Зображення сторінки
PDF
ePub

REVIEWS

Einige Strittige Fragen der Capitalstheorie. Drei Abhandlungen. Von E. vON BÖHM BAWERK. (Wien und Leipzig: Braumüller.) 1900.

In this book, which is entirely critical, Professor Böhm Bawerk addresses himself not to the well-worn arguments for and against the theory of final utility in relation to the theory of capital, but to one or two minor points which may be fresh to many readers. He had dismissed them briefly in his larger book as hardly controversial, but, since critics had controverted his views on them, he proceeded to deal with them further in the essays now put together into one small volume.

(1) The critics (Lexis and Philippovich) doubted the truth of his principle that the longer ways of production are technically the most productive. He admits that it is a conclusion of experience but considers that a large range of experience has well established it as a broad general rule (cf. 39). If it is true in the great majority of cases, then that is enough to cause the phenomena of interest (40). It is in fact the truth that lies in the common notion of the productivity of capital (11), and if the immediate ways of production were as fruitful as the indirect there would be none of the actual economic dependence of labourers on capitalists (13), though there might still be of labourers on land-owners (14). Lexis objects that all technical invention has tended not to lengthen but to shorten the period of production and to lessen the number of labourers employed in it in proportion to the capital employed (15).

In substance the Professor answers that it is so, once you have made the invention, but to make the invention you need to pause and take time, that is, you need to take the longer way (18 cf 35, 37),— while, besides, the curtailment of the labour is not the same thing as a curtailment of the whole cost of production or the time of it (19). But, say his critics, are there not, notoriously, inventions occurring suddenly, and at once cutting short the period of production? Yes, is the answer, and the result is that, apart from patents and monopolies, the gain is reduced accordingly; the interest founded on the longer

period falls with its foundations, by the competition of producers; it is retained only while the long methods are still wanted for the whole demand of the public (31 seq.). But he admits that there is still need for a good account of the effects of inventions from this point of view, in a "dynamical theory of capital," which may perhaps come from his own pen (42 cf., 102 seq.).

(2) The critics doubted the possibility of viewing the process of production as a whole with the completeness they consider to be required by the Professor's theory. The regression from means of production to the means of producing the means of production is infinite. How then (says Lexis) can we prove the "functional connection" of the length of the period of production with the productivity of labour? (44).

Böhm Bawerk answers that at a certain point in the regression the contributions become negligible and may be neglected on the average accordingly (45). The average "time of waiting" possible to producers in a given country is limited by the amount of the fund of subsistence there (45-6). It is true that there is no exact knowledge anywhere of the precise length of a period of production. But it is not with exact figures and factors, present to the consciousness of producers, that we deal (cf. 69 seq., esp. 72). Broad general facts of concomitant variation, agreement and difference, are appreciable by the experience of every one even where there is no power of reducing the varying factors to exact figures. Even a person who knows nothing of the laws of Light can judge for himself that the nearer is the light the greater is the clearness (48). Further, the average length of the whole process of production may be the determining cause of the rate of interest even though the several separate producers, among whom the work is divided, regard, each of them, only the rate of profit falling to their several separate branches of the work. By means of the levelling influence of competition the last applied investment of capital results in determining what the average rate is to be, though the last employer cares nothing about the average but only about his own particular profit (55). It is as with "supply and demand" and cost, in their relation to price; the price. will be according to supply and demand, but with freely produced goods it will also be according to cost, the cost of the last necessary portion of the supply (55-6). The additional investment of capital involving an addition to the period of production shows itself the last that is profitable, if the surplus of products over the additional wages is greater than the previous surplus. But does this surplus constitute an increased rate of interest in the reckoning ?—The difficulty of explaining the rate of interest, without assuming it, is keenly felt at this point. It is fully discussed in the Positive Theory of Capital (Book III., V., II., in Smart's translation VII., II.: The Rate of Interest in Market Transactions). Professor Hadley seems to be right in thinking that our author is at least more successful than his brother-Austrians in avoiding this difficulty (Hadley, Economics, 1896, pp. 274, 275).

If it be asked whether the levelling influence of competition can be assumed as a fact, in such arguments, the answer is (61) that it is enough of a fact to be a basis of conclusions that are rather general than universal. It seems to be sufficiently near exact truth to substantiate our author's statement that the production in complicated stages of a particular article is made really one process by it, whether the stages are carried on under the roof of one factory or by quite separate employers every man for himself (64, &c.).

(3) The subject of the third and last of the essays in this volume is hardly conveyed by the title of it, which is substantially this, "The true test of a correct theory of Interest; the socialistic theory reproduced by an orthodox economist." Philippovich and Dietzel had represented that Böhm Bawerk's theory, though good enough for loans, was not enough to explain all interest. Böhm replies that Philippovich had expected not a theory of interest, but a theory of that which is not interest of employer's profits of management (80, &c.). To Philippovich, the new theory is not comprehensive enough (100). To Dietzel, it errs by trying to be comprehensive at all, in face of nature; he himself gives a separate explanation for all the chief forms of interest, explaining interest on loans by Böhm Bawerk's theory, but recognising an interest due to "exploitation," an interest due to productiveness, an interest due to use (85). The Professor seems right in his severe strictures on this despairing abandonment of the economist's task to find the common cause. It is, he neatly remarks, as if we so separated the different species of Rent (89, 90, 100).

Finally, the opposing views of Lexis are considered, Lexis being the political economist who has revived the theory of Marx and his school in a new dress. We had already heard of this exploit in the pamphlet on "Karl Marx and the Close of his System" (1898).1 Lexis conceives interest to be due to the dependence of the labourer on the capitalist, and to the power of the employer to turn the labourer's work to his private benefit from his position of advantage (111). There is certainly a feature of resemblance between such a view and our author's. Unless "present goods" had a very different importance for the labourer and for the capitalist the agio of present over future would hardly lead to the phenomena of interest as they are now.

But, though we read of a German denunciation of "Pareto's theory of final utility as the basis of an ultra-liberal economic policy" (126 n., referring to an article by Bortkevitsch, in Schmoller's Jahrbuch), the Austrians and others of the school have not really tinged their economics with politics. Böhm Bawerk's claim to have been free from extraneous bias, political or otherwise, in his economic reasonings (117), will be admitted to be just by all who know the man and his writings.

1 See ECONOMIC JOURNAL, vol. viii. (1898), 375 seq.

J. BONAR

Die Technik des Welthandels. Von Dr. RUDOLF SONNDORFER. Zweite Auflage. (Wien und Leipzig: Alfred Holder. 1900. 8vo, pp. 495.)

THE appearance of a second edition of a work of this class, rendered necessary by the exhaustion of the first, even though that appeared so long as ten years ago, is a sign of that development which is otherwise becoming sufficiently striking, namely, the increasing attention which is being paid to the training of young men for mercantile careers. The author is the director of the Handelsakademie of Vienna and writes of a subject in the teaching of which he has had experience. He regards it as an essential element in the more advanced education in preparation for business, in which he gives it a place alongside of Economic Theory, Commercial Geography, and the study of commercial products. It may, as expounded by him, certainly claim a place, even in a course which excluded the practical study of commodities as being more properly acquired in actual business life than in institutions of an academical nature. The subject occurs in the curricula of but few institutions, and in some its teaching is mingled with an attempt to combine with it a modicum of knowledge of businessroutine which, being regarded in England as a playing at business, has discredited the more really useful part of the work done.

The importance of the subject-matter dealt with in the book will be best indicated by stating its general contents. First comes a description of the nature of the business done, and the principles on which the modern organisation of that business is based, on the great Produce Exchanges which occupy an increasingly important place in the trade of the world. With the growth of facilities of intercommunication between different parts of the earth's surface, the machinery by which exchange is carried on has steadily increased in importance. It is, therefore, deserving of closer theoretical study than it commonly gets. The bearing of different features of its changing organisation cannot be taken for granted without examination. For the young merchant a grip of the general lines on which the different sections of the modern business world are dovetailed together is as desirable as it is for the young artisan to seek in a technical school that more general knowledge of his craft which apprenticeship no longer serves to impart. Thus the study of exchanges and exchange arrangements, with the means of transit by railway and water by which the goods, whose ownership forms the subject of exchange operations, are transported so as to meet the convenience of the new owners, is hardly to be regarded as unnecessary, as something which will be picked up in the course of office work or other practical experience. The reproduction of a considerable number of actual documents used in business, many of them by a photo-lithographic process, enables the applicability of general ideas to be tested by reference to the precise details of

actual practice. These documents serve, not the purpose of familiarising the student with office routine, but of importing a sense of reality into the study in which he is engaged.

The first half of the book contains, besides the study of exchanges and means of transport, sections devoted to weights and measures and to exchange operations. The first would seem to be rather a part of a text-book of commercial arithmetic, but that the mere comparison of different systems of weights and measures does not stand by itself. It serves as an introduction to chapters on trade customs in regard to standards of measurement for various articles, and though the mere arithmetic relating to, for example, the numbering of cotton yarns as employed in England and as used elsewhere, may not be considered an essential part of such a work as this, the presentation of the principles is alone able to give any reasonableness of appearance to the arithmetical problems, while the young learner of arithmetic would probably fail to grasp the importance or bearing of the facts here. usefully recorded.

In the section dealing with the exchanges, the same applies. There is some appearance of the mere arithmetic having no small importance. The setting forth of the customs of the great centres of the monetary transactions of the world is the real subject-matter, the arithmetical work being introduced to render more clear a verbal explanation which might alone just fail to convey the correct impression.

In the second half of the book the more precise detail of the trade arrangements which apply to dealing in wheat, cotton, petroleum, and a number of other products entering largely into the world's exchanges are examined in greater detail. The customs of the leading markets for each commodity are separately dealt with.

Those who will be engaged in the work of organising the advanced instruction in preparation for mercantile pursuits, which shows signs of early development in England, will find Dr. Sonndorfer's text-book useful as mapping out the lines of a very serviceable course of instruction. It may be called a specialised branch of descriptive economics, but one where, on account of its specialised nature, description will more conveniently follow than precede theoretical studies.

Where chances of error abound as they necessarily do in such a book, it is very satisfactory to record that errors detected are few and of minor importance. A. W. FLUX

The Elements of Public Finance. By Professor W. M. DANIELS. (New York: Holt and Co.) 1899.

THE establishment of special courses in finance by several of the chief American Universities has created a demand for convenient textbooks, which has naturally been met by an increase in supply. The latter, indeed, stood at zero a few years ago, but now-not to speak of larger works-there are Prof. Plehn's excellent Introduction (reviewed.

« НазадПродовжити »