224 president's address — section g (i.). 



(in the third volume of " Capital," not published until after Marx's death, 

 and not yet translated into English) that the labor theory of value was 

 only a category of the past, roughly descriptive of an obsolete mode of 

 production. It ceases to be vahd when applied to the complicated 

 system of modern industry and commerce. This is obvious enough. 

 The value of separate individual labor no longer coincides, granting 

 that it ever did coincide, with price. Quantity of labor is only one of 

 the factors which determine the value of a product. The decisive 

 factor is the capacit}^ of the object to satisfy a given economic need. 



Now, the theory of remuneration according to labor cost, as put 

 forward by collectivist theorists, rests upon the following assumptions. 

 It assumes, first, the abolition of the competition which has hitherto 

 been the main instrument in maintaining and extending the supply 

 of commodities. And in the absence of that competition it assumes 

 a stable and permanent equilibrium between supply and demand — 

 that is, between the total national supply and the total national demand. 

 It assumes, further, an average man, who does not exist, and an equality 

 between different kinds of labor, so that they can all be estimated as 

 regards their value — social, aesthetic, political, educational, economic — 

 in terms of labor time. And it assumes, finally, for its successful work- 

 ing — to mention no other assumptions — -that the problem would not 

 be complicated by the ever-varying values which would be attached 

 to different objects in demand by different persons at particular times 

 and places. 



Some collectivists have simplified the problem of remuneration 

 in the labor state by proposing to distribute the products of labor 

 according to the reasonable needs of the laborer. If one were tempted 

 to follow the example of collectivist writers, and try to shine in the high 

 prophetic line, one might predict that this would lead to a system of 

 exploitation worse than any conceivable under capitalism. It would 

 mean the appropriation by one set of persons of the surplus value 

 created by others. Laborer would exploit laborer. The lazy would 

 exploit the industrious. The impudent would exploit the modest. 

 And the demagogue would become the universal engine of exploitation. 



Of course, when a man or a party has a gospel, we cannot object 

 to the preaching of it. The collectivist has his visions of a simplified 

 social state, aud I wish to rob no man of his visions of a new heavens 

 and a new earth. It is through visions, through ideals, that man moves 

 on to higher things. Ideals, like poetry, enrich the blood of the world. 

 But it is one thing to preach ideals, another thing to impose them. 

 I have not a word to say against that practical state socialism which 

 seeks with knowledge and careful forethought to secure and maintain 

 the conditions under which it will be possible for every citizen to develop 

 his activities so as to lead a healthy and happy as well as a useful 

 life. But collectivism would try to attain its ideal in the wrong way — 

 by eliminating a necessary condition of human progress, or rather, a 

 necessary condition of human life itself. It is said that in the collecti- 

 vist state competition will not be abolished, but only competition for 

 profits. Competition will remain, only under another name. People 



