The general position of Rodbertus was ‘social, monarchical, and national.’ With his entire soul he held the purely economic part of the creed of the German Social Democratic party, yet he did not agree with their methods, and had no liking for the productive associations with State help of Lassalle. He regarded a socialistic republic as a possible thing, but he cordially accepted the monarchic institution in his own country, and hoped that a German emperor might undertake the _rôle_ of a social emperor. He was also a true patriot, and was proud and hopeful of the career that lay before the regenerated empire of Germany. The basis of the economic teaching of Rodbertus is the principle laid down by Adam Smith and Ricardo, and insisted on by all the later socialists, that labour is the source and measure of value. In connection with this he developed the position that rent, profit, and wages are all parts of a national income produced by the united organic labour of the workers of the community. Consequently there can be no talk of the wages of labour being paid out of capital; wages is only that part of the national income which is received by the workmen, of a national income which they have themselves entirely produced. The wages fund theory is thus summarily disposed of. But the most important result of the theory is his position that the possession of land and capital enables the landholders and capitalists to compel the workmen to divide the product of their labour with those non-working classes, and in such a proportion that the workers only obtain as much as can support them in life. Thus the Iron Law of Wages is established. Hence also Rodbertus deduces his theory of commercial crises and of pauperism, and in the following way: In spite of the increasing productivity of labour, the workers obtain in general only sufficient to support their class, and therefore a smaller relative share of the national income. But the producers form also the large mass of consumers, and, with the decline of their relative share in the national income, must decline the relative purchasing power of this large class of the people. The growing production is not met by a correspondingly growing consumption; expansion is succeeded by contraction of production, by a scarcity of employment, and a further decline in purchasing power on the part of the workers. Thus we have a commercial crisis bringing with it pauperism as a necessary result. In the meantime the purchasing power of the non-producing capitalists and landholders continues relatively to increase; but, as they have already had enough to buy all the comforts of life, they spend the more in the purchase of luxuries, the production of which increases.