The paramount and overriding aim of bourgeois economic
science is to present itself – precisely – as “science”, that is to say, as a
system of universally valid “laws” based on some causally binding physical
“necessity”. Of course, bourgeois science accepts that it is possible for human
beings to choose to act in a manner that diverges significantly from these
“necessary laws” of economic reality, just as it is possible for humans to
choose not to follow the path dictated by physical laws to achieve a stated
goal. But in both cases, choosing such a divergent path, far from negating the
validity of scientific laws, will only result in the non-attainment of those
stated goals, at least not in an “optimal” sense.
Thus, scientific laws are seen not as the result of human
practices or techniques but rather as an “objective” framework that must be
followed because it is ineluctable. Science is no longer seen as a human
practice, as praxis, as one of many and indefinite paths to action – just as
the causal “chains” that lead to a particular outcome are indefinite (cf. M. Weber,
The Methodology of the Social Sciences)
-, but rather as objective and unchangeable, hence “physical”, laws. The
difficulty with the assumption of scientific necessity of physical laws lies in
the expression itself – because there is nothing “physical” about “laws” and
there is nothing “legal” about the supposedly “physical”. The pursuit of
science (Nietzsche’s “will to truth”) is just that: – a “pursuit”, a particular
modus operandi or praxis that has nothing to do with
physical necessity. The necessity implied in the word “physical” or “natural”
can only be “legal” and therefore not “necessary” at all! Scientific laws do
not and cannot prescribe “necessity” – because to do so they would have to have
the “irresistibility” of logic (H. Arendt, The
Life of the Mind). Yet, even and especially in the case of logic we know
that nothing is “irresistible” at all. For this reason, Leibniz and Kant spoke
of the intuitus originarius. Kant in
particular, having first sought to establish the a priori status of scientific findings – though synthetic rather
than analytic -, was forced finally to concede the failure of his enterprise in
the Opus Postumum.
The path followed by Menger to establish the scientificity
of his economic theory starts appositely with the bare assertion of causal
necessity. As we have seen, Menger prudently distinguishes between the necessity of causal relations known to
us and the merely probable connection
of causal relations we have not yet been
able to establish. Human “freedom” – or rather, the illusion of “freedom” - can
be only “provisional”; it can apply only to the realm of the unknown or of
uncertainty – because all events must be causally determined regardless of
whether we know or do not know such a con-nection.
That is the point of all determinisms (cf. Hobbes, Of Liberty and Necessity) – that all events are causally related
even though there are many whose causal relation is as yet not known to us. This
is the presumption of scientific progress
to which Menger staunchly adheres:
All
things are subject to the law of cause and effect. This
great
principle knows no exception, and we would
search
in vain in the realm of experience for an example
to
the contrary. Human progress has no tendency to cast it in
doubt,
but rather the effect of confirming it and of always further
widening
knowledge of the scope of its validity. Its continued and
growing
recognition is therefore closely linked to human progress.
The problem with this position is, of course, that the
assertion that every event must be causally related is a simple and unprovable
presumption – and we know only too well that events we think at present are
causally related may well not be so because their causal relation – the
physical law that con-nects them –
must be empirically falsifiable to be valid (K. Popper, The Logic of Scientific Discovery) – whence we can conclude that
every physical law is only “legally”, that is, conventionally, valid and not at all ab-solutely. In other words, no physical law is a legibus soluta (literally, absolute,
free from all laws) – that is to say, no physical necessity is immune from
“law”, from a conventional or normative assumption or rule: there is no ordo et connexio rerum et idearum.
Menger seeks to extend the necessity of scientific laws from physical events to the realm of
human needs – starting from the most
basic individual needs for the provision of physical sustenance or survival.
Yet we know that, first, no such basic
needs are definable at an “individual” level, and indeed all needs are not
definable at a physical level, in terms of calories or in any other way, that
is not culturally or “legally” defined in terms of scientific laws. Menger
seeks to establish such a scientific necessity starting with the most basic
needs of the human individual, consisting of “goods of lower order”, and then ascend
to “goods of higher order” which, because of their complementarity and
relatedness (Verhaltnisse), lead to
and result in the division of social labour - which Menger, like Adam Smith,
mistakes for the division of “labour” or “individual labours”.
But each time it is evident that even the most basic goods,
those of lower order, are indefinable not just because they are not “goods” in
terms of their objective physical properties – a proposition with which Menger
agrees -, but also because they are indefinable in terms of human needs
understood other than “culturally”, that is to say, in terms of the “higher
order” from which Menger arbitrarily distinguishes them. There are no elemental “needs” because human beings
are aspects of being human so that all human being presupposes the existence of
social labour. Consequently, contra Adam Smith, it is not “exchange”
that leads to the division of “labour”, because there is no such thing as
“labour” in the abstract: but it is instead the
division of social labour that makes exchange
possible. And this is so essentially because it is impossible to define needs
in “individual” terms – because all human needs are essentially “social” and
therefore cultural – for they are never “biological” in any sense at all. Use
values do not become “goods” because of biological needs: – they become “goods”
because a historically specific division
of social labour allows for their “exchange” – but it is not their “exchange”
that gives rise to the division of social labour in the first place, as Adam
Smith incorrectly believed!
Menger unjustifiably assumes that use values are necessarily
“goods” or exchange values – he assumes what he needs to prove. Thus, he tries
to establish a causal connection between “indirect” goods and “direct” goods –
but must settle for the reality that such a causal chain between “need” and
“relations” is categorically and scientifically impossible: categorically,
because needs – which are presumably served by the direct goods of lower order
- cannot be understood separately from “indirect goods” of higher order; and
scientifically because therefore there cannot be any “necessary causal relation
or link” leading from direct to indirect goods, that is, from goods that
satisfy human needs immediately and
goods that do so mediately.
The
goods-character of a thing is, as we have seen, dependent
on
its being capable of being placed in a causal connection with the
satisfaction
of human needs. But we have also seen that a direct
causal
connection between a thing and the satisfaction of a need is
by
no means a necessary prerequisite of its goods-character. On the
contrary,
a large number of things derive their goods-character
from
the fact that they stand only in a more or less indirect causal
relationship to the
satisfaction of human needs. P.64
And because needs are not biological but social,
Menger is never able to establish a strictly economic nexus between the various
“order” of goods that is not tied to their “possession” so that each time
Menger tries to link causally one good with one of higher order in terms of
“value” the value can no longer be attributed to the “order” or nature of the
good but rather to its “possession”. In other words, Menger is simply unable to
separate causally the biological usefulness of goods from the fact (a very
human and cultural fact in a Vichian political sense) of their constituting “property”.
The indissolubility of use value and property so as to fix scientifically a
science of exchange value or of economics is the insurmountable obstacle that
condemns Menger’s entire scientific enterprise to failure ab initio! Given that a “good” cannot be defined independently in a
biological sense and therefore independently of human social relations, it is
obvious that the “science” of economics cannot stand on “necessary laws of
cause and effect” as Menger pretended to show.
Menger’s fallacious attempt to establish a scientific link
between use values and “goods” or exchange values falters because use values
are not necessarily “goods” for exchange for the simple reason that exchange is a historically specific form of
the division of social labour – it is not exchange that causes the division
of social labour because social labour
is not dissectible into individual
labours. But because Menger wrongly assimilates use values to exchange
values he then needs to pursue this mistaken “physical” assimilation to include
the “temporal” dimension of production.
The
process by which goods of higher order are progressively
transformed
into goods of lower order and by which these are
directed
finally to the satisfaction of human needs is, as we have
seen
in the preceding sections, not irregular but subject, like all
other
processes of change, to the law of causality. The idea of
causality,
however, is inseparable from the idea of time. A process
of
change involves a beginning and a becoming, and these are only
conceivable
as processes in time. Hence it is certain that we can
never
fully understand the causal interconnections of the various
occurrences
in a process, or the process itself, unless we view it in
time
and apply the measure of time to it. Thus, in the process of
change
by which goods of higher order are gradually transformed
into
goods of first order, until the latter finally bring about the state
called
the satisfaction of human needs, time is an essential feature
of our
observations. P.67
Time is central to Menger’s division of goods of different
orders because those of lower order are for immediate
consumption or need, and those of
higher order are for delayed consumption or “relations” or “wants” (Bedarf), requirements).
After
what has been said, it is evident that command of
goods
of higher order and command of the corresponding
goods
of first order differ, with respect to a particular kind of
consumption,
in that the latter can be consumed immediately
whereas
the former represent an earlier stage in the formation of
consumption
goods and hence can be utilized for direct consump-
tion
only after the passage of an appreciable period of time, which
is
longer or shorter according to the nature of the case. P.68
Here is the first intimation of that “renunciation” of
immediate consumption that leads to “interest” or the accumulation of capital
through the “roundaboutness” of production that is central to Bohm-Bawerk’s
economic theory. It is entirely evident, however, that these “physical-natural”
attributes of use values only become relevant to the process of production if
we consider human products as exchange values, as “goods”, that therefore
necessarily “belong” to separated
producers, to individual labours.
From the viewpoint of social labour,
of associated producers, time simply
cannot be a factor in the production of exchange values (“goods”) either as
sacrifice or as uncertainty.
But
another exceedingly important difference between immediate
command
of a consumption good and indirect command of it (through
possession
of goods of higher order) demands our consideration. A
person
with consumption goods directly at his disposal is certain of their
quantity
and quality. But a person who has only indirect command of
them,
through possession of the corresponding goods of higher order,
cannot
determine with the same certainty the quantity and quality of the
goods
of first order that will be at his disposal at the end of the production
process.
Pp.68-9
Leaving uncertainty
to one side for the moment, the delay or postponement of consumption – this
ascetic renunciation (cf.
Schopenhauer’s Entsagung) – is
rewarded by the greater productivity of goods of higher order. But here Menger
and Bohm-Bawerk fail to explain why producers would wish to delay consumption
in exchange for higher productivity given that delay and uncertainty cannot be
the aim of production. Menger himself contradicts this “natural” progress of
production with this example:
Conversely,
goods often lose their goods-character because men
do
not have command of the necessary labor services, complementary
to
them. In sparsely populated countries,
particularly in
countries raising one predominant crop
such as wheat, a very serious
shortage of labor services frequently
occurs after especially
good harvests, both because agricultural
workers, few in numbers
and living separately, find few incentives
for hard work in times of
abundance, and because the harvesting
work, as a result of the
exclusive cultivation of wheat, is
concentrated into a very brief
period of time. Under such conditions (on the fertile plains of Hungary,
for
instance), where the requirements for labor services,
within
a short interval of time, are very great but where the available
labor
services are not sufficient, large quantities of grain often
spoil
on the fields. The reason for this is that the goods complementary
to
the crops standing on the fields (the labor services necessary
for
harvesting them) are missing, with the result that the
crops themselves
lose their goods-character. P.62
Here the “natural progression” of human production from the
satisfaction of basic needs to less basic wants
and requirements (Bedarf) is
clearly called into question: not only do the producers in Menger’s example choose
not to produce in excess of their
immediate needs, not only do they not
postpone consumption, but they also seek to produce those use values that can
be obtained with the least amount of effort intended as sacrifice (Kraft als Leid als Opfer)! (This link between effort and sacrifice will
be made explicit by the co-founder, with Menger and Jevons, of neoclassical
economics, Gossen.) Therefore, the willingness of some workers to delay
consumption can never turn them into capitalists and result in their
accumulating wealth-as-capital (or Menger’s “goods of higher order” or
Bohm-Bawerk’s “roundabout tools”) unless these “ascetics” can use their
“command” over “goods” to force others to work for them – that is to say,
unless they use their possession of dead
labour to command politically and violently the living labour of other workers!
Clearly then, the ability of intermediate or indirect goods
to command immediate or direct goods depends on the ability of
the owners of the former to deny the
consumption of the latter by other producers! As Menger asseverates, where
workers are “few in numbers and living
separately, [they] find few
incentives for hard work” – whence we infer that the causal connection between
direct and indirect goods in terms of “command” breaks down – unless those few
workers are made “many” – that is, there is an excess of population caused by
the violent denial to some workers of access to the harvest through
expropriation! Conversely, the reason why “the
crops themselves lose their goods-character” is precisely that workers are
not forcibly excluded from access to them as use values. Thus, the creation of
exchange values, of “goods”, is not a “natural” or “physical” attribute of overall
“command” over use values by all human beings and producers, but rather it
requires the parcelisation of social labour through the proprietary exclusion
of some producers by others from the products of human labour, from use values.
This is the key to the accumulation of social wealth as capital.
Menger’s utter misconception of the human basis of
production he makes utterly evident in these passages…
Assume
a people
which
extends its attention to goods of third, fourth, and higher
orders,
instead of confining its activity merely to the tasks of a
primitive
collecting economy—that is, to the acquisition of naturally
available
goods of lowest order (ordinarily goods of first, and
possibly
second, order). If such a people progressively directs
goods
of ever higher orders to the satisfaction of its needs, and
especially
if each step in this direction is accompanied by an
appropriate
division of labor, we shall doubtless observe that
progress
in welfare which Adam Smith was disposed to attribute
exclusively
to the latter factor. We shall see the hunter, who initially
pursues
game with a club, turning to hunting with bow and
hunting
net, to stock farming of the simplest kind, and in
sequence,
to ever more intensive forms of stock farming. We shall
see
men, living initially on wild plants, turning to ever more intensive
forms
of agriculture. We shall see the rise of manufactures,
and
their improvement by means of tools and machines. And in
the
closest connection with these developments, we shall see the
welfare
of this people increase.
The
further mankind progresses in this direction, the more varied
become
the kinds of goods, the more varied consequently the
occupations,
and the more necessary and economic also the progressive
division
of labor. But it is evident that the increase in the
consumption
goods at human disposal is not the exclusive effect of
the division of
labor. Indeed, the division of labor cannot even be designated as the most
important cause of the economic progress of mankind. Correctly, it should be
regarded only as one factor among the great influences that lead mankind from
barbarism and misery to civilization and wealth. P.73
Obviously, here Menger reduces Smith’s observations on the
division of labour to a purely “technical” factor – which is simply wrong
because Smith made civilisation and the division of labour one and the same
thing – with the mistake that he attributed the division of “labour” to the
need for exchange rather than the existence of exchange as a historically
specific form of the division – not of “labour”! - but of “social labour”. For
Smith, quite rightly, it is impossible to dissect the division of labour from
the expansion of human needs. But these needs and their satisfaction through
new production and the division of social labour cannot be linked “naturally”
to exchange and therefore to property rights – though this is what Smith does
by assuming (a) the existence of “individual labours” and therefore, (b), the
necessity for exchange, for “goods”.
Menger’s vain attempt to link the provision (Bedarf) of use values to the production
of exchange values (“goods”) – his attempt to identify use values with “goods”
and thus to link two categorically
different entities – is evinced in the last two sections of Chapter One of
the Principles of Economics: the
first on the division of labour and the command over production, and the second
on property. Now, the division of social labour has nothing to do with the command over production, as every
anthropologist can attest. But it is this emphasis on the “quantity” of use
values, and therefore their transformation into exchange values that can be
“commanded” that truly concerns Menger. It is not sufficient that human beings
divide up social labour, as they must to be “human” in any sense. Because for
Menger, and for Smith, the division of social labour is only the division of
“individual labours” which is made “social” only by the need “to exchange” the
products of individual labours, then it is clear that the mere division of “labour”
is not sufficient to drive economic growth – because Menger, unlike Smith,
understands economic growth “scientifically” or “physically-naturally” as the
ultimate need to satisfy what he thinks are clearly identifiable “basic human
needs”. Therefore, this greater command over the production of lower order
goods can be achieved only through the renunciation
of immediate consumption, which is paid for with abstinence (from immediate consumption) and uncertainty (of
eventual production). And these two “sacrifices” are what gives rise to
“property”.
The
explanation of the effect of the increasing employment of
goods
of higher order upon the growing quantity of goods available
for
human consumption (goods of first order) is a matter of little
difficulty.
In
its most primitive form, a collecting economy is confined
to
gathering those goods of lowest order that happen to be
offered
by nature. Since economizing individuals exert no
influence
on the production of these goods, their origin is independent
of
the wishes and needs of men, and hence, so far as they are concerned,
accidental.
But if men abandon this most primitive and treat them as goods
of
higher order, they will obtain consumption
goods
that are as truly the results of natural processes as
the
consumption goods of a primitive collecting economy, but the
available
quantities of these goods will no longer be independent
of
the wishes and needs of men. Instead, the quantities of consumption
goods
will be determined by a process that is in the
power
of men and is regulated by human purposes within the limits
set
by natural laws. Consumption goods, which before were the
product
of an accidental concurrence of the circumstances of their
origin,
become products of human will, within the limits set by
natural
laws, as soon as men have recognized these circumstances
and
have achieved control of them. The quantities of consumption
goods
at human disposal are limited only by the extent of human
knowledge
of the causal connections between things, and by the
extent
of human control over these things. Increasing understanding
of
the causal connections between things and human welfare,
and
increasing control of the less proximate conditions responsible
for
human welfare, have led mankind, therefore, from a state of
barbarism
and the deepest misery to its present stage of civilization
and
well-being, and have changed vast regions inhabited by a
few
miserable, excessively poor, men into densely populated civilized
countries.
Nothing is more certain than that the degree of
economic
progress of mankind will still, in future epochs, be commensurate
with the degree of
progress of human knowledge. Pp.73-4
Just as Menger mistakenly sought to distinguish between
basic needs and wants or requirements (Bedarf),
satisfied respectively by goods of lower and higher order, so now he seeks also
to distinguish between basic needs and less basic ones by means of the amount
of control or command that human beings have over the production of “goods” for
their satisfaction. In both cases, Menger seeks to trace a causal link or chain
in the “progress” from the satisfaction of basic to less basic needs or
requirements or wants. Yet we know that no such distinction can be made, nor
can any such link be traced. Furthermore, there can be no question of making
the leap from “command” over use values on the part of human beings as a species - through social labour – and command over
“goods” for exchange between individual
human beings – because command over use values by the human species will
never be able to be reduced to command over “goods” or exchange values as if
use values naturally or physically or
“scientifically” belonged to individual producers!
In the quotation below, Menger fully displays his inability
to distinguish between the division of social labour, which is not the product
of individual decisions but rather the result of specific historical forms of
social organisation, and one such specific historical form whereby the division
of social labour hinges entirely on the politically violent institution of
private property over “individual labours”, that is to say, on the fictitious
parcelisation of social labour into alienable individual labours (wage labour).
When
the economy of a people is highly developed, the various
complementary
goods are generally in the hands of different persons.
The
producers of each individual article usually carry on
their
business in a mechanical way, while the producers of the
complementary
goods realize just as little that the goods-character
of
the things they produce or manufacture depends on the existence
of
other goods that are not in their possession. The error that
goods
of higher order possess goods-character by themselves, and
without
regard to the availability of complementary goods, arises
most
easily in countries where, owing to active commerce and a
highly
developed economy, almost every product comes into existence
under
the tacit, and as a rule quite unconscious, supposition
of
the producer that other persons, linked to him by trade, will
provide
the complementary goods at the right time. Only when
this
tacit assumption is disappointed by such a change of conditions
that
the laws governing goods make their operation manifestly
apparent,
are the usual mechanical business transactions
interrupted,
and only then does public attention turn to these manifestations
and
to their underlying causes. P.63
Use values can belong to individual producers and be
available for exchange as “goods” only through the political establishment of property rights over “individual” use
values. Menger simply cannot see that property rights can in no guise arise
from “natural” relations of cause and effect. No amount of causal links between
basic needs, at one end of the causal chain, and wants or requirements at the
other can ever explain what is the necessarily political origin of property rights. And only property rights can
beget more property rights – because no amount of “physical-natural command over
use values” will turn use values –
which refer to humans as a species with its division of social labour - into
“goods” or exchange values subject to property rights that are necessarily
“individual” – the essential ingredient for the “exchange” of use values and
therefore for the existence of “goods”!
The colossal non sequitur involved in Menger’s reasoning;
his entirely fallacious “leap” from social labour to alienable individual
labours based on the institution of private property is made entirely evident
in his reckless explanation of the nature of property rights:
We
see everywhere that not single goods but combinations of
goods
of different kinds serve the purposes of economizing men.
These
combinations of goods are at the command of individuals
either
directly, as is the case in the isolated household economy,
or
in part directly and in part indirectly, as is the case in our
developed
exchange economy. Only in their entirety do these
goods
bring about the effect that we call the satisfaction of our
requirements,
and in consequence, the assurance of our lives and
welfare.
[75]
The
entire sum of goods at an economizing individual’s command
for
the satisfaction of his needs, we call his property. His
property
is not, however, an arbitrarily combined quantity of
goods,
but a direct reflection of his needs, an integrated whole, no
essential
part of which can be diminished or increased without
affecting
realization of the end it serves. [76]
Menger here leaps from stating correctly that “only in their
entirety[!] do these goods [use values] bring about…the satisfaction of our
requirements”, to the inadmissible conclusion that “the entire sum of goods[!]
at an…. individual’s command[!]… we call his property”. The entire sum of use values, belonging to the human
division of social labour, can never suddenly become “the entire sum of
[individually owned] goods [exchange values]” without the violent institution
of alienated labour, wage labour on which private property is based!