Page:The Economic Journal Volume 1.djvu/502

480 The key, then, to the difficulty as to Ricardo's meaning is apparently this. When he laid down that value depended altogether on the quantity of labour, he included in that quantity all the labour that had gone to the production of all the capital in its various forms with which the manual toil was assisted. He would therefore not have used such a phrase as Professor Marshall's, that values are ' proportionate to the amount of labour required only on condition... that it is assisted by proportionate amounts of capital'; because that treats Capital as a separate element in production alongside of Labour, while he included Capital in Labour as merely another form of the one great force. This might seem at first sight only another phraseology for the same view, a difference between Tweedledum and Tweedledee. But the mischief lay in what seemed to be suggested by Ricardo's formula; namely, that as all the contributions towards production were of the same nature, the shares justly assignable to each out of the resulting value must be determined by the same principle. Hence the contribution towards production of the capitalist-employer must be either his direct labour, which could be remunerated on the same scale as that of any other manager, or the stored-up labour (i.e. capital) which contributed just itself and therefore could claim only to be replaced. True, Ricardo did not draw this conclusion himself. Profits, according to him, are (not, as they should be on his general principle, determined by the same law as wages, but) what remains from value after wages are taken out. Moreover, he regarded the payment of interest, i.e. of something more than the mere replacement of the capital, as a matter of course. In one sense, therefore, it is true that the Socialists cannot justly claim him as their authority; for he assumed as self-evident the continuance of certain parts of the modern distributive process which they reject. But in another and more important sense they can; for they can fairly maintain that in his theory of the production of value he furnishes them with a test wherewith to disprove the justice of the modern system of distribution. This is recognised by a writer so unsympathetic to the Socialists