object could not be. It has never been denied that "supply and demand" is the ratio existendi, the empirical cause, of the value of a commodity; but this does not touch the fact that the ground of its essential being (its ratio essendi) is "labor." This economic value is the point round which the temporary differences of price due to the fluctuations of the market, that is, the inequalities between supply and demand, circulate. Whenever supply and demand balance each other this essential or substantive value is realized, and in all the fluctuations of the market, however great, it tends toward realization. The above mixed systems, viz., those of the "Katheder-Sozialisten" of Germany, and of the non-orthodox political economists of other countries whose views tend in the same direction, are, as already stated, sometimes collectively known as the "vulgar economy."
The Socialist school, of which the late Karl Marx is the foremost exponent, while accepting the Smith-Ricardian doctrine of value, draws from it conclusions very divergent from those of the classical economy. When Adam Smith wrote things were very different from what they are now. He stood in no fear of consequences, and therefore followed out the natural results of his own thought. Nowadays, every non-socialist economist has the dread of Socialism before his eyes, and, consequently, feels bound to caution in the statement of conclusions. For instance, the doctrine that labor is the basis of value seems to the ordinary economist to remove any theoretic justification in the nature of things for the independent function of the capitalist. In consequence, we have the various attempts of the "vulgar economy" to "nibble" at this and other orthodox definitions which seem to have dangerous implications.
