in an advantageous light, has hindered Adam Smith from following upthe idea 'productive power' (which has been expressed by him in theintroduction, and al so frequently afterwards, although merelyincidentally) and from exhibiting his doctrines in a much moreperfect form.By the great value which he attached to his idea'division of labour' he has evidently been misled into representinglabour itself as the 'fund' of all the wealth of nations, althoughhe himself clearly perceives and also states that theproductiveness of labour principally depends on the degree of skilland judgment with which the labour is performed.We ask, can it bedeemed scientific reasoning if we assign as the cause of aphenomenon that which in itself is the result of a number of deeperlying causes? It cannot be doubted that all wealth is obtained bymeans of mental and bodily exertions (labour), but yet from thatcircumstance no reason is indicated from which useful conclusionsmay be drawn; for history teaches that whole nations have, in spiteof the exertions and of the thrift of their citizens, fallen intopoverty and misery.Whoever desires to know and investigate how onenation from a state of poverty and barbarism has attained to one ofwealth and prosperity, and how another has fallen from a conditionof wealth and well-being into one of poverty and misery, hasalways, after receiving the information that labour is the cause ofwealth and idleness the cause of poverty (a remark which KingSolomon made long before Adam Smith), to put the further question,what are the causes of labour, and what the causes of idleness?
It would be more correct to describe the limbs of men (thehead, hands, and feet) as the causes of wealth (we should thus atleast approach far nearer to the truth), and the question thenpresents itself, what is it that induces these heads, arms, andhands to produce, and calls into activity these exertions? Whatelse can it be than the spirit which animates the individuals, thesocial order which renders their energy fruitful, and the powers ofnature which they are in a position to make use of? The more a manperceives that he must provide for the future, the more hisintelligence and feelings incite him to secure the future of hisnearest connections, and to promote their well-being; the more hehas been from his youth accustomed to forethought and activity, themore his nobler feelings have been developed, and body and mindcultivated, the finer examples that he has witnessed from hisyouth, the more opportunities he has had for utilising his mentaland bodily powers for the improvement of his condition, also theless he has been restrained in his legitimate activity, the moresuccessful his past endeavours have been, and the more their fruitshave been secured to him, the more he has been able to obtainpublic recognition and esteem by orderly conduct and activity, andthe less his mind suffers from prejudices, superstition, falsenotions, and ignorance, so much the more will he exert his mind andlimbs for the object of production, so much the more will he beable to accomplish, and so much the better will he make use of thefruits of his labour.However, most depends in all these respectson the conditions of the society in which the individual has beenbrought up, and turns upon this, whether science and arts flourish,and public institutions and laws tend to promote religiouscharacter, morality and intelligence, security for person and forproperty, freedom and justice; whether in the nation all thefactors of material prosperity, agriculture, manufactures, andtrade, have been equally and harmoniously cultivated; whether thepower of the nation is strong enough to secure to its individualcitizens progress in wealth and education from generation togeneration, and to enable them not merely to utilise the naturalpowers of their own country to their fullest extent, but also, byforeign trade and the possession of colonies, to render the naturalpowers of foreign countries serviceable to their own.
Adam Smith has on the whole recognised the nature of thesepowers so little, that he does not even assign a productivecharacter to the mental labours of those who maintain laws andorder, and cultivate and promote instruction, religion, science,and art.His investigations are limited to that human activitywhich creates material values.With regard to this, he certainlyrecognises that its productiveness depends on the 'skill andjudgment' with which it is exercised; but in his investigations asto the causes of this skill and judgment, he does not go fartherthan the division of labour, and that he illustrates solely byexchange, augmentation of material capital, and extension ofmarkets.His doctrine at once sinks deeper and deeper intomaterialism, particularism, and individualism.If he had followedup the idea 'productive power' without allowing his mind to bedominated by the idea of 'value,' 'exchangeable value,' he wouldhave been led to perceive that an independent theory of the'productive power,' must be considered by the side of a 'theory ofvalues' in order to explain the economical phenomena.But he thusfell into the mistake of explaining mental forces from materialcircumstances and conditions, and thereby laid the foundation forall the absurdities and contradictions from which his school (as wepropose to prove) suffers up to the present day, and to which aloneit must be attributed that the doctrines of political economy arethose which are the least accessible to the most intelligent minds.
That Smith's school teaches nothing else than the theory of values,is not only seen from the fact that it bases its doctrineeverywhere on the conception of 'value of exchange,' but also fromthe definition which it gives of its doctrine.It is (says J.B.
