of the day the labourer produces value over and above his own cost-a surplus value. This is the secret of the Profits of the Capitalist. He may increase this surplus value either (1) "relatively," by reducing the cost of the labourers' subsistence, or (2) "absolutely," by lengthening the time during which the labourers work. In either case, the effect is produced by increasing the unpaid labour at the expense of the paid. The articles made are sold (on Ricardian principles) at their cost price, which depends on the time socially necessary to produce them, not on the wages paid to the producers. If they are made in quantities more than enough to pay the socially necessary wages, the surplus quantities are really turned out by the workers for nothing, for the workers get nothing but the said wages.

Even the friends of Marx and his theories have found a difficulty at this point. Marx himself allows that competition tends to reduce the profits of capitalists to a level; and yet undeniably the proportion which labour (or the "variable" part of capital) bears to the fixed (or "constant") part of capital differs exceedingly between one business and another. Now, profits consist of prices got for goods made by unpaid labour; and these prices (like other prices) are said to be determined by the time socially necessary to produce the goods. But, if competition reduces profits to the same margin in all businesses, the prices cannot be equally determined in all businesses by the said necessary time of production, for the profits in businesses where labour bulks largely are (it appears) lowered by the competition of capitalists, or else these businesses (having more of unpaid labour) would yield higher profits than the others. Marx says himself:—“Every one knows that a cotton spinner, with much constant and little variable capital, gets no less profit or surplus value than a baker, with relatively much variable and little constant." He adds:-"For solution of this apparent contradiction many middle terms. are necessary, as in elementary algebra it needs many

1 "Absolute" and "relative" are often used in this loose way by Marx. By the very definition this "absolute" is a relative.

2 Kapital, I. 312 (3rd ed., 303).

middle terms to make it clear that can represent an actual quantity." He has perhaps given his explanation in the unpublished third volume of Kapital.1

Whatever we think of the theoretical economics of Marx, it is as strictly deductive as Ricardo's, and on the whole follows the same lines. It is surprising, therefore, to find Marx expressly rejecting the Malthusian doctrine of population, and ascribing to each stage of society its own "law" of population, the Malthusian being only the law of the "capitalistic" stage of production. In present society the increase tends to be such as in conjunction with the effects of invention provides a surplus population ready to do the work for which they are wanted by the capitalists. They are only in excess because under this industrial system the producer is separated from his product, and the production benefits only the employer and capitalist.

Apart from the phraseology of such a passage (which will seem awkward to those who feel bound to conceive a law as a generality and not as varying with the facts to which it applies), there is nothing absurd in its contention that the analysis given by Ricardo and Malthus applies only to the modern world of “ great industry." Marx in this differs little from Bagehot, and even less from the more moderate historical economists, who allow a place to theoretical deduction, but confine it to our own society, and exclude it from all reasonings about primitive communities and half-developed civilizations, like that of Europe in the Middle Ages. Historical economists are a genus wide enough to include theorists like Marx, and professedly pure historians like Thorold Rogers and Roscher, who introduce their deductions furtively and eclectically. The historical method and the Hegelian are not opposed; but the latter is no doubt to a greater extent a priori in so far as the prejudgments with which we enter on a study of the historical facts are essential and undisguised. As Marx himself retained nothing of Hegel except the "method," the

1 The Second was published posthumously in 1885.

"

2 Engels (Ursprung der Familie, 4th ed., p. 184) speaks of "laws dwelling in apparent chance and asserting themselves with rigorous. necessity.

prejudgments might mean no more than that in nations which have a history at all there is a movement of thought' with a logic in it, tending through the struggle of opposing principles towards partial solutions, that come in their turn into conflict with each other—and that this process goes on without end, the present economic society being simply one stage in it. Marx and Engels, however, have another prejudgment besides this. process is to them always more or less obviously economical in all cases. The logic they expect to find in the changes is always that of economical facts. economical element in history is the dominant element.

The

The

In taking this view of history,' the scientific socialists seem to be committing the mistake which they blame in Ricardo and the older economists. They are taking the ruling principle of their own age for the ruling principle of all times. Economical influences are probably in our time the most important of all the many forces at work in society. But before our own times it is doubtful if they were so; and it is possible that in the remote future they will lose the primacy. The ideal of Marx (if we may judge from Das Kapital, I. p. 56) is a society of free men with common ownership of the means of production, consciously using their individual powers of labour as a social function. All the products of individual labour will be judged by their value-in-use. The collective product of society will (a) be used socially to serve over again as means of production (in other words capitalized); and (6) it will be distributed among the members for satisfaction of their wants. The method of distribution will vary with the social organization of a people and their historical development. But the share of each member in the means of subsistence will be determined by the time of his labour. This time will play a double part (1) determining the distribution of the different classes of labourers in proportion to the different wants of society, according to a general plan, (2) acting as a measure of the individual share of the producer in the common labour, and therefore in that part of the product

1 Or, as Marx would have said, "of facts, whereof thoughts are simply the expression."

2 For further criticism see below (ch. ii.).

which is given over to individual consumption. The social relations of men to their labour and to the product of their labour will remain transparently simple both in production and distribution.

Marx being no Utopian, does not predict the exact form which regenerated society will take, even as Hegel was never weary of telling us that the philosopher can make no predictions. But philosophy is more than criticism; and, to judge by the accessible written evidence, Engels, who modestly holds himself a mere follower of Marx, has a much clearer philosophical vision than his master. There is probably no scientific socialist who has so well justified his claim to have followed the spirit of Hegel's philosophy; and for socialism at this stage of its history he has probably said the last philosophical word.

In his Development of Socialism from a Utopia to a Science (1882), Engels distinguishes the former from the latter in the following way. The older socialists, whether they were "enlightened" French metaphysicians of the 18th century (like Mably) or really in touch with the working classes (like Fourier and Owen), saw absolute truth and absolute justice in their own conceptions of society. All else to them was false. Their different "absolutes" rubbed each other's angles down, and the result was an eclectic or "average" socialism (p. 18). The New Socialism recognises in the first place that instead of constructing a future society we must understand the present. Starting with Hegel's principle that all is movement and change, Engels concludes (in spite of Hegel) that there is no absolute truth. The only absolute truth would be that all truth is relative. Hegel's own dialectic is inconsistent with any finality of results. In his later book, Ludwig Feuerbach and the Outcome of Classical German Philosophy (1888), Engels argues that the dictum "the real is the rational and the rational the real" means "what must be shall be," but also that the real has in itself a dialectic displacing it for a new real; no particular institution, though it shows its present or relative rationality by persisting to exist, is to be considered eternally rational. The Prussian constitution, because real, was rational only in the sense that "the Prussians of Hegel's time had the constitution

they deserved to have"; but the movement that was changing it into something quite different was equally rational, and proved so by its persistence. (Ludw. Feuerb., pp. 2, 3.) The famous paradox of the great Idealist might be paraphrased by Goethe's words :—

"Alles das besteht

Ist werth dass es zu Grunde geht." (p. 4.) Here lay the Revolutionary character of the Hegelian principle. Truth lies in a process of development. The institutions of a particular time are historically necessary; but equally so is the germ they contain of their own removal and replacement by different ones. The conservatism of Hegelianism is relative; the revolutionary character of it is absolute, and the only Absolute.

"With Hegel all Philosophy ends-partly because it is he who comprehends its whole development in his system, and partly because without intending it he has pointed the way out of the labyrinth of systems to the real positive knowledge of the world" (Feuerb., p. 9). There were a Hegelian Right and Hegelian Left, because the emphasis could be laid either on the relative Conservatism or upon the Dialectic. The difference showed itself strongly in Politics and Religion. The Left or Young Hegelians followed Strauss (Leben Jesu, 1835), and went on to the Materialism of the 18th century, quitting what Hegel himself counted essential, the idea that nature is only an external realization of thought. Feuerbach frankly raised nature to the first place (Essence of Christianity) but his apotheosis of Love, though a natural reaction against the apotheosis of "pure thought," led to a useless and unscientific socialism, which had broken away from Hegel before it had understood him (Feuerb., p. 13). The Materialism of last century had not the notion of development which is now beginning to animate science (ib. 25, cf. Dev. of Socialism, p. 24; and Kautsky, More, p. 328). Then the Revolution of 1848 threw both philosophy and Feuerbach into the shade.

Engels is no Agnostic; he thinks the revival of Kantianism in Germany is "a step backwards and practically only a timid way of accepting materialism behind the scenes and rejecting it before the public" (Feuerb., 19).