Capital and Interest: A Critical History of Economical Theory
Book VI, Chapter II
The starting-point of Rodbertus's*17 theory of interest is the proposition, introduced into the science by Adam Smith and more firmly established by the Ricardian school, that goods, economically considered, are to be regarded as products of labour alone, and cost nothing but labour. This proposition, which is usually expressed in the words "Labour alone is productive," is amplified by Rodbertus as follows:—
1. Only those goods are economical goods which have cost labour; all other goods, be they ever so useful or necessary to mankind, are natural goods, and have no place in economical consideration.
2. All economic goods are the product of labour and labour only; for the economic conception they do not count as products of nature or of any other power, but solely as products of labour; any other conception of them may be physical, but it is not economic.
3. Goods, economically considered, are the product solely of that labour which has performed the material operations necessary to their production. But to this category belongs not merely that labour which immediately produces the goods, but also that labour which first creates the instrument by which the goods are made. Thus grain is not merely the product of the man who held the plough, but also of him who made the plough, and so on.*18
The fundamental proposition that all goods, economically considered, are the product of labour alone, has with Rodbertus very much the claim of an axiom. He considers it a proposition about which, "in the advanced state of political economy, there is no longer any dispute;" it is naturalised among English economists, has its representatives among those of France, and, "what is most important, in spite of all the sophisms of a retrograde and conservative doctrine, is indelibly imprinted upon the consciousness of the people."*19 Only once do I find any attempt in Rodbertus to put this proposition on a rational foundation. He says that "every product that comes to us through labour in the shape of a good ought to be put solely to the account of human labour, because labour is the only original power, and also the only original cost with which human economy is concerned."*20 This proposition also is put down as an axiom, and Rodbertus does not go any farther into the subject.
The actual labourers who produce the entire product in the shape of goods have, at least "according to the pure idea of justice," a natural and just claim to obtain possession of this entire product.*21 But this with two rather important limitations. First, the system of the division of labour, under which many co-operate in the production of one product, makes it technically impossible that each labourer should receive his product in natura. There must therefore be substituted, for the claim to the whole product, the claim to the whole value of the product.*22
Further, all those who render society useful services without immediately co-operating in the material producing of the goods must have a share in the national product; such, for example, as the clergyman, the physician, the judge, the scientific investigator, and, in Rodbertus's opinion, even the undertakers, who "understand how to employ a number of labourers productively by means of a capital."*23 But such labour, being only "indirect economic labour," may not put in its claim of payment at the "original distribution of goods," in which the producers alone take part, but only at a "secondary distribution of goods." What then is the claim which the actual labourers have to put forward, according to the pure idea of justice? It is a claim to receive the entire value of the product of their labour in the original distribution, without prejudice to the secondary claims on salary of other useful members of society.
This natural claim Rodbertus does not find recognised in present social arrangements. The labourers of to-day receive as wages, in the original distribution, only a part of the value of their product, while the remainder 