Philip H Wicksteed in To-day April 1885
To-day April 1885, pp. 177-179.
Transcribed: by Steve Palmer.
Markup: by Steve Palmer.
Bernard Shaw's brilliant but good-natured "comments" on my article on the theory of value seem to invite a few words of reply from me.
I will, however, make them very short. After admirably illustrating the fact that to each individual the utility of beef runs daily and weekly through enormous variations, Mr. Shaw declares that this does not affect the exchange value of the article. No more it does, if the variations counteract each other. If they are all in the same direction at the same time they do affect the exchange value - as Mr. Shaw would know were he a butcher or a housekeeper. But at any rate, says Mr. Shaw, the exchange value cannot rise above the "cost of catching, killing and cooking a cow." Had I Mr. Shaw's pen in my fingers I could give my readers a delectable picture of the indignant housekeeper defeating the extortionate butcher by sallying forth to catch, kill and cook "a cow" for dinner, but I will not enter upon an unequal combat in badinage with Mr. Shaw. I presume he means that the price of beef cannot rise above the cost of bringing it into the market. No more it can, permanently. Temporarily it can, and often does. The only reason why it cannot do so permanently is because as long as labour can produce a higher average utility by bringing beef into the market than by taking - any other direction it will put itself to that special task by preference and so will reduce the final utility of beef by supplying the want of it down to a lower point.
I am quite at a loss to know what Mr. Shaw means by saying that "If the labour necessary to produce the beef be halved or doubled, neither the mass nor the final degree of utility in the beef will be altered one jot; and yet the value will be halved or doubled." Unless and until both the total and the final utilities are altered the exchange value will remain exactly the same. It is only by producing more beef, and thus at the same time increasing its total and lowering its final utility, that the increased facilities of beef-making can produce any effect on the price whatever.
As for Mr. Shaw's extortionate sheikh he simply illustrates my contention that some of the consumers always get the whole, and every consumer may sometimes get a part of the commodity he consumes at something less than it is worth to him (the first mouthful of beef costs no more than the twentieth), but that all pay the price represented by the minimum or final utility of the last increment to that one of the consumers, to whom it has, relatively to other commodities, the least utility.
Similar remarks apply to Mr. Shaw's remaining criticisms; but I should like to say a word in elucidation of my statement that when the supply of any commodity is increased the successive increments meet an ever less urgent want, and are in fact less and less useful. I admit that in a certain sense this language is misleading, for if we are speaking of absolute utilities the presumption is that if the supply of beef is increased till it falls to 6d. a pound, the final increments which get into the workman's alimentary canal are more useful than previous ones, the fate of which we need not pursue beyond the servants' hall. But I never compare absolute utilities and I do not see how such a comparison could he instituted on any scientific basis. All contend for is that if yesterday no one had a watch except those to whom a watch was as useful as anything that could be got for £15, and if to-day a number of men possess watches to whom they are only as useful as other things which could be got for the new watches are relative to other things less useful than the former ones were.
Mr. Shaw's youthful experiences about x and a areso highly instructive that I cannot refrain from dwelling upon them for a moment. His friend induced him to "let x = a,"and Mr. Shaw - not expecting that x would take any mean advantage of the permission - granted the request. But he did not understand that in letting x = a he was also letting x- a = 0, and the proof (of the proposition, 2 = 1) that "followed with rigorous exactness," assumed that x - a did not equal 0.
Mr. Shaw arrived at the sapient conclusion that there was "a screw loose somewhere" - not in his own reasoning powers, but - "in the algebraic art;" and thenceforth renounced mathematical reasoning in favour of the literary method which enables a clever man to follow equally fallacious arguments to equally absurd conclusions without seeing that they are absurd. This is the exact difference between the mathematical and literary treatment of the pure theory of political economy.
Only a single word, in conclusion, on the importance of this controversy. It is not a mere question of abstract reasoning (although, if it were, that could hardly be urged in its disparagement by an admirer of Marx). It affects the whole system of economics, and more particularly Marx's economics, In admitted contradiction to apparent facts, and without (at present) any attempt to remove the apparent contradiction, Marx by sheer logic attempts to force us into the admission that "profits," "interest," and "rent," must have their origin in the "surplus-value" that results from purchasing "labour-force" at its value and selling wares at their value. The keystone of the arch is the theory of value adopted by Marx, and I have tried to show that it is not sound. In doing so I have found an unexpected but powerful ally in Mr. John Carruthers, whose elaborate and thoughtful essay on "The Industrial Mechanism of a Socialist Society," shows the phenomena of "profits" reappearing, in a modified form, in communal industry. My own rather clumsy illustrations of the varying utilities and values of "coats and hats," etc., laboured under the disadvantage of requiring my readers to imagine the wants of society in part at least supplied successively, not contemporaneously. Mr. Carruthers escapes this, and shows how in a communal industry the price (though he would not say the "exchange" value) of each article depends on its final utility, and that it is only when, as a consequence of the indications thus afforded, labour has been properly apportioned amongst the industries, that prices are apportioned to labour cost.
Philip H Wicksteed.