de £50, in the other £1000 as rent, what becomes, further, of the doctrine that the amount of rent to be obtained in a production is not regulated by the amount of capital employed, but only by the amount of labour performed in it?
The contradiction in which Rodbertus has involved himself here is as obvious as it is insoluble. Either products do really exchange, in the long run, in proportion to the labour incorporated in them, and the amount of rent in a production is really regulated by the amount of labour employed in it,—in which case an equalisation of profits is impossible; or there is an equalisation of the profits of capital,—in which case it is impossible that products should continue to exchange in proportion to the labour incorporated in them, and that the amount of labour spent should be the only thing that determines the amount of rent obtainable. Rodbertus must have noticed this very evident contradiction if he had only devoted a little real reflection to the manner in which profits become equalised, instead of dismissing the subject in the most superficial way with his phrase about the equalising effect of competition.
But we are not done with criticism. The whole explanation of land-rent, which, with Rodbertus, is so intimately connected with the explanation of interest, is based upon an inconsistency so striking that the author's carelessness in not observing it is almost inconceivable.
There are only two possibilities here: either, as the effect of competition, an equalisation of profits does take place, or it does not. Assume first that it does take place. What justification has Rodbertus for supposing that the equalisation will certainly embrace the whole sphere of manufacture, but will come to a halt, as if spellbound, at the boundary of raw production? If agriculture promises an attractive profit why should not more capital flow to it? why should not more land be cultivated, or the land be more intensively cultivated, or cultivated by more improved methods, till the exchange value of raw products comes into correspondence with the increased capital now devoted to agriculture, and yields to it also no more than the common rate of profit? If the "law" that the amount of rent is not regulated by the outlay of capital, but only by the amount of labour expended, has not prevented equalisation in manufacture, how could it prevent it in raw production? But what in that case would become of the constant surplus over the usual rate of profit, the land-rent?
Or assume that an equalisation does not take place. In that case, there being no universal rate of profit, then in agriculture, as in everything else, there is no definite rule as to how much "rent" one may calculate as profit of capital. And, finally, there is no division line between capital and rent of land.
Therefore, in either case, whether an equalisation of profits does take place or does not, Rodbertus's theory of land-rent hangs in the air. There is contradiction upon contradiction, and that, moreover, not in trifles, but in the fundamental doctrines of the theory.
My criticism has hitherto been directed to the individual parts of Rodbertus's theory. I may conclude by putting the theory as a whole to the test. If correct, it must be competent to give a satisfactory explanation of the phenomenon of interest as presented in actual economic life, and, moreover, of all the essential forms in which it presents itself. If it cannot do so, it is self-condemned; it is not correct.
I now maintain, and shall attempt to prove, that although Rodbertus's Exploitation theory might possibly account for the interest borne by that part of capital which is invested in wages, it is absolutely impossible for it to explain the interest on that part of capital which is invested in the materials of manufacture. Let the reader judge.
A jeweller, whose chief business it is to make strings of pearls, employs annually five labourers to make strings to the value of £100,000, and sells them on an average in a year's time. He will accordingly have a capital of £100,000 consta