m the magnanimous commonwealth state to its poorer members.
And now a brief practical application. It is easy to recognise that the method of payment which I have just now described in our illustration is that which actually does obtain in our economic world. In it the full final value of the product of labour is not divided as wages, but only a smaller sum; this smaller sum, however, being divided at an earlier period of time. Now, so long as the total sum of the wages spread over the course of the production is not less than the final value of the finished product by more than is necessary to make up the difference in the valuation of present as compared with future goods—in other words, so long as the sum of the wages does not differ from the final value of the product by more than the amount of the interest customary in the country—no curtailment is made on the claims that the workers have on the whole value of their product. They receive their whole product according to its valuation at the point of time in which they receive their wages. Only in so far as the total wages differ from the final value of the product by more than the amount of interest customary in the country, can there be, under the circumstances, any real exploitation of the labourers.*45
To return to Rodbertus. The second, and most distinct blunder of which I have accused him in the foregoing, is that he interprets the proposition I have conceded (the labourer is to receive the whole value of his product) in an unwarrantable and illogical manner, as if it meant that the labourer is to receive now the whole value which his completed product will have at some future time.
If we inquire how it was that Rodbertus fell into this mistake, we shall find that the cause of it was another mistake, this being the third important error in the Exploitation theory. It is that he starts with the assumption that the value of goods is regulated solely by the amount of labour which their production has cost. If this were correct, then the first product, in which is embodied the labour of one year, must now possess a full fifth part of the value which the completed product, in which is embodied five years of labour, will possess. In this case the claim of the labourer to receive as wages a full fifth part of that completed value would be justified. But this assumption, as Rodbertus puts it, is undoubtedly false. To prove this I need not question in the least the theoretical validity of Ricardo's celebrated theory, that labour is the source and measure of all value. I need only point out the existence of a distinct exception to this law, noticed by Ricardo himself and discussed by him in detail in a separate chapter, but, strangely enough, passed over without notice by Rodbertus. This exception is found in the fact that, of two goods which have cost an equal amount of labour to produce, that one obtains a higher exchange value the completion of which demands the greater advances of previous labour, or the longer period of time. Ricardo notices this fact in a characteristic manner. He declares (§ 4 of the first chapter of his Principles) that "the principle that the quantity of labour employed in the production of goods regulates their relative value, suffers a considerable modification by the employment of machinery and other fixed and durable capital," and further, in § 5, "on account of the unequal durability of capital, and of the unequal rapidity with which it is returned to its owner." That is to say, in a production where much fixed capital is used, or fixed capital of a greater durability, or where the time of turn-over on which the floating capital is paid back to the undertaker is longer, the goods made have a higher exchange value than goods which have cost an equal amount of labour, but into the production of which the elements just named do not enter, or enter in a lesser degree,—indeed an exchange value which is higher by the amount of the profit which the undertaker expects to obtain.
That this exception to the law of labour-value noticed by Ricardo real