The Development of Economics

CHAPTER XVII

SCIENTIFIC SOCIALISM

In Germany conditions were different. Absolute monarchy was still the dominant type of government there, agitation for constitutions having weakened it considerably and modified it here and there but not supplanted it by popular government. Social experimentation of the kind prevalent in France was there impossible. The need for reform was great, however, and the desire for it widespread. Thousands of Germans who felt this need most keenly were living in exile because of the intolerance of their home governments, and a considerable number of them had been witnesses—some of them participants—in the French Revolution. There were colonies of such Germans in all the large cities of Europe, especially in Paris, London, and Brussels. Germany was, therefore, ready for reform ideas, offered a wide field for social change in the political as well as the economic realm, and had the machinery at hand for utilizing the results of the thinking and experimentation of other countries.

The development of a new type of socialism in Germany, however, is due more to the genius of two men than to the condition of the country, though the latter furnished the environment in which these men grew up and doubtless determined the direction of their thought. These were Johan Carl Rodbertus and Karl Marx, men differing widely in personal characteristics, family and social environment, race, and occupation and working quite independently, but nevertheless arriving at very similar conclusions by similar routes.

A. Johan Carl Rodbertus

Rodbertus spent the greater part of his life as a landlord on an estate named Jagetzau near Jarmen, Pomerania. His father was professor of Roman law in the University of Greifswald, and Johan Carl was educated for the profession of law at a Gymnasium in Mecklenburg-Friedland and at the Universities of Gottingen and Berlin. For a few years after finishing his university course in 1826 he practised his profession; then he traveled in various parts of Europe and in 1834 purchased the landed estate on which he lived the remainder of his life.

He was honored at various times by appointment to important political positions, in 1847 to the Provincial Assembly and the second Parliament of the Kingdom of Prussia and later to the post of Kultus Minister. He was also a member of the national Parliament which met at Frankfort-am-Main in the stirring days of 1848.

His chief interest and occupation, however, was thinking and writing on social topics, and the conclusions at which he arrived made him an enemy of autocracy in government and a Socialist. He also believed in national unity. His principal published works were:

Die Forderungen der arbeitenden Klassen (1837)

Zur Erkenntnisse unserer staatswirthschaftlichen Zustande (1842)

Sociale Briefe an Von Kirchmann (1850-1851), entitled respectively

Die sociale Bedeutung der Staatswirthschaft, Kirchmanns soziale Theorie und die Meinige, and Widerlegung der Ricardoschen Lehre von der Grundrente und Begrundung einer neuen Rente-theorie Der Normal Arbeitstag

Offener Brief an das Comite des deutschen Arbeiter-vereins (1863)

Zur Erklärung und Abhülfe der heutigen Creditnoth des Grund-besitzes (1868-1869)

His system of thought may be briefly summarized as follows: Society is an organism created by the division of labor, each person being a cog in a machine engaged in the production, exchange, and distribution of wealth, a mechanism speedily becoming world-wide in scope. Each person thus performs a part in a work in which the cooperation of all is necessary, and the well-being of each one, therefore, depends upon the work of others and the cooperation of nature as well as upon himself.

In this society there are three essential functions to be performed, the adaptation of production to needs, the maintenance of the volume of production up to the standard set by existing resources, and the just distribution of the common product among the producers. At present none of these functions are properly performed. Instead of being adjusted to needs, production follows demand, a very different thing, since it is directed and measured by income, which is very far from corresponding to needs. Production also is very far from being maintained at the standard of existing resources. It is directed by capitalist proprietors with the view to securing maximum profits, heredity playing an important role and frequently placing the control of economic forces in the hands not of the most, but of the least, competent. Wealth is very unjustly distributed, the masses being exploited by the few.

“It signifies in the first place that only those goods belong to the category of economic goods which have cost labor, whose production has demanded effort. All other goods, however necessary or useful they may have been, are natural goods which have no connection with economy, for economy exists for men only because most of the means of satisfying their reappearing and ever increasing needs are never to be found in nature, either in regard to locality or quality, in such a relation to him that he can use them for his satisfaction; because his work is the only means of establishing such a relation and because this work limited in time and power always involves a diminution of his freedom.

“This statement in the second place means that all economic goods are only the product of labor, that economically speaking they can not be regarded as the product of nature or of any other power, for what nature has done for economic goods man may be thankful for since it has saved him so much work, but economy considers it only in so far as labor has completed the work of nature. As goods are on this account economic goods, so they are economic goods on this account only.

“This statement means in the third place that goods economically considered are the product of that labor which performs the material operations which are necessary to their existence. This includes, however, not merely the labor which immediately operates upon the goods, but also that which produced the tools employed in their production. Wheat, for example, is not merely the product of the one who guided the plow, but also of the one who made the plow. So true is this that goods can be mathematically proven to be a product of these two categories of labor.”

“Economic goods are the product of no kind of labor except these two. The judge, for example, who looks after the legal rights of the laborer indirectly promotes the production of economic goods to an extraordinary degree, and for the service he renders deserves pay, but he does not produce economic goods but justice and one can as little speak of his producing economic goods because he gets his pay from them as he can of the laborer producing justice because he gives the judge economic goods in return for his labor. In a word, the great and universal help-and-service-rendering involved in the constitution of society is a much wider conception than that of the division of labor which has to do only with the production of economic goods.”

Rodbertus did not confuse the proposition that labor alone produces goods with the one that it is the sole source of value. He did not hold that goods actually exchange for each other in proportion to the amounts of labor that produce them but merely that they ought so to do.

The fact that they are not exchanged in accordance with this principle is due to the position which landlords and capitalists occupy in our present-day society. These classes have inherited a position which enables them to secure an income without work—in other words, to exploit the labor of others.

“So long as the division of labor has existed others have actually tilled the soil and produced the capital than those to whom both belong. And those to whom it did belong never have themselves cultivated the soil or produced the capital. Go back to the oldest nations, the first transmitters of our culture, and what will you find? The exploitation of some through others; the exploitation of wife and child and slave; the exploitation of family through the lord. The former obeyed, the latter ruled and enjoyed. The former worked while to the latter the first cultivated land and produce of the labor belonged. This exploitation of the family through the lord is as old as the division of labor. It is as old as law. Only before the division of labor did this condition not exist.”

“Consider the tribe of a hunting people, that social union which first preceded the division of labor. Here there was no division of labor and no exploitation. Here all were free. Here to each one belonged the game he shot and the tools with which he shot it. Here also the soil belonged to the tribe, to one member of it as much as to another. Here there was no lasting subordination of some to others. Here conquered enemies were put to death.”

“All the beginnings of our sad legal and social conditions are products of economic necessity. If each one had only so much booty as was necessary to support himself and his wife alone and to feed his children, no one could live at the cost of another. Under such conditions there could be no subordination. The conquered enemy must be killed. With the division of labor on the other hand, with agriculture which made work more productive and enabled some to live from the product of others, begins also slavery. Connected also with the first economic advance and with slavery was the first step in advance in justice, for then ceased the killing of the conquered enemy. Then began the exploitation of some by others. History does not furnish us an example of any people among whom the first beginnings of the division of labor and of agriculture were not connected with economic exploitation and in which the burden of work did not fall to one class and the fruits of it to another; in which, in other words, the division of labor did not assume the form of the subordination of one class to another.”

According to Rodbertus’s view, therefore, rent, interest, and profits are exploited incomes and their existence as shares in the social product is characteristic of the stage of social development we have reached, a stage which, compared with those which preceded it, represents a closer approximation to justice and a nearer approach to the realization of the rights of men but not perfection, a stage which is destined to give place to another which will more closely approximate the ideals of justice and be accompanied by a much higher level of human wellbeing.

He next asks whether the desires of the people will be withheld from them by others, and he answers that there is no such possibility. The laboring class constitutes a vast majority of mankind. When they come to a realization of their rights and their powers, the accomplishment of their desires cannot be prevented.

In the third place, he asks whether the realization of their desires will constitute the grave of modern culture. He answers that, on the contrary, the satisfaction of the desires of the laboring class, far from being the grave of modern culture, will be the means of its rapid advancement. “Owing to the power which the possessing now exert over the laboring classes, the latter are deprived of the opportunity to increase the productivity of society, and the possibility of advancement of all classes is enormously diminished.”

This same condition, according to Rodbertus, also explains commercial crises. Starting with a state of equilibrium in which there is being produced for the laboring and every other class just the quantity of goods it is able to buy, the increase in the productivity of labor, and saving and investment in productive enterprises by the landlord and capitalist classes, soon bring about a condition of things in which laborers are unable to purchase the goods produced for them. A glut on the market follows, with falling prices, production at a loss, closing factories, unemployment and the other phenomena of crises. This condition is due to the fact that, because the landlord and capitalist classes cannot and do not consume their incomes, but invest a considerable portion of them in productive enterprises, increased productivity can only result in more goods for laborers which they are unable to buy since their incomes have not proportionately increased.

The remedy for these evils Rodburtus did not expect to result from the operation of natural law or from the regime of laissez-faire recommended by the classical economists. He believed that the intervention of the state is necessary, especially in the realm of distribution. In his monograph entitled Der Normal-Arbeit-Tag he outlined a plan which he thought the state should follow. He proposed that in each industry there should be established a normal day’s work and that statistics should be collected indicating the number of such days’ work required in the production of each commodity and that exchange between these should be allowed in accordance with the ratios indicated by these figures. In the distribution of the product he proposed that to the state should be assigned such a portion as is required for its proper functioning and to landlords and capitalists an adequate remuneration for the sacrifices the reform imposes upon them, and that the remainder should be distributed among the laborers in accordance with the number of normal days’ work or fraction thereof each performs in a day. One laborer in ten hours might turn out much more, possibly several times, the normal day’s work, whereas another might turn out only a fraction of it. He proposed that wages be readjusted every time there is a change in the productivity of labor, thus guaranteeing to laboring men a proportionate share in every increase.

In the opinion of Rodbertus, this reform would remedy the evils of poverty and commercial crises. The former, by enabling the laborer to share proportionately in the increased productivity of labor, the latter by distributing income in such a way that the total product of society could always be purchased back by those for whom it had been produced.

B. Karl Marx

Karl Marx was born of Jewish parents in Trier, Germany, in 1818. His father was a lawyer in the service of the Province in which Trier is located and was able to give his gifted son the best of educational opportunities. In the Gymnasium in which he studied Karl exhibited unusual intellectual powers and made a fine scholastic record, but at the Universities of Bonn and Berlin his mind was in such a turmoil and he was so occupied with a love-affair that he did indifferent work. During this period he was passing through the mental and spiritual crisis which made philosophy and economics instead of law his life study and the education of the proletariat and agitation for social reform his career. His love-affair resulted in an early marriage with Jenni von Westphalen, a young woman belonging to a family of rank and influence, who made him a devoted wife.

During his university course Marx’s tastes inclined him toward an academic career, but he was unable to secure a university appointment on account of his radical tendencies, the Prussian government at the time being in a state of reaction against liberal movements. Forced by his marriage to find a means of earning a livelihood, in October, 1842, he accepted the position of editor of the Rheinische Zeitung and at once began a vicious attack upon the policy of the Prussian government relative to freedom of the press and of association which resulted in the suppression of his paper.

This was the beginning of a tempestuous epoch in his career in which he resided for short periods, first in Paris, which he was invited to leave by Guizot, one of Louis Phillippe’s ministers, then in Germany once more where he edited the Neue rheinische Zeitung, which like its predecessor, was suppressed by the government; then for a short time again in Paris, from which he was driven by the police finally to take up his residence in London, where he remained during the rest of his life. He died March 14, 1883.

During his first sojourn in Paris, from March, 1843, to January, 1845, Marx came into contact with the French Socialists and with those of other countries, who like himself were making the French capital a temporary refuge, and studied socialistic literature. His own thinking and association with the young Hegelians at Berlin had previously made him an extreme liberal in politics and philosophy and he now became a Socialist, being considerably influenced no doubt by Saint-Simon’s philosophy of history and by conditions in France which just at that time were ripening for the revolution of 1848. He joined a group of radical exiles which had been organized here and conceived with them the project of educating and organizing the proletariat of the world for the socialistic revolution which he believed was approaching.

One of the episodes in the history of this project was the attempt to weld into a great international organization the groups of radical exiles locally organized in Paris, Brussels, London, and some other cities. This idea had been discussed with Marx during his first sojourn in Paris and, when he went to Brussels in January, 1845, he made its realization one of his chief goals. At this time he had formed a close affiliation with Frederick Engels, the son of a manufacturer of Barmen,

Germany, and part owner of a cotton factory in Manchester, England, and with him visited London in the summer of 1845, when he discussed this proposed international organization with the Commun-istische Arbeiter Bildungsverein, which assumed leadership in the project and asked Marx to prepare a program of procedure and a statement of principles. The result was the famous Communist Manifesto in which Marx called upon the proletarians of the world to organize for the overthrow of the capitalistic system and formulated the principles which he thought should guide them. Then followed the organization of a Communistic League for the spread of the doctrines set forth in the Manifesto.

The short period occupied by the revolution of 1848 in France and its reverberations throughout Europe was followed by a reaction which was unfavorable to the spread of the doctrines of the Manifesto and the success of the Communistic League. Marx’s first years in London were, therefore, chiefly occupied in study and writing. In 1859 he published Zur Kritik der politischen Oekonomie and in 1867 the first volume of Das Kapital.

In 1864 he revived the project of creating an international organization of the proletariat in the form of the so-called International Labor Party. He became the executive head and leading spirit of this organization, which, however, finally came to shipwreck on the rock of internal dissension. With all his devotion and ability, Marx could not work in successful coöperation with his fellow-radicals. He quarreled with Proudhon and Bakounine, and the party split into warring factions. The chief bone of contention was violence versus evolution as a means to the end toward which the Socialists were working. Marx stood rigidly for the latter, believing the world was moving inevitably and rapidly in the direction of socialism and that violent methods would retard, instead of facilitate, the movement.

Upon his death in 1883 he left unfinished manuscripts which his lifelong friend and coworker, Engels, completed and edited, publishing them in 1885 and 1893 as volumes two and three, respectively, of Das Kapital.

As an economist Marx is chiefly known for his doctrines of value, surplus value, and historical evolution. In Das Kapital he aimed to present a complete system of political economy and, barring some degree of incompleteness due to the unfinished condition in which he left his work, he succeeded.

He based his doctrine of value on the labor theory expounded by Adam Smith and Ricardo, modifying it, however, by substituting the amount of labor socially necessary for the amount actually expended as the regulator of the ratio of exchange. By “socially necessary labor” he meant the amount to be employed considering all the conditions of production of the time, including skill, organization, technique, etc.

His proof of this proposition is abstract in the extreme and negative in character. The exchange of goods he claimed implies the existence of something common to them, and he sought to determine what that common element is. He shows that it cannot be any physical property and assumes that it must be labor. Since it is easy to show that things exchange for each other in proportions very different from those determined by the actual amounts of labor incorporated in them, he assumed that they must exchange in proportion to what he called the amounts socially necessary for their production.

“Surplus value,” according to Marx, arises at a certain point in the evolution of exchange. After barter comes money-exchange, the formula for which is C-M-C; that is commodities are exchanged for money and money for commodities, the purpose being the securing of use values better adapted to the needs of the exchangers. In the process of time another form of exchange evolves with a different purpose. The formula for this is M-C-M; that is, money is exchanged for commodities and commodities again for money. The purpose of this exchange cannot be the securing of use values better adapted to the satisfaction of wants, since the beginning and end of the process is the same commodity, money. The only purpose of it, therefore, must be the obtaining of more money. That is possible only when the second M is larger than the first. The difference between the amounts of these two M’s Marx called surplus value.

The stage of economic evolution in which this method of exchange dominates he characterized as the capitalistic stage and money exchanged against goods for the purpose of using the goods for the obtaining of more money, according to his definition, is capital par excellence.

The only commodity which can serve in the process of exchange that creates surplus value is labor, since it is the value-creating substance. When it is bought and sold on the market, like any other commodity its exchange value is determined by the amount of labor socially necessary for its production, that is by the amount necessary to produce the food, clothing, shelter, and other things required to maintain and reproduce the laborers. When this amount is less than the amount purchased, as it normally is, surplus value results, since the value of the goods produced by the labor is greater than that of the goods paid out in wages, the first M in the exchange formula thus being less than the second.

According to Marx, the condition in which the production of surplus value is the leading function of economic society has been brought about historically by the evolution of the proletariat. So long as labor was in a condition of slavery or so long as it owned and used its own instruments of production and there were no large accumulations of capital, a real proletariat did not and could not exist. Only when labor is free, when it has become entirely separated from the instruments of production, and is obliged to offer itself for sale as a commodity on the market, and when capital has accumulated to such an extent that the means and the motive for its purchase exist, can proletarianism appear.

That combination of conditions, according to Marx, occurred for the first time about the middle of the seventeenth century, a time which marks the beginning of what he called the manufacturing period, which extended to about 1770. This period was characterized by the division of labor and its cooperation in simple industrial operations. By that time capital had accumulated in considerable quantities in the hands of the trading class, which had grown rich largely through foreign commerce. The division and cooperation of labor increased its productivity enormously, and the old type of artisan working by himself or assisted by a few apprentices, unable to compete with the new capitalistic establishments, gradually disappeared.

This stage was succeeded by the machinery and factory stage, which has extended to the present day. This stage is characterized by modern machinery and the growth of the modern factory with its new type of division of labor, its marvelous use of natural forces, and its tremendous increase in the productivity of labor. If the independent laborer employing his own capital and land could not compete with the capitalistic production of the manufacturing period, still less can he do so in modern times. The machine era, therefore, made proletarianism universal and completed the process of evolution by which the economic world has been divided into the property-owning and proper-tyless classes, or, as Marx preferred to call them, the capitalist and proletarian classes.

This process of evolution, according to Marx, has made surplus value the dominant economic force of modern society. Originally capital was accumulated through saving, but for many generations it has been accumulated solely from surplus value. Marx tried to show that its continued and continual accumulation is inevitable and that its accompanying condition, a hopeless proletariat, is equally inevitable.

Surplus value means exploitation of the laboring class, and the income of capital, which takes the form of rent, profits, and interest, is its result.

The next stage in the evolution of economic society, according to Marx, will be characterized by the expropriation of the capitalist class and the development of a socialistic organization of industry in which surplus value will disappear and the total product of labor will be distributed among laborers.

Footnotes

1 For an excellent account of this experimentation and its failure, see Gide and Rist, A History of Economic Doctrines, translated by Smart and Richards, pp. 300-306.

2 Schriften von Dr. Carl Rodbertus-]agetzau, zur Beleuchtung der sodden Frage, herausgegeben von Moritz Wirth, zweite auflage (Berlin, 1899), I, 104-110.

3 Ibid., I, 114.

4 Schriften, I, 120-126.

5 Ibid., II, 195 sq.

6 Ely, French and German Socialism in Modern Times (1883), p. 164.

• 1Professor Schmoller found the key to the explanation of this aspect of the system in the development of the national economies of the various European states. These succeeded (in order of time) territorial, municipal, tribal, and family economies, each representative of a certain stage in the history of European civilization, and each produced by the struggle of contending forces, a higher and broader organization in each case subordinating to itself lower and narrower ones. “The essence of this system,” he says, “lies not in some doctrine of money, or of the balance of trade; not in tariff barriers, protective duties, or navigation laws, but in something far greater, namely, in the total transformation of society and its organization, as well as of the state and its institutions, in the replacing of a local and territorial economic policy by that of the national state.” More specifically he says, “The whole internal history of the seventeenth and eighteenth centuries, not only in Germany but everywhere else, is summed up in the opposition of the economic policy of the state to that of the town, the district, and the several estates; the whole foreign history is summed up in the opposition to one another of the separate interests of the newly rising states, each of which sought to obtain and retain its place in the circle of European nations, and in that foreign trade which now included America and India. What was at stake was the creation of real political economies as unified organisms, the center of which should be, not merely a state policy reaching out in all directions, but rather the living heart-beat of a united sentiment.”
• 2Professor Schmoller found the key to the explanation of this aspect of the system in the development of the national economies of the various European states. These succeeded (in order of time) territorial, municipal, tribal, and family economies, each representative of a certain stage in the history of European civilization, and each produced by the struggle of contending forces, a higher and broader organization in each case subordinating to itself lower and narrower ones. “The essence of this system,” he says, “lies not in some doctrine of money, or of the balance of trade; not in tariff barriers, protective duties, or navigation laws, but in something far greater, namely, in the total transformation of society and its organization, as well as of the state and its institutions, in the replacing of a local and territorial economic policy by that of the national state.” More specifically he says, “The whole internal history of the seventeenth and eighteenth centuries, not only in Germany but everywhere else, is summed up in the opposition of the economic policy of the state to that of the town, the district, and the several estates; the whole foreign history is summed up in the opposition to one another of the separate interests of the newly rising states, each of which sought to obtain and retain its place in the circle of European nations, and in that foreign trade which now included America and India. What was at stake was the creation of real political economies as unified organisms, the center of which should be, not merely a state policy reaching out in all directions, but rather the living heart-beat of a united sentiment.”
• 3The industrial organization of the towns was also gradually weakened by conflicts of interest between townsmen themselves and the oppression of the weaker trades by the stronger, and by the growth of domestic industries. Increasing interference of the central government in town affairs was invited by these conditions, and the power of resistance to it was weakened. The growth of a merchant class in London and some of the other large towns also contributed to the same result. The interests of this class extended beyond the boundaries of the town in which they lived and were promoted by the breaking-down of local trade barriers. The power of this class grew rapidly in and after the sixteenth century.
• 4By the seventeenth century a national commercial and industrial organization had developed, the chief organs of which were middlemen who intervened between producers and consumers and between different classes of producers. Among those of chief importance were the wool-staplers, the clothiers, the drapers, and the foreign trading companies. The wool-staplers purchased the farmers’ wool, their most important staple, and sold it to manufacturers or foreign merchants. The clothiers acted as middlemen between the carders, spinners, weavers, and other handicraftsmen engaged in transforming the wool into cloth. They purchased the wool from the staplers, delivered it to the carders and spinners, distributed the yarn among the weavers to be woven into cloth, and then placed the cloth in the hands of the “fuller,” “walker,” or “tucker” to be fulled and cleansed. The spinners, carders, weavers, and fullers were scattered throughout the hamlets and villages as well as the cities of the country, in many, perhaps most cases, doing agricultural work as a main or a side occupation. The drapers purchased the cloth and sold it to consumers or to foreign merchants; some of them were themselves connected with one of the trading companies. Foreign commerce was chiefly carried on by these latter organizations, to each of which a charter had been granted conferring the exclusive right to trade in a specified part of the world. The Eastland Company, for example, had the exclusive right to trade with Scandinavia and the Baltic region; the Russian Company, with Russia; the Merchant Adventurers, with the Netherlands; the Levant Company, with the Mediterranean region; the Guinea or African Company, with Africa; the East India Company, with the countries of Asia; and several other companies with portions of the American field. At the beginning of the seventeenth century France, Spain, and Portugal were the only countries with which trade could be carried on by an Englishman not a member of one of the companies.
• 5The literary remains of Colbert are of the same general character as those of Sully in that they consist of letters, instructions, and memoirs. They differ from Sully’s, however, in the extent to which they reflect mercantile doctrines. Colbert was the chief executor of the mercantile policy of France, and among his letters, instructions, and other papers may be found expositions and defense of nearly every feature of it. Much more completely than the English writers he reflected the doctrines of nationalism and of the entrepreneur relation of the state to industry. To a greater extent than in any other country these doctrines were realized in the practices of France during the reign of Louis XIV, and for this fact Colbert was largely responsible. Louis XIV aspired to be not only absolute sovereign in France but the dictator of Europe, and he fully realized that foreign commerce and command of the world’s supply of the precious metals would assist in the accomplishment of his purposes.
• 6Becher was at one time a court physician and professor of medicine in Mainz, whence he went to Wurzburg, and later to Vienna. At the two latter places, he was connected with the carneræ of the reigning sovereigns. He wrote on natural science as well as Kameralwissenschaft, his chief work in the latter field appearing at Frankfurt in 1668 under the title Politische Discurs von den eigentlichen Ursachen des Auf- und Abnehmens der Städte, Lander und Republiken, in specie, wie ein Land Volkreich und Nahrhaft zu machen und in rechte Societaten civilen zu bringen. In this book he defines a city as eine volkreiche, nahrhafte Gemeine and defends the following fundamental propositions: The more populous a city, the more powerful it is; but in order to be populous, it must be supplied with an abundance of nourishment; the membership of a community consists of (a) those who serve it and are supported by it, for example, government officers, clergy, learned men, physicians, apothecaries, soldiers, etc.; and (b) those who really constitute it, namely, peasants, handicraftsmen, and merchants. These three classes are essential each to the other. In explaining their mutual relations, however, he makes the following argument: “Consumption is the soul of the three classes, the only bond which holds them together and enables them to live by each other. It is on account of consumption that the merchant class is so necessary in a community, however large the peasant class may be. . . . Since the nourishing of a community can only be accomplished through the trading [Verhandlung] and turning into money [Versilberung] of goods . . . everything which hinders these operations hinders and weakens the populousness which results from it.”