Freeland: A Social Anticipation | Page 6

as the quantity of labour put into it; consequently, when with increasing productiveness of labour the amount of labour necessary to the production of a thing is diminished, then the value of that thing diminishes also. Hence no increase in the productiveness of labour can increase the total sum of values. This, however, is a fundamental mistake, for what depends upon the amount of labour is merely the relative value of things--the exchange relation in which they stand to other things. This is so self-evident that Ricardo himself cannot avoid expressly stating that he is speaking of merely the 'relative' value of things; nevertheless, this relative value--which, strictly speaking, is nothing but a value relation, the relation of values--is treated by him as if it were absolute value.
And yet Ricardo's error is a not less important step in the evolution of doctrine than those of his previously mentioned predecessors. It signifies the revival of the original problem of political economy, which had been lost sight of since Adam Smith; and Ricardo's follower, Marx, is in a certain sense right when, with bitter scorn, he denounces as 'vulgar economists' those who, persistently clinging to Smith's optimism, see in the productiveness of labour the measure of the increase of actual wealth. For all that was brought against Ricardo by his opponents was known by him as well as or better than by them; only he knew what had escaped their notice, or what they saw no obligation to take note of in their theory--namely, that the actual facts directly contradicted the doctrine. It by no means escaped Ricardo that his attempted reconciliation of the theory with the great problem of economics was absurd; and Marx has most clearly shown the absurdity of it. The latter speaks of the alleged dependence of value, not upon the productiveness of labour, but upon the effort put forth by the labourer, as the 'fetishism' of industry; this relation, being unnatural, contrary to the nature of things, ought therefore--and this, again, is Marx's contribution to the progress of the science--to be referred back to an unnatural ultimate cause residing, not in the nature of things, but in human arrangements. And in looking for this ultimate cause, he, like his great predecessors, comes extremely near to the truth, but, after all, glides past without seeing it.
On this road, which leads to truth past so many errors, the last stage is the hypothesis set up by the so-called Historical School of political economy--the hypothesis, namely, that there exists in the nature of things a gulf between economic theory and practice, which makes it quite conceivable that the principles that are correct in thesi do not coincide with the real course of industrial life. The existence of the problem is thereby more fully established than ever, but its solution is placed outside of the domain of theoretical cognisance. For the Historical School is perfectly correct in maintaining that the abstractions of the current economic doctrine are practically useless, and that this is true not only of some of them, but of all. The real human economy does not obey those laws which the theorists have abstractedly deduced from economic phenomena. Hence it is only possible either that the human economy is by its very nature unfitted to become the object of scientific abstraction and cognisance, or that the abstractions hitherto made have been erroneous--erroneous, that is, not in the sense of being actually out of harmony with phenomena from which they are correctly and logically deduced, but in the sense of being theoretically erroneous, deduced according to wrong principles, and therefore useless both in abstracto and _in concreto_.
Of these alternatives only the second can, in reality, be correct. There is absolutely no reasonable ground for supposing that the laws which regulate the economic activity of men should be beyond human cognisance; and still less ground is there for assuming that such laws do not exist at all. We must therefore suppose that the science which seeks to discover these laws has hitherto failed to attain its object simply because it has been upon the wrong road--that is, that the principles of political economy are erroneous because, in deducing them from the economic phenomena, some fact has been overlooked, some mistake in reasoning has been committed. There must be a correct solution of the problem of political economy; and the solution of the social problem derived from the theory of social evolution offers at once the key to the other.
The correct answer to the question, 'Why are we not richer in proportion to the increase in our productive capacity?' is this: _Because wealth does not consist in what can be produced, but in what is actually produced; the actual production, however, depends not merely upon the amount of productive power, but