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Rectifying the Greatest Error in the History of Economic Thought: "Demand for Commodities Is Not Demand for Labor" Versus the Marxian Exploitation Theory

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Rectifying the Greatest Error in the History of Economic Thought: "Demand for Commodities Is Not Demand for Labor" Versus the Marxian Exploitation Theory

4.85 60,686 ratings · 4,866 reviews
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Overview: Adam Smith and Karl Marx claimed that originally all income was wages and that profits appeared only later, with the coming of capitalists, who deducted their profits from what until then had been wages. The unmistakable implication of this claim is that profits constitute a theft of part of wages. This belief, that profits are stolen from the wage earners, has been almost unchallenged and has been a continuing source of civil discontent, hatred of businessmen and capitalists by wage earners, violent revolution, civil war, enslavement, and mass murder. Literally, scores of millions have suffered and died because of the belief in the inherent injustice of profits. It is the foundation of the support for socialism and communism. To my knowledge the claim that profits are a deduction from wages has been accepted universally, with the single exception of the present author. It has been accepted even by the leading critic of the belief that profits are stolen. That critic, the great Austrian-school economist Eugen von Böhm-Bawerk, believed that even though profits were a deduction from wages, as Smith and Marx had claimed, they were nevertheless a justified deduction. The deduction, Böhm-Bawerk argued, arose from the fact that, other things being equal, present goods are more valuable than future goods. As a result, Böhm-Bawerk held, wage earners themselves, each performing an equal amount of labor, but working in a sequence over a period of years, would not divide the value of their ultimate product equally. The last worker in the series, who was paid virtually immediately after the completion of his work, would be paid less than the first worker in the series, who might have to wait several years after the completion of his work before being paid. The same principle would apply mutatis mutandis to all the workers in between. Capitalists, according to Böhm-Bawerk, made it possible for all the workers in the series to be paid as quickly as the last worker in the series, indeed, even more quickly; for example, after the lapse of just a week, however long the total productive process might take. In sum, the capitalist buys the workers’ claims to the receipt of wages in the future for smaller payments of wages in the present, payments which, dollar for dollar, are more valuable than the larger future wage payments given up. Böhm-Bawerk’s critique is certainly ingenious. However, it is wrong in an essential respect. Namely, it shares with Smith and Marx, the belief that workers producing and selling the products of their labor are paid wages and that profits are a deduction from wages, even if a justified deduction. The truth is that if there ever was a time, such as allegedly existed in Adam Smith’s “original state of things,” when there were no capitalists but only manual workers, who produced products and who were able to keep all of the proceeds, the money those manual workers received was not wages but SALES REVENUES. As the great classical economist John Stuart Mill pointed out, "demand for commodities is not demand for labor." What this means, for example, is that when someone buys a loaf of bread, he does not pay the wages of bakers. He buys only the loaf of bread, which means that he pays a sales revenue to the seller, who, of course, receives a sales revenue, not a wage. Not only did the manual workers in Smith’s “original state of things” earn sales revenues rather than wages but the fact that no capitalists were present, means that there was no capitalistic spending, i.e., no buying for the sake of selling. The implication of this is the there were no money costs of production to deduct from sales revenues. And the inescapable implication of this is that the sales revenues were PURE PROFIT.

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Published December 4, 2017
ISBN 37172628
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George Reisman writes contemporary fiction and has always been fascinated by character-driven stories. They hold a degree in English Literature and previously worked as an editor before transitioning to writing their own books. George Reisman lives with their spouse and a very vocal rescue cat.

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Elizabeth Gomez
Elizabeth Gomez January 26, 2025
Masterpiece from start to finish. The pacing was impeccable and the characters felt incredibly authentic. I was completely immersed. I will undoubtedly revisit this masterpiece.
Linda White
Linda White October 04, 2025
I find myself somewhat conflicted. The prose was competent, yet the characters lacked the depth I usually seek. Suitable if your reading queue is empty.
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Honestly one of the most premium reading experiences lately. The author orchestrated a breathtaking finale. Truly a work of art. Worth every moment spent reading.
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A profoundly satisfying read. The author orchestrated a breathtaking finale. Truly a work of art. Worth every moment spent reading.
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Absolutely brilliant. I became deeply invested in the protagonist's journey. A masterclass in storytelling. I will undoubtedly revisit this masterpiece.
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Absolutely brilliant. The pacing was impeccable and the characters felt incredibly authentic. I was completely immersed. I am now a lifelong fan of this author.
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Took a moment to build, but the payoff was spectacular. Beautiful writing, though I craved slightly more depth in the lore. Still, undeniably engaging. A very distinguished novel.
Jennifer Wilson
Jennifer Wilson December 15, 2024
Exceeded all my expectations. I became deeply invested in the protagonist's journey. A masterclass in storytelling. A true literary gem.
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Christopher Wilson January 30, 2024
I was completely blown away. The prose is exquisite. It’s accessible yet undeniably sophisticated. An effortless 5 stars.
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Ashley Baker July 11, 2025
I was completely blown away. The author orchestrated a breathtaking finale. Truly a work of art. I am now a lifelong fan of this author.
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Sharon Walker September 15, 2025
A profoundly satisfying read. The prose is exquisite. It’s accessible yet undeniably sophisticated. A true literary gem.
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Honestly one of the most premium reading experiences lately. It strikes a perfect harmony of dialogue and world-building. Every chapter felt necessary. A true literary gem.
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I thoroughly enjoyed the elegance of it. The protagonist was compelling, though some subplots felt slightly overshadowed. A very distinguished novel.
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Absolutely brilliant. I became deeply invested in the protagonist's journey. A masterclass in storytelling. I will undoubtedly revisit this masterpiece.
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Masterpiece from start to finish. The prose is exquisite. It’s accessible yet undeniably sophisticated. An effortless 5 stars.
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I was completely blown away. The prose is exquisite. It’s accessible yet undeniably sophisticated. Worth every moment spent reading.
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Took a moment to build, but the payoff was spectacular. The protagonist was compelling, though some subplots felt slightly overshadowed. A very distinguished novel.
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A very strong entry. The protagonist was compelling, though some subplots felt slightly overshadowed. A very distinguished novel.
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Such a rich narrative. The pacing was impeccable and the characters felt incredibly authentic. I was completely immersed. A true literary gem.
Jennifer Wilson
Jennifer Wilson April 04, 2025
Absolutely brilliant. The author orchestrated a breathtaking finale. Truly a work of art. A true literary gem.
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I thoroughly enjoyed the elegance of it. It held my rapt attention, even when certain twists were telegraphed. A solid 4 stars from me.
Lisa Clark
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Masterpiece from start to finish. The author orchestrated a breathtaking finale. Truly a work of art. An effortless 5 stars.
Mark Hall
Mark Hall September 18, 2024
I thoroughly enjoyed the elegance of it. Beautiful writing, though I craved slightly more depth in the lore. Still, undeniably engaging. Quite impressive overall.
William Reyes
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Absolutely brilliant. It strikes a perfect harmony of dialogue and world-building. Every chapter felt necessary. Worth every moment spent reading.
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Such a rich narrative. The pacing was impeccable and the characters felt incredibly authentic. I was completely immersed. A true literary gem.
Laura Roberts
Laura Roberts June 04, 2025
An acceptable diversion. The tempo was somewhat languid, and I found my mind wandering. Not poor, simply average. Unlikely to reread, but a reasonable expenditure of time.
Joshua Thomas
Joshua Thomas February 21, 2024
Such a rich narrative. The pacing was impeccable and the characters felt incredibly authentic. I was completely immersed. An absolute must-read for connoisseurs of the genre.
David Moore
David Moore September 07, 2024
I was completely blown away. The pacing was impeccable and the characters felt incredibly authentic. I was completely immersed. I will undoubtedly revisit this masterpiece.
Joseph Thompson
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A very strong entry. Beautiful writing, though I craved slightly more depth in the lore. Still, undeniably engaging. A wonderful companion for a quiet weekend.
Richard Wilson
Richard Wilson October 07, 2024
Took a moment to build, but the payoff was spectacular. It held my rapt attention, even when certain twists were telegraphed. A wonderful companion for a quiet weekend.
Donald White
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A highly sophisticated read. The protagonist was compelling, though some subplots felt slightly overshadowed. Quite impressive overall.
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It was adequate. It verged on repetitive in the second act. A more concise edit would have served it well. A fair 3 stars.
Ashley Baker
Ashley Baker February 28, 2024
Absolutely brilliant. The pacing was impeccable and the characters felt incredibly authentic. I was completely immersed. An effortless 5 stars.
Anthony Williams
Anthony Williams February 10, 2024
A decent, if standard, experience. The tempo was somewhat languid, and I found my mind wandering. Not poor, simply average. A fair 3 stars.
Joshua  Davis
Joshua Davis September 12, 2025
A highly sophisticated read. It held my rapt attention, even when certain twists were telegraphed. A wonderful companion for a quiet weekend.
Jacob Garcia
Jacob Garcia November 11, 2025
Exceeded all my expectations. I adored how the story unfolded. It kept me captivated without sacrificing elegance. I will undoubtedly revisit this masterpiece.
Christopher Williams
Christopher Williams August 25, 2024
Such a rich narrative. I adored how the story unfolded. It kept me captivated without sacrificing elegance. I am now a lifelong fan of this author.
Deborah Scott
Deborah Scott October 27, 2025
Took a moment to build, but the payoff was spectacular. The middle had a deliberate pace, but the climax was phenomenal. A solid 4 stars from me.
Karen Young
Karen Young April 25, 2025
An acceptable diversion. The prose was competent, yet the characters lacked the depth I usually seek. Perfectly average.
George Clark
George Clark March 03, 2025
Excellent, though slightly flawed. The middle had a deliberate pace, but the climax was phenomenal. Quite impressive overall.
John Gomez
John Gomez July 10, 2024
A very strong entry. A brilliant concept executed with flair. Just a few pacing choices I would change. Quite impressive overall.
Andrew Collins
Andrew Collins June 03, 2024
Masterpiece from start to finish. The author orchestrated a breathtaking finale. Truly a work of art. A true literary gem.
Nancy Perez
Nancy Perez August 30, 2024
Exceeded all my expectations. The author orchestrated a breathtaking finale. Truly a work of art. A true literary gem.
Ryan Adams
Ryan Adams September 15, 2025
A decent, if standard, experience. The prose was competent, yet the characters lacked the depth I usually seek. Unlikely to reread, but a reasonable expenditure of time.
Susan Thomas
Susan Thomas September 28, 2025
Exceeded all my expectations. I adored how the story unfolded. It kept me captivated without sacrificing elegance. I will undoubtedly revisit this masterpiece.
Carol Flores
Carol Flores March 26, 2025
Took a moment to build, but the payoff was spectacular. A brilliant concept executed with flair. Just a few pacing choices I would change. Quite impressive overall.
Nicholas Rodriguez
Nicholas Rodriguez May 21, 2025
Exceeded all my expectations. The pacing was impeccable and the characters felt incredibly authentic. I was completely immersed. A true literary gem.
Linda Mitchell
Linda Mitchell October 21, 2025
Took a moment to build, but the payoff was spectacular. The middle had a deliberate pace, but the climax was phenomenal. A solid 4 stars from me.
James Hernandez
James Hernandez September 04, 2024
A very strong entry. Beautiful writing, though I craved slightly more depth in the lore. Still, undeniably engaging. I would highly recommend this to discerning readers.
Sharon Young
Sharon Young December 19, 2025
Absolutely brilliant. It strikes a perfect harmony of dialogue and world-building. Every chapter felt necessary. I will undoubtedly revisit this masterpiece.
Eric  Davis
Eric Davis May 19, 2025
Honestly one of the most premium reading experiences lately. The author orchestrated a breathtaking finale. Truly a work of art. Worth every moment spent reading.
William Baker
William Baker January 26, 2025
Masterpiece from start to finish. The author orchestrated a breathtaking finale. Truly a work of art. Worth every moment spent reading.
Kenneth Roberts
Kenneth Roberts April 09, 2024
Exceeded all my expectations. I adored how the story unfolded. It kept me captivated without sacrificing elegance. Worth every moment spent reading.
Deborah Lewis
Deborah Lewis July 03, 2025
Such a rich narrative. I became deeply invested in the protagonist's journey. A masterclass in storytelling. Worth every moment spent reading.
Gary Edwards
Gary Edwards September 17, 2025
Such a rich narrative. I adored how the story unfolded. It kept me captivated without sacrificing elegance. A true literary gem.
Nicholas Rodriguez
Nicholas Rodriguez June 27, 2024
Absolutely brilliant. The pacing was impeccable and the characters felt incredibly authentic. I was completely immersed. An absolute must-read for connoisseurs of the genre.
Kevin Baker
Kevin Baker April 25, 2025
Such a rich narrative. The prose is exquisite. It’s accessible yet undeniably sophisticated. A true literary gem.
George Lopez
George Lopez April 27, 2025
A highly sophisticated read. The protagonist was compelling, though some subplots felt slightly overshadowed. A solid 4 stars from me.
Kenneth Adams
Kenneth Adams March 01, 2025
A decent, if standard, experience. The prose was competent, yet the characters lacked the depth I usually seek. Unlikely to reread, but a reasonable expenditure of time.
Joseph Hill
Joseph Hill January 28, 2024
Took a moment to build, but the payoff was spectacular. Beautiful writing, though I craved slightly more depth in the lore. Still, undeniably engaging. A wonderful companion for a quiet weekend.
Anthony Rivera
Anthony Rivera October 08, 2024
Such a rich narrative. The prose is exquisite. It’s accessible yet undeniably sophisticated. I am now a lifelong fan of this author.
Matthew Jackson
Matthew Jackson June 01, 2024
I thoroughly enjoyed the elegance of it. Beautiful writing, though I craved slightly more depth in the lore. Still, undeniably engaging. A very distinguished novel.
Patricia Gonzalez
Patricia Gonzalez May 13, 2025
I thoroughly enjoyed the elegance of it. It held my rapt attention, even when certain twists were telegraphed. Quite impressive overall.
Emily Diaz
Emily Diaz May 31, 2025
An acceptable diversion. The tempo was somewhat languid, and I found my mind wandering. Not poor, simply average. Unlikely to reread, but a reasonable expenditure of time.
Michael Diaz
Michael Diaz September 22, 2024
A profoundly satisfying read. The prose is exquisite. It’s accessible yet undeniably sophisticated. An effortless 5 stars.
Ashley Anderson
Ashley Anderson March 07, 2024
A highly sophisticated read. The protagonist was compelling, though some subplots felt slightly overshadowed. A very distinguished novel.
Nancy Martinez
Nancy Martinez March 25, 2025
I was completely blown away. The pacing was impeccable and the characters felt incredibly authentic. I was completely immersed. Worth every moment spent reading.
Emily  Davis
Emily Davis September 07, 2024
A profoundly satisfying read. The pacing was impeccable and the characters felt incredibly authentic. I was completely immersed. Worth every moment spent reading.
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