The crux of Marx's proof lies in the statement; that the labourers who would have had to remain unemployed, find on the contrary employment, but with a capital _increased by so much_ (= 200) over the original. Is this statement correct? On what does Marx base it?
To this fundamental proposition my _criticism_ refers, itself equally fundamental. If it is admitted it amounts to _a most complete denial of the truth of the Marxian law_. Nevertheless I state my idea in the form of a _criticism_ and _doubtfully_, because, in dealing with a thinker of Marx's rank, it is necessary to proceed cautiously, and to remember (which I do not forget) that several times errors ascribed to him have been explained as mistakes of his opponents.
For what reason, I ask myself, do the ten un-occupied labourers, in order to be employed afresh, require a constant capital larger than the original?
The technical improvement has not diminished the natural _utility_ of the production (also in our hypothesis it has not increased it either, but has left it unchanged); but it has only diminished its _value_. There will be then, with the improved technical organisation, raw materials, tools, clothing, foodstuffs, etc., of the same total natural utility as at first. The economic value of all these products is diminished, because in them (to employ the metaphor chosen by Marx), is congealed a smaller quantity of labour, _i.e._ less by the work of ten labourers. But from the point of view of power to satisfy wants, the raw materials, the tools, the clothing, the means of sustenance, etc., remain, in virtue of the technical improvement, of the same rank as at first. If then capitalists and workpeople have remained as temperate as before, and their standard of life has not risen (and this is in the hypothesis), the production will offer as at first means of employment and means of sustenance for the ten labourers left unoccupied. By re-employing them, _i.e._ maintaining them with the original means of subsistence, and setting them to work on the original raw materials or their new products, the capitalists will increase their production, or--what is the same thing--will improve its quality. But since we know that, economically, the value of that capital has _diminished_, it will come about that a capital _economically smaller_ will absorb the same energy of labour as formerly, _i.e._ _the same amount of profits_; and an equal amount of profits with a smaller total capital means an _increased rate of profits_. Exactly the opposite to what Marx thought it possible to prove.