Functional socialism

124 FUNCTIONAL SOCIALISM

be over the cost of production, then says to capitalist and worker that they can divide what remains. As to that, wages can only rise at the expense of profits. There is, and must be, a class struggle, which is my inference and not Ricardo’s. How does he visualize it? “For as soon as wages should be equal to the whole receipts of the former, there must be an end to accumulation; for no capital can then yield any profit whatever, and no additional labour can be demanded, and consequently population will have reached its highest point.” This lame and impotent conclusion reminds us of John Stuart Mill’s famous passage in which he pictures the ultimate effect of the law of diminishing returns: “the river of human life will eventually be lost in the sea of stagnation”. We of this generation have a more enduring faith; other vistas open before us.

RENT AND ECONOMIC VALUE

Two further issues of gravity flow out of Ricardo. He brings down rent from its mystical eminence to the level of any other economic factor. But does not our whole conception of rent change in consequence? Rightly understood, is it not in fact the economic power, legally enforced, exercised by one man over another? Is not any other economic power, backed by law or custom, equally a rent? I must buy bread; the baker charges a profit. I am in desperate need of an operation; the surgeon charges a fee. If there is an abundance of land, the economic power of rent diminishes, perhaps disappears; if