Carl Rodbertus von Jagetzow
For Rodbertus (1805-1875) the social misery of the working class was the prime motive of his economic and social studies. Following Ricardo, Rodbertus started from the postulate that all goods are the result of human labour and that, therefore, labour is the sole source of economic value.
He explained the existence of rent, profit and interest by means of a surplus theory. In the modern economy which is characterized by a highly developed division of labour it is the system of property rights that enables the owners of capital and land to acquire the results of the production process and reserve part of the product of labour for themselves. Rodbertus put great emphasis on the distinction between “capital” in itself, in the sense of produced means of production, and the “ownership of capital” (“Kapitalbesitz”) (Kozak 1882: 194). Private ownership of capital and land is the legal institution through which capitalists and landowners can rob workers of part of their product (“surplus theory” of profit). Profit and rent are essentially the same phenomenon, based on the ownership of capital and land by the propertied class.Based on his surplus theory of profit, Rodbertus developed a dynamic theory of increasing relative exploitation of workers in the process of industrialization. Rodbertus saw very clearly that national product not only grew due to increasing population and labour force, but also due to increasing productivity per worker. As a consequence of the working of “natural laws” of market exchange, the share of the wage in the product declined while the productivity of labour increased (Kozak 1882: 213). Explicitly rejecting Say’s law, Rodbertus also attributed the recurrent crises of production to the increasing income gap between capitalists and workers during the upswing of the trade cycle. In the long run, the severity of crises is increasing, whereas the duration of the upswing-phase is shortening.
In Rodbertus’s words, the welfare losses of the capitalist system are “immeasurable”, compared with a production system organized by the state (1850 [1979]: 128 ff.). The central idea of Rodbertus’s reform socialism was to ensure regular and full participation of workers in the increase of productivity. This would not only lead to a gradual improvement of living standards of the working class, but also save the economy from recurrent economic crises. He also proposed a new system of money based on the unit of labour. However, workers cannot receive the full amount of their labour, since part of the total social product must be reserved for collective needs. (Kozak 1882: 238 ff.)Rodbertus located the fundamental flaw of this “economic system” in the pursuit of their own interest by the systems’ agents. Therefore, it is the central task of the state to establish a legal framework that provides an alternative mechanism for the functioning of the economy. The division of labour within the national economy is essentially a social phenomenon, based on the “unity of the social organism, and not on its atoms, the individual organisms”. This unity of the social organism is adequately represented by a system which Rodbertus called “national economy” in the sense of “state economy” (“Nationalokonomie oder Staatswirthschaft”). To divide the ownership of capital and land among workers would be a regression from the high degree of the division of labour and productivity of the economy achieved under the capitalist system. Hence, Rodbertus rejected models for the organization of production in co-operatives (Schulze-Delitzsch) as a principal approach to social reform. In the long run, Rodbertus envisaged a socialist economic system in which all capital and land is owned by the state, while consumption remains essentially private.
Rodbertus identified several tendencies within the existing capitalist system which prepare a transformation towards socialism (concentration of production, separation of entrepreneurial function from capital ownership).
He proposed to establish institutions through which the existing “defunct state system” could be gradually transformed into “a higher order of the state” (Kozak 1882: 220). Transition could be achieved “in a rather painless way, without inflicting injustice to the owners of land and capital”, through redemption of their claims to rent and profit by the state (Kozak 1882: 252). It would take centuries rather than decades to complete the transformation process. Rodbertus warned against revolution and strongly argued for “continuity of the law”. As a firm monarchist, Rodbertus expected a strong government that stands above conflicting parties to take the initiative.Occasionally, Rodbertus’s socialism takes a nationalistic turn. He considered it the mission of Germany and the German people to develop a solution of the “Social Question” (Kozak 1882: 192) and to save the world from the “Smithian system”. He considered the internationalist orientation of the proletarian movement as a challenge of the “national autonomy of state organisms” (Thier 1940: 176).