Note 13 — Chapter VII · COMPLEMENTARY GOODS

How far the theory of Complementary Goods admits of being applied directly to the problem of distribution of product among the various factors is matter of controversy. Böhm-Bawerk considers that it is the key which will lead to its solution. The line which this suggests would be something like the following. Labour and Capital enter into the composition of all productive groups: in proportion as they are abundant and mobile do they enter into competition with all labour and all capital, and become perfectly replaceable. In entering into products, then, they can never secure more than their outside value—that fixed by all their employments or uses. The surplus in the price of each product goes to the monopolist factor, whether that monopoly be caused by natural and site advantages of land, mental and technical qualities of undertakers and workers, peculiar conditions of process, or the like. And in proportion as these factors lose their monopoly, does the value of the group shrink; if all the members were to become replaceable, as when first-class land in other countries becomes available through rapid and cheap carriage, or when education makes unskilled labour the exception, the group value, as distinct from the combined isolated values, would disappear.

Wieser, again, considers that this is no more than a valuable suggestion. What guidance, he asks, will this law give where there are several irreplaceable members, and how is the outside value of replaceable members given if not in other combinations of complementary goods which in turn require to be split up into their factors? He points out acutely, in reply to Menger, that, to estimate the proportion contributed by any factor by the loss which would accrue if that factor were absent, is to reckon too much to it, as the loss of a factor from a co-operation will generally disorganise the group and cause more damage than its presence would cause gain. Instead of using the doctrine of Complementary Goods in this way, he proposes to find, by a series of equations, what each factor positively contributes; not, of course, the physical share, but the proportion of value which may be economically “imputed” to it. A great part of the Natürlicher Werth is taken up with this doctrine of the “Zurechnung,” which is treated in Wieser’s usual strong and graphic manner.