¹ Comment by J. F. Bergier: On peut dire “a cultural system” aussi, sans aucun doute; voir la controverse autour de la thèse de Max Weber.

² Comment by S. P. Pach: Since these comparisons and distinctions are mentioned here only as examples, I do not enter into their detailed consideration. For the same reason I do not want to deal with what are the main characteristics of socialist economy (and socialist society), and in what ways it differs both from capitalism and from other economic (and social) systems. (This concerns the second part of the memorandum also.)

³ Comment by S. P. Pach: While in the earlier systems of production, goods—and the part of goods used not for subsistence but for marketing —were mainly produced by slaves or serfs or by peasants and artisans, with the rise of capitalism (i.e., capitalistic system of production) a more and more considerable part of commodities is produced by wage laborers. These laborers, contrary to the slaves or serfs, are not in physical or personal dependence, but are personally free; they are labor-power owners who may sell their labor-power generally freely, being compelled only economically (by the necessity of earning their livelihood); and contrary to the serfs or to the peasants and artisans, these wage laborers do not possess means of production and are left out of the conditions of “roundabout” production; they work with other persons' instruments, and their production is possessed by others; they receive wages for their work from the owners or the production instruments and products, i.e, from the capitalists. Under these circumstances means of production, held in private property, become capital; “roundabout” production becomes capitalistic production, since commodity production changes into capitalistic commodity production, i.e., into capitalism.

⁴ Comment by F. C. Lane: When capitalists are thus increasing their capital, they may be said to receive “economic surplus.” I use the phrase i n almost the same sense in which it was used by Boulding, Kenneth (American Economic Review, Vol. XXXV, p. 851Google Scholar) to mean that “which may be said to be present whenever a seller makes a sale for a sum greater than the least sum for which he would have been willing to sell (or could have sold and still have continued to produce), or whenever a buyer (or investor) makes a purchase for a sum smaller than the greatest sum for which the buyer would have been willing to make the purchase (i.e., that for which the investor could have made the purchase without loss).” (Passages between brackets are my additions or elaborations of Bouldings's definition, since his is phrased for short-run analysis.)

^5a Comment by F. C. Lane: The bulk of what Karl Marx called surplus value may be described in Boulding's terms as a “buyer's surplus” received by the employers of labor. Employers hiring unorganized workers who had to compete with the “reserve army of the unemployed” were getting labor services for less than the value produced by those services and for less, therefore, than the employers would have been willing to pay if necessary. They were buying labor for less than they could have paid and still have stayed in business.

^5b Comment by S. P. Pach: As it appears to me, surplus value cannot be identified with the “economic surplus” in the sense of Kenneth Boulding or with a special sort of this “economic surplus,” namely, with a “buyer's surplus” received by the employers of labor who are buying labor-power for less than they would have been willing to pay if necessary. Surplus value as clarified by Marx, Karl (e.g., Capital, Vol. I, Ch. 5Google Scholar) derives from buying and utilization of human labor-power even if then this commodity is bought by the capitalist at its value, because human labor-power during its utilization is able to create bigger value than its own. Consequently, surplus value received by the capitalist consists fundamentally in the difference between the value produced by the labor-power and the value of the labor-power itself. The capitalist appropriates, therefore, a part of the value produced by the labor-power without compensation, even then if he fully pays in wages the value of labor-power. Of course, if he does not pay for the full value of labor-power, he receives an extra surplus value.

⁶ Comment by F. C. Lane: So far as the profit of the merchant capitalists came from buyers' surpluses it came from buying commodities, especially raw materials, on such terms that the merchant received all or part of any surplus derived from the laborers employed by the original producers.

⁷ Comment by P. S. Pach: I suggest that it is best to use the terms “commercial capitalism” and “loan capitalism” between quotation marks, because capitalism means a system of production. The process of accumulation of money capital through commercial transactions, credit operations, etc., has formed, however, certain important preliminaries for the development of capitalism (capitalistic system of production).

⁸ Comment by J. F. Bergier: Les critères du capitalisme proposés id par F. C. Lane sont d'ordre économique et social. Economique, dans la mesure où ils mettent en cause la notion de profit maximalisé. Social, dès lors qu'ils se fondent sur les rapports entre capital et travail, entre détenteurs et utilisateurs des moyens de production. Ces critères sont funda-mentaux, puisqu'ils définissent la structure d'une 6conomie (notion de profit; relations capital-travail) et le système qui la fait fonctionner (pro-priét é privée, libre entreprise, recherche concurrentielle du profit). Mais nous pensons qu'ils ne sont pas les seuls. F. C. Lane est sensible lui-meme a leur insuffisance, puisqu'il observe que le caractère capitaliste ou non d'une société donnée tient plus au degré de ces éléments qu'à leur nature même.

Nous pensons qu'une société—et l'économie qui lui permet de vivre et de se développer—peuvent être dites capitalistes lorsque deux conditions supplémentaires sont remplies, deux conditions au rests fort voisines:

(a) L'existence, au sein de cette société d'un groupe (qui peut etre relativement restreint) d'“entrepreneurs,” au sense que Schumpeter don-nait à ce terme; c'est-à-dire d'individus, ou de families, ou même d'en-treprises dirigées collégialement qui, pour assurer librement leur profit, prennent des risques (ce qui signifie que certains échoueront, qu'une sélection interviendra), innovent dans les méthodes et les formes de production, d'investissement, de commercialisation, de transport, etc. En d'autres termes, il ne saurait y avoir de capitalisme sans émulation dy-namique, entraînant le déVeloppement de la société considéréé, dans son ensemble (quelles que soient, par ailleurs, la nature et la position de l'Etat qui la représente et la governe). Example: les villes italiennes de la Renaissance, et plus particulierement Gênes.

(b) Mais cette condition est elle-même insuffisante si l'esprit capitaliste qui anime ces quelques individus n'est pas insufflé, si peu que ce soit, à l'ensemble de la société, à ses différents échelons de production et de vie sociale. Jacques Coeur ou Cosimo de Medici furent des capitalistes, mais la France de Charles VII ni meme la Florence des Medici n'étaient des nations ou le capitalisme dominât. L'esprit capitaliste, même s'il est fait d'individualisme, est nécessairement collectif et son dynamisme gagne de proche en proche. II convient dès lors, croyons-nous, de porter une attention particulière aux individus qui nous apparaissent comme des leaders du capitalisme (cf. la 2e séance de cette section), mais aussi aux moyens de diffusion, dans la société, de cet esprit capitaliste, et à la façon dont celuici agit sur elle.

⁹ Comment by Arthur H. Cole: Perhaps the foregoing survey of terminology relative to the meaning of the word “capitalism” should be extended to cover an abandonment of the term as proposed by a modern group of scholars or implied in their writings. I have in mind the proponents of entrepreneurial history. To be sure, no unanimity of view will be found within this band of infidels, but the essays in this area offered by such men as Cochran and Cole, Redlich, Chandler, and Hughes surely place explanation of economic change upon business management —broadly interpreted—rather than upon any magic in the operations of capital. AH of the traditional “factors of production”—land, labor, capital, and entrepreneurial guidance—seem to be given equal weight, while the last element, entreprenurial or administrative activity, is given prime importance, if one factor is to be chosen. Even the economist's ancient guide in analysis, the maximization of profits, becomes modified in their schema.

In this contemporary mingling of economic and business history, a trilogy of dominant approaches may perhaps be differentiated. Cochran, Landes, Jenks, and others would lay stress especially on the social milieu out of which the entrepreneur derives and from which he acquires his intellectual equipment and his appraisal of motives; Chandler and often Redlich seem to emphasize the internal structuring of specific business units; while Cole is currently calling attention to the importance of the proliferation of diverse business units—in functional and spatial institutional division of labor—which together form the business system and seem to contribute an independent forward push to economic expansion.

Even though this particular trend of concepts is now approximately a quarter of a century old in America, quite possibly the deviation will subside with the physical passing of its initial prophets. Surely the disease has not made appreciable inroads in foreign countries, except perhaps in Germany and Japan, but in an intellectual congress on American soil, it may be proper to make mention of this New World effort at schematic innovation.