Functional socialism

128 FUNCTIONAL SOCIALISM

As for “surplus labour”, it is surely as obvious to-day as it was then. The curious thing about Marx is that he appears to regard the commodity valuation of labour (upon which his argument is based) as inevitable in any economic system. His solution was State Socialism, the continuance of the wage system being predicated.

It is when he discusses capital as such that Marx is most suggestive—and most deceptive. He transforms the old ““Wage Fund” into what he calls “variable capital”. This variable capital is the financial pool out of which labour is paid. The money that goes into machinery, tools and equipment, he calls “constant capital”. He follows Adam Smith in essentials with a change of names. The most devoted follower must recognize that Marx cannot be sure whether the surplus is earned by constant or variable capital, or in what proportions. Since, by hypothesis, constant capital is not absorbed or vitalized by labour, and cannot therefore produce surplus value, plainly the surplus comes from variable capital. His logic, but not his system, depends upon this. But experience has taught that, in modern production, the largest profits go to those who employ most constant capital.

We may well enquire why Marx should stand to be shot at because of this particular interpretation of economic phenomena. None of it is original. As we have seen, his argument on constant and variable capital derives from Adam Smith, even though the developments in capitalist practice had a further