But there is a point the explanation of which I have vainly sought in Say and in the other economists, -- to wit, how the reality and legitimacy of net product is established.For it is plain that, in order to cause the disappearance of net product, it would suffice to increase the wages of the workmen and the price of the values consumed, the selling-price remaining the same.So that, there being nothing seemingly to distinguish net product from a sum withheld in paying wages or, what amounts to the same thing, from an assessment laid upon the consumer in advance, net product has every appearance of an extortion effected by force and without the least show of right.
This difficulty has been solved in advance in our theory of the proportionality of values.
According to this theory, every exploiter of a machine, of an idea, or of capital should be considered as a man who increases with equal outlay the amount of a certain kind of products, and consequently increases the social wealth by economizing time.The principle of the legitimacy of the net product lies, then, in the processes previously in use: if the new device succeeds, there will be a surplus of values, and consequently a profit, -that is, net product; if the enterprise rests on a false basis, there will be a deficit in the gross product, and in the long run failure and bankruptcy.Even in the case -- and it is the most frequent -- where there is no innovation on the part of the man of enterprise, the rule of net product remains applicable, for the success of an industry depends upon the way in which it is carried on.Now, it being in accordance with the nature of monopoly that the risk and peril of every enterprise should be taken by the initiator, it follows that the net product belongs to him by the most sacred title recognized among men, -- labor and intelligence.
It is useless to recall the fact that the net product is often exaggerated, either by fraudulently secured reductions of wages or in some other way.
These are abuses which proceed, not from the principle, but from human cupidity, and which remain outside the domain of the theory.For the rest, I have shown, in discussing the constitution of value (Chapter II, section 2): 1, how the net product can never exceed the difference resulting from inequality of the means of production; 2, how the profit which society reaps from each new invention is incomparably greater than that of its originator.As these points have been exhausted once for all, I will not go over them again; I will simply remark that, by industrial progress, the net product of the ingenious tends steadily to decrease, while, on the other hand, their comfort increases, as the concentric layers which make up the trunk of a tree become thinner as the tree grows and as they are farther removed from the centre.
By the side of net product, the natural reward of the laborer, I have pointed out as one of the happiest effects of monopoly the capitalization of values, from which is born another sort of profit, -- namely, interest, or the hire of capital.As for rent, although it is often confounded with interest, and although, in ordinary language, it is included with profit and interest under the common expression REVENUE, it is a different thing from interest; it is a consequence, not of monopoly, but of property; it depends on a special theory., of which we will speak in its place.
What, then, is this reality, known to all peoples, and never-theless still so badly defined, which is called interest or the price of a loan, and which gives rise to the fiction of the productivity of capital?
Everybody knows that a contractor, when he calculates his costs of production, generally divides them into three classes: 1, the values consumed and services paid for; 2, his personal salary; 3, recovery of his capital with interest.
From this last class of costs is born the distinction between contractor and capitalist, although these two titles always express but one faculty, monopoly.
Thus an industrial enterprise which yields only interest on capital and nothing for net product, is an insignificant enterprise, which results only in a transformation of values without adding anything to wealth, --
an enterprise, in short, which has no further reason for existence and is immediately abandoned.Why is it, then, that this interest on capital is not regarded as a sufficient supplement of net product? Why is it not itself the net product?
Here again the philosophy of the economists is wanting.To defend usury they have pretended that capital was productive, and they have changed a metaphor into a reality.The anti-proprietary socialists have had no difficulty in overturning their sophistry; and through this controversy the theory of capital has fallen into such disfavor that today, in the minds of the people, capitalist and idler are synonymous terms.Certainly it is not my intention to retract what I myself have maintained after so many others, or to rehabilitate a class of citizens which so strangely misconceives its duties: but the interests of science and of the proletariat itself oblige me to complete my first assertions and maintain true principles.
1.All production is effected with a view to consumption, -- that is, to enjoyment.In society the correlative terms production and consumption, like net product and gross product, designate identically the same thing.
