146 ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK 
evidently troubled and more or less impressed by nearly every 
count in the newer criticism on this subject. It seems a just 
characterization to say that Taussig’s general conclusions and 
position resemble somewhat those of Marshall, outlined below, 
but show certain significant differences. First, he is somewhat 
more definitely conscious that the adoption of the valuation con- 
cept involves a radical break with the older doctrines. Secondly, 
he therefore more explicitly (though with various concessions and 
doubts) adheres to the older formal definition of capital in terms 
of concrete goods, and to the older idea of the two-fold division of 
the “instruments of production and the different sorts of return 
to their owners” (i.e., land and capital, rent and interest, respec- 
tively).* Third, he, much more explicitly than Marshall, reaffirms 
a pretty bald labor-theory-of-value to account for the origin and 
distinctiveness of capital (concrete),® conceived of as “artificial” 
in contrast with land as “natural.” In accord with this thought, 
he (probably unique in this regard) denies “productivity” alike 
to capital and to land, and thinks labor alone can properly be 
said to be productive, more so to be sure if applied “through the 
use of tools” than without them, more applied “on some land . . . 
than on other land,” but in any case it is always labor alone that 
has “productivity.” * Fourth, far more than Marshall, he strug- 
gles to escape from the meshes of the inevitable valuation con- 
cept. He sees, as Marshall did not, that he is being trapped into 
a repudiation of the older views. He was forced to recognize that 
“the ordinary business method of measurement” of capital is “in 
terms of value.” He confesses that the old distinctions between 
rent and interest “find no response in the world of affairs.” * 
Earlier ° he had recognized that it was “often convenient to meas- 
ure and record capital in terms of value and price,—as so much 
money,” and he had even issued fair warning that he would 
“sometimes” so far conform “to everyday terminology” as to 
speak of capital in terms of its “value or price.” (Of course, he 
always does express capital in those terms whenever he discusses 
investment of capital and interest as a rate per cent of return— 
no one can do otherwise.) Yet he explicitly rejects the “valu- 
1 Principles of Economics, 1st ed., 1911, Vol. 2, p. 115. 
EE. Vol. 1, pp. 72, 75; Vol. 2, p. 119£. 
8 Idem., Vol. 2, pp. 5-8, 58. 
t Idem., Vol. 2, p. 118. 
5 Vol. 1, pp. 84, 85. 
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