a rule of abstract justice nor one of
convenience and social utility can be derived from the equivalence between value and
labour. Rules of either kind can only be based on consideration of a quite different grade
from that of a simple economic equation.

Sombart, avoiding this vulgar confusion, has been better advised in looking for the
meaning of the standard set up by Marx in the nature of society itself, and apart from our
moral judgments. Thus he says that labour is the economic fact of greater objective
importance, and that value, in Marx’s view, is nothing ‘if not the economic expression of
the fact of the socially productive power of labour, as the basis of economic existence.’

But this investigation appears to me to be merely begun and not yet worked out to a
conclusion; and if I might suggest wherein it needs completion, I should remark that it is
necessary to attempt to give clearness and precision to this word objective, which is
either ambiguous or metaphorical. What is meant by an economically objective fact? Do not
these words suggest rather a mere presentiment of a concept instead of the distinct vision
of this concept itself?

I will add, merely tentatively, that the word objective (whose correlative term is
subjective) does not seem to be in place here. Let us, instead, take account, in a
society, only of what is properly economic life, i.e. out of the whole society, only of
economic society. Let us abstract from this latter all goods which cannot be increased by
labour. Let us abstract further all class distinctions, which may be regarded as
accidental in reference to the general concept of economic society. Let us leave out of
account all modes of distributing the wealth produced, which, as we have said, can only be
determined on grounds of convenience or perhaps of justice, but in any case upon
considerations belonging to society as a whole, and never from considerations belonging
exclusively to economic society. What is left after these successive abstractions have
been made? Nothing but economic society in so far as it is a working society.(11*) And in
this society without class distinctions, i.e. in an economic society as such and whose
only commodities are the products of labour, what can value be? Obviously the sun, of the
efforts, i.e. the quantity of labour, which the production of the various kinds of
commodities demands. And, since we are here speaking of the economic social organism, and
not of the individual persons living in it, it follows that this labour cannot be reckoned
except by averages, and hence as labour socially (it is with society, I repeat, that we
are here dealing) necessary.

Thus labour-value would appear as that determination of value peculiar to economic
society as such, when regarded only in so far as it produces commodities capable of being
increased by labour.

From this definition the following corollary may be drawn: the determination of labour
value will have a positive conformity with facts as long as a society exists, which
produces goods by means of labour. It is evident that in the imaginary county of Cocaigne
this determination would have no conformity with facts, since all goods would exist in
quantities exceeding the demand; similarly it is also evident that the same determination
could not take effect in a society in which goods were inadequate to the demand, but could
not be increased by labour.

But hitherto history has shown us only societies which, in addition to the enjoyment of
goods not increasable by labour, have satisfied their needs by labour. Hence this
equivalence between value and labour has hitherto had and will continue for an indefinite
time to have, a conformity with facts; but, of what kind is this conformity? Having ruled
out (1) that it is a question of a moral ideal, and (2) that it is a question of
scientific law; and having nevertheless concluded that this equivalence is a fact (which
Marx uses as a type), we are obliged to say, as the only alternative, that it is a fact,
lout a fact which exists in the midst of other facts; i.e. a fact that appears to us
empirically as opposed, limited, distorted loy other facts, almost like a force amongst
other forces, which produces a resultant different from what it would produce if the other
forces ceased to act. It is not a completely dominant fact but neither is it non-existent
and merely imaginary.(12*)

It is still necessary to remark that in the course of history this fact has undergone
various alterations, i.e., has been more or less obscured; and here it is proper to do
justice to Engels’ remark in reference to Sombart; that as regards the way in which the
latter defines the law of value ‘he does not bring out the full importance which this law
possesses during the stages of economic development in which it is supreme.’ Engels makes
a digression into the field of economic history to show that Marx’s law of value, i.e. the
equivalence between value and the labour socially necessary, has been supreme for several
thousand years.(13*) Supreme is too strong a term; but it is true that the opposed
influences of other facts to this law have been fewer in number and less intense under
primitive communism and under medieval and domestic economic conditions, whilst they have
reached a maximum in the society based on privately owned capital and more or less free
universal competition, i.e. in the society which produces almost exclusively
commodities.(14*)

Marx, then, in postulating as typical the equivalence between value and labour and in
applying it to capitalist society, was, as it were, making a comparison between capitalist
society and a part of itself, isolated and raised up to an independent existence: i.e. a
comparison between capitalist society and economic society as such (but only in so far as
at is a working society). In other words, he was studying the social problem of labour and
was showing by the test implicitly established by him, the special way in which this
problem is solved in capitalist society. This is the justification, no longer formal but
real, of his method.

It was in virtue of this method, and by the light thrown by the type which he
postulated, that Marx was able to discover and define the social origin of profit, i.e. of
surplus value. Surplus value in pure economics is a meaningless word, as is evident from
the term itself; since a surplus value is an extra value, and thus falls outside the
sphere of pure economics. But it rightly has meaning and is no absurdity, as a concept of
difference, in comparing one economic society with another, one fact with another, or two
hypotheses with one another.

It is also in virtue of the same premise that he was able to arrive at the proposition:
that the products of labour in a capitalist society do not sell, unless by exception, for
their value, but usually for more or less, and sometimes with great deviations from their
value; which is to say, to put it shortly, value does not coincide with price. Suppose, by
hypothesis the organisation of production were suddenly changed from a capitalist to a
communistic system, we should see at once, not only that alteration in the fortunes of men
which appeals so much to popular imagination, but also a more remarkable change: a change
in the fortunes of things. A scale of valuation of goods would then fashion itself, very
different for the most part, from that which now exists. The way in which Marx proves this
proposition, by an analysis of the different components of the capital employed in
different industries, i.e. of the proportion of fixed capital (machines, etc.) and of
floating capital (wages), need not be explained here in detail.

And, in the same way, i.e. by proving that fixed capital increases continually in
comparison with floating capital, Marx tries to establish another law of capitalist
society, the law of the tendency of the rate of profits to fall. Technical improvement,
which in an abstract economic society would show itself in the decreased labour required
to produce the same wealth, shows itself in capitalist society in a gradual decline in the
rate of profits.(15*) But this section of Volume III of Das Kapital is one of the least
developed in this little worked-out posthumous book; and it seems to me to be worth a
special critical essay, which I hope to write at another time, not wishing to treat the
subject here incidentally.(16*)

II

MARX’S PROBLEM AND PURE ECONOMICS (GENERAL ECONOMIC SCIENCE)

Marxian economics is thus a study of abstract working society showing the variations
which this undergoes in the different social economic organisations. This investigation
Marx carried out only in reference to one of these organizations, i.e. the capitalist;
contenting himself with mere hints in regard to the slave and serf organizations,
primitive communism, the domestic system and to savage conditions.(17*)

In this sense he and Engels declared that economics (the economics studied by them),
was an historical science.(18*) But here, too, their definition has been less happy than
the investigation itself; we know that Marx’s researches are not historical, but
hypothetical and abstract, i.e. theoretical.(19*) They might better be called researches
into sociological economics, if the word sociological were not one which is employed most
variously and arbitrarily.

If Marx’s investigation is thus limited, if the law of value postulated by him is the
special law of an abstract working society, which only partially takes effect in economic
society as given in history, and in other hypothetical or possible economic societies, the
following results seem to follow evidently and readily: (1) That Marxian economics is not
general economic science; (2) that labour-value is not a general concept of value.
Alongside, then, of the Marxian investigation, there can, or rather must, exist and
flourish a general economic science, which may determine a concept of value, deducing it
from quite different and more comprehensive principles than the special ones of Marx. And,
if the pure economists, confined to their own special province, have been wrong to show an
ungenerous intellectual dislike for Marx’s investigations, his followers, in their turn,
have been wrong to regard ungratefully a branch of research which was alien to them,
calling it now useless, and now frankly absurd.

Such is, in effect, my opinion, and I freely acknowledge that I have never been able to
discover other antithesis or enmity between these two branches of research except the
purely accidental one of the mutual antipathy to and mental ignorance of each other, of
two groups of students. Some have resorted to a political explanation; but, with no wish
to deny that political prepossessions are often the causes of theoretical errors, I do not
consider an explanation as adequate and appropriate, which resolves itself into accusing a
large number of students of allowing themselves blindly and foolishly to be overcome by
passions alien to science; or, what is worse, of knowingly falsifying their thought and
constructing a whole economic system from motives of practical opportunism.

Indeed Marx himself had not the time or means to adopt an attitude, so to speak,
towards the purists, or the hedonists, or the utilitarians, or the deductive or Austrian
school, or whatever else they may call themselves. But he had the greatest contempt for
the oeconomia vulgaris, under which term he was wont to include also the researches of
general economics, which explain what needs no explanation and is intuitively evident, and
leave unexplained what is more difficult and of genuine interest. Nor has Engels discussed
the subject; but an indication of his opinion may be found in his attack on Dühring.
Dühring was struggling to find a general law of value, which should govern all possible
types of economic organisation; and Engels refuted him: ‘Anyone who wishes to bring under
the same law the political economy of Terra del Fuoco and that of modern England, can
produce nothing’ but the vulgarest commonplaces.’ He scorns the truth of ultimate
instance, the eternal laws of value, the tautologous and empty axioms which Herr Dühring
would have produced by his method.(20*) Fixed and eternal laws are non-existent: there is
then no possibility of constructing a general science of economics, valid for all times
and in all places. If Engels had meant to refer to those who affirm the eternity and
inevitability of the laws characteristic of capitalist society, he would have been
justified; and would have been aiming his blows at a prejudice which history alone
suffices to refute, by showing as it does, how capitalism has appeared at different times,
replacing other types of economic organization, and has also disappeared, replaced by
other types. But in Dühring’s case the criticism was much beside the mark; since Dühring
did not indeed mean to set up the laws of capitalist society as fixed and eternal; but to
determine a general concept of value, which is quite another matter: or, in other words,
to show how, from a purely economic point of view, capitalist society is explained by the
same general concepts as explain the other types of organization. No effort, not even that
of Engels, will suffice to stop such a problem from being stated and solved; unless it
were possible to destroy the human intellect, which, in addition to particular facts,
recognises universal concepts.

It would be instructive to examine the references which there are in Marx’s Das Kapital
to unfinished analyses, extraneous to his special method; for in this dependence on
analysis the researches of pure economics have their origin. What is, for instance,
abstract human labour (abstrakt menschliche Albeit) a concept which Marx uses like a
postulate? By what method is that reduction of complex to simple labour accomplished, to
which he refers as to an obvious and ordinary matter? And if, in Marx’s hypothesis,
commodities appear as congealed labour or crystalised labour, why by another hypothesis,
should not all economic goods and not only commodities, appear as congealed methods of
satisfying needs or as crystalised needs? I read at one point in Das Kapital: ‘Things
which in themselves are not commodities, e.g. knowledge, honour, etc., may be sold by
their owners; and thus, by means of their price, acquire the form of commodities. A thing
may formally have a price without having a value. The expression of the price here becomes
imaginary like certain quantities in mathematics.'(21*) Here is yet another difficulty,
indicated but not overcome. Where are these formal or imaginary prices to be found? And
what are they? By what laws are they governed? Or are they perhaps like the Greek words in
Latin prosody, which according to the school rule, per Ausoniae fines sine lege vagantur?
— Questions of this kind are answered by the researches of pure economics.

The philosopher Lange also, who rejected Marx’s law of value, which he regarded as an
extravagant production, a child of sorrow, thinking it unsuitable and in this he was
justified, as a general law of value, arrived at the solutions which have since been given
of the latter, a long time before the researches of the purists came into blossom. ‘Some
years ago,’ he wrote in his book on labour problems, ‘I too worked at a new theory of
value, which should be of such a character as to show the most extreme cases of variation
in value as special cases of the same formula.’ And, whilst adding that he had not
completed it, he intimated that the course which he attempted was the same as that hastily
glanced at by Jevons in his Theory of political economy, published in 1871.

To any of the more cautious and moderate Marxians it is plainly evident that the
researches of the Hedonists are not merely to be rejected as erroneous or unfounded; and
hence an attempt has been made to vindicate them in reference to the Marxian doctrine as
an economic psychology, having its place alongside of true economics itself. But this
definition contains a curious equivocation. Pure economics is quite apart from psychology.
indeed, to begin with, it is hard to fix the meaning of the words economic psychology. The
science of psychology is divided into formal and descriptive. In formal psychology there
is no place either for economic fact nor for any other fact which may represent a
particular content. In descriptive psychology, it is true, are included representations,
sentiments and desires of an economic content, but included as they appear in reality,
mixed with the other psychical phenomena of different content, and inseparable from them.
Thus descriptive economic psychology can be, at most, an approximate limitation, by which
we take as a subject of special description the way in which men (at a given time and
place, or even in the mass as hitherto they have appeared in history) think, feel and
desire in respect to a certain class of goods which are usually called material or
economic, and which, however, stand in need of specification and definition.
Subject-matter, in truth, better suited to history than to science, which regards such
matters only as empty and unimportant generalizations. This may be seen in the long
discussion of the matter by that most weighty of pedants, Wagner, in his manual, which, of
all that has been written on the question, I think the most worthy of notice, and which is
yet, in itself, a thing very little worthy of notice or conclusive.(23*) An enumeration
and description of the various tendencies which exist in men as they appear in ordinary
life: egoistical and altruistic tendencies, love of self-advantage and fear of
disadvantage, tear of punishment and hope of reward, sense of honour and fear of disgrace
and public contempt, love of activity and dislike of idleness, feeling of reverence for
the moral code, etc., this is what Wagner calls economic psychology; and which might
better be called : various observations in descriptive psychology, to be kept in mind
whilst studying the practical questions of economics.(24*)

But what, pray, has pure economics in common with psychology? The purists start from
the hedonistic postulate, i.e. from the economic nature itself of man, and deduce from it
the concepts of utility (economic utility which Pareto has proposed to call by a special
name, ofelimita, from the Greek {omega phi epsilon lambda iota mu omicron sigma}) of
value, and directly, all the other special laws in accordance with which man behaves in so
far as he is an abstract homo oeconomicus. They do exactly what the science of ethics does
with the moral nature; and the science of logic with the logical nature; and so on. At
this rate then would ethics be a psychology of ethics and logic a psychology of logic?
And, since all that we know passes through the human mind, ontology would be a psychology
of existence, mathematics a psychology of mathematics, and we should thus have confused
the most diverse things, ending in a disorder the aim of which would be no longer
comprehensible. Hence we conclude, that with care and the exercise of a little thought, it
will necessarily be agreed that pure economics is not a psychology, but is the true and
essential general science of economic facts.

Professor Labriola, too, shows a certain ill-humour which does not seem to me entirely
justified, towards the pure economists, ‘who’, he says, ‘translate into psychological
conceptualism the influence of risk and other analogous considerations of ordinary
commercial practice! And they do well I answer because the mind desires to give an account
even of the influences of risk and of commercial practice,and to explain their mechanism
and character. And then, psychological conceptualism; is not this an unfortunate
connection between what your intellect shows you that pure economics really is (science
which takes as its starting point an irreducible concept), and that hazardous definition
of psychology which has been criticised above? Are not the noun and adjective in
opposition to one another? And further, Labriola speaks contemptuously of the ‘abstract
atomism’ of the hedonists, in which, ‘one no longer knows what history is, and progress is
reduced to mere appearance.'(25*) Here too, it does not seem to me that his contempt is
justified; for Labriola is well aware that in all abstract sciences, concrete and
individual things disappear and that their elements alone remain as objects to be
considered: hence this cannot be made a ground for special complaint against economic
science. But history and progress, even if they are alien to the study of abstract
economics, do not therefore cease to exist and to form the subject of other studies of the
human mind; and this is what matters.

For my part I hold firmly to the economic notion of the hedonistic guide, to
utility-ophelimity, to final utility, and even to the explanation (economic) of interest
on capital as arising from the different degrees of utility possessed by present and
future goods. But this does not satisfy the desire for a sociological, so to speak,
elucidation of interest on capital; and this elucidation, with others of the same kind,
can only be obtained from the comparative considerations put before us by Marx.(26*)

III

CONCERNING THE LIMITATION OF THE MATERIALISTIC THEORY OF HISTORY

Historical materialism if it is to express something critically acceptable, can, as I
have had occasion to state elsewhere,(27*) be neither a new a priori notion of the
philosophy of history, nor a new method of historical thought; it must be simply a canon
of historical interpretation. This canon recommends that attention be directed to the
so-called economic basis of society, in order that the forms and mutations of the latter
may be better understood.

The concept canon ought not to raise difficulty, especially when it is remembered that
it implies no anticipation of results, but only an aid in seeking for them; and is
entirely of empirical origin. When the critic of the text of Dante’s Comedia uses Witte’s
well-known canon, which runs: ‘the difficult reading is to be preferred to the easy one,’
he is quite aware that he possesses a mere instrument, which may be useful to him in many
cases, useless in others, and whose correct and advantageous employment depends entirely
on his caution. In like manner and with like meaning it must be said that historical
materialism is a mere canon; although it be in truth a canon most rich in suggestion.

But was it in this way that Marx and Engels understood it? and is it in this way that
Marx’s followers usually understand it?

Let us begin with the first question. Truly a difficult one, and offering a
multiplicity of difficulties. The first of these arises so to speak, from the nature of
the sources. The doctrine of historical materialism is not embodied in a classical and
definite book by those authors, with whom it is as it were identified; so that, to discuss
that book and to discuss the doctrine might seem all one thing. On the contrary it is
scattered through a series of writings, composed in the course of half a century, at long
intervals, where only the most casual mention is made of it, and where it is sometimes
merely understood or implied. Anyone who desired to reconcile all the forms with which
Marx’s and Engels have endowed it, would stumble upon contradictory expressions, which
would make it impossible for the careful and methodical interpreter to decide what, on the
whole, historical materialism meant for them.

Another difficulty arises in regard to the weight to be attached to their expressions.
I do not think that there has yet been a study of what might be called Marx’s forma
mentis; with which Engels had something in common, partly owing to congeniality, partly
owing to imitation or influence. Marx, as has been already remarked, had a kind of
abhorrence for researches of purely scholastic interest. Eager for knowledge of things (I
say, of concrete and individual things) he attached little weight to discussions of
concepts and the forms of concepts; this sometimes degenerated into an exaggeration in his
own concepts. Thus we find in him a curious opposition between statements which,
interpreted strictly, are erroneous; and yet appear to us, and indeed are, loaded and
pregnant with truth. Marx was addicted, in short, to a kind of concrete logic.(28*) Is it
best then to interpret his expressions literally, running the risk of giving them a
meaning different from what they actually bore in the writer’s inmost thoughts? Or is it
best to interpret them broadly, running the opposite risk of giving them a meaning,
theoretically perhaps more acceptable, but historically less true?

The same difficulty certainly occurs in regard to the writings of numerous thinkers;
but it is especially great in regard to those of Marx. And the interpreter must proceed
with caution: he must do his work bit by bit, book by book, statement by statement,
connecting indeed these various indications one with another, but taking account of
differences of time, of actual circumstances, of fleeting impressions, of mental and
literary habits; and he must submit to acknowledge ambiguities and incompleteness where
either exists, resisting the temptation to confirm and complete by his own judgment. It
may be allowed for instance, as it appears to me for various reasons, that the way in
which historical materialism is stated above is the same as that in which Marx and Engels
understood it in their inmost thoughts; or at least that which they would have agreed to
as correct if they had had more time available for such labours of scientific elaboration,
and if criticism had reached them less tardily. And all this is of importance up to a
certain point, for the interpreter and historian of ideas; since for the history of
science, Marx and Engels are neither more nor less than they appear in their books and
works; real, and not hypothetical or possible persons.(29*)

But even for science itself, apart from the history of it, the hypothetical or possible
Marx and Engels have their value. What concerns us theoretically is to understand the
various possible ways of interpreting the problems proposed and the solutions thought out
by Marx and Engels, and to select from the latter by criticism those which appear
theoretically true and welcome. What was Marx’s intellectual standpoint with reference to
the Hegelian philosophy of history? In what consisted the criticism which he gave of it?
Is the purport of this criticism always the same for instance in the article published in
the Deutschfranzösische Jahrbücher, for 1844, in the Heilige Familie of 1845, in the
Misere de la philosophie of 1847, in the appendix to Das Komnunistische Manifest of 1848,
in the preface to the Zur Kritik of 1859, and in the preface to the 2nd edition of Das
Kapital of 1873? Is it so again in Engels’ works in the Antidühring, in the article on
Feuerbach, etc.? Did Marx ever really think of substituting, as some have believed, Matter
or material fact for the Hegelian Idea? And what connection was there in his mind between
the concepts material and economic? Again, can the explanation given by him, of his
position with regard to Hegel: ‘the ideas determined by facts and not the facts by the
ideas,’ be called an inversion of Hegel’s view, or is it not rather the inversion of that
of the ideologists and doctrinaires?(30*) These are some of the questions pertaining to
the history of ideas, which will be answered some time or other: perhaps at present the
time has not yet arrived to write the history of ideas which are still in the process of
development.(31*)

But, putting aside this historical curiosity, it concerns us now to work at these ideas
in order to advance in theoretical knowledge. How can historical materialism justify
itself scientifically? This is the question I have proposed to myself, and to which the
answer is given by the critical researches referred to at the beginning of this paragraph.
Without returning to them I will give other examples, taken from the same source, that of
the Marxian literature. How ought we to understand scientifically Marx’s neo-dialectic?
The final opinion expressed by Engels on the subject seems to be this: the dialect is the
rhythm of the development of things, i.e. the inner law of things in their development.
This rhythm is not determined a priori, and by metaphysical deduction, but is rather
observed and gathered a posterior), and only through the repeated observations and
verifications that are made of it in various fields of reality, can it be presupposed that
all facts develop through negations, and negations of negations.(32*) Thus the dialect
would be the discovery of a great natural law, less empty and formal than the so-called
law of evolution and it would have nothing in common with the old Hegelian dialect except
the name, which would preserve for us an historical record of the way in which Marx
arrived at it. But does this natural rhythm of development exist? This could only be
stated from observation, to which indeed, Engels appealed in order to assert its
existence. And what kind of a law is one which is revealed to us by observation? Can it
ever be a law which governs things absolutely, or is it not one of those which are now
called tendencies, or rather is it not merely a simple and limited generalization this
recognition of rhythm through negations of negations, it is not some rag of the old
metaphysics, from which it may be well to free ourselves.(33*) This is the investigation
needed for the progress of science. In like manner should other statements of Marx and
Engels be criticised. What for example shall we think of Engels’ controversy with Dühring
concerning the basis of history: whether this is political force or economic fact? Will it
not seem to us that this controversy can perhaps retain any value in face of Dühring’s
assertion that political fact is that which is essential historically, but in itself has
not that general importance which it is proposed to ascribe to it? We may reflect for a
moment that Engels’ thesis: ‘force protects (Schubert) but does not cause (verursacht)
usurpation,’ might be directly inverted into another that: ‘force causes usurpation, but
economic interest protects it,’ and this by the well known principle of the
interdependence and competition of the social factors.

And the class war? In what sense is the general statement true that history is a class
war? I should be inclined to say that history is a class war (1) when there are classes,
(2) when they have antagonistic interests, (3) when they are aware of this antagonism,
which would give us, in the main, the humourous equivalence that history is a class war
only when it is a class war. In fact sometimes classes have not had antagonistic
interests, and very often they are not conscious of them; of which the socialists are well
aware when they endeavour, by efforts not always crowned with success (with the peasantry,
for example, they have not yet succeeded), to arouse this consciousness in the modern
proletariat. As to the possibility of the non-existence of classes, the socialists who
prophesy this non-existence for the society of the future, must at least admit that it is
not a matter intrinsically necessary to historical development, since in the future, and
without classes, history, it may well be hoped will continue. In short even the particular
statement that ‘history is a class war,’ has that limited value of a canon and of a point
of view, which we have allowed in general to the materialist conception.(34*)

The second of the two questions proposed at the beginning is: How do the Marxians
understand historical materialism? To me it seems undeniable that in the Marxian
literature, i.e. the writings of the followers and interpreters of Marx, there exists in
truth a metaphysical danger of which it is necessary to beware. Even in the writings of
Professor Labriola some statements are met with which have recently led a careful and
accurate critic to conclude that Labriola understands historical materialism in the
genuine and original sense of a metaphysic, and that of the worst kind, a metaphysic of
the contingent.(35*) But although I have myself, on another occasion, pointed out those
statements and formulae which seem to me doubtful in Labriola’s writings, I still think,
as I thought then, that they are superficial outgrowths on a system of thought essentially
sound; or to speak in a manner agreeing with the considerations developed above, that
Labriola, having educated himself in Marxism, may have borrowed from it also some of its
over-absolute style, and at times a certain carelessness about the working out of
concepts, which are somewhat surprising in an old Herbartian like himself,(36*) but which
he then corrects by observations and limitations always useful, even if slightly
contradictory, because they bring us back to the ground of reality.

Labriola, moreover, has a special merit, which marks him off from the ordinary
exponents and adapters of historical materialism. Although his theoretical formulae may
here and there expose him to criticism, when he turns to history, i.e. to concrete facts,
he changes his attitude, throws off as it were, the burden of theory and becomes cautious
and circumspect: he possesses, in a high degree, respect for history. He shows unceasingly
his dislike for formulae of every kind, when concerned to establish and scrutinise
definite processes, nor does he forget to give the warning that there exists ‘no theory,
however good and excellent in itself, which will help us to a summary knowledge of every
historical detail.'(37*)

In his last book we may note especially a full inquiry into what could possibly be the
nature of a history of Christianity. Labriola criticises those who set up as an historical
subject the essence of Christianity, of which it is unknown where or when it has existed;
since the history of the last centuries of the Roman Empire shows us merely the origin and
growth of what constituted the Christian society, or the church, a varying group of facts
amidst varied historical conditions. This critical opinion held by Labriola seems to me
perfectly correct; since it is not meant to deny, (what I myself, do not deny) the
justification of that method of historical exposition, which for lack of another phrase, I
once called histories by concepts,(38*) thus distinguishing it from the historical
exposition of the life of a given social group in a given place and during a given period
of time. He who writes the history of Christianity, claims in truth, to accomplish a task
somewhat similar to the tasks of the historians of literature, of philosophy, of art: i.e.
to isolate a body of facts which enter into a fixed concept, and to arrange them in a
chronological series, without however denying or ignoring the source which these facts
have in the other facts of life, but keeping them apart for the convenience of more
detailed consideration. The worst of it is that whereas literature, philosophy, art and so
on are determined or determinable concepts, Christianity is almost solely a bond, which
unites beliefs often intrinsically very diverse; and, in writing the history of
Christianity, there is often a danger of writing in reality the history of a name, void
without substance.(39*)

But what would Labriola say if his cautious criticism were turned against that history
of the origin of the family, of private property and of class distinctions, which is one
of the most extensive historical applications made by the followers of Marx: desired by
Marx, sketched out by Engels on the lines of Morgan’s investigations, carried on by
others. Alas, in this matter, the aim was not merely to write, as could, perhaps, have
been done, a useful manual of the historical facts which enter into these three concepts,
but actually an additional history was produced: A history, to use Labriola’s own phrase,
of the essence family, of the essence class and of the essence private property, with a
predetermined cadence. A ‘history of the family,’ to confine ourselves to one of the three
groups of facts,can only be an enumeration and description of the particular forms taken
by the family amongst different races and in the course of time: a series of particular
histories, which unite themselves into a general concept. It is this which is offered by
Morgan’s theories, expounded by Engels, which theories modern criticism have cut away on
all sides.(40*) Have they not allowed themselves to presuppose, as an historical stage,
through which all races are fated to pass, that chimerical matriarchate, in which the mere
reckoning of descent through the mother is confused with the predominance of woman in the
family and that of woman in society? Have we not seen the reproofs and even the jeers
directed by some Marxians against those cautious historians who deny that it is possible
to assert, in the present condition of the criticism of sources, the existence of a
primitive communism, or a matriarchate, amongst the Hellenic races? Indeed, I do not think
that throughout this investigation proof has been given of much critical foresight.

I should also like to call Labriola’s attention to another confusion, very common in
Marxian writings, between economic forms of organisation and economic epochs. Under the
influence of evolutionist positivism, those divisions which Marx expressed in general: the
Asiatic, the antique, the feudal and the bourgeois economic organisation, have become four
historical epochs: communism, slave organization, serf organization, and wage-earning
organization. But the modern historian, who is indeed not such a superficial person as the
ordinary Marxians are accustomed to say, thus sparing themselves the trouble of taking a
share in his laborious procedure, is well aware that there are four forms of economic
organization, which succeed and intersect one another in actual history, often forming the
oddest mixtures and sequences. He recognises an Egyptian mediaevalism or feudalism, as he
recognises an Hellenic mediaevalism or feudalism; he knows too of a German
neo-mediaevalism which followed the flourishing bourgeois organisation of the German
cities before the Reformation and the discovery of the New World; and he willingly
compares the general economic conditions of the Greco-Roman world at its zenith with those
of Europe in the sixteenth and seventeenth centuries.

Connected with this arbitrary conception of historical epochs, is the other of the
inquiry into the cause (note carefully; into the cause) of the transition from one form to
another. Inquiry is made, for instance, into the cause of the abolition of slavery, which
must be the same, whether we are considering the decline of the Greco-Roman world or
modern America; and so for serfdom, and for primitive communism and the capitalist system:
amongst ourselves the famous Loria has occupied himself with these absurd investigations,
the perpetual revelation of a single cause, of which he himself does not know exactly
whether it be the earth, or population or something else yet it should not take much to
convince us, (it would suffice for the purpose to read, with a little care, some books of
narrative history), that the transition from one form of economic, or more generally,
social, organization, to another, is not the result of a single cause, nor even of a group
of causes which are always the same; but is due to causes and circumstances which need
examination for each case since they usually vary for each case. Death is death; but
people die of many diseases.

But enough of this; and I may be allowed to conclude this paragraph by reference to a
question which Labriola also brings forward in his recent work, and which he connects with
the criticism of historical materialism.

Labriola distinguishes between historical materialism as an interpretation of history,
and as a general conception of life and of the universe (Lebens-und-Weltanschauang), and
he inquires what is the nature of the philosophy immanent in historical materialism; and
after some remarks, he concludes that this philosophy is the tendency to monism, and is a
formal tendency.

Here I take leave to point out that if into the term historical materialism two
different things are intruded, i.e.: (1) a method of interpretation; (2) a definite
conception of life and of the universe; it is natural to find a philosophy in it, and
moreover with a tendency to monism, because it was included therein at the outset. What
close connection is there between these two orders of thought? Perhaps a logical
connection of mental coherence? For my part, I confess that I am unable to see it. I
believe, on the contrary, that Labriola, this time, is simply stating a proposition of
historical materialism what he thinks to be the necessary attitude of modern thought with
regard to the problems of ontology; or what, according to him, should be the standpoint of
the socialist opinion in regard to the conceptions of optimism and pessimism; and so on. I
believe, in short, that he is not making an investigation which will reveal the
philosophical conceptions underlying historical materialism; but merely a digression, even
if a digression of interest and importance. And how many other most noteworthy opinions
and impressions and sentiments are welcomed by socialist opinion! But why christen this
assemblage of new facts by the name of historical materialism, which has hitherto
expressed the well-defined meaning of a way of interpreting history? Is it not the task of
the scientist to distinguish and analyse what in empirical reality and to ordinary
knowledge appears mingled into one?

IV

OF SCIENTIFIC KNOWLEDGE IN FACE OF SOCIAL PROBLEMS

It has become a commonplace that, owing to Marx’s work, socialism has passed from
utopia to science, as the title of a popular booklet by Engels expresses it; and
scientific socialism is a current term. Professor Labriola does not conceal his doubts of
such a term; and he is right.

On the other hand, we hear the followers of other leaders, for instance the extreme
free traders (to whom I refer by preference honoris causa, because they, too, are amongst
the idealists of our times), in the name of science itself, condemn socialism as
anti-scientific and declare that free trade is the only scientific opinion.

Would it not be convenient if both sides retraced their steps and mortified their pride
a little, and acknowledged that socialism and free trade may certainly be called
scientific in metaphor or hyperbole; but that neither of them are, or ever can be,
scientific deductions? And that thus the problem of socialism, of free trade and of any
other practical social programme, may be transferred to another region; which is not that
of pure science, but which nevertheless is the only one suited to them?

Let us pause for an instant at free trade. It presents itself to us from two points of
view, i.e. with a two-fold justification. In the older aspect it undeniably has a
metaphysical basis, consisting in that conviction of the goodness of natural laws and that
concept of nature (natural law, state of nature, etc.) which, proceeding from the
philosophy of the 18th century, was predominant in the 18th century.(41*) ‘Do not hinder
Nature in her work and all will be for the best.’ A similar note is struck, only
indirectly, by a criticism like that of Marx; who, when analysing the concept of nature,
showed that it was the idealogical complement of the historical development of the middle
class, a powerful weapon of which this class availed itself against the privileges and
oppressions which it intended to overthrow.(42*) Now this concept may indeed have
originated as a weapon made occasional use of historically, and nevertheless be
intrinsically true. Natal law in this case, is equivalent to rational law; it is necessary
to deny both the rationality and the excellence of this law. Now, just because of its
metaphysical origin, this concept can be rejected altogether, but cannot be refuted in
detail it disappears with the metaphysic of which it was a part, and it seems at length to
have really disappeared. Peace to the sublime goodness of natural laws.

But free trade presents itself to us, among its more recent supporters, in a very
different aspect — the free traders, abandoning metaphysical postulates, assert two
theses of practical importance: (a) that of an economic hedonistic maximum, which they
suppose identical with the maximum of social desirability;(43*) and (b) the other, that
this hedonistic maximum can only be completely secured by means of the fullest economic
liberty. These two theses certainly take us outside metaphysics and into the region of
reality; but not actually into the region of science. Indeed the first of them contains a
statement of the ends of social life, which may perhaps be welcome, but is not a deduction
from any scientific proposition. The second thesis cannot be proved except by reference to
experience, i.e. to what we know of human psychology, and to what, by approximate
calculation, we may suppose that psychology will still probably be in the future. A
calculation which can be made, and has been made with great acumen, with great erudition
and with great caution and which hence may even be called scientific, but only in a
metaphorical and hyperbolical sense, as we have already remarked: hence the knowledge
which it affords us, can never have the value of strictly scientific knowledge.(44*)
Pareto, who is both one of the most intelligent and also one of the most trustworthy and
sincere, of the recent exponents and supporters of free trade,(45*) does not deny the
limited and approximate nature of its conclusions; which appears to him so much the more
clearly in that he uses mathematical formulae, which show at once the degree of certainty
to which statements of this kind may lay claim.

And, in effect, communism (which has also had its metaphysical period, and earlier
still a theological period) may, with entire justice, set against the two theses of free
trade, two others of its own which consist: (a) in a different and not purely economic
estimate of the maximum of social desirability; (b) in the assertion that this maximum can
be attained, not through extreme free trade, but rather through the organization of
economic forces; which is the meaning of the famous saying concerning the leap from the
reign of necessity ( = free competition or anarchy) into that of liberty ( = the command
of man over the forces of nature even in the sphere of the social natural life). But
neither can these two theses be proved; and for the same reasons. Ideals cannot be proved;
and empirical calculations and practical convictions are not science. Pareto clearly
recognises this quality in modern socialism; and agrees that the communistic system, as a
system, is perfectly conceivable, i.e. theoretically it offers no internal contradictions
(§ 446). According to him it clashes, not with scientific laws, but with immense
practical difficulties (l.c.) such as the difficulty of adopting technical improvements
without the trial and selection secured by free competition; the lack of stimuli to work;
the choice of officials, which in a communistic society would be guided, still according
to him, not by wholly technical reasons, as in modern industry, but on political and
social grounds (837). He admits the socialist criticism of the waste due to free
competition; but thinks this inevitable as a practical way of securing equilibrium of
production. The real problem he says is: whether without the experiments of free
competition it is possible to arrive at a knowledge of the line (the line which he calls
mn) of the complete adaptation of production to demand, and whether the expense of making
a unified (communistic) organisation of work, would not be greater than that needed to
solve the equations or production by experiments (718, 867). He also acknowledged that
there is something parasitical in the capitalist (Marx’s sad-faced knight); but, at the
same time, he maintains that the capitalist renders social services, for which we do not
know how otherwise to provide.(46*) If it be desired to state briefly the contrasts in the
two different points of view, it may be said that human psychology is regarded by the free
traders as for the most part, determined, and by the socialists, as for the most part
changeable and adaptable. Now it is certain that human psychology does change and adapt
itself; but the extent and rapidity of these changes are incapable of exact determination
and are left to conjecture and opinion. Can they ever become the subject of exact
calculation?

If now we pass to considerations of another kind, not of what is desirable, that is of
the ends and means admired and thought good by us; but of what under present
circumstances, history promises us; i.e. of the objective tendencies of modern society, I
really do not know with what meaning many free traders cast on socialism the reproach of
being Utopian. For quite another reason socialists might cast back the same reproach upon
free trade, if it were considered as it is at present, and not as it was fifty years ago
when Marx composed his criticism upon it. Free Trade and its recommendations turn upon an
entity which now at least, does not exist: i.e. the national or general interest of
society; since existing society is divided into antagonistic groups and recognizes the
interest of each of these groups, but not, or only very feebly, a general interest. Upon
which does free trade reckon? On the landed proprietors or on the industrial classes, on
the workmen or on the holders of public dignities? Socialism, on the contrary, from Marx
onwards, has placed little reliance on the good sense and good intentions of men, and has
declared that the social revolution must be accomplished chiefly by the effort of a class
directly interested, i.e. the proletariat. And socialism has made such advances that
history must inquire whether the experience that we have of the past justifies the
supposition that a social movement, so widespread and intense, can be reabsorbed or
dispersed without fully testing itself In the sphere of facts. On this matter too I gladly
refer to Pareto, who acknowledges that even in that country of free traders’ dreams, in
England, the system is supported not owing to people’s conviction of its intrinsic
excellence, but because it is in the interests of certain entrepreneurs.(47*) And he
recognises, with political acumen, that since social movement takes place in the same
manner as all other movements, along the line of least resistance, it is very likely that
it may be necessary to pass through Socialistic state,in order to reach a state of free
competition (§ 791).

I have said that the extreme free traders, much more than the socialists, are
idealists, or if one prefers it, ideologists. Hence in Italy we are witnesses of this
strange phenomenon, a sort of fraternising and spiritual sympathy between socialists and
free traders, in so far as both are bitter and searching critics of the same thing, which
the former call the bourgeois tyranny and the latter bourgeois socialism. But in the field
of practical activity the socialists (and here I no longer refer especially to Italy)
undoubtedly make progress whilst the free traders have to limit themselves to the
barrenness of evil-speaking and of aspirations, forming a little group of well-meaning
people of select intelligence, who make audience for one another.(48*) By this I mean no
reproach to these sincere and thoroughly consistent free-traders: rather I sincerely
admire them; their lack of success is not their own fault.

I wish merely to remark that if ideals, as the philosopher says, have short legs, those
of the free traders’ ideals are indeed of the shortest.

I could continue this exemplification, bringing forward various other social
programmes, such as that of state socialism, which consists in accepting the socialist
ideal, but as an ultimate end perhaps never fully attainable, and extending its partial
attainment over a long course of centuries; and in relying for the effective force, not in
a revolutionary class, nor simply in the views of right thinkers, but in the state,
conceived as a creative power, independent of and superior to individual wills. It is
certainly undeniable that the function of the state, like all social functions, owing to a
complication of circumstances, amongst which are tradition, reverence, the consciousness
of something which surpasses individuals, and other impressions and sentiments which are
analysed by collective psychology, acquires a certain independence and develops a certain
peculiar force; but in the estimation of this force great mistakes are made, as socialist
criticism has clearly shown: and, in any case, whether it be great or small, we are always
faced by a calculation; and one moreover, in the region of opinion, which region science
may, in part, yet bring under its power, but which in a great degree will always be
rebellious to it.

Oh the misuses which are made of this word science! Once these misuses were the
monopoly of metaphysics, to whose despotic nature they appeared suitable. And the
strangest instances could be quoted, even from great philosophers, from Hegel, from
Schopenhauer, from Rosmini, which would show how the humblest practical conclusions, made
by the passions and interests of men, have often been metaphysically transformed into
inferences from the Spirit, from the Divine Being, from the Nature of things, from the
finality of the universe. Metaphysics hypostatised whet it then triumphantly inferred. The
youthful Marx wittily discovered in the Hegelianism of Bruno Bauer, the pre-established
harmony of critical analysis (Kritische Kritik) under German censorship. Those who most
frequently have the word in their mouths make a sort of Sibyl or Pythia of a limited
intellectual function. But the desirable is not science, nor is the practicable.(49*)

Is scientific knowledge then in fact superfluous in practical questions? Are we to
assent to this absurdity? The attentive reader will be well aware that we are not here
discussing the utility of science, but the possibility of inferring, as some claim to do,
practical programmes from scientific prepositions; and it is this possibility only which
is denied.

Science, in so far as it consists in knowledge of the laws governing actual facts, may
be a legitimate means of simplifying problems, making it possible to distinguish in them
what can be scientifically ascertained from what can only be partially known. A great
number of things which are commonly disputed, may be cleared up and accurately decided by
this method. To give an example, when Marx in opposition to Proudhon and his English
predecessors (Bray, Gray, etc.) showed the absurdity of creating labour bonds, i.e.
labour-money; and when Engels directed similar criticisms against Dühring, and then
again, perhaps with less justification, against Rodbertus(50*) or when both established
the close connection between the method of production and the method of distribution, they
were working in the field proper to scientific demonstration, trying to prove an
inconsistency between the conclusions and the premises, i.e. an internal contradiction in
the concepts criticised. The same may be said of the proof, carefully worked out by the
free traders, of the proposition: that protection of every kind is equivalent to a
destruction of wealth. And if it were possible to establish accurately that law of the
tendency of the rate of profits to decline, with which Marx meant to correct and widen the
Ricardian law deduced from the continuous encroachments of the rent of land, it could be
said, under certain conditions, that the end of the bourgeois capitalist organisation was
a scientific certainty, though it would remain doubtful what could take its place

This limitation ‘uncle’ certain conditions’ is the point to be noticed. All scientific
laws are abstract laws; and there is no bridge over which to pass from the concrete to the
abstract; just because the abstract is not a reality, but a form of thought, one of our,
so to speak, abbreviated ways of thinking. And, although a knowledge of the laws may light
up our perception of reality, it cannot become this perception itself.

Here we may agree with what Labiola justly felt, when, showing his dissatisfaction with
the term scientific socialism, he suggested, though without giving any reasons, that that
of critical communism might be substituted.(51*)

If then from abstract laws and concepts we pass to observations of historical fact, we
find, it is true, points of agreement between our ideals and real things, but at the same
time we enter upon those difficult calculations and conjectures, from which it is always
impossible to eliminate, as was remarked above, the diversity of opinions and
propensities.

In face of the future of society, in face of the path to be pursued, we have occasion
to say with Faust — Who can say I believe? Who can say I do not believe?

Not indeed that we wish to advocate or in any way justify a vulgar scepticism. But at
the same time we need to be sensible of the relativity of our beliefs, and to come to a
determination in practice where indetermination is an error. This is the point; and herein
lie all the troubles of men of thought; and hence arises their practical impotence, which
art has depicted in Hamlet. Neither shall we wish, in truth, to imitate that magistrate,
famous for miles around the district where he officiated for the justice of his decisions,
of whom Rabelais tells us, that he used the very simple method, when about to make up his
mind, of offering a prayer to God and settling his decision by a game of odd and
even.(52*) But we must strive to attain personal conviction, and then bear always in mind
that great characters in history have had the courage to dare. ‘Alea jacta est.’ said
Caesar; ‘Gott helfe mir, amen!’ said Luther. The brave deeds of history would not be brave
if they had been accompanied by a clear foresight of the consequences, as in the case of
the prophets and those inspired by God.

Fortunately, logic is not life, and man is not intellect alone. And, whilst those same
men whose critical faculty is warped, are the men of imagination and passion, in the life
of society the intellect plays a very small part, and with a little exaggeration it may
even be said that things go their way independent of our actions. Let us leave them to
their romances, let them preach, I will not say in the market places where they would not
be believed, but in the university lecture rooms, or the halls of congresses and
conferences the doctrine that science (i.e. their science) is the ruling queen of life.
And we will content ourselves by repeating with Labriola that ‘History is the true
mistress of all us men, and we are as it were vitalised by History.’

V

OF ETHICAL JUDGMENT IN FACE OF SOCIAL PROBLEMS

Labriola, with his usual piquancy, lashes those who reduce history to a case of
conscience or to an error in bookkeeping.

With this he recalls us to the two-fold consideration (1) that for Marx the social
question was not a moral question, and (2) that the analysis made by Marx of capitalism
amounts to a proof of the laws which govern a given society, and not indeed to a proof of
theft, as some have understood it, as though it would suffice to restore to the workman
the amount of his wrongfully exacted surplus labour, so that the accounts may turn out in
order, and the social question be satisfactorily solved.(53*)

Leaving the second consideration, which yet gives us an instance of the ludicrous
travesties which may be made of a scientific theory, let us pause for a moment over the
first formula, which usually gives the greatest offense to non-socialists; so much so that
many of them wish to put a little salt in the broth and complete socialism by morality.

In actual fact, offense and moral indignation have never been caused less
appropriately.

Those remarks in Marx’s writings which savour of moral indifference, bear a very
limited and trivial meaning. Consider a moment, as indeed has been considered many times,
that no social order of any kind can exist without a basis of slavery, or serfdom, or
hired service; that is to say that slavery, or serfdom, or hired service are natural
conditions of social order, and that without them a thing cannot exist, which is so
necessary to man that, at least since he was man, he has never done without it, viz.,
society. Faced by such a fact, what meaning would our moral judgment have, directed
against these governing human beings who call themselves slave owners, feudal lords and
bourgeois capitalists, and in favour of these governed human beings who call themselves
slaves, serfs, free labourers; neither of whom could be different from what they are, nor
could otherwise fulfil the function assigned to them by the very nature of things.(54*)
Our condemnation would be a condemnation of the inevitable; a Leopardian curse directed
against the genital power which rules in secret to the general harm. But moral praise or
blame has reference always to an act of will, good or bad; and such judgments would on the
contrary be directed against a fact, which has not been willed by anyone, but is endured
by every one because it cannot be different. You, indeed, may lament it; but by lamenting
it, you not only do not destroy it, you do not even touch it, i.e., you waste your time.

This is what Marx calls the impotence of morality, which is as much as to say that it
is useless to propound questions which no effort can answer and which are therefore
absurd.

But when, on the other hand, these conditions of subjection are not conceived as
necessary for the social order in general, but only as necessary for a stage in its
history; and when new conditions make their appearance which render it possible to destroy
them (as was the case in the industrial advance toward serfdom, and as the socialists
reckon will happen in the final phase of modern civilisation in regard to wage earners and
capitalism); then moral condemnation is justified, and, up to a certain point, is also
effective in quickening the process ot destruction and in sweeping away the last remnants
of the past.

This is the meaning of Marx’s other saying: that morality condemns what has already
been condemned by history.(55*)

I cannot manage to see any difficulty in agreeing to remarks of this kind, even from
the standpoint of the strictest ethical theories. There is here no question of
misunderstanding the nature of morality, and of wishing to make it into something
fortuitous or relative; but simply of determining the conditions of human progress,
turning the attention from the inevitable effects to the fundamental causes, and seeking
remedies in the nature of things and not in our caprices and pious wishes. It must needs
be thought that the opposition proceeds, not from intellectual error, but rather from
human pride, or vanity it may be, owing to which many desire to retain for their wretched
words a little of the virtue of the divine word, which created light by its decree.(56*)

The same feeling must perhaps be present as the basis of the horror which usually
greets the other practical maxim of the socialists; that the workman educates himself by
the political struggle. But Labriola is fully justified in admiring in the advance of
German socialism ‘the truly new and imposing instance of social pedagogy; viz. that,
amongst such an enormous number of men, particularly of workmen of the lower middle class,
a new consciousness is developing, within which compete in equal degree, a direct sense of
the economic situation, which incites to the struggle, and the socialist propaganda
understood as the goal or point of arrival.’ What means have the preachers of moral maxims
at their disposal, to secure a result equal to this? Who are these workmen who combine in
associations, who read their newspapers, discuss the acts of their delegates and accept
the decisions of their congresses, if not men who are educating themselves morally?

But there is not only a question of vanity and pride in that feeling of aversion, which
animates many with regard to the practical maxims of the socialists, and in the desire,
which people also show, of undertaking in the name of morality or religion, the spiritual
direction of the education of the working man; nor shall we wish to be so ingenuous and
complacent as to confine ourselves to such a partial explanation. There is more, there is,
I might almost say, an apprehension and a fear. An apprehension, little justified, lest
the political organisation of the proletariat may lead to a brutal and unrestrained
outbreak of the masses and to I know not what kind of social ruin: as if such outbreaks
were not recorded by history in precisely those periods in which it is usual to suppose
that the dominion of religion over conscience was greatest, as in the jacqueries of the
fourteenth century in France, and again in the peasants’ wars in Germany, and in which
there was no organisation and political culture amongst the common people.(57*) A fear,
which is on the contrary thoroughly justified and arises from the knowledge that
instinctive and blind proletariat movements are conquered by force; whereas organisation
combined with an enlightened consciousness, is not conquered or only suffers temporary
reverses. Does not Mommsen remark, in reference to the slave revolts in ancient Rome; that
states would be very fortunate if they were in no other dangers besides those which might
come to them from the revolts of the proletariat, which are no greater than the dangers
arising front the claws of hungry bears or wolves?

These statements concerning ethics and socialist pedagogy having been explained,
someone might yet ask: — But what was the philosophical opinion of Marx and Engels in
regard to morality? Were they relativists, utilitarians, hedonists, or idealists,
absolutists, or what else?

I may be allowed to point out that this question is of no great importance, and is even
somewhat inopportune, since neither Marx nor Engels were philosophers of ethics, nor
bestowed much of their vigorous ability on such questions. It is indeed of consequence to
determine that their conclusions in regard to the function of morality in social movements
and to the method for the education of the proletariat, contain no contradiction of
general ethical principles, even if here and there they clash with the prejudices of
current pseudo-morality. Their personal opinions upon the principles of ethics did not
take an elaborate scientific form in their books; and some wit and some sarcasm are not
adequate grounds upon which to base a discussion of the subject.

And I will say yet more; in ethical matters, I have not yet succeeded in freeing myself
from the prison of the Kantian Critique, and do not yet see the position taken up by Kant
surpassed; on the contrary, I see it strengthened by some of the most modern tendencies,
and to me the way in which Engels attacks Dühring with regard to the principles of
morality in his well-known book, does not in truth appear very exhaustive.(58*) Here again
the procedure is repeated which we have already criticised in connection with the
discussions upon the general concept of value. Where Dühring, owing to the exigencies of
scientific abstraction, takes for consideration the isolated individual and explicitly
states that he is dealing with an abstract illustration (Denkschema), Engels remarks,
wittily but erroneously that the isolated man is nothing but a new edition of the first
Adam in the Garden of Eden. It is true that in that criticism are contained many
well-directed blows; and it might even be called just, if it refers only to ethical
conceptions in the sense of assemblages of special rules and moral judgments, relative to
definite social situations, which assemblages and constructions cannot claim absolute
truth for all times, and all places, precisely because they are always made for particular
times and particular places. But apart from these special constructions, analysis offers
us the essential and ruling principles of morality, which give opportunity for questions
which may, truly, be differently answered, but which most certainly are not taken into
account by Marx and Engels. And, in truth, even if some may be able to write on the theory
of knowledge according to Marx,(59*) to write on the principles of ethics according to
Marx seems to me a somewhat hopeless undertaking.

VI

CONCLUSION

The preceding remarks are partly attempts at interpretation, and partly critical
emendations of some of the concepts and opinions expressed by Marx and in the Marxian
literature. But how many other points deserve to undergo revision ! Beginning with that
concentration of private property in a few hands, which threatens to become something like
the discredited iron law of wages, and ending with that strange statement in the history
of philosophy that the labour movement is the heir of German classical philosophy. And
attention could thus be given to another group of questions which we have not discussed
(ea. to the conception of future society) in regard to their detailed elucidation and
their practical and historical applications.(60*) If that decomposition of Marxism, which
some have predicted,(61*) meant a careful critical revision, it would indeed be welcome.

To sum up, in the meantime, the chief results which are suggested in the preceding
remarks: they maintain.

1. In regard to economic science, the justification of Marxian economics, understood
not as general economic science, but as comparative sociological economics, which is
concerned with a problem of primary interest for historical and social life.

2. In regard to the philosophy of history, the purification of historical materialism
from all traces of any a priori standpoint (whether inherited from Hegelianism or an
infection from ordinary evolutionism) and the understanding of the theory as a simple,
albeit a fruitful, canon of historical interpretation.

3. In regard to practical matters, the impossibility of inferring the Marxian social
programme (or, indeed any other social programme) from the propositions of pure science,
since the appraisement of social programmes must be a matter of empirical observations and
practical convictions; in which connection the Marxian programme cannot but appear one of
the noblest and boldest and also one of those which obtain most support from the objective
conditions of existing society.

4. In regard to ethics, the abandonment of the legend of the intrinsic immorality or of
the intrinsic anti-ethical character of Marxism.

I will add a remark on the second point. Many will think that if historical materialism
is reduced to the limits within which we have confined it, it will not only no longer be a
legitimate and real scientific theory (which we are indeed prepared to grant) but will
actually lose all importance whatever, and against this second conclusion we once more, as
we have done already on another occasion, make vigorous protest. Undoubtedly the horror
expressed by some for pure science and for abstractions is inane, since these intellectual
methods are indispensable for the very knowledge of concrete reality; but no less inane is
the complete and exclusive worship of abstract propositions, of definitions, of theorems,
of corollaries: almost as if these constituted a sort of aristocracy of human thought.
Well! the economic purists (not to draw examples from other fields, though numbers could
be found in pure mathematics) prove to us, in fact, that the discovery of scientific
theorems, strictly, unimpeachably scientific,is frequently neither an over-important nor
over-difficult matter. To be convinced thereof we need only remark how many eponimi of new
theorems issue from every corner of the German or English schools. And concrete reality,
i.e. the very world in which we live and move, and which it concerns us somewhat to know,
slips out, unseizable, from the broad-meshed net of abstractions and hypotheses. Marx, as
a sociologist, has in truth not given us carefully worked out definitions of social
phenomena, such as may be found in the books of so many contemporary sociologists, of the
Germans Simmel and Stammler, or of the Frenchman Durckheim; but he teaches us, although it
is with statements approximate in content and paradoxical in form, to penetrate to what
society is in its actual truth. Nay, from this point of view, I am surprised that no one
has thought of calling him ‘the most notable successor of the Italian Niccolo
Machiavelli’; a Machiavelli of the labour movement.

And I will also add a remark on the third point if the social programme of Marxism
cannot be wholly included in Marxian science, or in any other science, no more can the
daily practice of socialist politics be, in its turn, wholly included in the general
principles of the programme, which programme, if we analyse it, determines (1) an ultimate
end, (the technical organisation of society); (2) an impulse, based on history, towards
this end, found in the objective tendencies of modern society (the necessity for the
abolition of capitalism and for a communistic organization, as the one possible form of
progress); (3) a method (to accelerate the final phases of the bourgeoisie, and to educate
politically the class destined to succeed them). Marx, owing to his political insight, has
for many years in a striking manner, joined with, and guided by his advice and his work,
the international socialist movement; but he could not give precepts and dogmas for every
contingency and complication that history might produce. Now the continuation of Marx’s
political work is much more difficult than the continuation of his scientific work. And,
if, in continuing the latter, the so-called Marxians have sometimes fallen into a
scientific dogmatism little to be admired, some recent occurrences remind us of the
danger, that the continuation of the former may also degenerate into a dogmatism with the
worst effects, i.e. a political dogmatism. This gives food for thought to all the more
cautious Marxians, amongst whom are Kautsky and Bernstein in Germany, and Sorel in France;
Labriola’s new book, too, contains serious warnings on the matter.

November, 1897.

NOTES:

1. ‘An immense monograph’ (of economics understood) it is called by Professor Antonio
Labriola, the most notable of the Italian Marxians, in his recent book (Discorrcodo di
filosophia e socialismo, Rome, Loescher, 1898). But in an earlier work (In Memoria del
‘Manifesto dei Comunisti’, 2nd ed. Rome, 1895, p. 36) he defined it as ‘a philosophy of
history ‘.

2. I leave out those who regard the law of labour-value as the general law of value.
The refutation is obvious. How could it ever be ‘general’ when it leaves out of account a
whole category of economic goods, that is the goods which cannot be increased by labour?

3. WERNER SOMBART: Zur Kritik des oekonomischer Systems
von Karl Marx (in the Archiv fur soziale Gesetzgebung and Statistik, Vol. vii, 1894, pp.
555-594). I have not by me the criticism (from the Hedonistic point of view) of this
article by Sombart — on the third volume of Das Kapital — made last year by BOHM BAWERK
in the Miscellany in honour of Knies.

4. Loc. cit., p. 571, at seq.

5. In the Neue Zeit xiv. vol. I, pp. 4-11, 37-44, I quote from the Italian translation:
Dal terzo volume del ‘Capitale,’ preface and notes by F. Engels, Rome 1896, p. 39.

6. Sur la théorie Marxiste de la valeur (in the Journal des Economistes, number for
March 1897, pp. 122-31, see p. 228).

7. Discorrendo di sorialismo e di filosophia, p. 21.

8. It must be carefully noticed that what I call a concrete fact may still not be a
fact which is empirically real, but a fact made by us hypothetically and entirely
imaginary, or a fact partially empirical, i.e. existing partially in empirical reality. We
shall see later on that Marx’s typical premise belongs properly to this second class.

9. I accept the term employed by Labriola so much the more readily since it is the same
as that used by me a year ago. See Essay on Loria (Materialismio Storico, pp. 48-50).

10. In making an hypothesis of this nature, Marx distinguished clearly that, in such a
case, ‘labour-time would serve a down purpose: on the one hand as standard of value, on
the other as a standard of the individual share reckoned to each producer in the common
labour’ (andrerseits dient die Arbeitzeit zugleich als Mass des individuellen Antheils des
Producenten an der Gemeinarbeit, und daher auch an dem individuell verzehbaren Theil des
Gemein products): See Das Kapital I, p. 45.

11. This is a different thing from the workmen or operatives in our capitalist society,
who form a class, i.e. a portion of economic society and not economic society in general
and in the abstract, producing goods which can be increased by labour.

12. It may be doubted whether this general application of labour-value to every working
economic society was included in the ideas of Marx and Engels, when the numerous passages
are recalled in which one or other has declared many times that in the future communistic
society the criterion of value will disappear and production will be based on social
utility, of Engels as early as in the Umrisse 1844, (Italian translation in Critica
sociale a. v. 1895) Marx, Misère de la philosophie, 2nd ed. Paris, Giard et Brière.
1896, p. 83; Engels Antidühring, p. 335. But this must be understood in the sense that,
not being a hypothetical communistic society based on exchange, the function of value (in
exchange) would lose, according to them, its practical importance; but not in the other
sense that in the opinion of the communistic society the value of goods would no longer
equal the labour which they cost to society. Because even in such a system of economic
organization, value-labour would be the economic law which entirely governed the valuation
of individual commodities, produced by labour. There would be that clearness of valuation
which Marx describes in his Robinsonia, cf: Das Kapital, p. 43.

13. Dal terzo volume del ‘Capitale,’ pp. 42-55.

14. Hence also Marx in §4 of Chap. I.: Der Fetischcharakter der Waare and sein
Geheimniss (I. pp. 37-50) gave a brief outline of the other economic systems of medieval
society, and of the domestic system: ‘Aller Mysticismus der Waarenwelt, all der Zauber und
Spuk, welcher Arbeitsprodukte auf grundlage der Waarenproduktion umnebelt, verschwindet
daher sofort, sobal wir zu anderen Producktions formen fliichten (p. 42). The relation
between value and labour appears more clearly in the less complex economic systems,
because less opposed and obscured by other facts.

15. Das Kapital, Book III., sec. III., Chaps. XIII, XIV, XV, Gesetz des tendentiellen
Falk der Profitrate (vol. iii., Part I, pp. 191-249).

16. The task of Marx’s followers ought to be to free his thought from the literary form
which he adopts, to study again the questions which he propounds, and to work them out
with new and more accurate statements, and with fresh historical illustrations. In this
alone can scientific progress consist. The expositions made hitherto of Marx’s system, are
merely materials; and some (like Aveling’s) consist entirely in a series of little
summaries, which follow the original chapter by chapter and prove even more obscure. For
the law of the fall in the rate of profits, see below, chap. V.

17. ‘To follow out completely this criticism of bourgeois economics a knowledge of the
capitalist form of production, exchange and distribution is not alone adequate. We ought
similarly to study at least in their essential features and taken as terms of comparison,
the other forms which have preceded it in time, or exist alongside of it in less developed
countries. Such an investigation and comparison has hitherto been briefly expounded only
by Marx; and we owe almost entirely to his researches what we know about pre-bourgeois
theoretical economics.’ (ENGELS, Antidühring, p. 154). This was written by Engels twenty
years ago; and since then the literature of economic history has grown remarkably, but
historical research has been seldom accompanied by theoretical research.

18. ‘Political economy is essentially an historical science.’ (ENGELS, l.c., p. 150).

19. What is strange is that ENGELS (in the passage quoted in the penultimate note) says
himself most truly that Marx has written theoretical economics, nevertheless in the
sentence quoted in the last note (which appears in the same book and on the same page) he
states definitely that economics in the Marxian sense is nothing but an historical
science.

20. Antidühring, pp. 150, 155.

21. Das Kapital, I, p. 67.

22. F. A. LANGE, Die Arbeiterfrage, 5th ed., Winterthur, 1894, (the author’s last
revision was in 1874) see p. 332; of p. 248 and on p. 124, the quotation from Gossen’s
book, then very little known.

23. ADOLF WAGNER, Grundlegung den politischen oekonomie, 3rd Ed., Leipzig, 1892, vol.
I, pt. I; Bk. I, ch. i. Die Wirthschaftliche Natur des Menschen, pp. 70-137.

24. I may be allowed to remark that in similar discussions, economists usually make the
serious mistake of making the concept economic coincide with the concept egoistic. But the
economic is an independent sphere of human activity, in addition to all the others, such
as the spheres of ethics, aesthetics, logic, etc. The moral goods and the satisfaction of
the higher moral needs of man, just because they are goods, and needs, are taken into
account in economics, but still only as goods and needs, not as moral or immoral, egoistic
or altruistic. In like manner, a manifestation (by words or by any other means of
expression) is taken into account in aesthetics; but only as a manifestation not as true,
false, moral, immoral, useful, harmful, etc. Economists are still impressed by the fact
that Adam Smith wrote one book of theory and of ethics, and another of economic theory;
which may interpret to mean that one dealt with a theory of altruistic facts and the other
with one of egoistic facts. But if this had been so, Adam Smith would have discussed, in
both of his chief works, facts of an ethical character, estimable or reprehensible; and
would not have been an economist at all; a ridiculous conclusion which is a reductio ad
absurdum of the identification of economic action with egoism.

25. Discorrendo di socialismo e di filesophia, 1. vi.

26. It is strange how among the students of pure economics also this need for a
different treatment makes itself felt, leading them to contradictory statements and to
insuperable perplexities. PANTALEONI, Principi di economia pura, Florence, Barbera, 1889,
p. 3, Ch. iii § 3 (pp. 299-302), contradicts Bohm-Bawerk, inquiring whence the borrower
of capital at interest is able to find the wherewithal to pay the interest. PARETO,
Introd. critica agli Estratti del Capitale del Marx, Ital. trans. Palermo, Sandron, 1894,
p. xxx, n.: ‘The phenomena of surplus value contradicts Marx’s theory which determines
values solely by labour. But, on the other hand, there is an expropriation of the kind
which Marx condemns. It is not at all proved that this expropriation helps to secure the
hedonistic maximum. But it is a difficult problem how to avoid this expropriation.’ A
learned and accurate Italian work which attempts to reconcile the opinions of the
hedonistic school with those of the followers of Ricardo and Marx, is the memorandum of
Prof. G. RICCA SALERMO, La theoria del valore nella storia delle dottrine e dei fatti
economici, Rome 1894. (extr. from the Memorie dei Lincei, s. v. vol. I., pt. i.)

27. See above, chap. 1.

28. The over-abused Dühring was not mistaken when he remarked that in Marx’s works
expressions occur frequently ‘which appear to be universal without being actually so’
(Allgemein aussehen ohne es zu sein). Kritische Gerchichte der Nationalökonomie and des
Socialismus, Berlin, 1871, p. 527.

29. GENTILE, Una critica del materialismo storico in the Studi storici of Crivellucci,
vol. VI, 1897, pp. 379-423, throws doubt on the interpretation offered by me of the
opinions of Marx and Engels, and on the method of interpretation itself. I gladly
acknowledge that in my two earlier essays I do not clearly point out where precisely the
textual interpretation ends and the really theoretical part begins; which theoretical
exposition, only by conjecture and in the manner described above, can be said to agree
with the inmost thoughts of Marx and Engels. In his recent book, La filosofia di Marx,
Pisa, Spoerri, 1899 (in which the essay referred to is reprinted), Gentile remarks (p.
104), that, although it is a very convenient practice, and in some cases legitimate and
necessary ‘to interpret doctrines, by calling a part of their statement worthless or
accidental in form and external and weak, and a part the real substance and essential and
vital, it is yet necessary to justify it in some way.’ He means certainly, ‘justify it as
historical interpretation,’ since its justification as correction of theory cannot be
doubtful. It seems to me that even historically the interpretation can be justified
without difficulty when it is remembered that Marx did not insist, (as Gentile himself
says) on his metaphysical notions; and did certainly insist on his historical opinions and
on the political policy which he defended. Marx’s personality as a sociological observer
and the teacher of a social movement, certainly outweighs Marx as a metaphysician which he
was almost solely as a young man. That it is worth the trouble to study Marx from all
sides is not denied, and Gentile has now admirably expounded and criticised his youthful
metaphysical ideas.

30. I confess that I have never been able to understand — however much I have
considered the matter — the meaning of this passage (which ought however to be very
evident, since it is quoted so often without any comment), in the preface to the second
edition of Das Kapital: ‘Meine dialektische Methode ist der Grundlage nach von der
Hegel’schen nicht nur verschieden, sondern ihr direktes Gegentheil. Fur Hegel is der
Denkprocess, den er sogar unter dem Namen Idee in ein selbständiger subjeckt verwandelt,
der Demjurg des Wirklichen, das nur seine aüstere Erscheinung bildet. Bei mir ist
umgekehrt das Ideelle nichts Andres als das im Menschenkopf umgesetzte und ubersetzte
Materielle.’ (Das Kapital I, p. xvii.) Now it seems to me that the Ideelle of the last
phrase has no relation to the Denkproress and to the Hegelian Idea of the preceding
phrase, cf. above pp. 17. Some have thought that by the objections there stated, I
intended to deny Marx’s Hegelian inspiration. It is well to repeat that I merely deny the
logical relation affirmed between the two philosophical theories. To deny Marx’s Hegelian
inspiration would be to contradict the evidence.

31. Answers to several of the questions suggested above are now supplied in the book
already referred to, by GENTILE: La Filosofia di Marx.

32. Antidühring, pt. I. ch. xiii., especially pp. 138-145, which passage is translated
into Italian in the appendix to the book by Labriola referred to above: Discorrendo di
socialismo e di filosophia, cf. Das Kapital, I . p. xvii, ‘Gelingt dies und spiegelt sick
nun das Leben des stoffs ideell wieder, so mag es aussehen, als habe man es mit einer
Konstruction a priori zu thun.’

33. LANGE, indeed, in reference to Marx’s Das Kapital, remarked that the Hegelian
dialectic, ‘the development by antithesis and synthesis, might almost be called an
anthropological discovery. Only in history, as in the life of the individual, development
by antithesis certainly does not accomplish itself so easily and radically, nor with so
much precision and symmetry as in speculative thought.’ (‘Die Arbeiterfrage, pp. 248-9.)

34. With regard to the abstract classes of Marxian economics and the real or historical
classes, see some remarks by SOREL in the article referred to in the Journal des
Economistes, p. 229.

35. G. GENTILE, o.c. in Studi storici, p. 421. cf 400-401.

36. Labriola has indeed an exaggerated dislike for what he calls the scholastic: but
even this exaggeration will not appear wholly unsuitable as a reaction against the method
of study which usually prevails among the mere men of letters, the niggardly scholars, the
empty talkers and jugglers with abstract thought, and all those who lose their sense of
close connection between science and life.

37. Discorrendo di socialismo e di filosophia, 1. ix.

38. In torno alla storia della cultura (Kulturgeschichtein Atti dell Accad. Pant.; vol.
xxv. 1895, p. 8.)

39. ‘If by Christianity is meant merely the sum of the beliefs and expectations
concerning human destiny, these beliefs’ — writes Labriola — ‘vary as much, in truth, as
in the difference, to mention only one instance, between the free will of the Catholics
after the Council of Trent, and the absolute determination of Calvin!’ (L.c. ix.)

40. Without referring to the somewhat unmethodical work of Westermarck, History of
Haman Marriage, see especially Ernst Grosse’s book, Die Formen der Familie and die Formen
des Wirthschaft, Freiburg in B., 1896.

41. This connection is shortly but carefully dealt with by INGRAM, History of Political
Economy, Edinburgh, A. & C. Black, 1888, p. 62.

42. See, amongst many passages, MARX, Misère de la philosophie, p. 167, at see.
ENGELS, Antidühring, p. 1, et set.

43. On the hedonistic maxima, cf. Bertolini-Pantaleoni, Cenni sul concetto di massimi
edonistici individuali e collectivi (in Giorn, degli Econ., s II vol. iv) and Coletti, in
the same Giornale, vol. v.

44. In regard to this metaphysical use of the word science; there even exists in Italy
a Rivilta di Bolivia scientifica! And the metaphor may pass here also.

45. Cours d’économie politique, Lausanne, 1896-7.

46. Cf. also his criticism of Marx already referred to. p. xviii.

47. Sauf l’Angleterre, où règne le libre échange principalement parcequ’il est
favourable aux interets de certains entrepreneurs, le reste des pays civilises verse de
plus en plus dans le protectionnisme (§ 964).

48. See the Giornale degli econonlisti, excellent in all its critical sections: and
especially Pareto’s chronirles therein.

49. It may be remarked that in the difficulty of distinguishing the purely scientific
from the practical lies the chief cause of the dangers and poverty of the social and
political sciences. And we may even smile at those scientists or their ingenious admirers,
who claim to accomplish the salvation of the social and political sciences, by applying to
them the methods, as they say, of the natural sciences. (An Italian astronomer, ingenuous
as clever, has suggested the formation of sociological observatories which, in a few years
would make sociology something like astronomy!) Alas! the matter is not so simple; all
sociologists intend indeed to apply exact methods; but how can this application succeed
when one advances per ignes or over ground which moves; d’una e d’altra parts sì come
l’onda chefagge e s’appressa? (From both sides like the wave which ebbs and flows.)

50. See the preface of the German translation of Misère de la philosophie, 2nd ed.
Stuttgart, 1892, and now also in French in the reprint of the original text of the same
work (Paris, Giard et Brière, 1896.)

51. The word communism is also more appropriate, since there are so many socialisms
(democratic state, catholic, etc.). On the relation between the materialistic theory of
history and socialism, see GENTILE, op. cit., passim.

52. Pantagruel, III, 39-43

53. The absurdity of this interpretation will come out clearly if it is merely
remembered that there are many cases in which the capitalist manufacturer pays for the
labour of his workman, a price higher than what he then realists on the market: cases, it
is true, where the capitalist is proceeding towards ruin and bankruptcy; but which he
cannot, on this account, always avoid. ‘Marx part des recherches faites par cette école
Anglaise, dont it avail fait une etude approfondie; et il veut expliquer le profit sans
admettre aucon brigandage.’ (SOREL, art. cit., p. 227.)

54. See in Antidühring, p. 303, the historical justification of class divisions.

55. From among the many passages which support this interpretation, cf; Antidühring,
pp. 152-3, 206 and especially pp. 61-2, and the preface to the German translation of
Misère de la Philosophie, 2nd ed. Stuttgart, 1892 pp. IX-X, cf. also Labriola, o.c. Lett.
VIII.

56. See LABRIOLA, o.c. l. cit., the remarks on the difficulty with which the theory of
historical materialism meets owing to mental dispositions, and amongst those who wish to
moralist socialism.

One instance, in some respects analogous to this which arises from the discussions on
Marx’s ethics, is the traditional criticism of Machiavelli’s ethics: which was refuted by
De Sanctis (in the remarkable chapter devoted to Machiavelli, in his Storia Della
letteratura), but which continually recurs and is inserted even in Professor Villari’s
book, who finds this defect in Machiavelli: that he did not consider the moral question.

I have always asked myself for what reason, by what obligation, by what agreement,
Machiavelli was bound to discuss all kinds of questions, even those for which he had
neither preparation nor sympathy. Can it be said, by way of example, to some one who is
researching in chemistry: — Your weak and erroneous spot is that you have not gone back
from your detailed investigations to the general metaphysical enquiries into the
principles of reality? Machiavelli starts from the establishment of a fact: the condition
of war in which society found itself; and gives rules suited to this state of affairs. Why
should he, who was not cut out for a moral philosopher, discuss the ethics of war? He goes
straight to practical conclusions. Men are wicked he says and to the wicked it is needful
to behave wickedly. You will deceive him who would certainly deceive you. You will do
violence to him who would do violence to you. These maxims are neither moral nor immoral,
neither beneficial nor harmful; they become one of the two according to the subjective
aims and the objective effects of the action, i.e. according to the intentions and the
results. What is evident is that a morality which desired to introduce into war the maxims
of peace would be a morality for lambs fit for the slaughter, not for men who wish to
repel injustice and to maintain their rights. ‘And if men were all good, this precept
would not be good, etc., etc.’ says Machiavelli himself. (Principe, ch. XVIII). Villari is
also troubled by the old formula concerning the ‘end which justifies the means’ and the
‘moral end’ and the ‘immoral means’. It is however sufficient to consider that the means,
just because they are means, cannot be divided into moral and immoral, but merely into
suitable and unsuitable. Immoral means, unless as an expression in current speech, is a
contradiction in terms. The qualification moral or immoral can only belong to the end.
And, in the examples usually given, an analysis made with a little accuracy shows at once,
that it is never a question of immoral means but of immoral ends. The height of the
confusion is reached by those who introduce into the question the absurd distinction of
private and public morality.

I may be pardoned the digression; but, as I said, questions which are really analogous
reappear now in connection with the ethical maxims of Marxism.

57. And it would be to the point to draw a comparison between the peasants’ rebellions,
with which modern Italy has supplied us with another example in recent years, and the
political struggles of the German workmen, or the economic struggles of the Trade Unions
in England.

58. See in particular P. I. ch. ix., Moral sand Recht, Ewige Wahrheiten.

59. See, in particular, MARX’S ideas: Ueber Feuerbach, in 1845, in the appendix to
Engels’ book, Ludwig Feuerbach und der Ausgang der Klassischen deutschen Philosophie, 2nd
ed. Stuttgart, 1895, pp. 59-62; and cf. ANDLER in Revue de metaphysique, 1897, LABRIOLA,
o.c. passim and GENTILE, l.c., p. 319. From this point of view (i.e. limiting the
statement to the theory of knowledge) we might speak like Labriola of historical
materialism as a philosophy of practice, i.e. as a particular way of conceiving and
solving, or rather of overcoming, the problem of thought and of existence. The philosophy
of practice has now been designedly studied by Gentile in the volume referred to.

60. Some interpretations would be merely verbal explanations. To some it will appear a
very hard statement that socialism aims at abolishing the State. Yet it suffices to
consider that the State, among socialists, is synonymous with difference of classes and
the existence of governing classes, to understand that as in such a case we can speak of
the origin of the State, so we can speak of its end; which does not mean the end of
organised society (cf. Antidühring,, p. 302). The conception of the way in which
capitalist society will come to an end demands no little critical working out; on this
point the thought of Marx and Engels is not without obscurities and inconsistencies (cf.
Antidühring, pp. 287 et seq. and p. 297).

61. See CH. ANDLER, Les origines du socialisms d’état en Allemagne, Paris, Alcan,
1897. Andler promises a book, and is now giving a course of lectures on the decomposition
of Marxism.

CHAPTER IV: RECENT INTERPRETATIONS OF THE MARXIAN THEORY OF VALUE AND CONTROVERSIES
CONCERNING THEM

I

I have always discussed frankly the views expressed in the writings of my eminent
friend Professor Antonio Labriola. I am therefore glad that he has taken the same liberty
with me, and has subjected to a vigorous criticism (in the French edition of his book on
Socialismo e la filosofia),(1*) my interpretation of the Marxian theory of value.(2*)
Labriola has been impelled to this also from a wish to prevent my opinions from appearing,
‘to the reader’s eyes,’ as a supplement, approved by him, of his own personal ones. And
though I do not think that ‘to the reader’s eyes (I will however add intelligent readers),
this would be possible, since, I have always carefully indicated the points, and they are
neither few nor unimportant, where we disagree: yet being convinced that clearness is
never superfluous, I welcome his intention to make it still plainer that I am not he, and
that he thinks with his mind whilst I think with mine.

Labriola rejects entirely the method adopted by me, which he describes variously as
scholastic, metaphysical, metaphorical, abstract, formal logic. When I take pains to point
out the differences between homo oeconomicus and man, moral or immoral, between personal
interest and egoism,(3*) he shrugs his shoulders, he does not refuse a certain indulgence
to this traditional scholasticism, and compares me to the man in the street who speaks of
the rising or setting of the sun, or of shining light and warm heat. When I firmly
maintain the theoretical necessity for a general economics in addition to the
heterogeneous considerations of sociological economics, he taxes me with creating, in
addition to all the visible and tangible animals, an animal as such. And he charges me,
moreover, with wishing to attack history, comparative philology and physiology in order to
substitute for all these the plain Logic of Port Royal, so that instead of studying
examples of epigenesis which have actually occurred, such as the transitions from
invertebrates to vertebrates,from primitive communism to private property in land, from
Differentiated roots to the systematic differentiation of nouns and verbs in the
Ariosemitic group, it might suffice to register these facts in concepts passing from the
more general to the more particular, in the series A a1 a2 a3 etc.

But I hardly know how to defend myself seriously from such accusations, because it
obliges me to repeat what is too obvious, i.e., that to make concepts does not mean to
create entities; that to employ metaphors (and language is all metaphor), does not mean to
believe mythology; that to construct experiences in thought, and scientific abstractions,
does not mean to substitute either one or the other for concrete reality; that to make
use, when needful, of formal logic, does not mean to ignore fact,growth, history. When
Marx expounds historical facts I know no way of approaching him except that of historical
criticism, and when he defines concepts and formulates laws, I can only proceed to
recognise the content of his concepts, and to test the correctness of his inferences and
deductions. Thus I have followed this second method in studying his theory of value. If
Labriola knows another and better one, let him state it. But what could this other one
possibly be? Real logic? In that case let us boldly re-establish Hegel, it will be the
lesser evil, at least we shall understand one another. Or a still worse alternative, what
monstrous empirical-dialectic or evolutionist method may it be, which confuses together
and abuses two distinct procedures, and lends itself so readily to the lovers of prophecy?
Or is it merely a question of new phraseology by which we shall go on humbly working, more
or less well, with the old methods, whilst detesting the old words? Or again, is this
dislike for formal logic nothing but a convenient pretext for dispensing with any
vindication of the concepts which are employed?

Marx has stated his concept of value; has expounded a process of transformation of
value into price; has reconstructed the nature of profit as surplus value. For me the
whole problem of Marxian criticism is confined within these limits: — Is Marx’s
conception substantially erroneous (entirely, owing to false premises, and partially,
owing to false deductions)? or, is Marx’s conception substantially correct, but has it
been subsumed under a category to which it does not belong, and has search been made in it
for what it cannot supply, whilst what it actually offers has been ignored? Having come to
this second conclusion I have asked myself: Under what conditions and assumptions is
Marx’s theory thinkable? And this question I have tried to answer in my essay.

What Marx wished to do, or mistakenly thought himself to be doing is, I think, of
interest to criticism up to a certain point; although the history of science shows that
thinkers have not always had the clearest and plainest knowledge of the whole of their
thought; and that it is one thing to discover a truth, and another to define and classify
the discovery when made. It may be allowed that he who confuses ideological with
historical research thus best reproduces Marx’s spirit; but in this case the work will be
an artistic recasting or a psychological reproduction, not a criticism; and will gather up
with the sound also the unsound portion of Marx’s thought.

To go into details. Labriola tries to prove the emptiness or vagueness of some of my
definitions and the falsity of some of my reasoning. 1 having asserted that capitalist
economics is a special case of general economics, Labriola remarks, ‘en passant,’ that it
is nevertheless the only case which has given rise to a theory and to divisions of
schools; and I acknowledge that I do not understand the point of this remark, although it
is said to be made ‘en passant.’ Both Marx and Engels lamented that the ancient and
medieval economic systems had not been studied in the same way as the modern. Thus there
are conceivable at least three economic theories, ancient, medieval and modern, and is it
not lawful to construct a general economics; i.e. to study in isolation that common
element which causes these three groups of facts to be all three denoted by a common name?
Labriola then asks what this general and extra-historical economics can consist of, and
whether it can never be of service to the conjectural psychology of primitive man: he
jests after the manner of Engels, who in truth has sometimes Joked too much during a
discussion on serious matters. Is it incredible that I too should jest? But I do not think
there is occasion to do so! He wonders at my insatiability, because having accepted the
hedonistic theories, I wish to accept Marx’s theories too: as though my entire proof was
not intended to make it plain that the antithesis between these theories exists only in
imagination; and that Marx’s theory is not an economic system entirely opposed to other
systems (‘quelque chose de tout-à-fait opposé’ are Labriola’s own words), but a special
and partial inquiry; and as though by hedonism I meant all the personal convictions,
philosophical, historical and political, of those who follow, or say that they follow, its
guidance, and not indeed only what follows legitimately from its axiom. When I call the
explanation of the nature of profits, offered by the hedonistic school, an economic
explanation, he inquires sarcastically: ‘Could it possibly be non-economic?’ But my
statement contains no pleonasm: the adjective economic is added to mark off the hedonistic
explanation from that of Marx, which, to my thinking, is not purely economic, but
historical and comparative, or sociological, if it is preferred. He wonders that I speak
of a working society, and asks: ‘As opposed to what?’ ‘Perhaps to the saints in paradise?’
But I have pointed out the opposition between a hypothetical working society,i.e. such
that all its goods are produced by labour,and a society, economic certainly, but not
exclusively working, because it enjoys goods given by nature, as well as the products of
labour. The saints in paradise form another irrelevant jest.

I called Marx’s concept of surplus-value a concept of difference; 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(4*) “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,(5*) to protest. Seventeenth century style
consists in ingenuity, i.e. in putting cold intellectuality into an aesthetic 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.(6*)

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).(7*) 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 carte il vero,
Non e lontano a discoprirsi it porto….'(8*)

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).(9*) 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

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,(10*) 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 elliptical 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 end
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 formula; hence in such a society, utility, demand, and commerce
in commodities arc 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 and Recht
nach der materialistischen Geschichtsauffassung,(11*) 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.(12*)

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,(13*) 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, aesthetics 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 recumt!(14*)

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 Giosue..
Fermare it sole.'(15*)

April, 1899.

NOTES:

1. Socialisms et philosophie by ANTONIO LABRIOLA. Paris, Giard et Briere, 1899, see pp.
207-224. Postscript to the French edition.

2. See chap. III.

3. 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.

4. I write equivalance 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.

5. 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);
Ipredicatori italiani delseietnto e il gusto spagnaolo, Naples, Pierro, 1899; I
trattatisti italiani Gel ‘conerttismo’ e Baltasar Grarian (Atti dell’Acc. Pontan; vol.
XXIX. 1899).

6. LABRIOLA — who reproduces Marx’s style very well here and there in his own —
writes in his essay on ‘Das Kommanistische 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.

7. ‘Als Hegel auf dem Todbette lag, sagte er: — Nur einer hat much verstanden! Aber
gleich darauf fugte er verdriesslich hinzu. Und der hat mich auch nichtverstanden!’
(Heine. Zar Geschichte der Religion and Philosophie in Deutschland. Bk. III).

8. ‘Now, if my map shows me true, we are not far from the sight of our haven….’
(Ariosto, Orlando Furioso.)

9. SOMBART, in the Archiv fur soziale Gesetzgelung and Statism, 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 economistes, no. for May 15th, 1897; CROCE, Per la
interpretazione e la critica di alcuni concerti del marxism, see in this volume chap. III;
SOREL, Nuovi contributi alla Doria marxistica del valore, in the Giornale degli
economisti, June 1898.

10. In the article referred to, in the Journal des Economistes.

11. See pp. 266-8, 658-9.

12. See chap. II.

13. La prodozione capitalistica, Turin, Bocca, 1899.

14. 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, With 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 organization 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 laborers, 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 laborer 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.

15. ‘As follower of Joshua…. to stop the sun.’

CHAPTER V. A CRITICISM OF THE MARXIAN LAW OF THE FALL IN THE RATE
OF PROFITS

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 Bohm 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 premise 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 equalization, 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,(1*) 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,
alit 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 too 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.(2*)

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, lo 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 depends 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 Mark’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 unoccupied 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
organization, 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, etc., 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 ot 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 reemployed, 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 hereto 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 of
these, was perhaps not worked out to the same extent as the fundamental or central part of
the theory.(3*) It it 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 prof is. Herein day 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 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!(4*)

May 1899.

NOTES:

1. See chaps. III and IV.

2. 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, A, whose actual social value no longer corresponds to
the original one. But to consider the separate stages would here cause a useless
complication.

3. 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.

4. 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

Esteemed Friend,

On reading the little paper, which you were courteous enough to send me, on how to
state the problem of pure economics,(1*) 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 hew and still unpublished
treatise on pure economics, which came out in the March number of this Review,(2*) 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 speculative, 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,(3*) 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 he 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’economie pure ntest pas
seulement semblable a la mechanique: c’est, a proprement parlor, un genre de mechanique.’
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 van Ehrenfels fails to
grasp. I do not know whether you have read the two volumes hitherto published on the
System des Werttheorie.(4*) 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 and 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
Principe 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 1 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 aesthetics to logic. And I might point out the reason why scientific and
aesthetic 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 aesthetics rest, are so simple that they do not demand a special economic
theory.’ It should not be difficult to see that logical and aesthetic 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.(5*)

II

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 gong 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 1 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.(6*)

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? at minerals;
passing rapidly along the steep slope down which my friend Professor C. Trivero has
slipped in his recently published Teoria dei lisogni, for which may he be forgiven!(7*)

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 esthetic 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. aesthetic, 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 1
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 farsighted 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 Economies 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.(8*)

NOTES:

1. Comment se pose le problème de l’economie pure. Paper read in December 1898 to the
Societé Stella.

2. Giornale degli economisti, March 1900, pp. 216-235.

3. Rivista di sociolgia, III. no. vi., pp. 746 8, see Materialismio Storico, pp.
193-208.

4. 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.

5. PARETO answered this letter in the same journal, Giornale degli economisti. August.
1900, pp. 110-162.

6. 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 Psychologist 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 doorkeepers (Fechner,
Wundt, etc.), and has learnt that it does not dwell there. Well and good!

7. 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 proximal 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 mace 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.

8. PARETO answers this second letter in the Giornale degli
economisti, February, 1901, pp. 131-138.

Benedetto Croce (died 1952):

Italian critic, philosopher, politician, historian. Croce deeply influenced aesthetic
thought in the first half of the 20th century, including Robin C. Collingwood’s
Principles of Art
(1934) and John Dewey’s Art as Experience (1934), although in

the latter the philosophical background is totally different. Croce’s main thesis was that
art is intuition. His best-known work in the English-speaking world is Aesthetic as
Science of Expression and General Linguistic
(1902).

1 Comment »

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