II (8)

There remains Marx' other great discovery, that of “surplus-value” or “surplus-labour,” which Engels calls “the key of capitalist production.” It is not less completely belied by facts than the “iron law of wages.” If all the profits of the employer were derived from surplus-labour, he would have to devote himself to two operations: (1) to increase the hours of labour and lower wages; (2) to increase the number of his workmen and repress all improvements in plant. According to these propositions, if the hours of labour decrease and wages rise, the individual employer must lose his profits and fall into difficulties. Now in England, to take an example, wages have risen and the hours of labour decreased, and yet English industry has made enormous progress and earned enormous profits during the last half century. The same thing has happened in all countries, from which the conclusion follows that Karl Marx' theory of surplus-value is belied by facts.

If the employer's profit be derived from the surplus labour of the workmen, the employer should increase their number, and should decline to employ machinery, the effect of which is to decrease it. How comes it then that employers attempt, on the contrary, to decrease the number of their workmen and to supplant them by machinery? They do not seek to increase their profits by adding to the number of their employees, but by perfecting their plant.

What remains, then, of Marx' theory of surplus-value? What becomes of the sonorous word “surplus-labour” and the denunciations of the exploitation of man by man? Are the socialists who continue to proclaim it entitled to protest against science when the most cursory observation so clearly gives them the lie?