Chapter XIII: Conclusion (3)

This error arises as follows: if an economic fact is a practical activity, it is still necessary to say how this activity is distinguished from moral activity. But moral activity is defined as _altruistic_; then, it is inferred, economic data will be _egoistic_. Into this mistake has fallen, amongst others, our able Professor Pantaleoni, in his _Principî d'economia pura_, and in other writings.

The _egoistic_ is not something merely _different_ from a moral fact; it is the _antithesis_ of it; it is the _immoral_. In this way, by making the economic principle equivalent to an egoistic fact, instead of distinguishing economics from morality, we should be subordinating the former to the latter, or rather should deny it any right to exist, recognising it as something merely negative, as a deviation from moral activity.

A datum in economics is quite different. It does not form an antithesis to a moral datum; but is in the peaceable relation of condition to conditioned. It is the general condition which makes the rise of ethical activity possible. In the concrete, every action (volition) of man is either moral or immoral, since no actions are _morally indifferent_. But both the moral and the immoral are economic actions; which means that the economic action, taken by itself, is neither moral nor immoral. Strength of character, for example, is needed both by the honest man and by the cheat.

It seems to me that you approach gropingly to this conception of the economic principle, as relating to practical actions, which taken in the abstract, are neither moral nor immoral; when at one point in your last essay, you exclude from economic consideration _choices_, which have an _altruistic motive_; and further on, exclude also those which are _immoral_. Now, since choices are necessarily either altruistic or egoistic, either moral or immoral, you have no way of escaping from the difficulty except the one which I suggest; to regard economics as concerned with practical activity in so far as it is (abstractly) _emptied_ of all _content, moral or immoral_.

I might enlarge further on this distinction and show how it has an analogy in the sphere of theoretical activity, where the relation of economics to ethics is repeated in the relation of æsthetics to logic. And I might point out the reason why scientific and æsthetic productions cannot be subjects of economic science, _i.e._ are not economic products. The reason given, in this connection, by Professor Ehrenfels, is, to say the least of it, curious: he remarks that: 'the relations of value upon which the data of logic and æsthetics rest, are so simple that they do not demand a special economic theory.' It should not be difficult to see that logical and æsthetic values are theoretical and not practical values, whereas economic value is a practical value, and that it is impossible to unite an _economics_ of the _theoretical_ as such. When, some years ago, the lamented Mazzola sent me the introduction in which he had discussed _Economics_ and _Art_, I had occasion to write to him and afterwards to say to him by word of mouth, that much more fundamental relations might be discovered between the two groups of phenomena; and he urged me to expound my observations and inquiries. This I have done in the essay on _Estetica_, referred to above. I am sorry to be obliged to _refer_ so many times in writing to you and to the public. But here the need for brevity and clearness constrains me.

This, then, is a rapid statement of how I arrive at the definition of the data of economics, which I should like to see at the beginning of every economic treatise. _The data of economics are the practical activities of men in so far as they are considered as such, independent of any moral or immoral determination._

Granted this definition, and it will be seen also that the concept of _utility_, or of _value_ or of _ofelimity_, is nothing but the economic action itself, _in so far as it is rightly managed_, _i.e._ in so far as it is really economic. In the same way as _the true_ is _thinking_ activity itself, and _the good_ is _moral_ activity itself.

And to speak of things (physical objects) as having or not having value, will appear simply a metaphorical usage to express those _causes which we think efficacious to produce the effects_ which we _desire_, and which are therefore our _ends_. _A_ is worth _b_, the value of _a_ is _b_, does not mean (the economists of the new school knew it well) _a=b_; nor even as is said _a>b_; but that _a_ has _value_ for us, and _b_ has not. And value--as you know--exists only at _the moment of exchange_, _i.e._ of _choice_.

To connect with these general propositions the different problems which are said to belong to economic science, is the task of the writer of a special treatise on economics. It is your task, esteemed friend, if after having studied these general propositions, they seem to you acceptable. To me it seems that they alone are able to safeguard the independence of economics, not only as distinct from _History_ and _Practice_ but as distinct from _Mechanics_, _Psychology_, _Theory of Knowledge_, and _Ethics_.

Naples, 15th May 1900.[97]

II

_Disagreement (1) about method (2) postulates: (1) Nothing
arbitrary in economic method, analogy of classificatory
sciences erroneous: (2) Metaphysical postulate that facts
of human activity same as physical facts erroneous:
Definition of practical activity in so far as admits of
definition: Moral and economic activity and approval:
Economic and moral remorse: Economic scale of values._

_Esteemed Friend_,

Our disagreement concerning the nature of economic data has two chief sources: disagreement on a question of _method_ and disagreement on a question of _postulates_. I acknowledge that one object of my first letter was to obtain from you such explanations as might set clearly in relief our disagreement on the two points indicated.--To reduce controversies to their simplest terms, to expose ultimate oppositions, is, you will agree, an approach to truth. I will explain briefly the two points at issue. In regard to that of method, although I agree with you in upholding the claims of a procedure that is logical, abstract and scientific, as compared with one that is historical (or synthetic, as you say), I cannot in addition allow that the former procedure involves something of the nature of an arbitrary choice, or that it can be worked out equally well in either of two ways. You talk of _cutting away_ a _slice_ from a concrete phenomenon, and examining this by itself; but I inquire how you manage to cut away that slice? for it is no question here of a piece of bread or of cheese into which we can actually put the knife, but of a series of representations which we have in our consciousness, and into which we can insert nothing except the light of our mental analysis. In order to cut off your slice you would thus have to carry out a logical analysis; _i.e._ to do at the outset what you propose to do subsequently. Your _cutting off of the slice_ is indeed an answer to the problem of the _quid_ in which an economic fact consists. You assume the existence of a test to distinguish what you take for the subject of your exposition from what you leave aside. But the test or guiding concept must be supplied by the very nature of the theory, and must be in conformity with it.

Would it for instance be in conformity with the nature of the thing, to cut away, as you wish to do, only that group of economic facts which relates to objects capable of measurement? What intrinsic connection is there between this merely accidental attribute, measurability, of the objects which enter into an economic action, and the economic action itself? Does measurability lead to a modification in the economic fact by changing its nature, _i.e._ by giving rise to _another_ fact? If so, you must prove it. I, for my part, cannot see that an economic action changes its nature whether it relates to a sack of potatoes, or consists in an exchange of protestations of affection!

In your reply you refer to the need of avoiding waste of time over matters that are too simple, for which 'it is not worth while to set in motion the great machine of mathematical reasoning.' But this need relates to the pedagogy of the professional chair or of the book, not to the science in itself, which alone we are now discussing. It is quite evident that anybody who speaks or writes lays more stress on those portions which he thinks harder for his hearers and readers to grasp, or more useful to be told. But he who thinks, _i.e._ speaks with himself, pays attention to all portions without preferences and without omissions. We are now concerned with thought, that is with the _growth_ of science; not with the manner of _communicating_ it. And in thought, we cannot admit arbitrary judgments.

Nor need we be turned aside by an analogy with the _classes_ of facts, made by zoology and other natural sciences. The classifications of zoology and botany are not scientific operations, but merely views in perspective; and, considered in relation to really scientific knowledge, they are arbitrary. He who investigates the nature of economic data, does not, however, aim at putting together, in perspective and roughly, groups of economic cases, as the zoologist or the botanist do, mutilating and manipulating the inexhaustible, infinite varieties of living creatures.

Upon the confusion between _a science_ and the _exposition of a science_ is based also the belief that we can follow different paths in order to arrive at a demonstration of the same truth. Unless in your case, since you are a mathematician, it arose from a false analogy with calculation. Now, calculation is not a science, because it does not give us the reasons of things; and hence _mathematical_ logic is logic in a manner of speaking, a variety of formal logic, and has nothing to do with _scientific_ or inventive logic.

When we pass to the question of the postulates, you will certainly be surprised if I tell you that the disagreement between us consists in your wish to introduce a _metaphysical_ postulate into economic science; whereas I wish here to rule out every metaphysical postulate and to confine myself entirely to the analysis of the given facts. The accusation of being _metaphysical_ will seem to you the last that could ever be brought against you. Your implied metaphysical postulate is, however, this; that the facts of man's activity are of the same nature as physical facts; that in the one case as in the other we can only observe regularity and deduce consequences therefrom, without ever penetrating into the inner nature of the facts; that these facts are all alike _phenomena_ (meaning that they would presuppose a _noumena_, which evades us, and of which they are manifestations). Hence whereas I have called my essay 'On the economic _principle_,' yours is entitled 'On the economic _phenomenon_.'

How could you defend this postulate of yours except by a _metaphysical_ monism; for example that of Spencer? But, whilst Spencer was anti-metaphysical and positivist in words, I claim the necessity of being so in deeds; and hence I cannot accept either _his_ metaphysics or _his_ monism, and I hold to experience. This testifies to me the fundamental distinction between external and internal, between physical and mental, between mechanics and teleology, between passivity and activity, and secondary distinctions involved in this fundamental one. What metaphysics unites philosophy distinguishes (and joins together); the abstract contemplation of unity is the death of philosophy. Let us confine ourselves to the distinction between physical and mental. Whilst the external facts of nature, admitted by empirical physical science, are always phenomena, since their source is by definition outside themselves, the internal facts or activities of man, cannot be called phenomena, since they are their own source.

By this appeal to experience and by this rejection of all metaphysical intrusion, I place myself in a position to meet the objection which you bring forward to my conception of economic data. You think that the ambiguity of the term _value_ comes from this, that it denotes a very complex fact, a collection of facts included under a single word. For me, on the contrary, the difficulty in it arises from its denoting a very simple fact, a _summum genus_, _i.e._ the fact of the very _activity_ of man. Activity is value. For us nothing is valuable except what is an effort of imagination, of thought, of will, of our activity in any of its forms. As Kant said that there was nothing in the universe that could be called _good_ except the _good will_; so, if we generalise, it may be said that there is nothing in the universe that is valuable, except the _value of human activity_. Of value as of activity you cannot demand a so-called genetic definition. The simple and the original is genetically indefinable. Value is observed immediately in ourselves, in our consciousness.[98]

This observation shows us also that the _summum genus_ 'value,' or 'mental activity' gives place to irreducible forms, which are in the first instance those of theoretical activity and practical activity, of theoretical values and practical values. But what does _practical_ mean?--you now ask me. I believe that I have already answered by explaining that the theoretical is everything which is a work of _contemplation_, and the practical everything that is the work of _will_. Is will an obscure term? We may rather call the terms _light_, _warmth_ and so on, obscure; not that of _will_. What will is, I know well. I find myself face to face with it throughout my life as a man. Even in writing this letter, today, in a room in an inn, and in shaking off the laziness of country life, I have _willed_; and if I have delayed the answer for two months, it is because I have been so feeble as not to know how to _will_.

You see from this that the question raised by me, whether by _choice_ you meant _conscious_ or _unconscious_ choice, is not a _careless_ question. It is equivalent to this other one; whether the economic fact is or is not a fact of _will_. 'This does not alter the fact of the choice,' you say. But indeed it does alter it! If we speak of _conscious_ choice, we have before us a mental fact, if of _unconscious_ choice, a natural fact; and the laws of the former are not those of the latter. I welcome your discovery that economic fact is the fact of choice; but I am _forced_ to mean by _choice_, _voluntary_ choice. Otherwise we should end by talking not only of the _choices_ of a man who is _asleep_ (when he moves from side to side) but of those of _animals_, and why not? of _plants_ and why not again? of _minerals_; passing rapidly along the steep slope down which my friend Professor C. Trivero has slipped in his recently published _Teoria dei bisogni_, for which may he be forgiven![99]

When I defined economic data as 'the practical activities of man, in so far as they are considered as such, independently of any moral or immoral determination,' I did not make an arbitrary judgment, which might authorise others to do likewise, in a science which does not tolerate arbitrary judgments; but I merely _distinguished_ further within the species _practical activity_, two _sub-species_ or grades: _pure_ practical activity, (economic), and _moral_ practical activity, (ethical); will that is merely economic, and moral will. There is ambiguity in your reproach that when I speak of approval or disapproval as aroused by economic activity, I am considering the matter from a _synthetic_ instead of an analytic point of view, and that approval or disapproval are _extraneous_ factors. I did not however speak (and I believed that I had explained myself clearly), of _moral_, _intellectual_ or _æsthetic_ approval or disapproval. No, I said, and I repeat, that a judgment of approval or reprobation was necessarily bound up with economic activity: but a _merely_ ECONOMIC judgment of approval or reprobation. '_By saying_ that Rhenish wine is _useful_ to me, has a _value_ for me, is _ofelimo_ to me, I mean only to say that I like it; and I do not see how this simplest of relations can be well or ill-managed.' You will forgive me if in this sentence of yours I have italicised the words _by saying_. Here is the point. Certainly the mere _saying_ does not give rise to an internal judgment of economic approval or disapproval. It will give rise to a grammatical or linguistic, _i.e._ æsthetic, approval or disapproval, according to whether the saying is clear or confused, well or ill expressed. But it is no question of _saying_: it is a question of _doing_, _i.e._ of the action willed carried out by the movement that is willed, of a _choice_ of movement. And do you think that the acquisition and consumption of a bottle of Rhenish wine involves no judgment of approval or disapproval? If I am very rich, if my aim in life is to obtain momentary sensual pleasures, and I know that Rhenish wine will secure me one of them, I buy and drink Rhenish wine and approve my act. I am satisfied with myself. But if I do not _wish_ to indulge in gluttony, and if my money is all devoted to other purposes, for which I _wish_ as preferable, and if, in spite of this, yielding to the temptation of the moment, I buy and drink Rhenish wine, I have put myself into contradiction with myself, and the sensual pleasure will be followed by a judgment of disapproval, by a legitimate and fitting ECONOMIC REMORSE.

To prove to you how, in all this, I omit every _moral_ consideration, I will give you another example: that of a knave who thinks it _ofelimo_ to himself to murder a man in order to rob him of a sum of money. At the moment of assassination, and although remaining a knave at heart, he yields to an emotion of fear or to a pathological feeling of compassion, and does not kill the man. Note carefully the terms of the hypothesis. The knave will call himself an ass and an imbecile, and will feel _remorse_ for his contradictory and inconclusive conduct; but not indeed a _moral_ remorse (of that he is, by hypothesis, incapable), but, precisely, a remorse that is merely _economic_.

It seems to me that there is another confusion, easy to dispel, in your counter criticism to my criticism of the _scale of values_ (economic) you say that 'there is no need for one person to find himself at the same moment under different conditions; it is enough that he can _picture to himself_ these different conditions.' Can you in truth _picture yourself_ being _at the same moment_ under _different_ conditions? Fancy has its laws; and does not allow the imagination of what is unimaginable. You can easily say that you _picture_ it to yourself: words are docile; but, to picture it _in reality_, is, pardon me, another matter altogether. You will not succeed in it any more than I. Ask me to imagine a lion with the head of a donkey, and I will comply at once; but ask me to imagine a lion standing _at the same moment_ in two different places, and I cannot succeed. I will picture to myself, if you like, two similar lions, two exactly alike, but not the same in two different positions. Fancy reconstructs reality, but possible reality, not the impossible or what is contradictory. Thus my demonstration of the absurdity of the _scale of values_ applies both to actual and to possible reality. Nay, in discussing science in the abstract it was framed precisely on the mere consideration of the possible.

I do not know whether I have answered all your objections, but I have endeavoured to answer all those which seem to me fundamental. A dispute, in which questions of method and of principle are at stake need not be carried on pedantically into minute details; we must depend to some extent on the assistance of the readers, who, putting themselves mentally in the position of the two disputants, work out for themselves the final application. I wish merely to add that it is my strongest conviction that the reaction against metaphysics (a far-sighted reaction in that it has freed scientific procedure from admixture with the arbitrary judgments of feeling and belief) has been pushed forward by many so far as to destroy science itself. The mathematicians who have a quick feeling for scientific procedure, have done much for economic science by reviving in it the dignity of abstract analysis, darkened and overwhelmed by the mass of anecdotes of the historical school. But, as it happens, they have also introduced into it the prejudice of their profession, and, being themselves students of the general conditions of the physical world, the particular prejudice that mathematics can take up in relation to economics--which is the science of _man_, of a form of the conscious activity of man--the same attitude which it rightly takes up in relation to the empirical natural sciences.

From what I have now stated you will easily discover exactly how far we are in agreement in the establishment of the principles of _Economics_ and how far we disagree. If my new observations should assist in further reducing the extent of the disagreement, I shall indeed be glad.

Perugia, _20th October, 1900_.[100]

FOOTNOTES:

[93] _Comment se pose le problème de l'economie pure._ Paper read in December 1898 to the _Societé Stella_.

[94] _Giornale degli economisti_, March 1900, pp. 216-235.

[95] _Rivista di sociologia_, III. no. vi., pp. 746-8, see _Materialismo Storico_, pp. 193-208.

[96] DR CHRISTIAN V. EHRENFELS (Professor at Prague University): _System der Werttheorie_, vol. I, _Allgemeine Werttheorie, Psychologie des Begehrens_, Leipzig, Reisland, 1897; vol. II, _Grundzüge einer Ethik_, the same, 1898.

[97] PARETO answered this letter in the same journal, _Giornale degli economisti_, August, 1900, pp. 139-162.

[98] I have before me Professor A. GRAZIADEI's article _Intorno alla teoria edonistica del valore_. (In _Riforma Sociale_, September 15th, 1900); in which A. fails to see how the purist theory of value dovetails in with the doctrines of Psychophysics and Psychology. I can well believe it! Psychophysics and Psychology are natural sciences and cannot throw light on economic fact which is mental and of value. I may be allowed to point out, that, even three years ago, I gave a warning against the confusion of economics with psychology. (See in this volume pp. 72-75.) He who appeals to psychology (naturalistic) in order to understand economic fact, will always meet with the delusion, opportunely shown up by Graziadei. I have stated the reasons owing to which economics cannot dwell where the psychologists and hedonists say; now Graziedei has questioned the door-keepers (Fechner, Wundt, etc.), and has learnt that it does not dwell there. Well and good!

[99] CAMILLO TRIVERO, _La teoria dei bisogni_, Turin, Bocca, 1900, pp. 198. Trivero means by _need_ 'the condition of a being, either conscious or unconscious (man, animal, plant, thing), in which it cannot remain': so that it can be said 'that all needs are ultimately condensed into the supreme _need_ or _end_ of being or becoming.' _Need_ for him is hence actual reality itself. But since, on the other hand, he declares that he does not wish to solve nor even to consider the philosophical problem, it is hard to understand what a _theory of needs_ (_i.e._ of reality) can be, and for what reason he goes back to such generalities.

It is true that Trivero believes that, by going back to the general concept of _need_, he can establish the _parent theory_ on which rest the particular doctrines of needs; and amongst them economics, which concerns itself with _economic_ needs. If there are _species_--he says--we ought to determine of what _genus_ they are species. But he will allow me to remark that the genus to look for is, as logic teaches, the _proximate_ genus. To jump to such a great distance as to reality or to fact, would only lead to the noble discovery: that economic needs are part of reality, are a group of facts.

And what he does is to make an equally valuable discovery: that the true theory of history is the theory of needs, which, granted his definition of _needs_, is as much as to say that history is history of reality and the theory of it is--the theory.

I have then no objection to make to the meaning which Trivero wishes to give to the word _need_; but I must assert that, having given it this meaning, he has not afterwards constructed the theory of anything, nor thrown light on any special group of facts.

For real economic theory his book is quite useless. Economists do not recognise the needs of things and plants and animals, but only human needs, or those of man in so far as he is _homo oeconomicus_ and hence a conscious being. I too believe that it is right to work out philosophically the principle of economics; but in order to do this, Trivero should have studied economic science. He declares that 'he does not want to hold fast to anyone's petticoats.' This statement is superfluous if it means that each individual ought to base his own scientific convictions on reason and not on authority. It is dangerous if it signifies, on the contrary, an intention to spare himself the trouble of studying other people's books, and of reconstructing everything from the beginning by his own personal efforts and by the aid of general culture alone. The result obtained--being far from satisfactory--should deter the author (who will not grumble at my plain speaking), from returning to this unfruitful method in the future.

[100] PARETO answers this second letter in the _Giornale degli economisti_, February, 1901, pp. 131-138.

INDEX OF NAMES*

*Marx's name is omitted. The Asterisks indicate notes.

Aristotle, 18

Aveling, E., 66*

Bauer, B., 102

Bernstein, E., 119

Bertolini, A., 96

Böhm-Bawerk, 54, 76,* 142

Bray, 103

Coletti, F., 115*

Croce, B., 129,* 131*

Dühring, E. 69, 79,* 84, 103, 114

Durckheim, E., 118

Ehrenfels, Christian Von, 168, 172

Engels, F., 7, 11, 14, 18, 19, 25, 26, 28, 41, 55, 63, 67, 69, 78-81,
83, 84, 89, 95,* 103, 114-116, 124, 131*

Fechner, 180

Ferrara, F., 127

Gentile, G., 80,* 83,* 86,* 104,* 115*

Gray, A., 103

Graziadei, A., 138-140, 179*

Grosse, E., 90*

Hegel, G.F., 6, 11, 81-82, 102, 122, 130

Heine, H., 130

Helvetius, 8

Herbart, 24, 25

Holbach, 8

Kant, E., 24, 25, 43, 113-114, 179

Kautsky, K., 119, 137

Ingram, 95*

Jevons, 72

Labriola, Antonio, 1, 5, 9, 10-15, 18, 21-26, 51,* 55, 76, 84,* 86-93,
106, 109,* 110, 111, 114, 119, 120-132

Lange, A.F., 8, 41, 71, 72*

Leibniz, 160

Loria, A., 49, 91, 138, 142

Machiavelli, N., 110,* 118

Manzoni, A., 19

Mommsen, T., 122

Morgan, 89

More, Thomas, 19*

Pantaleoni, M., 76,* 96, 127, 171

Parrto, V., 74, 76,* 96-101, 159-186

Plechanow, G., 8

Proudhon, P.G., 103

Rabelais, 105

Ricardo, D., 53, 135, 156, 157*

Ricca, Salermo G., 77*

Richter, G.P., 18

Rodbertus, K., 103*

Rosmini, 102

Rümalin, 36

Sanctis (de), F., 110*

Schiller, 25*

Schmidt, C., 54

Schopenhauer, A., 102

Simmel, G., 5, 24, 118

Smith, A., 74*

Sombart, W., 54,* 55, 60, 63, 131,* 142

Sorel, G., 55, 86,* 119, 131-138

Spencer, H., 36, 178

Stammler, R., 27-47, 118, 137,* 138, 170

Stein, L., 18

Stern, G., 133

Trivero, C, 181,* 182

Villari, P., 110*

Wagner, A., 73*

Westermarck, E., 90*

Witte, 78

Wundt, 180*

EDINBURGH; J.C. THOMSON
AT THE MERCAT PRESS

* * * * *

+-----------------------------------------------------------+
| Typographical errors corrected in text: |
| |
| Page ix: philosopy replaced with philosophy |
| Page xxiii: knowlege replaced with knowledge |
| Page 53: manifestions replaced with manifestations |
| Page 55: acknowleges replaced with acknowledges |
| Page 60: necesary replaced with necessary |
| Page 61: corrollary replaced with corollary |
| Page 85: schutzt replaced with schützt |
| Page 86: contigent replaced with contingent |
| Page 86: idealogical replaced with ideological |
| Page 104: abreviated replaced with abbreviated |
| Page 122: empirical-dialetic replaced with |
| empirical-dialectic |
| Page 124: sytems replaced with systems |
| Page 149: Mark's replaced with Marx's |
| Page 187: Duhring replaced with Dühring |
| Page 187: Colatti replaced with Coletti |
| Page 187: Kantsky replaced with Kautsky |
| Page 187: Leibnitz replaced with Leibniz |
| Page 188: Parrto replaced with Pareto |
| Page 188: Plechanov replaced with Plechanow |
| Page 188: Rümalin replaced with Rümelin |
| Footnote 15: oekonomischer replaced with oekonomischen |
| Footnote 15: Bohm replaced with Böhm |
| Footnote 15: fur replaced with für |
| Footnote 22: verzehbaren replaced with verzehrbaren |
| Footnote 42: aüssere replaced with äussere |
| Footnote 59: entrepeneurs replaced with entrepreneurs |
| Footnote 74: Briere replaced with Brière |
| Footnote 80: fugte replaced with fügte |
| Footnote 82: fur replaced with für |
| Footnote 92: ittle replaced with little |
| Footnote 95: "Materialismio Storico" replaced with |
| "Materialismo Storico" |
| |
| Note that on page 166 that the word 'measurabilility' |
| is likely to be a typo either for 'measurability' or |
| 'measurably' |
| |
+-----------------------------------------------------------+

* * * * *