Theories of Surplus Value, Marx 1861-3
[Chapter III] Adam Smith
[1. Smith’s Two Different Definitions of Value;
the Determination of Value by the Quantity of Labour
Expended Which Is Contained in a Commodity, and Its
Determination by the Quantity of Living Labour Which Can Be
Bought in Exchange for This Commodity]
[See Adam Smith Archive.]
Adam Smith, like all economists worth speaking of, takes
over from the Physiocrats the conception of the average
wage, which he calls the natural price of wages.
“A man must always live by his work,
and his wages must at least be sufficient to maintain
him. They must even upon most occasions be somewhat
more, otherwise it would be impossible for him to bring up a
family, and the race of such workmen could not last beyond
the first generation.” ([Adam Smith, Wealth of
Nations, Oxford University Press, London, 1928. Vol. I,
p. 75, Garnier] t. 1, l. I, ch. VIII, p. 136.*)
Adam Smith expressly states that the development of the
productive powers of labour does not benefit the labourer
himself. He says (1. I, ch. VIII [An Inquiry into
the Nature and Causes of the Wealth of Nations]
edit. McCulloch, London, 1828):
“The produce of labour constitutes
the natural recompense or wages of labour. In that
Original state of things, which precedes both the
appropriation of land and the accumulation of
stock, the whole produce of labour belongs to the
labourer. He has neither landlord nor master to share
with him. Had this state continued, the wages of
labour would have augmented with all those improvements
in its productive powers, to which the division of
labour gives occasion. All things would gradually
have become cheaper.” ‹At any rate all those
things requiring a smaller quantity of labour for their
reproduction, but they “would” not only have
become cheaper; they have, in point of fact, become
cheaper.› “They would have been produced by a
smaller quantity of labour; and as the commodities produced
by equal quantities of 1abour would naturally in this state
of things be exchanged for one another, they would have been
purchased likewise with ||244| the produce of a smaller
quantity […] But this original state of things, in
which the labourer enjoyed the whole produce of his own
labour, could not last beyond the first introduction of
the appropriation of land and the accumulation of
stock. It was at an end, therefore, long before
the most considerable improvements were made in the
productive powers of labour, and it would be to no purpose
to trace further what might have been its effects upon the
recompense or wages of labour” (Vol. I,
pp. 107–09).
Here Adam Smith very acutely notes that the really great
development of the productive power of labour starts only
from the moment when it is transformed into wage-labour, and
the conditions of labour confront it on the one hand as
landed property and on the other as capital. The
development of the productive power of labour thus begins
only under conditions in which the labourer himself can no
longer appropriate its result. It is therefore quite
useless to investigate how this growth of productive powers
might have influenced or would influence
“wages”, taken here as equal to the product of
labour, on the hypothesis that the product of labour (or the
value of this product) belonged to the labourer himself.
Adam Smith is very copiously infected with the
conceptions of the Physiocrats, and often whole strata run
through his work which belong to the Physiocrats and are in
complete contradiction with the views specifically advanced
by him. This is so, for example, in the theory of
rent, etc. For our present purpose we can completely
disregard these passages in his writings, which are not
characteristic of himself, but in which he is a mere
Physiocrat.
In the first part of this work, when dealing with the
analysis of the commodity, I have already pointed out
Adam Smith’s inconsistency in his treatment of how
exchange-value is determined. In particular, [I have
shown] how he sometimes confuses, and at other times
substitutes, the determination of the value of
commodities by the quantity of labour required for
their production, with its determination by the quantity of
living labour with which commodities can be bought, or, what
is the same thing, the quantity of commodities with which a
definite quantity of living labour can be bought. Here
he makes the exchange-value of labour the measure for
the value of commodities. In fact, he makes
wages the measure; for wages are equal to the
quantity of commodities bought with a definite quantity of
living labour, or to the quantity of labour that can be
bought by a definite quantity of commodities. The
value of labour, or rather of labour-power, changes, like
that of any other commodity, and is in no way specifically
different from the value of other commodities. Here
value is made the measuring rod and the basis for the
explanation of value—so we have a vicious circle.
From the exposition that follows, however, it will be
seen that this vacillation and this jumbling up of
completely heterogeneous determinations of value do not
affect Smith’s investigations into the nature and origin of
surplus-value, because in fact, without even being aware of
it, whenever he examines this question, he keeps firmly to
the correct determination of the exchange-value of
commodities —that is, its determination by the
quantity of labour or the labour-time expended on
them. |244||
||VII-283a| <Many examples can be given to show
how often in the course of his work, when he is explaining
actual facts, Smith treats the quantity of labour contained
in the product as value and determining value. Some of
these are quoted by Ricardo. His whole doctrine
of the influence of the division of labour and improved
machinery on the price of commodities is based on it.
Here one passage will be enough to cite. In ch. XI,
l. I Adam Smith speaks of the cheapening of many manufactured
goods in his time, as compared with earlier centuries, and
he concludes with the words:
“It cost a greater quantity of labour
||283b| to bring the goods to
market. When they were brought thither, therefore,
they must have purchased, or exchanged for the price, of a
greater quantity.” ([Wealth of Nations,
O.U.P. edition, Vol. I, p. 284], [Garnier] t. II,
p. 156).//|VII-283b||
||VI-245| Secondly, however, this contradiction
in Adam Smith and his passing from one kind of explanation
to another is based upon something deeper, which Ricardo, in
exposing this contradiction, overlooked or did not rightly
appreciate, and therefore also did not solve. Let us
assume that all workers are producers of commodities, and
not only produce their commodities but also sell them.
The value of these commodities is determined by the
necessary labour-time contained in them. If therefore
the commodities are sold at their value, the labourer buys
with one commodity, which is the product of twelve hours’
labour-time, another twelve hours’ labour-time in the form
of another commodity, that is to say, twelve hours’
labour-time which is embodied in another use-value.
The value of his labour is therefore equal to the value of
his commodity; that is, it is equal to the product of twelve
hours’ labour-time. The selling and buying again, in a
word, the whole process of exchange, the metamorphosis of
the commodity, alters nothing in this. It alters only
the form of the use-value in which this twelve hours’
labour-time appears. The value of labour is therefore
equal to the value of the product of labour. In the
first place, equal quantities of materialised labour are
exchanged in the commodities—in so far as they are
exchanged at their value. Secondly, however, a certain
quantity of living labour is exchanged for an equal quantity
of materialised labour, because, firstly, the living labour
is materialised in a product, a commodity, which belongs to
the labourer, and secondly, this commodity is in turn
exchanged for another commodity which contains an equally
large quantity of labour. In fact, therefore, a
certain quantity of living labour is exchanged for an equal
amount of materialised labour. Thus it is not only
commodity exchanging for commodity in the proportion in
which they represent an equal quantity of materialised
labour-time, but a quantity of living labour exchanging for
a commodity which represents the same quantity of labour
materialised.
On this assumption the value of labour (the quantity of
commodities which can he bought with a given quantity of
labour, or the quantity of labour which can be bought with a
given quantity [of commodities]) could serve as the measure
of the value of a commodity just as well as the quantity of
labour contained in it, since the value of labour always
represents the same quantity of materialised labour as the
living labour requires for the production of this commodity;
in other words, a definite quantity of living labour-time
would always command a quantity of commodities which
represents an equal amount of materialised
labour-time. But in all modes of production—and
particularly in the capitalist mode of production —in
which the material conditions of labour belong to one or
several classes, while on the other hand nothing but
labour-power belongs to another class, the working class,
what takes place is the opposite of this. The product
or the value of the product of labour does not belong to the
labourer. A definite quantity of living labour does
not command the same quantity of materialised labour, or a
definite quantity of labour materialised in a commodity
commands a greater quantity of living labour than is
contained in the commodity itself.
But as Adam Smith quite correctly takes as his
starting-point the commodity and the exchange of
commodities, and thus the producers initially confront each
other only as possessors of commodities, sellers of
commodities and buyers of commodities, he therefore
discovers (so it seems to him) that in the exchange between
capital and wage-labour, ||246| materialised labour and
living labour, the general law at once ceases to apply, and
commodities (for labour too is a commodity in so far as it
is bought and sold) do not exchange in proportion to the
quantities of labour which they represent.
Hence he concludes that labour-time is no longer the
immanent measure which regulates the exchange-value of
commodities, from the moment when the conditions of labour
confront the wage-labourer in the form of landed property
and capital. He should on the contrary, as Ricardo
rightly points out, have drawn the opposite conclusion, that
the expressions “quantity of labour” and
“value of labour” are now no longer identical,
and that therefore the relative value of commodities,
although determined by the labour-time contained in them, is
not determined by the value of labour, since that was only
correct so long as the latter expression remained identical
with the former. Later on, when we deal with Malthus,
we can show how wrong and absurd it would be, even when the
labourer appropriated his own product, i.e., the value of
his own product, to make this value or the value of labour
the measure of value, in the same sense in which labour-time
or labour itself is the measure of value and the
value-creating element. For even in that case the
labour which can be bought with a commodity cannot serve as
a measure in the same sense as the labour contained in
it. One would be merely an index to the other.
In any case Adam Smith feels the difficulty of deducing
the exchange between capital and labour from the law that
determines the exchange of commodities, since the former
apparently rests on quite opposite and contradictory
principles. And indeed the contradiction could not be
solved so long as capital was set directly against labour
instead of against labour-power. Adam Smith was well
aware that the labour-time expended on the reproduction and
maintenance of labour-power is very different from the
labour which it [i.e., labour-power] itself can
perform. Thus he himself quotes from Cantillon’s
Essai sur la nature du commerce:
“The labour of an able-bodied slave,
the same author adds, is computed to be worth double his
maintenance; and that of the meanest labourer, he thinks,
cannot be worth less than that of an able-bodied
slave” ([Wealth of Nations, O.U.P. edition,
Vol. I, p. 75], [Garnier] t. I, l. I, ch. VIII,
p. 137).
On the other hand it is strange that Adam Smith did not
grasp how little the objection he raises has to do with the
law that determines the exchange of commodities for each
other. That commodities A and B exchange in proportion
to the labour-time contained in them is in no way upset by
the proportions in which the producers A or B divide the
products A and B, or rather their value, between
themselves. If a part of A goes to the landowner,
another to the capitalist, and a third part to the labourer,
no matter what the share of each may be, this does not alter
the fact that A itself exchanges with B according to its
value. The relation between the labour-time contained
in commodities A and B is in no way affected by how the
labour-time contained in A and B is appropriated by various
persons. “When the exchange of broadcloth for
linen has been accomplished, the producers of broadcloth
will share in the linen in a proportion equal to that in
which they previously shared in the broadcloth” ([Karl
Marx], Misére de la Philosophie, p.
29). It is this, too, that later the Ricardians
rightly maintained against ||247| Adam Smith. Thus the
Malthusian John Cazenove says:
“… Interchange and
Distribution distinct from each other. …* The circumstances
which affect the one do not always affect the other.
For instance, a reduction in the cost of producing any
particular commodity will alter its relation to all others;
but it will not necessarily alter its own distribution, nor
will it in any way affect theirs. Again, a general
reduction in the value of commodities affecting them all
alike will not alter their relation to each other.
It might or might not affect their distribution” (John
Cazenove: Preface to his edition of Malthus’s Definitions
in Political Economy, London, 1853, [p. VI]).
But since the “distribution” of the value of
the product between capitalist and worker is itself based on
an exchange between commodities —commodities and
labour-power —Adam Smith is justifiably
startled. The fact that he had also made the value of
labour, or the extent to which a commodity (or money) can
purchase labour, the measure of value, has a disturbing
effect on Smith’s argument when he comes to the theory of
prices, shows the influence of competition on the rate of
profit, etc.; it deprives his work of all unity, and even
excludes a number of essential questions from his
inquiry. As we shall soon see, however, it did not
affect his exposition of surplus-value in general,
because here he keeps consistently to the correct
determination of value by the labour-time expended in
different commodities.
So now to his treatment of the question.
But first we must mention one other circumstance.
Adam Smith mixes up different things. First he states
in Book I, Ch. V:
“Every man is rich or poor according
to the degree in which he can afford to enjoy the
necessaries, conveniences and amusements of human
life. But after the division of labour bas once
thoroughly taken place, it is but a very small part of these
with which a man’s own labour can supply him. The far
greater part of them he must derive from the labour of
other people, and he must he rich or poor
according to the quantity of that labour which he
can command, or which he can afford to purchase. The
value of any commodity, therefore, to the person who
possesses it, and who means not to use or consume it,
himself, but to exchange it for other commodities, is
equal to the quantity of labour which it enables him
to purchase or command. Labour, therefore, is the
real measure of the exchangeable value of all
commodities” ([Wealth of Nations,
O.U.P. edition, Vol. I, pp. 32–33], [Garnier] t. I, pp. 59
to 60).
Further:“They” (the goods)
“contain the value of a certain quantity of labour,
which we exchange ||248|
for what is supposed at the time to contain the value of
an equal quantity… It was not by gold or by
silver, but by labour, that all the wealth of the world was
originally purchased; and its value, to those who possess
it, and who want to exchange it for some new productions, is
precisely equal to the quantity of labour which it can
enable them to purchase or command” ([ibid., p. 33],
[Garnier] l. I, ch. V, pp. 60–61).
Finally: “Wealth, as Mr. Hobbes says, is
power. But the person who either acquires, or
succeeds to a great fortune, does not necessarily acquire or
succeed to any political power, either civil or
military… The power which that possession
immediately and directly conveys to him, is the power of
purchasing a certain command over all the labour, or over
all the produce of labour which is then in the
market” ([Ibid.], [Garnier] i.e., p. 61).
It can be seen that in all these passages Adam Smith
confuses the labour of other people with the
produce of this labour. The exchange-value of
the commodity which anyone possesses consists —after
the division of labour—in the commodities belonging to
someone else which he can buy, i.e., in the quantity of
someone else’s labour which is contained in them, the
quantity of someone else’s materialised labour. And
this quantity of the labour of others is equal to the
quantity of labour that is contained in his own
commodity. As he expressly says:
“They” (the goods)
“contain the value of a certain quantity of labour,
which we exchange for what is supposed at the time to
contain the value of an equal quantity.”
It emphasis here is on the change brought about by the
division of labour: that is to say, that wealth no
longer consists in the product of one’s own labour, but in
the quantity of the labour of others which this product
commands, the social labour which it can buy, the quantity
of which is determined by the quantity of labour it itself
contains. In fact, only the concept of exchange-value
is here involved —that my labour now counts only as
social labour, and consequently its product determines my
wealth by its command over an equal quantity of social
labour. My commodity, which contains a definite
quantity of necessary labour-time, gives me command over all
other commodities of equal value, and therefore over an
equal quantity of the labour of others realised in other
use-values. The emphasis here lies on the
equalisation, brought about through the division of labour
and exchange-value, of my labour with the labour of
others, in other words, with social labour (the fact
that my labour too, or the labour contained in my
commodities, is already socially determined, and has
fundamentally changed its character, escapes Adam), and not
at all on the difference between materialised labour
and living labour, and the specific laws of their
exchange. In fact, Adam Smith is here saying nothing
more than that the value of commodities is determined by the
labour-time contained in them, and that the wealth of the
owner of commodities consists in the quantity of social
labour at his disposal.
However, the equating here of labour and
product of labour ||249|
in fact provides the first occasion for the confusion
between the determination of the value of commodities by the
quantity of labour contained in them, and the determination
of their value by the quantity of living labour that they
can buy, in other words, their determination by the value of
labour. When Adam Smith says:
“His fortune is greater or less,
precisely in proportion to the extent of this power, or to
the quantity of either of other men’s labour, or, what is
the same thing” (here is the false identification)
“of the produce of other men’s labour, which it
enables him to purchase”. ( [Wealth of
Nations, O.U.P. edition, Vol. I, p. 33], [Garnier] l.c.,
p. 61.)
He might just as well have said: it is in proportion to
the quantity of social labour contained in his own commodity
or fortune; as indeed he also says:
“They” (the goods)
“contain the value of a certain quantity of labour,
which we exchange for what is supposed at the time [to
contain] the value of an equal
quantity.”
(The word value is here superfluous and
meaningless.) The false conclusion emerges already in
this Chapter V, when for example he says:
“Labour alone, therefore, never
varying in its own value, is alone the ultimate and
real standard by which the value of all commodities can at
all times and places he estimated and compared”
([ibid., p. 36], [Garnier] l.c., p. 66).
What is true of labour itself and consequently of its
measure, labour-time —that the value of commodities is
always proportionate to the labour-time realised in them, no
matter how the value of labour may change —is
here claimed for this changing value of labour itself.
Here Adam Smith is examining only commodity exchange in
general: the nature of exchange-value, of the division of
labour and of money. The parties to the exchange still
confront each other only as owners of commodities.
They buy the labour of others in the form of a commodity,
just as their own labour appears in the form of a
commodity. The quantity of social labour which they
command is therefore equal to the quantity of labour
contained in the commodity with which they themselves make
the purchase. But when in the following chapters he
comes to the exchange between materialised labour and living
labour, between capitalist and worker, and then
stresses that the value of the commodity is now no
longer determined by the quantity of labour it itself
contains, but by the quantity —which is different from
this —of living labour of others which it can command,
i.e., buy, he is not in fact saying by this that commodities
themselves no longer exchange in proportion to the
labour-time they contain; but that the increase of
wealth, the increase of the value contained in the
commodity, and the extent of this increase, depends upon the
greater or less quantity of living labour which the
materialised labour sets in motion. And put in this
way it is correct. Smith, however, remains unclear on
this point.
[2. Smith’s General Conception of
Surplus-Value. The Notion of Profit, Rent and
Interest as Deductions from the Product of the Worker’s
Labour]
||250| In Chapter VI of
Book I Adam Smith passes on from those relations in which it
is assumed that the producers confront one another only as
sellers and possessors of commodities to the relations of
exchange between those who possess the conditions of labour
and those who possess labour-power alone.
“In that early and rude state of
society which precedes both the accumulation of stock and
the appropriation of land, the proportion between the
quantities of labour necessary for acquiring different
objects, seems to be the only circumstance which can
afford any rule for exchanging them for one
another… It is natural that what is usually the
produce of two days’ or two hours’ labour, should be worth
double of what is usually the produce of one day’s or one
hour’s labour” ([ibid., p. 52] t. I, ch. VI. pp. 94–95,
Garnier).
That is to say, the labour-time necessary to produce
different commodities determines the proportion in which
they exchange for one another, or their
exchange-value.
“In this state of things, the whole
produce of labour belongs to the labourer; and the quantity
of labour commonly employed in acquiring or producing any
commodity, is the only circumstance which can regulate the
quantity of labour which it ought commonly to purchase,
command, or exchange for” ([ibid., p. 53], [Garnier]
l.c., p. 96).
Consequently, on this assumption the labourer is a mere
seller of commodities, and one commands the labour of
another only in so far as he buys the other’s commodity with
his commodity. He thus commands with his commodity
only so much of the other’s labour as is contained in his
own commodity, since both exchange only commodities against
each other, and the exchange-value of the commodities is
determined by the labour-time or quantity of labour they
contain.
But, Adam continues:
“As soon as stock has accumulated
in the hands of particular persons, some of them will
naturally employ it in setting to work industrious people,
whom they will supply with materials and subsistence, in
order to make a profit by the sale of their work, or by what
their labour adds to the value of the materials”
([ibid., p. 53], [Garnier] l.c., p. 96).
Stop, before we follow the passage further. In the
first place, whence come the “industrious
people” who possess neither means of subsistence nor
materials of labour—people who are hanging in mid
air? If we strip Smith’s statement of its naïve
phrasing, it means nothing more than: capitalist production
begins from the moment when the conditions of labour belong
to one class, and another class has at its disposal only
labour-power. This separation of labour from the
conditions of labour is the precondition of capitalist
production.
Secondly, however, what does Adam Smith mean when he says
that the employers of labour set labourers to work
“in order to make a profit by the sale of their
work, or by what their labour ||251| adds to the value of the
materials”?
Does he mean by this that the profit comes from the
sale, that the commodity is sold above its
value —that is, what Steuart calls profit upon
alienation, which is nothing but a vibration of wealth
between parties?* Let
him answer for himself.
“In exchanging the complete
manufacture either for money, for labour,”
(here again is a source of new error) “or for other
goods, over and above what may he sufficient to pay the
price of the materials, and the wages of the workmen,
something must be given for the profits of the
undertaker of the work, who hazards his stock in this
adventure” ([ibid., p. 53], [Garnier], l.c.).
We shall return to this “hazarding” later
(see notebook VII, p. 173) in the chapter on the apologetic
accounts of profit.29 This something given for the
profits of the undertaker, when the complete work is
exchanged, does it come from the sale of the commodity above
its value, is it Steuart’s profit upon alienation?
“The value,” Adam
continues immediately, “which the workmen add
to the materials, therefore, resolves itself in
this case” (when capitalist production has begun)
“into two parts, of which the one pays their wages,
the other the profits of their employer upon the whole stock
oaf materials and wages which he advanced”
([ibid., p. 53], [Garnier] l.c., pp. 96–97).
Here therefore Adam Smith explicitly states: the profit
which is made on the sale of the complete manufacture
originates not from the sale itself, not from the
sale of the commodity above its value, is not profit
upon alienation. The value, that is, the quantity of
labour which the workmen add to the material, falls rather
into two parts. One pays their wages or is paid for
through their wages. By this transaction the workmen
give in return only as much labour as they have received in
the form of wages. The other part forms the profit of
the capitalist, that is, it is a quantity of labour which he
sells without having paid for it. If therefore he
sells the commodity at its value, that is, for the
labour-time contained in it, in other words if he exchanges
it for other commodities in accordance with the law of
value, then his profit originates from the fact that he has
not paid for a part of the labour contained in the
commodity, but has nevertheless sold it. Adam
Smith has thereby himself refuted the idea that the
circumstance that the whole product of his labour no longer
belongs to the labourer, that he is obliged to share it or
its value with the owner of capital, invalidates the law
that the proportion in which commodities exchange for each
other, or their exchange-value, is determined by the
quantity of labour-time materialised in them. Indeed,
on the contrary, he traces the profit of the capitalist
precisely to the fact that he has not paid for a part of the
labour added to the commodity, and it is from this that his
profit on the sale of the commodity arises. We shall
see how further on Adam Smith even more explicitly derives
profit from the labour performed by the workman over and
above the quantity of labour with which he pays for
his wages, that is to say, replaces it by an
equivalent. Thereby he has recognised the true origin
of surplus-value. At the same time he has expressly
stated that it does not arise from the ||252| advanced funds, whose value
—however useful they may he in the real labour-process
—merely reappears in the product; but that it arises
exclusively from the new labour which the workmen add to
the materials in the new process of production, in which
those funds figure as means of labour or instruments of
labour.
On the other hand, the phrase “in exchanging the
complete manufacture either for money, for labour, or
for other goods—“ is wrong (and arises from the
confusion mentioned earlier).
If he exchanges the commodity for money or for a
commodity, his profit arises from his selling more labour
than he has paid for, from the fact that he does not
exchange an equal quantity of materialised labour for an
equal quantity of living labour. Adam Smith therefore
must not put the exchange either for money or for other
goods on the same footing as the exchange of the complete
manufacture for labour. For in the first exchange the
surplus-value originates from the fact that the commodities
are exchanged at their value, for the labour-time contained
in them, which however is in part unpaid for.
Here it is assumed that the capitalist does not exchange an
equal quantity of past labour for an equal quantity of
living labour; that the quantity of living labour
appropriated by him is greater than the quantity of living
labour he has paid for. Otherwise the workman’s wage
would be equal to the value of his product. The profit
on the exchange of the complete manufacture for money or
commodities, if they are exchanged at their value, arises
therefore from the fact that the exchange between the
complete manufacture and the living labour is subject to
other laws; that no equivalents are exchanged here.
These cases, therefore, must not be lumped together.
Profit is consequently nothing but a deduction from the
value which the workmen have added to the material of
labour. They add to the material, however, nothing but
a new quantity of labour. The workman’s labour-time
therefore resolves itself into two parts: one for which he
has received an equivalent, his wages, from the capitalist;
the other which he gives to him gratis and which constitutes
the profit. Adam Smith rightly points out that
only the part of the labour (value) which the workman newly
adds to the material resolves itself into wages and profit,
that is to say, the newly-created surplus-value in itself
has nothing to do with the part of the capital which has
been advanced (as materials and instruments).
Adam Smith, who has thus reduced profit to the
appropriation of the unpaid labour of others, at once goes
on to say:
“The profits of stock, it may perhaps
he thought, are only a different name for the wages of a
particular sort of labour, the labour of inspection and
direction” ([ibid., p. 53], [Garnier] p. 97).
And he refutes this false view of the labour of
superintendence. We shall return to this later, in
another chapter. Here it is only important to stress
that Adam Smith very clearly recognises, brings out and
expressly emphasises the contradistinction between his view
of the origin of profit and this apologist view. After
pointing out this contradistinction he proceeds:
||253| “In this state
of things the whole produce of labour does not always belong
to the labourer. He must in most cases share it with
the owner of the stock which employs him.
Neither is the quantity of labour commonly employed in
acquiring or producing any commodity, the only circumstance
which can regulate the quantity which it ought commonly to
purchase, command or exchange for. An additional
quantity, it is evident, must he due for the profits of
the stock which advanced the wages and furnished the
materials of that labour” ([ibid., pp. 54–55],
[Garnier] l.c., p. 99).
This is quite correct. Given capitalist production,
materialised Labour—in the form of money or
commodity—always purchases, besides the quantity of
labour which it itself contains, an “additional
quantity” of living labour “for the profits of
the stock”; which however in other words means nothing
but that it appropriates for nothing, appropriates without
paying for it, a part of the living labour. Adam Smith
is superior to Ricardo in that he so strongly emphasises how
this change begins with capitalist production. On the
other hand, he is inferior to Ricardo in that he is never
able to free himself from the viewpoint —though it is
one he himself refuted by his own analysis —that
through this changed relation between materialised labour
and living labour a change takes place in the determination
of the relative value of commodities, which in relation to
each other represent nothing but materialised labour, given
quantities of realised labour.
After thus presenting surplus-value in the one form, the
form of profit, as part of the labour which the worker
performs over and above the part of the labour which pays
his wages, he does the same with the other form of
surplus-value, rent of land. One of the
objective conditions of labour alienated from labour, and
therefore confronting it as other men’s property, is
capital; the other is the land itself, the
land as landed property. Therefore after
dealing with the owner of capital, Adam Smith
continues:
“As soon as the land of any country has all become
private property, the landlords, like all other men,
love to reap where they never sowed, and demand a
rent even for its natural produce…
He” (the labourer) “must give up to the landlord
a portion of what his labour either collects or
produces. This portion, or, what comes to the same
thing, the price of this portion, constitutes the rent of
land” ([ibid., p. 55], [Garnier], l.c.,
pp. 99–100).
Like industrial profit proper, rent of land is only a
part of the labour which is added by the labourer to the
materials and which he gives up, hands over to the
owner of the land without being paid for it; hence, only a
part of the surplus-labour performed by him over and above
the part of the labour-time which he works to pay his wages
or to return an equivalent for the labour-time contained in
his wages.
Thus Adam Smith conceives surplus-value—that
is, surplus-labour, the excess of labour performed and
realised in the commodity over and above the paid
labour, the labour which has received its equivalent in the
wages —as the general category, ||254| of which profit in the strict
sense and rent of land are merely branches.
Nevertheless, he does not distinguish surplus-value as such
as a category on its own, distinct from the specific forms
it assumes in profit and rent. This is the source of
much error and inadequacy in his inquiry, and of even more
in the work of Ricardo.
Another form in which surplus-value appears is
interest on capital, interest on money. But
this “interest on money is always”, Adam
Smith says in the same chapter, “a derivative
revenue, which, if it is not paid from the profit
which is made by the use of the money, must he paid from
some other source of revenue” (therefore either rent
or wages. In the latter case, assuming the average
wage, it does not originate from surplus-value but is a
deduction from the wage itself or—and in this form, as
we shall later have occasion to see, it appears in
undeveloped capitalist production —it is only another
form of profit) “unless perhaps the borrower is a
spendthrift, who contracts a second debt in order to pay the
interest of the first” ([ibid., p. 581, [Garnier],
l. c., pp. 105–06). Interest is therefore either a
part of the profit made with the capital lent; in
this case it is only a secondary form of profit itself, a
branch of profit, and thus only a further division between
different persons of the surplus-value appropriated in the
form of profit. Or it is paid out of rent. In
which case the same holds good. Or the borrower pays
the interest out of his own or someone else’s capital.
In which case it in no way constitutes surplus-value, but is
merely a different distribution of existing wealth,
vibration of the balance of wealth between parties, as in
profit upon alienation. Excluding the latter case,
when interest is not in any way a form of surplus-value (and
excluding the case where it is a deduction from the wage or
itself a form of profit; Adam Smith does not mention this
latter case), interest is therefore only a secondary form of
surplus-value, a mere part of profit or of rent (affecting
merely their distribution), and therefore also is nothing
but a part of unpaid surplus-Labour.
“The stock which is lent at interest
is always considered as a capital by the
lender. He expects that in due time it is to be
restored to him, and that in the meantime the borrower is to
pay him a certain annual rent for the use of it. The
borrower may use it either as a capital, or as a
stock reserved for immediate consumption. If he
uses it as a capital, he employs it in the maintenance of
productive labourers, who reproduce the value with a
profit. He can, in this case, both restore the
capital and pay the interest without alienating or
encroaching upon any other source of revenue. If he
uses it as a stock reserved for immediate consumption, he
acts the part of a prodigal, and dissipates in the
maintenance of the idle, what was destined for the support
of the industrious. He can, in this case, neither
restore the capital nor pay the interest, without either
alienating or encroaching upon some other source of revenue,
such as the property or […] rent of land”
(Vol. II, b. II, ch. IV, p. 127 edit.
McCulloch).
|255| Thus whoever borrows money, which here means
capital, either uses it himself as capital, and makes a
profit with it. In this case the interest which he
pays to the lender is nothing but a part of the profit under
a special name. Or he consumes the borrowed
money. Then he increases the wealth of the lender by
reducing his own. What takes place is only a different
distribution of the wealth that passes from the hand of the
spendthrift into that of the lender, but there is no
generation of surplus-value. In so far therefore as
interest in any way represents surplus-value, it is nothing
but a part of profit, which itself is nothing but a definite
form of surplus-value, that is, unpaid labour.
Finally, Adam Smith observes that in the same way all
incomes of persons who live on the proceeds of taxes are
paid either from wages, and are therefore a deduction from
wages themselves; or have their source in profit and rent,
thus representing only claims whereby various social strata
share in the consumption of profit and rent, which
themselves are nothing but different forms of
surplus-value.
“All taxes, and all the revenue which
is founded upon them, all salaries, pensions, and annuities
of every kind, are ultimately derived from some one or other
of those three original sources of revenue, and are paid
either immediately or mediately from the wages of labour,
the profits of stock, or the rent of land ([Wealth of
Nations, O.U.P. edition, p. 53], [Garnier] I, ch. VI,
p. 106).
Thus interest on money, along with taxes or revenues
derived from taxes—in so far as they are not
deductions from wages themselves —are merely shares in
profit and rent, which are themselves in turn reducible to
surplus-value, that is, unpaid labour-time.
This is Adam Smith’s general theory of surplus-value.
In yet another passage Adam Smith sums up his views on
the whole question, making it all the more clear how far he
is from even attempting in any way to prove that the value
added by the labourer to the product (after deducting the
costs of production, the value of raw materials and of the
instruments of labour) is no longer determined by the
labour-time contained in the product, because the labourer
does not himself appropriate this value in full, but has to
share it—the value or the product—with the
capitalist and the landowner. The way in which the
value of a commodity is distributed among the producers of
this commodity naturally alters nothing in the nature of
this value or in the relative value of commodities to one
another.
“As soon as land becomes private
property, the landlord demands a share of almost all the
produce which the labourer can either raise, or collect from
it. His rent makes the first deduction from the
produce of the labour which is employed upon land.
It seldom happens that the person who tills the ground has
wherewithal to maintain himself till he reaps the
harvest. His maintenance is generally advanced to him
from the stock of a master, the farmer who employs him, and
who would have no interest to employ him, unless he was to
share in the produce of his labour, or unless his stock was
to be replaced to him with a profit. This profit
makes a second deduction ||256| from the […]
labour which is employed upon land, The produce of
almost all other labour is liable to the like deduction
of profit. la all arts and manufactures the
greater part of the workmen stand in need of a master to
advance them the materials of their work, and their wages
and maintenance till it he completed. He shares in
the produce of their labour, or in the value which it adds
to the materials upon which it is bestowed; and in this
share consists his profit” ( [McCulloch edition ]
Vol. I, b. I, ch. VIII, pp. 109–10).
Here therefore Adam Smith in plain terms describes rent
and profit on capital as mere deductions from the
workman’s product or the value of his product, which is
equal to the quantity of labour added by him to the
material. This deduction however, as Adam Smith has
himself previously explained, can only consist of that part
of the labour which the workman adds to the materials, over
and above the quantity of labour which only pays his wages,
or which only provides an equivalent for his wages; that is,
the surplus-labour, the unpaid part of his labour.
(Therefore, incidentally, profit and rent or capital and
landed property can never be a source of value.)
[3. Adam Smith’s Extension of the Idea of
Surplus-Value to All Spheres of Social Labour]
We see the great advance made by Adam Smith beyond the
Physiocrats in the analysis of surplus-value and hence of
capital. In their view, it is only one definite kind
of concrete labour—agricultural labour —that
creates surplus-value. Therefore what they examine is
the use-value of labour, not labour-time, general social
labour, which is the sole source of value. In this
special kind of labour, however, it is nature, the
land, which in fact creates the surplus-value, consisting in
an increase of (organic) matter—the excess of the
matter produced over the matter consumed. They see it,
however, still in quite a restricted form and therefore
distorted by fantastic ideas. But to Adam Smith, it is
general social labour—no matter in what use-values it
manifests itself—the mere quantity of necessary
labour, which creates value. Surplus-value, whether it
takes the form of profit, rent, or the secondary form of
interest, is nothing but a part of this labour, appropriated
by the owners of the material conditions of labour in the
exchange with living labour. For the Physiocrats,
therefore, surplus-value appears only in the form of rent of
land. For Adam Smith, rent, profit and interest are
only different forms of surplus-value.
When I speak of surplus-value, in relation to the total
sum of capital advanced, as profit on capital, this
is because the capitalist directly engaged in production
directly appropriates the surplus-labour, no matter
under what categories he has subsequently to share this
surplus-value with the landowner or with the lender of
capital. Thus the farmer pays the landowner
directly. And the manufacturer, out of the
surplus-value he has appropriated, pays rent to the owner of
the land on which the factory stands, and interest to the
capitalist who has advanced capital to him.
||257| <There are now
still to be examined: 1. Adam Smith’s confusion
of surplus-value with profit; 2. his views on
productive labour; 3. how he makes rent and profit
sources of value, and his false analysis of the
“natural price” of commodities, in which the
value of raw materials and instruments is not supposed to
have a separate existence, and therefore not to be
considered, apart from the price of the three sources of
revenue.//
[4. Smith’s Failure to Grasp the Specific Way in
Which the Law of Value Operates in the Exchange between
Capital and Wage-Labour]
Wages or the equivalent with which the capitalist buys
the temporary disposal of labour-power are not a commodity
in its immediate form, but the commodity metamorphosed,
money, the commodity in its independent form as
exchange-value, as the direct materialisation of social
labour, of labour-time in general. With this money the
labourer naturally buys commodities at the same price as any
other possessor of money <disregarding here such details
as, for example, that he buys on less favourable conditions
and in worse circumstances, etc.> He faces the
seller of commodities as does every other possessor of
money—as a buyer. He enters commodity
circulation itself not as a labourer, but as pole Money
facing pole Commodity, as possessor of commodity in its
general, always exchangeable form. His money is once
more transformed into commodities, which are to serve him as
use-values, and in this process he buys commodities at the
current market-price—generally speaking, at their
value, In this transaction he carries through only the act
M—C, which indicates a change of form, but, as a
general rule, by no means a change in magnitude of
value. Since however, by his labour materialised in
the product, he has added not only as much labour-time as
was contained in the money he received, he has paid not only
an equivalent but has given surplus-labour
gratis—which is precisely the source of the
profit—he has thus in fact (the mediating
process, the sale of his labour-power, is not relevant when
we are dealing with the result) given a higher value than
the value of the sum of money which forms his wages.
In return, he has bought with more labour-time the quantity
of labour realised in the money which comes to him as
wages. It can therefore be said that in the same way
he has indirectly bought all the commodities into which the
money (which is only the independent expression of a
definite quantity of social labour-time) he received is
converted with more labour-time than they contain, although
he buys them at the same price as any other buyer or
possessor of a commodity in its first transformation.
Conversely, the money with which the capitalist buys labour
contains a smaller quantity of labour, less labour-time,
than the quantity of labour or labour-time of the workman
contained in the commodity produced by him. Besides
the quantity of labour contained in this sum of money which
forms the wage, the capitalist buys an additional quantity
of labour for which he does not pay, an excess over the
quantity of labour contained in the money he pays out.
And it is precisely this additional quantity of labour which
constitutes the surplus-value created by capital.
But as the money ||258| with
which the capitalist buys labour (in the actual result, even
though mediated through exchange not with labour directly,
but with labour-power) is nothing other than the transmuted
form of all other commodities, their independent
existence as exchange-value, it can equally well be said
that all commodities in exchange with living labour buy more
labour than they contain, It is precisely this more that
constitutes surplus-value.
It is Adam Smith’s great merit that it is just in the
chapters of Book I (chapters VI, VII, VIII) where he passes
from simple commodity exchange and its law of value to
exchange between materialised and living labour, to exchange
between capital and wage-labour, to the consideration of
profit and rent in general—in short, to the origin of
surplus-value—that he feels some flaw has
emerged. He senses that somehow—whatever the
cause may be, and he does not grasp what it is—in the
actual result the law is suspended: more labour is exchanged
for less labour (from the labourer’s standpoint), less
labour is exchanged for more labour (from the capitalist’s
standpoint). His merit is that he emphasises—and
it obviously perplexes him—that with the
accumulation of capital and the appearance of
property in land—that is, when the conditions of
labour assume an independent existence over against labour
itself—something new occurs, apparently (and actually,
in the result) the law of value changes into its
opposite. It is his theoretical strength that he feels
and stresses this contradiction, just as it is his
theoretical weakness that the contradiction shakes his
confidence in the general law, even for simple commodity
exchange; that he does not perceive how this contradiction
arises, through labour-power itself becoming a commodity,
and that in the case of this specific commodity its
use-value—which therefore has nothing to do with its
exchange-value—is precisely the energy which creates
exchange-value. Ricardo is ahead of Adam Smith in that
these apparent contradictions—in their result real
contradictions—do not confuse him. But he is
behind Adam Smith in that he does not even suspect that this
presents a problem, and therefore the specific
development which the law of value undergoes with the
formation of capital does not for a moment puzzle him or
even attract his attention. We shall see later how
what was a stroke of genius with Adam Smith becomes
reactionary with Malthus as against Ricardo’s
standpoint.
Naturally, however, it is at the same time this deep
insight of Adam Smith’s that makes him irresolute and
uncertain, cuts the firm ground from under his feet, and
prevents him—in contrast to Ricardo—from
reaching a consistent and comprehensive theoretical view of
the abstract, general foundations of the bourgeois
system.
||259| The above-quoted
statement by Adam Smith that the commodity buys more labour
than it contains, or that labour pays a higher value for the
commodity than the latter contains, is thus formulated by
Hodgskin:
“Natural or necessary
price* means
[…] the whole quantity of labour nature
requires from man, that he may produce any
commodity… Labour was the original, is now and
ever will he the only purchase money in dealing with
nature… .Whatever quantity of labour may he
requisite to produce any commodity, the labourer must
always, in the present state of society, give a great deal
more labour to acquire and possess it than is requisite to
buy it from nature. Natural price thus** increased to the labourer is
social price … we must always attend to the
difference between natural and social price***” (Thomas
Hodgskin, Popular Political Economy, etc., London,
1827, pp. 219–20).
In this presentation Hodgskin reproduces both what is
correct and what is confused and confusing in Adam Smith’s
view.
[5. Smith’s Identification of Surplus-Value with
Profit. The Vulgar Element in Smith’s Theory]
We have seen how Adam Smith explains surplus-value
in general, of which the rent of land and profit are only
different forms and component parts. As he presents
it, the part of capital which consists of raw material and
means of production has nothing directly to do with the
creation of surplus-value. The latter arises
exclusively from the additional quantity of labour which the
labourer gives over and above the part of his labour
which forms only the equivalent for his wages.
Therefore it is only that part of the capital advanced which
consists in wages from which surplus-value directly arises,
since it is the only part of capital which not only
reproduces itself but produces an overplus. In profit,
on the other hand, the surplus-value is calculated on the
total amount of capital advanced, and besides this
modification other new complications arise through the
equalisation of profits in the various spheres of production
of capital.
Because Adam makes what is in substance an analysis of
surplus-value, but does not present it explicitly in the
form of a definite category, distinct from its special
forms; he subsequently mixes it up directly with the further
developed form, profit. This error persists with
Ricardo and all his disciples. Hence arise
(particularly with Ricardo, all the more strikingly because
he works out the fundamental law of value in more systematic
unity and consistency, so that the inconsistencies and
contradictions stand out more strikingly) a series of
inconsistencies, unresolved contradictions and fatuities,
which the Ricardians (as we shall see later in the section
on profit) attempt to solve with phrases in a scholastic
way. Crass empiricism turns into false
metaphysics, scholasticism, which toils painfully to deduce
undeniable empirical phenomena by simple formal abstraction
directly from the general law, or to show by cunning
argument that they are in accordance with that law. At
this point where we discuss Adam Smith we will give an
example, because the confusion creeps in immediately not
when he is dealing specifically with profit or
rent—those particular forms of surplus-value—but
where he is thinking of them only as forms of surplus-value
in general, as deductions from the labour bestowed by
the labourers upon the materials.
||260| After Adam Smith has
said, in Book I, Chapter VI, “The value which the
workmen add to the materials, therefore, resolves
itself in this case into two parts, of which the one pays
their wages, the other the profits of their employer upon
the whole stock of materials and wages which he
advanced”, he continues: “He” (the
entrepreneur) “could have no interest to employ them,
unless he expected from the sale of their work something
more than what was sufficient to replace his stock to him;
and he could have no interest to employ a great stock rather
than a small one, unless his profits were to bear some
proportion to the extent of his stock” [ibid.,
p. 53].
We note first: surplus-value, the overplus which the
entrepreneur makes over and above the amount of value
required to replace his stock, is reduced by Adam Smith to
that part of the labour which the workmen add to the
materials over and above the quantity that pays their
wages—thus making this overplus arise purely from the
part of the capital which is laid out in wages. Then,
however, he immediately conceives this overplus in the form
of profit—that is, he thinks of it not in relation to
the part of the capital from which it arises, but as an
overplus over the total value of the capital advanced,
“upon the whole stock of materials and wages which he
advanced”. (It is oversight that the means of
production are here left out of account). He therefore
conceives surplus-value directly in the form of
profit. Hence the difficulties that soon appear.
The capitalist, Adam Smith says, “could have no
interest to employ them, unless he expected from the sale of
their work something more than what was sufficient to
replace his stock to him”.
Once capitalist relations are assumed, this is quite
correct. The capitalist does not produce in order to
satisfy his needs with the product; he produces with
absolutely no direct regard for consumption. He
produces in order to produce surplus-value. But this
premise—which amounts to no more than that, capitalist
production being assumed, the capitalist produces for the
sake of surplus-value—is not made use of by Adam Smith
to explain surplus-value, as some of his silly
disciples subsequently did; that is to say, he does not
explain the existence of surplus-value by the interests of
the capitalist, by his desire for surplus-value. On
the contrary, he has already derived surplus-value from the
value which the workmen add to the materials over and above
the value which they add in exchange for the wages they have
received. But then he goes on at once: the capitalist
would have no interest to employ a great stock rather than a
small one, unless his profits were to bear some proportion
to the extent of the stock advanced. Here profit is no
longer explained by the nature of surplus-value, but by the
“interest” of the capitalist. Which is
downright silly.
Adam Smith does not sense that, by thus directly
confusing surplus-value with profit and profit with
surplus-value, he is upsetting the law of the origin of
surplus-value which he has just established. ||261| If surplus-value is only the
part of the value (or of the quantity of labour)
added by the workman in excess of the part
that he adds to the materials to replace the wages, why
should that second part grow as the direct result of the
value of the capital advanced being in one case greater than
in the other? The contradiction becomes even clearer
in the example which Adam Smith himself gives immediately
following on this, in order to refute the view that profit
is wages for the so-called labour of superintendence.
For he says:
“They” (the profits of stock)
“are, however, altogether different” (from
wages), “are regulated by quite different principles,
and bear no proportion to the quantity, the hardship, or the
ingenuity of this supposed labour of inspection and
direction. They are regulated altogether by the
value of the stock employed, and are greater or smaller
in proportion to the extent of this stock. Let us
suppose, for example, that in some particular place,
where the common annual profits of manufacturing
stock are ten per cent there are two different
manufactures, in each of which twenty workmen are employed,
at the rate of fifteen pounds a year each, or at the expense
of three hundred a year in each manufactory. Let us
suppose, too, that the coarse materials annually wrought up
in the one cost only seven hundred pounds, while the finer
materials in the other cost seven thousand. The
capital annually employed in the one will, in this case,
amount only to one thousand pounds; whereas that employed in
the other will amount to seven thousand three hundred
pounds. At the rate of ten per cent, therefore, the
undertaker of the one will expect a yearly profit of about
one hundred pounds only; while that of the other will expect
about seven hundred and thirty pounds. But though
their profits are so very different, their labour of
inspection and direction may be either altogether or very
nearly the same” ([ibid., pp. 53–54], [Garnier]
l.c.).
From surplus-value in its general form we come straight
to a general rate of profit, which has nothing directly to
do with it. But let us pass on! In both
manufactories twenty workmen are employed; in both their
wages are the same, £300. Proof therefore that
it is not perhaps a case of a higher kind of labour being
employed in one as compared with the other, so that one
hour’s labour and therefore also one hour’s surplus-labour
would in one be equal to several hours’ surplus-labour in
the other. On the contrary, the same average labour is
assumed in both, as the equality of their wages shows.
How then can the surplus-labour which the workers add,
beyond the price of their wages, be worth seven times as
much in one factory as in the other? Or why should the
workers in one factory, because the materials they work up
in it are seven times as costly as in the other, provide
seven times as much surplus-labour as in the other, although
in both factories they receive the same wages, and therefore
work the same time to reproduce ||262| their wages?
The seven times greater profit in the one manufactory as
compared with the other—or in general the law of
profit, that it is in proportion to the magnitude of the
capital advanced—thus prima facie contradicts
the law of surplus-value or of profit (since Adam Smith
treats the two as identical) that it consists purely of the
unpaid surplus-labour of the workmen. Adam Smith puts
this down with quite naïve thoughtlessness, without the
faintest suspicion of the contradiction it presents.
All his disciples— since none of them considers
surplus-value in general, as distinct from its determinate
forms—followed him faithfully in this. With
Ricardo, as already noted, it merely comes out even more
strikingly.
As Adam Smith resolves surplus-value not only into profit
but also into the rent of land—two particular kinds of
surplus-value, whose movement is determined by quite
different laws—he should certainly have seen from this
that he ought not to treat general abstract form as directly
identical with any of its particular forms. With all
later bourgeois economists, as with Adam Smith, lack of
theoretical understanding needed to distinguish the
different forms of the economic relations remains the rule
in their coarse grabbing at and interest in the empirically
available material. Hence also their inability to form
a correct conception of money, in which what is in question
is only various changes in the form of exchange-value, while
the magnitude of value remains unchanged.
[6. Smith’s Erroneous View of Profit, Rent of
Land and Wages as Sources of Value]
Lauderdale, in Recherches sur la nature et
l’origine de la richesse publique (traduit par Lagentie de
Lavaïsse, Paris, 1808), raises the objection to
Adam Smith’s exposition of surplus-value—which he says
corresponds with the views already advanced by
Locke—that according to it capital is not an original
source of wealth, as Smith makes out, but only a derivative
source. The relevant passages run:
“‘Above a century ago,
Mr. Locke stated pretty nearly the same opinion” (as
Adam Smith)… ‘“‘Money’,
he said, ‘is a barren thing and produces nothing; but
by compact transfers that profit that was the reward of one
man’s labour into another man’s pocket’”
(Lauderdale, p. 116).
“If this, however, was a just and
accurate idea of the profit of capital, it would follow that
the profit of stock must he a derivative, and not an
original source of revenue; and capital could not therefore
he considered as a source of wealth, its profit being only a
transfer from the pocket of the labourer into that of the
proprietor of stock” (pp. 157–58). (l.c.,
p. 116–17)*
[Lauderdale, James Maitland, An Inquiry into the
Nature and Origin of Public Wealth…,
Edinburgh and London, 1804, pp. 157–58].
In so far as the value of the capital reappears in the
product, it cannot he called a “source of
wealth”. Here it is only as accumulated labour,
as a definite quantity of materialised labour, that it adds
its own value to the product.
Capital is productive of value only as a relation,
in so far as it is a coercive force on wage-labour,
compelling it to perform surplus-labour, or spurring on the
productive power of labour to produce relative
surplus-value. In both cases it only produces value as
||263| the power of labour’s
own material conditions over labour when these are alienated
from labour; only as one of the forms of wage—labour
itself, as a condition of wage—labour. But in
the sense commonly used by economists, as stored up labour
existing in money or commodities, capital—like all
conditions of labour, even the unpaid natural
forces—functions productively in the labour-process,
in the production of use-values, but it is never a source of
value. It creates no new value, and only adds
exchange-value to the product at all in so far as it has
exchange-value, that is to say, only in so far as it itself
consists in materialised labour-time, so that labour is the
source of its value.
Lauderdale is right in this respect—that Adam
Smith, after explaining the nature of surplus-value and of
value, wrongly presents capital and land as independent
sources of exchange-value. They are sources of revenue
for their owners in so far as they are titles to a certain
quantity of surplus-labour, which the labourer must perform
over and above the labour-time required to replace his
wages. Thus Adam Smith says for example:
“Wages, profit, and rent, are the three
original sources of all revenue, as well as of all
exchangeable value” ([Wealth of Nations,
O.U.P. edition, p. 57], [Garnier], l. I, ch. VI).
Just as it is true that they are the three original
sources of all revenue, so it is false that they also are
the three original sources of all exchangeable value,
since the value of a commodity is exclusively determined by
the labour-time contained in it. After just presenting
rent and profit as mere deductions from the value or from
the labour added by the workman to the raw material, how can
Adam Smith call them original sources of exchangeable
value? (They can only be that in the sense that they
set in motion the original source, that is to say, that they
compel the workman to perform surplus-labour.) In so far as
they are titles (conditions) for the appropriation of a part
of the value, that is, of the labour materialised in the
commodity, they are sources of income for their
owners. But the distribution or appropriation of value
is certainly not the source of the value that is
appropriated. If this appropriation did not take
place, and the workman received the whole product of his
labour as his wage, the value of the commodities produced
would be just the same as before, although it would not be
shared with the landowner and the capitalist.
The fact that landed property and capital are sources of
income for their owners, that is, give them the power to
appropriate a part of the values created by labour, does not
make them sources of the value which they appropriate.
But it is equally wrong to say that wages are an original
source of exchangeable value, although wages, or rather the
continuous sale of labour-power, is a source of income for
the labourer. It is the labour and not the wages of
the labourer that creates value. Wages are only
already existing value, or if we consider the whole of
production, the part of the value created by the labourer
which he himself appropriates; but this appropriation does
not create value. His wages can therefore rise or fall
without this affecting the value of the commodity produced
by him. |263||
||265| <The following
quotation should be added to what has been said above in
regard to Adam Smith making the categories in which the
value of the commodity is appropriated into sources of this
value: After he has refuted the view that profit is only
another name for the wages of the capitalist, or wages of
labour of superintendence, he concludes:
“In the price of
commodities, therefore, the profits of stock
constitute a component part altogether different from
the wages [of labour], and regulated by quite different
principles” ([ibid., p. 54], [Garnier ] b. I, ch. VI,
p. 99).
Adam Smith has just shown that the value added by the
workmen to the materials is divided between them and the
capitalists in the form of wages and profit; labour is
therefore the only source of value, and the price of
wages and the price of profits arise out of this source of
value. But these prices themselves are not a source
of value.// |265||
[7. Smith’s Dual View of the Relationship
between Value and Revenue. The Vicious Circle of
Smith’s Conception of “‘Natural Price” as
the Sum of Wages, Profit and Rent]
||263| Here we will leave
entirely out of account how far Adam Smith regards rent as a
constituent element of the price of commodities. For
our present inquiry this question is all the more
unimportant because he treats rent just as he treats profit,
as a mere part of surplus-value, a deduction from the labour
added by the labourer to the raw material, and consequently
||264| in fact also as a
deduction from profit, inasmuch as the total unpaid
surplus-labour is directly appropriated by the
capitalist in his relations with labour; it does not matter
under what categories he may later have to share this
surplus-value with owners of the conditions of
production—the landowner or the lender of
capital. For the sake of simplicity we shall therefore
speak only of wages and profit as the two categories into
which newly-created value is divided.
Let us assume that twelve hours of labour-time are
materialised in a commodity (leaving out of account
the value of the raw material and instruments of labour
consumed in it.) We can express its value as such only in
money. Let us therefore assume that twelve
hours of labour-time are likewise materialised in five
shillings. Thus the value of the commodity is five
shillings. By the natural price of commodities Adam
Smith understands nothing but their value expressed in
money. (The market-price of the commodity, of course,
stands either above or below its value. Indeed, as I
shall show later, even the average price of commodities is
always different from their value. Adam
Smith, however, does not deal with this in his discussion of
natural price. Moreover, neither the market-price nor
still less the fluctuations in the average price of
commodities can be comprehended except on the basis of an
understanding of the nature of value.)
If the surplus-value contained in the commodity is twenty
per cent of its total value, or what amounts to the same
thing, twenty-five per cent of the necessary labour
contained in it, then this value of five shillings, the
natural price of the commodity, can be resolved into four
shillings wages and one shilling surplus-value (which here
we will call profit, following Adam Smith). It would
be correct to say that the magnitude of value of the
commodity determined independently of wages and profit, or
its natural price, can be resolved into four shillings wages
(the price of the labour) and one shilling profit (the price
of the profit). But it would he wrong to say that the
value of the commodity arises from adding together or
combining the price of the wages and the price of the profit
which are regulated independently of the value of the
commodity. If this were the case there would be
absolutely no reason why the total value of the commodity
should not be 8 shillings, 10 shillings, etc., according to
whether one assumes the wages to be 5 shillings and the
profit 3 shillings, and so on.
When Adam Smith is examining the “natural
rate” of wages or the “natural price” of
wages, what guides his investigation? The natural
price of the means of subsistence required for the
reproduction of labour-power. But by what does he
determine the natural price of these means of
subsistence? In so far as he determines it at all, he
comes back to the correct determination of value, namely,
the labour-time required for the production of these means
of subsistence. But when he abandons this correct
course, he falls into a vicious circle. By what is the
natural price of the means of subsistence determined, which
determine the natural price of wages? By the natural
price of “wages”, of “profit”, of
“rent”, which constitute the natural price of
those means of subsistence as of all commodities. And
so in infinitum. The twaddle about the law of
demand and supply of course does not help us out of this
vicious circle. For the “natural price” or
the price corresponding to the value of the commodity is
supposed to exist just when demand meets supply, that is,
when the price of the commodity does not stand above or
below its value as a result of fluctuations in demand and
supply; when, in other words, the cost-price of
the commodity (or the value of the commodity supplied by the
seller) is also the price which the demand pays.
||265| But as we have said:
In investigating the natural price of wages Adam Smith in
fact falls back—at least in certain passages—on
the correct determination of the value of the
commodity. On the other hand, in the chapter dealing
with the natural rate or the natural price of profit he gets
bogged down, so far as the real problem is concerned, in
meaningless commonplaces and tautologies. In fact, at
first it was the value of the commodity which he saw as
regulating wages and profit and rent. Then however he
sets to work the other way round (which was closer to what
empirical observation showed and to everyday ideas), and now
the natural price of commodities is supposed to be
calculated and discovered by adding together the natural
prices of wages, profit and rent. It is one of
Ricardo’s chief merits that he put an end to this
confusion. We shall return to this point briefly when
we are dealing with him.
Here there is only this further point to be noted: the
given magnitude of value of the commodity, serving as
a fund for the payment of wages and profit, appears
empirically to the industrialist in the form that a definite
market-price for the commodity holds good for a shorter or
longer time, in spite of all fluctuations in wages.
It is necessary therefore to call attention to this
peculiar train of thought in Adam Smith’s book: first the
value of the commodity is examined, and in some passages
correctly determined—so correctly determined that he
traces out in general form the origin of surplus-value and
of its specific forms, hence deriving wages and profit from
this value. But then he takes the opposite course, and
seeks on the contrary to deduce the value of commodities
(from which he has deduced wages and profit) by adding
together the natural prices of wages, profit and rent.
It is this latter circumstance that is responsible for the
fact that he nowhere correctly explains the influence of
oscillations of wages, profit, etc., on the price of
commodities—since he lacks the basis [for such an
explanation]. |VI-265||
***
|VIII-364|| <Adam
Smith, Value and Its Component Parts. Smith’s
erroneous conception, see above, which he [develops] in
spite of his originally correct view, is shown also in the
following passage:
“Rent … enters into the
composition of the price of commodities in a
different way from wages and profit. High or low wages
and profit are the causes of high or low price; high or
low rent is the effect of it” ( Wealth
of Notions, b. I, ch. XI, [O.U.P. edition, p. 165]).//
|VIII-364||
[8. Smith’s Error in Resolving the Total Value
of the Social Product into Revenue. Contradictions in
His Views on Gross and Net Revenue]
||VI-265| We come to
another point, which is linked with the analysis of the
price or value of the commodity (since the two are here
still assumed to be identical). Let us assume that
Adam Smith has calculated correctly—that is to say,
the value of the commodity being given, he has correctly
resolved it into the constituent parts in which this value
is distributed among the various agents of
production—but has not on the contrary tried to deduce
value from the price of these constituent parts. Thus
we shall leave this aside and also the one-sided way in
which wages and profit are presented only as forms of
distribution, and hence both as revenues in the same sense
that their owners can consume. Apart from all this,
Adam Smith himself raises a question, and this again shows
his superiority over Ricardo—not that he finds the
right solution to the question he raises, but that he raises
it at all. ||266| What
Adam Smith says is:
“These three parts” (wages,
profit and rent) “seem either immediately or
ultimately to make up the whole price of
corn.”
(Of all commodities, Adam Smith here takes corn, because
in some commodities rent does not enter into the price as a
constituent part.)
“A fourth part, it may he
thought, is necessary for replacing the stock of the farmer,
or for compensating the wear and tear of his labouring
cattle, and other instruments of husbandry. But it
must be considered, that the price of an instrument of
husbandry, such as a labouring horse, is itself made u p of
the same three p arts; the rent of the land upon which he is
reared, the labour of tending and rearing him, and
the profits of the farmer, who advances both the rent of
this land, and the wages of this labour.”
<Here profit appears as the primary form, which also
includes rent.//
“Though the price of the corn,
therefore, may pay the price as well as the maintenance of
the horse, the whole price still resolves itself,
either immediately or ultimately, into the same three parts
of rent, labour and profit” ([Wealth of
Nations, O.U.P. edition, p. 56], [Garnier] b. I,
ch.VI).
(Here it is perfectly preposterous that all of a sudden
he says labour instead of wages, while he does not put
landed property or capital for rent and profit.)
But was it not equally obviously necessary to consider
that just as the farmer included the price of the horse and
the plough in the price of the corn, the horse breeder or
the plough maker from whom the farmer bought the horse and
the plough, would include in the price of the horse and the
plough the price of the instruments of production (in the
case of the former, perhaps another horse) and of raw
materials such as feeding stuffs and iron, whereas the fund
from which the horse breeder and plough maker paid
wages and profit (and rent) consisted only in the new labour
which they added in their sphere of production to the
amount of value present in their constant capital?
Since therefore Adam Smith admits, in relation to the
farmer, that the price of his corn includes, besides the
wages, profit and rent paid by him to himself and others,
also a fourth constituent part which is different from
these—the value of the constant capital he has
used up, such as horses, agricultural implements,
etc.—this must also hold good for the horse breeder
and the manufacturer of agricultural implements; and it is
of no avail for Adam Smith to send us from pillar to
post. Incidentally, the example of the farmer is
peculiarly unhappily chosen for sending us from pillar to
post, for in this case the items of constant capital include
one that does not at all need to be bought from somebody
else, namely the seed; and does this constituent part of the
value resolve itself into wages, profit or rent for
anybody?
But for the present let us proceed, and see whether Smith
sticks to his view that the value of every commodity is
resolvable into one or all of the sources of revenue: wages,
profit, rent; and can therefore, being destined for
consumption, be devoured or at any rate used up in one way
or another for personal use (not industrial
consumption). First ||267| another preliminary
point. In the case for example of gathering berries
and such like it can be assumed that their value consists
entirely of wages, although here also as a rule some
appliances, such as baskets and so on, are required as means
of labour. But examples of this kind are quite
irrelevant here, where we are dealing with capitalist
production.
To start with, once more the repetition of the view
expressed in Book I, Chapter VI; Book II, Chapter II,
(b. II, Garnier pp. 212–13) states:
“It has been shown … that
the price of the greater part of commodities resolves
itself into three parts, of which one pays the wages of the
labour, another the profits of the stock, and a third the
rent of the land” [Wealth of Nations, O.U.P.
edition, p. 313].
According to this, the whole value of any commodity
resolves itself into revenue, and therefore falls to the
share of one or another of the classes which live on this
revenue, as a fund for consumption. Now since the
total production of a country, each year for example,
consists solely of the total of the values of the
commodities produced, and since the value of each single one
of these commodities is resolved into revenues, so also must
their sum, the annual product of labour, the gross revenue,
be consumable annually in this form. And so
immediately after this passage Smith himself raises the
point:
“Since this is the case, it has been
observed, with regard to every particular ‘commodity,
taken separately, it must he so with regard to all
the commodities which compose the whole annual produce of
the land and labour of every country, taken complexly.
The whole price or exchangeable value of the annual
produce, must resolve itself into the same three parts, and
he parcelled out among the different inhabitants of the
country, either as the wages of their labour, the profits of
their stock, or the rent of their land” ([ibid.,
p. 313], [Garnier] l.c., p. 243).
This is in fact the necessary consequence. What is
true of the individual commodity is necessarily true of the
total sum of commodities. But quod non,* says Adam. He goes
on:
“But though the whole value of the
annual produce of the land and labour of every country is
thus divided among, and constitutes a revenue to, ‘its
different inhabitants; yet, as in the rent of a private
estate, we distinguish between the gross rent and the
neat rent, so may we likewise in the revenue of
oil the inhabitants of a great country”
([ibid., p. 313], [Garnier] l.c., p. 213).
(But stop! Above he told us the direct opposite: in
the case of the individual farmer we can distinguish a
fourth part into which the value of his wheat for example
resolves itself, namely the part which merely replaces the
constant capital used up. This is directly true
for the individual farmer. But when we go further into
it, what is constant capital for him resolves itself at an
earlier point, in another person’s hand before it became
capital in his, into wages, profit, etc., in a word, into
revenue. Therefore if it is true that commodities,
considered in the hands of an individual producer, contain
one part of the value which does not form revenue, then it
is untrue for “all the inhabitants of a great
country”, because what in one person’s hand is
constant capital derives its value from the fact that it
came from another person’s hand as the aggregate price of
wages, profit and rent. Now he says the direct
opposite.)
Adam Smith continues:
||268| “The
gross rent of a private estate comprehends whatever
is paid by the farmer; the neat rent, what remains
free to the landlord, after deducting the expense of
management, of repairs, and all other necessary
charges; or what, without hurting his estate, he can
afford to place in his stock reserved for immediate
consumption, or to spend upon his table,” etc.
… “His real wealth is in proportion, not to his
gross, but to his neat rent” [ibid.,
pp. 313–14].
(In the first place, Smith brings in here something
improper. What the farmer pays as rent to the
landowner, just as what he pays as wages to the labourers,
is like his own profit, part of the value or price of the
commodity, which resolves itself into revenue. The
question is however whether the commodity contains yet
another constituent part of its value. He admits this
here, As he should admit it in the case of the farmer, but
that should not pre-vent the latter’s corn (i.e., the price
or exchange-value of his corn) from being resolvable merely
into revenue. Secondly, .a note in passing. The
real wealth of which an individual farmer, considered as a
farmer, can dispose, depends on his profit. But
on the other hand, as owner of commodities he can sell the
whole farm, or if the laud does not belong to him, he can
sell all constant capital there is on it such as draught
cattle, agricultural implements, etc. The value which
he can realise in this way, therefore the wealth at his
disposal, is conditioned by the value, that is the size of
the constant capital belonging to him. However, he can
only sell this again to another farmer, in whose hands it is
not disposable wealth but constant capital. So we are
still just where we were.)
“The gross revenue of all the inhabitants of
a great country comprehends the whole annual produce
of their land and labour” (previously we were told
that this total—that is its value—resolves
itself into wages, profits and rents, nothing but different
forms of net revenue); “the neat revenue, what
remains free to them, after deducting the expense of
maintaining, first, their fixed, and, secondly, their
circulating capital”; (so he now deducts
instruments of labour and raw materials); “or what,
without encroaching upon their capital, they can place in
their stock reserved for immediate
consumption.” (So now we learn that the price ox
exchangeable value of the total stock of commodities, just
as in the case of the individual capitalist, so also for the
whole country, is resolvable into a fourth part which does
not form a revenue fox anyone and cannot be resolved into
wages, profit or rent.)
“The whole expense of maintaining the
fixed capitol must evidently be excluded from the
neat revenue of the society. Neither the materials
necessary for supporting their useful machines and
instruments of trade, their profitable buildings, etc., nor
the produce of the labour necessary for fashioning
those materials into the proper form, can ever make any pant
of it. The price of that labour may
indeed make a part of it; as the workmen so employed may
place the whole value ||269| of their wages in their
stock reserved for immediate consumption. But in
other sorts of labour, both the price and the produce go
to this stock; the price to that of the workmen, the
produce to that of other people, whose subsistence,
conveniences, and amusements, are augmented by the labour of
those workmen” ([Wealth of Nations,
O.U.P. edition, p. 314], [Garnier] l.c., pp. 214–15).*
Here Adam Smith once more shies away from the question
which he has to answer—the question concerning the
fourth part of the total price of the commodity, which is
not resolved into either wages, profit or rent. First
something that is quite wrong: with makers of machinery, as
with all other industrial capitalists, the labour which
fashions the raw materials of the machine, etc., into the
proper form in fact consists of necessary and
surplus-labour, and therefore resolves itself not only into
the wages of the workmen, but also into the profit of the
capitalist. But the value of the materials and the
value of the instruments with which they are fashioned by
the workmen into the proper form, is resolvable into neither
the one nor the other. That products which are
destined by their nature not for individual consumption but
for industrial consumption do not enter into the stock
reserved for immediate consumption, has nothing at all to do
with it. Seed, for example (that portion of the corn
which serves for sowing), by its nature could also enter
into the stock for consumption; but by its economic function
it must enter into the stock for production. But
furthermore it is quite wrong to say with regard to the
products destined for individual consumption that both the
full price and the product enter into the stock for
consumption. Linen, for example, when not used for
sail-cloth or other productive purposes, all goes as a
product into consumption. But not its price, for one
part of this price replaces the Linen yarn, another part
looms and so on, and only a part of the price of the linen
is converted into revenue of any kind.
Just now Adam told us that the materials necessary for
machines, profitable buildings, etc. “can never make
any part of this neat revenue”, any more than the
machines and so on fashioned from them can; presumably,
therefore, they form a part of the gross revenue.
Shortly afterwards, [Garnier] l. c., Chapter II of Book II,
p. 220, he says on the contrary:
“The machines and instruments of
trade, etc., which compose the fixed capital either
of an individual or of a society, make no part either of
the gross or of the neat revenue of either: so
money…” [ibid., p. 317].
Adam’s twistings and turnings, his contradictions and
wanderings from the point, prove that, once he had made
wages, profit and rent the constituent component parts of
exchangeable value or of the total price of the product, he
had got himself stuck in the mud and had to get stuck.
[9. Say as Vulgariser of Smith’s Theory.
Say’s Identification of the Social Gross Product with the
Social Revenue. Attempts to Draw a Distinction between
Them by Storch and Ramsay]
Say, who tries to hide his dull superficiality by
repeating in absolute general phrases Smith’s
inconsistencies and blunders, says:
“If we consider a nation as a whole,
it has no net product; for since the products have
only a value equal to the costs of their production,
when these costs are deducted, the whole value
of the products is deducted… The
annual revenue is the gross revenue”
[Jean-Baptiste Say]. (Traité d’économie
politique…, Troisième édition,
Paris, 4811, t. II, p. 469.)
The value of the total annual products is equal to the
quantity of labour-time materialised in them. ||270| If this aggregate value is
deducted from the annual product, then in fact, so far as
value is concerned, there remains no value, and by this
deduction both the net revenue and the gross revenue have
come to a final end But Say thinks that the annually
produced values are annually consumed. Hence for the
whole nation there is no net product but only a gross
product. In the first place, it is not true that the
annually produced values are annually consumed. This
is not the case for a large part of the fixed capital.
A large part of the annually produced values enters into the
labour-process without entering into the process of the
formation of value, that is to say without their total value
being annually consumed. But in the second place: a
part of the annual consumption of values consists of values
that are used not as the stock for consumption, but as means
of production, and which are returned to production (either
in the same form or in the form of an equivalent), just as
they originated in production. The second part
consists of the va1ues which can enter into individual
consumption over and above the first part. These form
the net product.
Storch says of this trash of Say’s:
“It is […] evident that the
value of the annual product is divided partly into capital
and partly into profits, and that each of these parts of
the value of the annual product goes regularly to purchase
the product needed by the nation, as much for the
purpose of preserving its capital as for renewing its
consumable stock” (Storch, Cours
d’économie politique, t. V:
Considérations sur la nature du revenu
national, Paris, 1824, pp. 134–35). “Let us
then imagine a family which through its own labour is
self-sufficing in all its needs, such as there are so many
examples of in Russia .., is the revenue of such a
family equal to the gross product coming from its land, its
capital and its industry? Can it live in its barns or
its stables, eat its seed and forage, clothe itself with its
labouring cattle, amuse itself with its agricultural
implements? According to Mr. Say’s thesis, all these
questions would have to be answered in the
affirmative” (l.c., pp. 135–36). “Mr. Say
[…] regards the gross product as the revenue of
society; and from this he concludes that society can consume
a value equal to this product” (l.c., p. 145).
“The (net) revenue of a nation is not the excess of
values produced over the totality of values consumed
(as Say, the author, imagines it to be), but only [the
excess of values produced] over the values consumed in
order to produce.” Therefore, “if a nation
consumes all this excess in the year it is produced, it
consumes all its (net) revenue “ (l.c., p. 146).
“If it is admitted that the revenue of a nation is
equal to its gross product, so that no capital is to
he deducted, then it must also he admitted that this nation
may consume unproductively the entire value of its annual
product, without in the least reducing its future
revenue” (l.c., p. 147). “…
the products which represent the [constant]
capital of a nation are not consumable” (l.c.,
p. 150).
Ramsay (George)—An Essay on the Distribution of
Wealth (Edinburgh, 1836)—remarks on the same
subject, namely, Adam Smith’s fourth part of the total
price, or what I call constant capital as distinct from the
capital laid out in wages:
||271|
“Mr. Ricardo,” he says, “[…seems
to…] consider the whole produce as divided between
wages and profits, forgetting the part necessary for
replacing fixed capital” (p. 174, note).
By “fixed capital” Ramsay in fact means not
only instruments of production, etc., but also the raw
material—in short, what I call constant capital within
each sphere of production. When Ricardo speaks of the
division of the product into profit and wages, he always
assumes that the capital advanced to production itself and
consumed in it has been deducted. Nevertheless, on the
main issue Ramsay is right. Because Ricardo does not
make any further examination at all of the constant part of
capital, and pays no attention to it, he makes gross errors
and in particular confuses profit with surplus-value,
besides errors in investigating oscillations in the rate of
profit and so on.
Let us hear now what Ramsay himself says:
“In what manner is a comparison to be
instituted between the product and * the stock expended upon it?…**. With regard to
a whole nation … it is evident that all the various
elements of the stock expended must he reproduced in some
employment or another, otherwise the industry of the country
could not go on as formerly. The raw material of
manufactures, the implements used in them, as also in
agriculture, the extensive machinery engaged in the former,
the buildings necessary for fabricating or storing the
produce, must all he parts of the total return of a country,
as well as of the advances of*** […] its
master-capitalists. Therefore, the quantity of the
former may he compared with that of the latter, each article
being supposed placed as it were beside that of a similar
kind” (l.c., pp. 137–39). Now as regards the
individual capitalist, since he does net replace his
outgoings in kind, “by far the greater number must be
obtained by exchange, a certain portion of the product being
necessary for this purpose. Hence each individual
master-capitalist comes to look much more to the
exchangeable value of his**** product than to its quantity” (l.c.,
pp. 145–46). “The more the value of the
product exceeds the value of the capital
advanced, the greater will be his**** profit. Thus, then, will he
estimate it, by comparing value with value, not quantity
with quantity… Profit […] must rise or
fall exactly as the proportion of the gross produce, or of
its value, required to replace necessary
advances, falls or rises […] the rate of profit
must depend immediately upon two circumstances*****; first, the
proportion of the whole produce which’ goes to the
labourers; secondly, the proportion which must he set apart
for replacing, either in kind or by exchange, the fixed
capital” (l.c., pp. 146–48, passim).
<What Ramsay here says on the rate of profit has to be
considered in Chapter III, on profit. It is important
that he rightly lays stress on this element. On the
one hand what Ricardo says is correct—that the
cheapening of commodities which form constant capital (which
Ramsay calls fixed capital) always depreciates a part of the
existing capital. This is especially true of fixed
capital proper—machinery, etc. It is of no
advantage to the individual capitalist that the
surplus-value rises in relation to the total capital, if the
rise in this rate has been due to a fall in the total value
of his constant capital (which he already had before the
depreciation). But this is true only to a very small
extent for that part of the capital which consists of raw
materials or completed commodities (which do not form part
of the fixed capital). The existing amount of these
that can be depreciated in this way is always only an
insignificant magnitude compared with the total
production. It holds good for each capitalist only to
a slight extent for that part of his capital expended as
circulating capital. On the other hand—since the
profit is equal to the proportion of the surplus-value to
the total advanced capital, and since the quantity of labour
that can be absorbed depends not on the value but on the
quantity of raw materials and on the efficiency of the means
of production—not on their exchange-value but on their
use-value—it is clear that the greater the
productivity of industry in the branches whose ||272| product enters into the
formation of constant capital, the smaller the outlay of
constant capital required to produce a given quantity of
surplus-value; consequently the greater the proportion of
this surplus-value to the whole advanced capital, and
therefore the higher the rate of profit for a given amount
of surplus-value.//
(What Ramsay considers doubly—replacement of
product by product in the process of reproduction for the
whole country, and replacement of value by value for the
individual capitalist —are two aspects, both of which,
in relation to the individual capital, must be taken into
account in the circulation process of capital, which is
at the same time its reproduction process.)
Ramsay did not solve the real difficulty which occupied
Adam Smith’s attention and entangled him in all kinds of
contradictions. Put plainly, it is this: The whole
capital (as value) resolves itself into labour, is nothing
but a certain quantity of materialised labour. The
paid labour, however, is equal to the wages of the
labourers, the unpaid labour is equal to the capitalists’
profit. So the whole capital must be resolvable,
directly or indirectly, into wages and profit. Or is
labour somewhere performed which consists neither of wages
nor profit, and merely has the purpose of replacing the
values used up in production which are, however, the
conditions of reproduction? But who performs this
labour, since all labour performed by the labourer is
resolved into two quantities, one which maintains his own
power to produce, and the other which forms the profit of
capital?
[10. Inquiry into How It Is Possible for the Annual
Profit and Wages to Buy the Annual Commodities, Which
Besides Profit and Wages Also Contain Constant
Capital]
[(a) Impossibility of the Replacement of the Constant
Capital of the Producers of Consumption Goods through
Exchange between These Producers]
To rid the problem of any spurious admixture, there is
one more point to mention at the outset. When the
capitalist transforms a part of his profit, of his revenue,
into capital—into means of labour and materials of
labour—both are paid for by that part of the labour
which the labourer has performed gratis for the
capitalist. Here we have a new quantity of labour
forming the equivalent for a new quantity of commodities,
commodities which as use-values consist of means of labour
and materials of labour. This therefore enters into
the accumulation of capital and presents no difficulty; we
have here the growth of the constant capital beyond its
previous limits, or the formation of new constant capital in
excess of the amount of constant capital that already exists
and must be replaced. The difficulty is the
reproduction of the existing constant capital, not
the formation of new constant capital in excess of what has
to be reproduced. The new constant capital obviously
originates in profit, and has existed for a moment in the
form of revenue which is later transformed into
capital. This part of the profit consists of the
surplus labour-time, which, even without the existence of
capital, must constantly be performed by society, in order
to have at its disposal, so to speak, a fund for
development, which the very increase of population makes
necessary.
<There is a good explanation of constant capital, but
only in so far as concerns its use-value, in Ramsay’s work,
p. 166, which runs:
“… be the amount* of the gross
return” (of the farmer, for example) “small or
great, the quantity of it required for replacing what has
been consumed in these different forms, can undergo no
alteration whatsoever.** This quantity must he considered as
constant, so long as production is carried on the
same scale.”//
So we must first start from the fact: new formation of
constant capital—as distinct from the reproduction of
the existing constant capital—flows from profit as its
source; that is, assuming on the one hand that the wages
only suffice for the reproduction of labour-power, and on
the other that the whole surplus-value is embraced under the
category “profit”, since it is the industrial
capitalist who directly appropriates the whole
surplus-value, [irrespective of] to whom and where he has
to surrender some of it later.
<“… the master* […] is the general
distributor of the national revenue** […] who undertakes to pay
[…] to the labourers, the wages […]—to
the” (moneyed) “capitalist, the interest
[…]—to the proprietor, the rent of his
land” (Ramsay, [l.c. I, pp. 218–19).
In calling the whole surplus-value profit, we regard the
capitalist: 1. as the person who immediately appropriates
the whole surplus-value created; 2. as the distributor of
that surplus-value between himself, the moneyed capitalist,
and the proprietor of the soil.//
||VII-273| That this new
constant capital arises from profit however means nothing
but that it is due to a part of the surplus-labour of the
labourers. Just as the savage, in addition to the time
he needs for hunting, must necessarily use some time for
making his bow; or just as in patriarchal agriculture, the
peasant, in addition to the time spent in tilling the soil,
must use a certain quantity of labour-time in producing most
of his implements.
But the question here is: Who is it that labours in order
to replace the equivalent of the constant capital already
expended in production? The part of the labour which
the labourer performs for himself replaces his wages, or,
considered in relation to the whole of production, creates
his wages. On the other hand, his surplus-labour which
forms the profit is in part a consumption fund for the
capitalist, and in part is transformed into additional
capital. But the capitalist does not replace the
capital already used up in his own production out of this
surplus-labour or profit. <Were this the case, the
surplus-value would not be a fund for new capital formation,
but for the maintenance of the old capital.// But the
necessary labour which forms the wages and the
surplus-labour which forms the profit make up the whole
working-day, and no other labour is performed in addition to
these. (The contingency of the capitalist’s labour of
superintendence is included in wages. In this aspect
he is the wage-worker, even though not of another
capitalist, yet of his own capital.) What then is the
source, the labour, that replaces the constant capital?
The part of the capital expended in wages is replaced
(leaving surplus-labour out of account) by new
production. The labourer consumes the wages, but he
adds as much new labour as he has destroyed of old labour;
and if we consider the whole working class, without allowing
the division of labour to confuse us, he reproduces not only
the same value but the same use-values, so that, according
to the productivity of his labour, the same value, the same
quantity of labour, is reproduced in a greater or smaller
quantity of these same use-values.
If we take society at any one moment, there exists
simultaneously in all spheres of production, even though in
very different proportions, a definite constant
capital—presupposed as a necessary condition of
production—that once for all belongs to production and
must be given back to it, as seed must be given back to the
land, It is true that the value of this constant part
can fall or rise, depending on whether the commodities of
which it is composed have to be reproduced at less or
greater cost. This change in value, however,
never alters the fact that in the process of production,
into which it enters as a condition of production, it is a
postulated value which must reappear in the value of the
product. Therefore this change of value of the
constant capital can here be ignored. In all
circumstances it is a definite quantity of past,
materialised labour, which passes into the value of the
product as a determining factor. In order to bring out
more clearly the nature of the problem, let us therefore
assume that the production costs or the value of the
constant part of the capital similarly remain unchanged,
remain constant. It also makes no difference that for
example the whole value of the constant capital may not pass
into the products in a single year, but, as is the case with
fixed capital, only passes into the aggregate products of a
series of years. For the question here centres on that
part of the constant capital which is actually consumed
within the year, and therefore also must be replaced within
the year.
The question of the reproduction of the constant capital
clearly belongs to the section on the reproduction process
or circulation process of capital—which however is no
reason why the kernel of the matter should not be examined
here.
||274| Let us first take
the labourer’s wages. He receives, then, a certain sum
of money in which say ten hours’ labour are materialised, if
he works 12 hours for the capitalist. These wages are
converted into means of subsistence. These means of
subsistence are all commodities. Assume that the price
of these commodities is equal to their value, But in the
value of these commodities there is one component part which
covers the value of the raw materials they contain and the
means of production used up in them. All the component
parts of the value of these commodities taken together,
contain, however, like the wages spent by the labourer, only
ten hours’ labour. Let us assume that two-thirds of
the value of these commodities consists of the value of the
constant capital they contain, and one-third, on the other
hand, of the labour which has finally made the product into
a finished article for consumption. Thus the labourer,
with his ten hours of living labour, replaces two-thirds of
constant capital and one-third of living labour (added to
the article in the course of the year). If there were
no constant capital in the means of subsistence, the
commodities, which he buys, the raw material in them would
have cost nothing, and no instrument of labour would have
been required to make them. In that case there are two
possibilities. Either the commodities, as before,
would contain ten hours’ labour; then the labourer replaces
ten hours’ living labour by ten hours’ living labour.
Or the same quantity of use-values into which his wages are
converted and which he needed for the reproduction of
his. labour-power would have cost only 3 1/3 hours’
labour (with no instrument of labour and no raw material
which is itself a product of labour). In this
case the labourer has only to perform 3 1/3 hours’ necessary
labour, and his wages would in fact fall to 3 1/3 [hours’]
materialised labour-time.
Let us assume that the commodity is linen: 12 yards (the
actual price does not matter here)=36 shillings or
£1.16.0. Of this, let one-third be labour added,
two-thirds for raw material (yarn) and wear and tear of
machinery, Let the necessary labour-time= 0 hours; the
surplus-labour therefore=2. Let one hour’s labour,
expressed in money,= 1 shilling.
In this case the 12 hours’ labour =12 shillings, wages=10
shillings, profit=2 shillings. Let us assume that
labourer and capitalist spent the whole of their wages and
profit, that is 12 shillings (the total value that has been
added to the raw material and machinery, the whole quantity
of new labour-time materialised in the transformation of
yarn into linen), on linen itself as a consumption
article. (And it is possible that subsequently more
than one labour day will be spent on their own product.) A
yard of linen costs 3 shillings. With the 12 shillings
labourer and capitalist together—adding wages and
profit together—can only buy four yards of
linen. These four yards of linen contain 12 hours’
labour, of which however only 4 are newly-added labour, 8
representing the labour realised in the constant
capital. With the 12 hours’ labour wages and profit
together buy only one-third of their total product, because
two-thirds of this total product consist of constant
capital. The 12 hours’ labour are divisible into 4+8,
of which 4 replace themselves, while 8—independently
of the labour added in the weaving process—replace
such labour as entered into the weaving process in already
materialised form, as yarn and machinery.
In regard to that part of the product, of the commodity,
which exchanges against or is bought by wages and profit as
an article of consumption (or for any other purpose, even
reproduction, for the purpose for which the commodity is
bought makes no difference to the transaction), it is
therefore clear that the part of the value of the product
which is formed by the constant capital is paid for from the
fund of newly-added labour, which is resolved into wages and
profit. How much or how little of constant capital and
how much or how little of the labour added in the last
production process is bought by wages and profit combined,
in what proportions the labour last added and in what
proportions the labour realised in constant capital is paid
for, depends on the original proportions in which they
entered as component parts of value into the finished
commodity. To simplify matters we assume the
proportion of two-thirds labour realised in constant capital
to one-third newly-added labour.
||275| Now two things are
clear:
First. The proportion we have assumed in the
case of the linen—that is, in the case where labourer
and capitalist realise wages and profit in the commodities
they have themselves produced, when they buy back a part of
their product—this proportion remains the same when
they expend the same quantity of value on other
products. On the assumption that every commodity
contains two-thirds of constant capital and one-third
newly-added labour, wages and profit together could always
only purchase one-third of the product. The 12 hours’
labour=four yards of linen. If these four yards of
linen are transformed into money, then they exist as 12
shillings. If these 12 shillings are retransformed
into some commodity other than linen, they buy a commodity
of the value of 12 hours’ labour, of which 4 are newly-added
labour, 8 labour realised in constant capital.
Consequently, this proportion holds good generally provided
the other commodities contain the same original proportion
of labour last added and of labour realised in constant
capital as linen.
Secondly. If the daily newly-added labour=
12 hours, of these 12 hours only 4 replace
themselves—that is, the living, newly-added labour;
while 8 pay for the labour realised in the constant
capital. But who pays for the 8 hours of living labour
which are not replaced by living labour? It is
precisely the 8 hours of realised labour contained in the
constant capital that are exchanged for the 8 hours of
living labour.
There is not the slightest doubt, therefore, that the
part of the finished commodity which is bought by wages and
profit combined—which together however are nothing but
the total quantity of labour newly added to the constant
capital—is replaced in all its elements: the
newly-added labour contained in this part as well as the
quantity of labour contained in the constant capital.
Further, there is not the slightest doubt that the labour
contained in the constant capital has here received its
equivalent from the fund of living labour newly added to
it.
But now comes the difficulty. The total product
of the 12 hours of weaving labour—and this product
is absolutely different from what this weaving labour has
itself produced—is 12 yards of linen, of the value of
36 hours’ labour or 36s. But wages and profit
together, or the total labour-time of 12 hours can buy back
only 12 of these 36 hours’ labour, or of the total
product only 4 yards, not a piece more. What happens
to the other 8 yards? (Forcade, Proudhon.)
First we note that the 8 yards represent nothing but the
constant capital advanced. It has however been given a
changed form of use-value. It exists as a new product,
no longer as yarn, loom, etc., but as linen. These 8
yards of linen, just like the 4 others which have been
bought by wages and profit, contain—considered as
value—one-third labour added in the weaving process,
and two-thirds pre-existing labour materialised in the
constant capital. In the case of the 4 yards
previously discussed one-third of the newly-added labour
covered the weaving labour contained in these 4 yards, that
is, covered itself; two-thirds of the weaving labour on the
other hand covered the constant capital the 4 yards
contained. But now we have it the other way round: in
the 8 yards of linen, two-thirds of the constant capital
covers the constant capital they contain, and one-third of
the constant capital covers the newly-added labour.
What then happens to the 8 yards of linen, which have
absorbed the value of the whole constant capital which has
been maintained during the 12 hours’ weaving labour, or
which went into the production process, but is now in the
form of a product destined for direct, individual (not
industrial) consumption?
The 8 yards belong to the capitalist. Were he to
consume them himself, besides the two-thirds of a yard
representing his profit, ||276|
then he could not reproduce the constant capital contained
in the 12 hours’ weaving process; in general—with
regard to the capital contained in this 12 hours’
process—he is no longer able to function as a
capitalist. He therefore sells the 8 yards of linen,
transforming them into money to the amount of 24 shillings,
or 24 hours’ labour. But here we come to the
difficulty. To whom does he sell them?
Into whose money does he transform them? But we shall
return to this in a moment. Let us first have a look
at the further process.
When he has transformed into money, sold, converted into
the form of exchange-value, the 8 yards of linen—that
is to say, the part of the value of his product which is
equal to the constant capital he advanced—he buys
again with it commodities of the same kind (with regard to
their use-value) as those which originally composed his
constant capital. He buys yarn and looms and so
on. He divides the 24 shillings between raw materials
and means of production, in the proportions in which these
are required for the manufacture of new linen.
His constant capital is therefore, as a use-value,
replaced by new products of the same labour as that of which
it originally consisted. The capitalist has reproduced
the constant capital. This new yarn, looms, etc.,
however (on the assumption with which we began) likewise
consist of two-thirds of constant capital and one-third of
newly-added labour. While the first 4 yards of linen
(newly-added labour and constant capital) have thus been
paid for exclusively by newly-added labour, these 8 yards of
linen are replaced by their own newly-produced elements of
production, which consist partly of newly-added labour and
partly of constant capital. Hence it seems that at
least a part of the constant capital exchanges for constant
capital in another form. The replacement of the
products is real, because at the same time as the yarn is
being worked up into linen, flax is being worked up into
yarn and flax seed into flax; in the same way, while the
loom is wearing out, a new loom is being made; and
similarly, while the latter is being manufactured, new wood
and iron is being produced. The elements are produced
in one sphere of production at the same time as they are
being worked up in the others. But in all these
simultaneous processes of production, although each
of them represents a higher stage of the product, constant
capital is simultaneously being used up in varying
proportions.
The value of the finished product, the linen,
therefore resolves itself into two parts, of which one
repurchases the simultaneously produced elements of constant
capital, while the other is expended on articles of
consumption. For the sake of simplification no account
is here taken of the retransformation of part of the profit
into capital; that is, as throughout this inquiry, it is
assumed that wages plus profit, or the total of the labour
added to the constant capital, are consumed as revenue.
The only question left is: Who buys the part of the total
product with whose value the elements of constant capital
that have meanwhile been newly produced are again
bought? Who buys the 8 yards of linen? We
assume, in order to leave no loopholes, that it is a type of
linen specially intended for individual consumption, and is
not, like perhaps sail-cloth, for industrial
consumption. Here also the purely intermediary
operations of commerce—so far as they are only
mediatory—must be left completely out of
account. For example, if the 8 yards of linen were
sold to a merchant, and even if they pass through the hands
of not one but twenty merchants and are twenty times bought
and resold, then at the twentieth time they must at last be
sold by the merchant to the actual consumer, who therefore
actually pays the producer or the last, the twentieth
merchant, who as far as the consumer is concerned represents
the first merchant, that is to say, the actual
producer. These intermediary transactions postpone or,
if you like, mediate the final transaction, but they do not
explain it. The question remains exactly the same
whether it is: who buys the 8 yards of linen from the linen
manufacturer, or: ||277| who
buys them from the twentieth merchant into whose hand they
have come through a series of exchanges?
The 8 yards of linen, just as the first 4 yards, must
pass into the fund for consumption. That is to say,
they can only be paid for out of wages and profit, for these
are the only sources of revenue for the producers, who
figure here as the only consumers. The 8 yards of
linen contain 24 hours’ labour. Let us now assume
(taking 12 hours as the generally valid normal working-day)
that labourer and capitalist in two other branches spend
their whole wages and profit on linen, as labourer and
capitalist in the weaving industry have done with their
whole day’s labour (the labourer his 10 hours, the
capitalist the 2 hours’ surplus-value made on his labourer,
that is, on 10 hours). Then the linen weaver would
have sold the 8 yards, the value of his constant
capital for 12 yards would be replaced, and this value could
again be spent on the particular commodities of which the
constant capital consists, because these commodities,
yarn, loom, etc., available on the market, have been
produced at the same time as yarn and loom were being worked
up into linen. The simultaneous production of
yarn and loom as products alongside the production process
into which they enter as products but from which they do not
emerge as products, explains how it is that the part of the
value of the linen equal to the value of the material
worked up into it—[such as yarn], loom,
etc.—can be again transformed into yarn, loom,
etc. If this production of the elements of linen did
not proceed simultaneously with the production of the linen
itself, the 8 yards of linen, even when they have been sold
and transformed into money, could not be retransformed once
more from money into the constant elements of linen.*
On the other hand, however, although there may be new
yarn, new looms, etc., on the market, and therefore
production of new yarn and looms had taken place while
finished yarn and finished loom were being transformed into
linen—in spite of the simultaneous production of yarn
and loom alongside the production of the linen—the 8
yards of linen cannot be retransformed into these material
elements of constant capital for the weaving industry before
they are sold, before they are converted into money.
The continuous real production of the elements of linen,
running side by side with the production of linen itself,
therefore does not yet explain to us the reproduction of the
constant capital, before we know whence comes the fund to
buy the 8 yards of linen, to give them back the form of
money, of independent exchange-value.
In order to solve this last difficulty we have assumed
that B and C—which can stand for shoemaker and
butcher—have spent their total wages and profit, that
is, the 24 hours’ labour-time which they have at their
disposal, entirely on linen, And this gets us over our
difficulty with A, the linen weaver. His whole
product, the 12 yards of linen in which 36 hours’ labour is
materialised, has been replaced by wages and profit
alone—that is, by the whole of the labour-time newly
added to the constant capital in the spheres of production
A, B and C. All the labour-time contained in the
linen, both that already existing in its constant capital
and that newly added in the weaving process, has been
exchanged against labour-time which did not previously exist
as constant capital in any sphere of production, but which
was added simultaneously to the constant capital in the
three production spheres A, B and C, in the last stage of
production.
Though therefore it is still wrong to say that the
original value of the linen was composed of wages and profit
alone—since however it was made up of the value equal
to the total of wages and profit, 12 hours’ weaving, and the
24 hours’ labour which, independently of the weaving
process, was contained in the yarn, loom, in a word, the
constant capital—it would on the other hand be correct
to say that the equivalent of the 12 yards of linen, the
36s, for which they have been sold, is composed of wages and
profit alone; that is, not only the weaving labour but also
the labour contained in yarn and loom are replaced entirely
by newly-added labour, namely 12 hours’ labour in A, 12
hours in B and 12 hours in C.
The value of the commodity sold is itself divided ||278| into newly-added labour (wages
and profit) and pre-existing labour (value of the constant
capital); that is the value for the seller (in fact [the
value] of the commodity). On the other hand, the
purchasing value, the equivalent given by the buyer to the
seller, is made up entirely of newly-added labour, wages and
profit. But as every commodity, before it is sold, is
a commodity for sale and becomes money through a mere change
of form, so every commodity, after it has been sold, would
be made up of other component parts of value than it is
composed of as a buying commodity (as money), which is
absurd. Further: the labour performed by society for
example in one year would not only cover itself—so
that if the total quantity of commodities is divided into
two equal parts, one half of the year’s labour would form an
equivalent for the other half—but the one-third of the
labour, which forms the current year’s labour in the total
labour contained in the annual product, would cover
three-thirds of the labour, would be equal to a magnitude
three times greater than itself. This is still more
absurd.
In the above example we have shifted the difficulty,
pushed it on from A to B and C. But this has only
increased the difficulty, not made it simpler. In
the first place, in dealing with A we had the way out
that 4 yards, containing as much labour-time as had been
added to the yarn, that is, the total wages and profit in A,
were consumed in linen itself, in the product of A’s own
labour. With B and G this is not the case, since they
consume the total labour-time added by them, their total
wages and profit, in the product of sphere A, in linen, and
so not in the product of B or C. They have therefore
to sell not only the part of their product representing the
24 hours’ labour of constant capital, but also the part of
their product which represents the 12 hours’ labour newly
added to the constant capital. B must sell 36 hours’
labour, not only 24 like A. C is in same position as
B. Secondly, in order to see A’s constant
capital, to get it off his hands and transform it into
money, we need the whole newly-added labour not only of B
but also of C. Thirdly, B and C cannot sell any
part of their product to A, since the whole part of A which
constitutes revenue has already been expended in A itself by
the producers of A. Nor can they replace the constant
part of A by any part of their own product, since on the
assumption we have made their products are not production
elements for A but commodities which enter into individual
consumption. The difficulty increases at each further
step.
In order to exchange the 36 hours contained in A’s
product (that is, two-thirds or 24 hours in constant
capital, one-third or 12 hours in newly-added labour)
entirely for labour added to constant capital, A’s wages and
profit—the 12 hours’ labour added in A—one-third
of the product had to be consumed by A itself. The
other two-thirds of the total product=24 hours, represented
the value contained in the constant capital. This
value was exchanged for the total quantity of wages and
profit or newly-added labour in B and C. But in order
that B and C should be able, with the 24 hours in their
products that make up their wages [and profit], to buy
linen, they must sell these 24 hours in the form of their
own products—and in addition to replace the constant
capital they must sell 48 hours of their own products.
They have therefore to sell products of B and C to the
amount of 72 hours, in exchange for the total quantity of
profit and wages in the other spheres D, E, etc.; and this
means (with a normal 12-hour day) that 12’6 hours (=72) or
the labour added in six other spheres of production must be
realised in the products B and C; ||279| that is, the profit and wages
or the total labour added to their respective constant
capital in D, E, F, G, H, I.
In these circumstances the value of the total product of
B+C would be paid for entirely in newly-added labour, that
is, the aggregate wages and profit, in production spheres D,
E, F, G, H, I. But in these six spheres the total
product would then have to be sold (since no part of these
products would be consumed by their producers themselves, as
they have already put their whole revenue into products B
and C), and no part of it could be accounted for within
their own spheres; that is, the product of 6×36 hours’
labour=216, of which 144 represent constant capital and 72
(6×12) newly-added labour. Now in order in turn to
transform the products of D, etc., similarly into wages and
profit, that is, into newly-added labour, all the
newly-added labour in the 18 spheres
K1—K18, that is to say, the
total sum of wages and profit in these 18 spheres, must be
entirely expended on the products of spheres D, E, F, G, H,
I. These 18 spheres K1—K18
would have to sell—since they consumed none of
their products themselves, but had already spent their
entire revenue in the 6 spheres D—I—18×36 hours’
labour or 648 hours’ labour, of which 18×12 or 216 are in
newly-added labour, and 432 in labour contained in the
constant capital. In order therefore to transform this
total product of K1—K18 into the
labour added or total wages and profit in other spheres, the
labour added in the spheres L1—L54
would be required; that is to say, 12×54=648 hours’
labour. Spheres L1—L54, in
order to exchange their total product which is equal to
1,944 hours (of which 648=12×54 is the newly-added labour
and 1,296 hours’ labour is the labour contained in the
constant capital) for newly-added labour, would have to
absorb the newly-added labour of spheres M1
—M162, for 162×12=1,944; these in their
turn must absorb the newly-added labour of spheres N1
—N486 and so on.
This is the beautiful progression in infinitum
which we arrive at if all products are resolved into wages
and profit, newly-added labour—if not only the labour
added in the commodity but also its constant capital have to
be paid for by newly-added labour in another sphere of
production.
In order to convert the labour-time contained in product
A, 36 hours (one-third newly-added labour, two-thirds
constant capital), into newly-added labour, that is, to have
it paid for by wages and profit, we at first assumed that
one-third of the product (whose value is equal to the total
of wages and profit) was consumed or bought—which is
the same thing—by the producers of A themselves.
This was the progress.
1. Production sphere A.
Product=36 hours’ labour. 24 hours’ labour,
constant capital. 12 hours’ labour, newly added.
One-third of the product consumed by the shareholders of the
12 hours, wages and profit, labourer and capitalist.
There remain to be sold two-thirds of the product of A,
equivalent to the 24 hours’ labour contained in the constant
capital.
2. Production spheres
B1–B2. Product=72
hours’ labour; of which 24, labour added, 48,
constant capital. They buy with it the two-thirds of
A’s product, replacing the value of A’s constant
capital. But they have now to sell the 72 hours’
labour, of which the value of their total product
consists.
3. Production spheres
C1–C6. Product=216
hours’ labour; of which 72 added labour (wages and
profit). They buy with it the entire product of
B1—B2, But they have now to sell
216, of which 144 are constant capital.
||280| 4.
Production spheres D1–D18
Product=648 hours’ labour, 216 labour added, and
432 constant capital. With the labour added they buy
the total product of production spheres
C1–C6=216.
But they have to sell 648.
5. Production spheres
E1–E54. Product=1,944
hours’ labour; 648 labour added and 1,296 constant
capital. They buy the total product of
production spheres D1–D18.
But they have to sell 1,944.
6. Production spheres
F1–F162.
Product=5,832, of which 1,944 added labour and 3,888
constant capital. With the 1,944 they buy the product
of E1–E54. They have to
sell 5,832.
7. Production spheres
G1–G486.
In order to simplify the problem, only one working-day of
12 hours is assumed throughout, in every production sphere,
divided between capitalist and labourer. It does not
solve the problem to increase the number of working-days,
but complicates it needlessly.
So, to get a clearer picture of the law of this
series:
1. A. Product=36 hours. Constant
capital=24 hours. Total of wages and profit or
newly-added labour=12 hours. The latter is
consumed by capital and labour in the form of the product of
A itself. A’s product to be sold, equal to its
constant capital,=24 hours.
2. B1–B2.
We need here two days’ labour, that is, 2 production
spheres, to pay for A’s 24 hours.
Product=2×36, or 72 hours, of which 24 hours labour and
48 constant capital.
Product of B1 and
B2 to be sold=72 hours’ labour, no part of it
consumed in their own spheres.
6. C1–C6.
We need here 6 days’ labour, because 72=12×6, and the
total product of B1—B2 has to be
consumed by the labour added in
C1–C6. Product=6×36=216
hours’ labour, of which 72 newly added, 144 constant
capital.
18. D1–D18. We need
here 18 days’ labour because 216=12×18 so, since there
is two-thirds constant capital per day’s labour, 18×36
is the total product=648 (432 constant capital).
And so on.
The figures 1, 2, [etc.] placed at the beginning of
paragraphs signify the working-days or the different kinds
of labour in different production spheres, as we assumed one
working-day in each sphere.
Therefore: 1. A. Product=36
hours. Added labour 12 hours.
Product to be sold (constant capital)=24
hours.
Or:
1. A. Product to be sold or constant
capital=24 hours. Total product 36
hours. Labour added 12 hours. Consumed in A
itself.
2. B1–B2.
Buys with added labour=24 hours A. Constant
capital 48 hours. Total product 72
hours.
6. C1–C6.
Buys with added labour 72 hours
B1–B2 (=12×6).
Constant capital 144, total product=216.
Etc.
||281| Therefore:
1. A. Product=3 working-days (36
hours). 12 hours added labour. 24 hours
constant capital.
2. B1–2.
Product=2×3=6 working-days (72
hours). Added labour=12×2=24 hours.
Constant capital=48=2×24 hours.
6. C1–6. Product=3×6
working-days=3×72 hours=216 hours’ labour.
Added labour=6×12 hours (=72). Constant
capital=2×72=144.
18. D1–18
Product=3×3×6 working-days= 3×18
working-days (=54 working-days)=648 hours’ labour.
Added labour=12×18=216. Constant capital=432
hours’ labour.
54. E1–54
Product=3×54 working-days=162 working-days=1,944
hours’ labour. Added labour=54 working-days=648 hours’
labour; 1,296 constant capital.
162. F1–162.
Product=3×162 working-days (=486)=5,832 hours’ labour,
of which 162 working-days or 1,944 hours’ labour are added
labour, and 3,888 constant capital.
486. G1–486.
Product=3×486 working-days, of which 486
working-days or 5,832 hours’ labour are labour added, and
11,664 constant capital.
Etc.
Here we would already have the goodly total of
1+2+6+18+54+162+486 different working-days in different
production spheres= 729 different production spheres, which
already implies a considerably ramified society.
In order to sell the total product of A (where only 12
hours’ labour=1 working-day is added to the constant capital
of 2 working-days, and wages and profit consume their own
product), that is, only the 24 hours’ constant
capital—and moreover to sell it again entirely for
newly-added labour, for wages and profit—we need 2
working-days in B1 and B2 which
however require a constant capital of 4 working-days, so
that the total product of B1–2=6
working-days. These must be all sold, because
from here on it is assumed that each subsequent
sphere does not consume any of its own product, but spends
its profit and wages only on the product of the preceding
spheres. In order to replace these 6 working-days of
the product of B1–2, 6 working-days
are necessary, which however presuppose a constant capital
of 12 working-days. The total product of
C1–6 therefore=18 working-days.
In order to replace these by labour, 18 working-days
D1–18 are necessary, which however presuppose a
constant capital of 36 working-days; so that the product=54
working-days. To replace these, 54 working-days are
needed, E1–54, which presuppose a constant
capital of 108. Product= 162 working-days.
Finally, to replace these, 162 working-days are needed,
which however presuppose a constant capital of 324
working-days; that is, total product 486 working-days.
This is F1–162. Finally, to
replace this product of F1–162, we need 486
working-days (G1–486), which however presuppose a
constant capital of 972 working-days. So the total
product of G1–486=972+486=1,458 working-days.
But now let us assume that with sphere G we reach an end
to the shifting; and ||282| our
progression would soon bring us to an end in any
society. How would the matter stand then? We
have a product comprising 1,458 working-days of which 486
newly-added labour and 972 labour realised in constant
capital. The 486 working-days can then be spent in the
previous sphere F1–162. But what is to buy
the 972 working-days contained in the constant
capital? Beyond G486 there is no new sphere
of production and therefore no new sphere of exchange.
In the spheres that lie behind it, except for
F1–162, there is nothing to be ex-changed.
Moreover, G1–486 has expended all its wages and
profit up to the last centime in F1–162.
Therefore the 972 working-days realised in the total product
of G1–486, which are the equivalent of the
constant capital it contains, remain unsaleable. It
has thus not helped us at all to shift through nearly 800
branches of production the difficulty of the 8 yards of
linen of sphere A, or the 24 hours’ labour, the 2
working-days, representing in its product the value of the
constant capital.
It is no use imagining that the reckoning would have a
different result if perhaps A did not spend its whole wages
and profits in linen, but spent a part of it on the product
of B and C. The limit of the outlays, the hours of
labour added which are contained in A, B, C, can always only
command a labour-time equal to themselves. If they buy
more of one product, then they buy less of the other.
It would only confuse the reckoning, but in no way alter
result.
What then is to be done? In the above calculation
we find:
|
|
Working days
|
Labour added
|
constant capital
|
|
A Product=
|
3
|
1
|
2
|
|
B " =
|
6
|
2
|
4
|
|
C " =
|
18
|
6
|
12
|
|
D " =
|
54
|
18
|
36
|
|
E " =
|
162
|
54
|
108
|
|
F " =
|
486
|
162
|
324
|
|
Total:
|
729
|
243
|
486
|
(one-third of A’s product consumed by A itself)
If the last 324 working-days ([F’s] constant capital) in
this account were equal to the constant capital which the
farmer replaces for himself, subtracts from his product and
returns to the land—and so has not to be paid for by
new labour—then the account would balance. The
riddle, however, would only he solved because a part of the
constant capital replaces itself.
In fact therefore we have had consumed 243 working-days,
corresponding to the newly-added labour, The value of the
final product, 486 working-days, is equal to the value of
the total constant capital contained in A—F, which is
also 486 working-days. In order to account for this,
we assume 486 days of new labour in G, from which however
the only satisfaction we get is that instead of having to
account for a constant capital of 486 days, ||283| we have to account for a
constant capital of 972 working-days in G’s product, which
is equal to 1,458 working-days (972 constant capital+486
labour). If now we want to get out of our difficulty
by supposing that G works without constant capital, so that
the product is only equal to the 486 days of newly added
labour, the account would of course be cleared; but we would
have solved the problem of who pays for the part of the
value contained in the product which forms the constant
capital, by assuming a case in which the constant capital
equals nil and hence forms no part of the value of the
product.
In order to sell A’s total product entirely for
newly-added labour, in order to resolve it into profit and
wages, the whole of the labour added in A, B and C
must be spent on the labour realised in product
A. Likewise to sell the total product of B+C, all
labour newly added in D1—D18 is
needed. Similarly, to buy the total product of
D1—D18, all labour added in
E1–54. To buy the total product of
E1–54, all labour added in
F1-162. And finally, Ito buy]
the total product of F1–162, the total
labour-time added in G1–486. At the end, in
these 486 production spheres represented by
G1–486, the total labour-time added is equal to
the total product of the 162 spheres F, and this total
product which is replaced by labour is as large as the
constant capital in A, B1–2, C1–6,
D1–18, E1–54, F1–162, But
the constant capital of sphere G, twice the size of the
constant capital used in A —F162, is not
replaced and cannot be replaced.
In fact we have found, on our assumption that in all
production spheres the proportion of the newly-added to the
pre-existing labour is 1:2, that always twice [as many]
new production spheres [as all preceding ones taken
together] must use all their new labour to buy the product
of the preceding spheres —the labour added of A and
B1–2, to buy A’s total product; the labour added
of 18 D or D1–18 (2×9), to buy the product of
C1–6, and so on. In short, that twice as
much newly-added labour as the product itself contains is
always needed, so that there must be twice as much
newly-added labour in the last production sphere G as there
actually is, in order to buy the total product. In a
word, we find in the result of G what was already there in
our starting-point A, that the newly-added labour cannot buy
any greater quantity of its own product than it itself
amounts to and that it cannot buy the labour
pre-existing in the constant capital.
It is therefore impossible for the value of the revenue
to cover the value of the total product. But since,
apart from the revenue, no fund exists from which this
product sold by producers to (individual) consumers can be
paid for, it is impossible for the value of the total
product, minus the value of the revenue, ever to be sold,
paid for or (individually) consumed. On the other hand
it is necessary for every product to be sold and paid for at
its price (on the assumption that price is here equal to
value).
For that matter, it might have been foreseen from the
outset that introducing the acts of exchange, sales and
purchases between different commodities or the products of
different production spheres, would not bring us a step
forward. In A, the first commodity, the linen, we had
one-third or ||283a| 12 hours
of newly-added labour and 2×12 or 24 hours of
pre-existing labour in the [constant] capital. Wages
and profit could only repurchase that part of the product of
commodity A—and therefore also of any equivalent of
commodity A in any other product—which is equal to 12
hours’ labour. They could not buy back their own
constant capital of 24 hours, hence they could not
repurchase the equivalent of this constant capital in any
other commodity either.
It is possible for the relation of added labour to
constant capital to be different in commodity B. But
however different the proportion may be of constant capital
to newly-added labour in the various spheres of production,
we can calculate the average, and so say that in the product
of the whole society or of the whole capitalist class, in
the total product of capital, the newly-added labour is
equal to a, the labour pre-existing as constant
capital is equal to b. In other words, the
proportion of 1 : 2 which we assumed in A, the linen, is
only a symbolical expression of a : b and is not
intended to imply anything more than that a definite and
definable relation of some kind or other exists between
these two elements—the living labour added in the
current year or in any other period selected, and the past
labour preexisting as constant capital. If the 12
hours added to the yarn buy not only linen, but for example
linen only to the amount of 4 hours, then they could buy
some other product to the amount of 8 hours, but they could
never buy more than 12 hours altogether; and if they buy
another product to the value of 8 hours, then 32 hours’
linen in all must be sold by A. The example A
therefore holds good for the total capital of the entire
society, and though the problem can be complicated by
introducing the exchange of different commodities, the
problem itself remains unchanged.
Let us assume that A is the total product of society:
then one-third of this total product can be bought by the
producers for their own consumption, bought and paid for
with the total of their wages and their profits, equal to
the total newly-added labour, the amount of their aggregate
revenue. They have no fund with which to pay for, to
buy and consume, the other two-thirds. Just as the
newly-added labour, the one-third which consists of profit
and wages, is itself covered by its own product, or
withdraws only that part of the value of the product which
contains one-third of the total labour, newly-added labour
or its equivalent, so must the two-thirds of pre-existing
labour be covered by its own product. That is to say,
the constant capital remains equal to itself and replaces
itself out of that part of the value which represents the
constant capital in the total product. The exchange
between various commodities, the series of purchases and
sales between different spheres of production, brings about
a change in form only in the sense that the constant
capitals in the various production spheres mutually replace
each other in the proportion in which they were originally
contained in them.
We must now examine this more closely. |283a||
[(b) Impossibility of Replacing
the Whole Constant Capital of society by Means of Exchange
between the Producers of Articles of Consumption and the
Producers of Means of Production]
||283b| This view—that
the annual product of the country is divided into wages and
profits (rents, interest, etc., included in the
latter)—is expressed by Adam Smith, Book II, Chapter
II, in examining the circulation of money and the credit
system (on this, compare later Tooke), where he
says:
“The circulation of every country may be considered
as divided into two different branches; the circulation of
the dealers with one another, and the circulation between
the dealers and the consumers.” (Garnier explains that
by dealers Adam Smith here means “all traders,
manufacturers, artisans, and so on; in a word, the agents of
the trade and industry of a country”).
“Though the same pieces of money, whether paper or
metal, may be employed sometimes in the one circulation and
sometimes in the other; yet as both are constantly going on
at the same time, each requires a certain stock of
money, of one kind or another, to carry it on, The value
of the goods circulated between the different dealers never
can exceed the value of those circulated between the dealers
and the consumers; whatever is bought by the dealers being
ultimately destined to be sold to the consumers” (
[Wealth of Nations, O.U.P. edition, Vol. I,
pp. 358–59], [Garnier] t. II, b. II, ch. II,
pp. 292–93).
To this, as well as Tooke, we must come back later.
Let us return to our example. The day’s product of
A, a linen weaving factory, was equal to 12 yards=36s.=36
hours’ labour, of which 12 are newly-added labour divisible
into wages and profit, and 24 hours or 2 days equal to the
value of the constant capital, which now however, instead of
the old form of yarn and loom, exists in the form of linen,
but in a quantity of linen equal to 24 hours=24s, In this
there is the same quantity of labour as in the yarn and loom
which it replaces, and with it therefore the same quantity
of yarn and loom can be bought again (on the assumption that
the value of yarn and loom has remained the same, that the
productivity of labour in these branches of industry has not
altered). The spinner and the loom maker must sell the
whole of their year’s or their day’s product (which for our
purpose here is the same thing) to the weaver, for he is the
only person for whom their commodity has use-value, He is
their only consumer.
But if the weaver’s constant capital is equal to 2
working-days (his daily consumed constant capital), then for
one working-day of the weaver there are two working-days of
spinner and machine maker—2 working-days which may
themselves be divided in very different proportions into
labour added and constant capital. But the total daily
product of spinner and machine maker together (assuming that
the machine maker makes only looms)—constant capital
and added labour together— cannot amount to more than
2 days’ labour while that of the weaver, because of the 12
hours’ labour newly added by him, amounts to 3
working-days. It is possible that spinner and machine
maker consume as much living labour-time as the
weaver. Then the labour-time contained in their
constant capital must be smaller. However that may be,
they can in no case use the same quantity of labour
(summa summarum) materialised and living, as the
weaver. It would be possible for the weaver to use
proportionately less living labour-time than the spinner
(the latter for example would certainly use less than the
flax-grower); in that case the excess of his constant
capital over the variable part of his capital must be so
much greater.
||284| The weaver’s constant
capital thus replaces the entire capital of the spinner and
the loom maker, not only their own constant capital but the
labour newly added in the spinning process and in the
manufacture of machines. The new constant capital
therefore here replaces other constant capitals completely
and, besides that, the total amount of the labour newly
added to them. By the sale of their commodities to the
weaver, spinner and loom maker have not only replaced their
constant capital, but have received payment for their
newly-added labour. His constant capital replaces for
them their own constant capital and realises their revenue
(wages and profit together). In so far as the weaver’s
constant capital replaces for them only their own constant
capital, which they have handed over to him in the forms of
yarn and loom, constant capital in one form has only been
exchanged for constant capital in another form. There
has in fact been no change of value in the constant
capital.
Let us now go further back. The spinner’s product
is divided into two parts, flax, spindles, coal, etc., in a
word his constant capital, and the newly-added labour;
similarly for the machine maker’s total product. When
the spinner replaces his constant capital, he pays not only
for the total capital of the spindle manufacturer, etc., but
also for that of the flax-grower. His constant capital
pays for the one part of their constant capital plus the
labour added. Then as for the flax-grower, his
constant capital—after deducting agricultural
implements, etc.—consists of seed, manure, etc.
We will assume—as in agriculture must always be the
case, more or less directly—that this part of the
farmer’s constant capital is an annual deduction from his
own product, which he must return each year, out of his own
product, to the land —that is, to production
itself. Here we find a part of the constant capital
which replaces itself and is never sold, and therefore also
is never paid for, and is never consumed, never enters into
individual consumption. Seed, etc., are the equivalent
of so much labour-time. The value of the seed, etc.,
enters into the value of the total product; but the same
value, because it is the same amount of products (on the
assumption that the productivity of labour has remained the
same), is also deducted again from the total product and
returned to production, not entering into circulation.
Here we have at least one part of the constant
capital—that which can be regarded as the raw material
of agriculture—which replaces itself. Here
therefore is an important [branch I—the most important
branch in size and in the amount of capital it
contains—of the annual production in which an
important part of the constant capital, the part which
consists of raw materials (apart from artificial
fertilisers, etc.), replaces itself and does not enter into
circulation, and is therefore not replaced by any form of
revenue. Therefore the spinner has not got to repay to
the flax-grower this part of the constant capital (the part
of the constant capital which is replaced and paid for by
the flax-grower himself); nor has the weaver to pay for this
to the spinner, nor the buyer of the linen to the
weaver.
Let us assume that all those who directly or indirectly
participated in the production of the 12 yards of linen (=36
shillings=3 working-days or 36 hours’ labour) were paid in
linen itself, It is clear in the first place that the
producers of the elements of the linen, of the constant
capital of the linen, could not consume their own
product, since these products are produced for
production and do not enter into immediate ||285| consumption. They must
therefore spend their wages and profits on linen—on
the product which finally enters into individual
consumption. What they do not consume in linen, they
must consume in some other consumable product exchanged for
linen. As much (in value) linen is therefore consumed
by others as they consume in other consumable products
instead of linen, It is the same as if they had themselves
consumed it in linen, since as much as they consume in
another product is consumed in linen by the producers of
other products. The whole problem must therefore be
cleared up, without any reference to exchange, by
considering how the 12 yards of linen are divided up between
all the producers who have taken part in its production or
in the production of its elements.
Spinner and loom maker, who we assume also makes spinning
machinery, have added one-third in labour, their constant
capital amounting to two-thirds of yarn and loom, Of the 8
yards of linen (or 24 hours) or 24s., which replace their
total product, they can consequently consume
8/3 [yards], that is,
22/3 [yards] of linen or 8 hours’
labour or 8s. Therefore
51/3yards or 16 hours’ labour remain
to be accounted for.
51/3 yards or 16 hours’ labour
represent the constant capital of the spinner and of the
loom maker. Let us assume that of the spinner’s
constant capital two-thirds is raw material and is spent on
flax; then the flax-grower can consume these two-thirds
entirely in linen, since his constant capital <but here
we take the wear and tear of his implements of labour, etc.,
as equal to nil// is not put into circulation at all; he
has already deducted it and reserved it for
reproduction. He can therefore buy two-thirds of the
51/3 yards of linen or 16
hours’ labour, which is equal to 3 5/9
yards, or 102/3 hours’ labour.
So there remains to be accounted for only
51/3 minus 35/9
yards, or 16 –102/3 hours’
labour, that is, 17/9 yards or
51/3 hours’ labour. These
17/9 yards or
51/3 hours’ labour resolve
themselves into the constant capital of the loom maker and
the total product of the spinning machinery maker, who are
assumed to be one person.
||286| Therefore once
again:
|
Weaver
|
Total product
|
constant capital
|
Weaving labour added
|
consumption
|
|
12 yards linen (36s.) (36 hours’ labour)
|
8 yards (24 hours) (24s.)
|
12 hours
|
12 hours 12s.=4 yards
|
Of the weaver’s
constant capital let
3/4=yarn and 1/4=loom
(means of production in
general). The weaver thus
pays 6 yards or 18 hours to the
spinner and 2 yards or 6 hours to
the machine maker, etc.
|
Spinner
|
Machine maker
|
|
Total Product
|
Constant capital
|
Spinning labour added
|
Consumption
|
Total Product
|
Constant capital
|
labour added
|
Consumption
|
|
6 yards
|
4 yards
|
2 yards
|
2 yards
|
2 yards
|
4/3 yards
|
2/3 yard
|
2/3 yard
|
|
18s.
|
12s.
|
6s.
|
6s.
|
6s.
|
|
|
|
|
18 hours
|
12 hours
|
6 hours
|
|
6 hours
|
|
|
|
Of the 8 which replace the weaver’s constant capital,
therefore, 2 yards(=6s.=6 hours) are consumed by the spinner
2/3 of a yard (2s.=2 hour’s
labour) by the maker of looms, etc.
What remains for us to account for is thus
8–22/3yards=51/3
yards (=16s.=16 hours’ labour). These remaining
51/3 yards (=16s.=16 hours’
labour) are resolved as follows: We assume that in the 4
yards which represent the spinner’s constant capital, that
is, the elements of his yarn, 3/4 is
the equivalent of the flax, and 1/4 of
the spinning machine. The elements of the ||287| spinning machine will be
reckoned in further on with the constant capital of the loom
maker. The two are assumed to be the same person.
Of the 4 yards which replace the spinner’s constant
capital, 3/4=3 yards are therefore
resolved into flax. A considerable part of the
constant capital in the flax, used in its production, has
not however to be replaced; for the flax-grower has already
returned it to the land in the form of seed, manure,
fodder, cattle, etc. Therefore in the part of his
product that he sells, only the wear and tear of his
instruments of labour, etc., has to be included as constant
capital. Here we must rate the labour added at
two-thirds at least and the constant capital to be replaced
at one-third at the most.
Thus:
|
|
Total product
|
Constant capital
|
Farm labour
|
Consumable
|
|
Flax
|
3 yards
|
1 yard
|
2 yards
|
2 yards
|
|
9s.
|
3s.
|
6s.
|
6s.
|
|
9 hours’ labour
|
3 hours’ labour
|
6 hours’ labour
|
6 hours’ labour
|
Thus what we have still to account for is:
1 yard (3s., 3 hours’ labour), equal to the flax-grower’s
constant capital;
11/3 yards (4s., 4 hours’ labour),
equal to the constant capital for the loom;
finally 1 yard (3s., 3 hours’ labour) for the total
product contained in the spinning machine.
First what the machine maker can consume for the spinning
machine has to be deducted:
|
|
Total product
|
Constant capital
|
Engineering labour added
|
Consumable
|
|
Spinning machine
|
1 yard 3s. 3 hours’ labour
|
2/3 yard 2s. 2 hours’ labour
|
1/3 yard 1s. 1 hour’s labour
|
1/3 yard 1s. 1hour’s labour
|
Moreover, the agricultural machinery, the
flax-grower’s constant capital, has to be divided into its
consumable and other parts:
|
|
Total product
|
Constant capital
|
Engineering labour
|
Consumable
|
|
Agricultural machine
|
1 yard 3s. 3 hours’ labour
|
2/3 yard 2s. 2 hours’ labour
|
1/3 yard 1s. 1 hour’s labour
|
1/3 yard 1s. 1hour’s labour
|
If therefore we put together that part of the total
product which represents machinery, it amounts to 2 yards
for the loom, I yard for the spinning machine, 1yard for the
agricultural machine, 4 yards in all (12s., 12 hours’ labour
or 1/3 of the total product, 12 yards
of linen), Of these 4 yards, the machine maker can consume
2/3 of a yard for the loom,
1/3 for the spinning machine, ditto
1/3 for the agricultural machinery, in
all 11/3 yards.
22/3 yards are left, that is,
4/3 constant capital for the loom,
2/3 for the spinning machine, and
2/3 for the agricultural machine=
8/3=22/3 yards
(=8s.=8 hours’ labour). This therefore forms the
machine builder’s constant capital which has to be
replaced. Of what now does this constant capital
consist? On the one hand, of its raw material, iron,
wood, leather belting; and so on. But on the other
hand, of that part of the machine he works with (which he
may have built himself) which he uses in building machines
and which gets worn out. Let us assume that the raw
material amounts to two-thirds of the constant capital, and
the machine-building machine to one-third. This latter
one-third is to be examined later. The two-thirds for
wood and iron ||288| amount to
two-thirds of the 22/3 yards (or
22/3 yards=8/3
yards=24/9 yards),
1/3 of this=8/9;
therefore
2/3=16/9
yards.
Let us then assume that here [in the production of wood
and iron] machinery is one-third and added labour two-thirds
(since there is nothing for raw material); then two-thirds
of the 16/9 yards replace labour
added, and one-third machinery. Thus what is left
again for machinery is 16/27
yard. The constant capital of the producers of iron
and wood, in short, of the extractive industry, consists
only of instruments of production—which we here call
machinery in general — and not of raw material.
Therefore 8/9 yard for the
machine-building machine, 16/27 yard
for the machinery used by the producers of iron and
wood. So 24/27 +
16/27 = 40/27 =
113/27 yards. This therefore,
has in turn to be put down to the machine builder’s
account.
Machinery. 24/27 of a
yard forms the replacement for the machine building
machine. But this in turn is divided into raw material
(iron, wood, etc.), the part of, the machinery used up in
building the machine-building machine, and labour
added. So, if each of the elements is one-third of the
total, 8/27 of a yard would go for the
labour added, and 16/27 of a yard
would be left for the constant capital to be replaced
in the machine-building machine, that is,
8/27 of a yard for raw material and
8/27 of a yard to replace the part of
the value representing the machinery used up in working up
this raw material (together 16/27 of a
yard).
On the other hand the 16/27 of a
yard, which replace the iron and wood producers’ machinery,
likewise consist of raw material, machinery and labour
added. This last is equal to one-third, that is, equal
to 16/27×3 =
16/81 of a yard, and the constant
capital in this part of the machinery consists of
32/81 of a yard, of which
16/81 is for the raw material,
16/81 to make good the wear and tear
of the machinery.
Thus there remains in the machine builder’s hands, as
constant capital to make good the wear and tear of his
machinery, 8/27 of a yard, with which
he replaces the wear and tear of his machine-building
machine, and 16/81 of a yard for the
wear and tear of the iron and wood producers’ machinery that
has to be replaced.
Apart from this he had, for the replacement of his
constant capital, 8/27 of a yard for
the raw material (contained in the machine-building machine)
and 16/81 for the raw material
contained in the iron and wood producers’ machines. Of
this, however, another two-thirds consist of labour added
and one-third of machinery used up. Therefore
two-thirds of the
24/81+16/81=49/81
is paid for labour, that is,
(262/3)/81. Of this
raw material, ||289|
(131/3)/81 is
again left to replace machinery. This
(131/3)/81 of a
yard therefore comes back to the machinery manufacturer.
Now there would again be in the hands of the latter:
8/27 of a yard for the replacement of
the wear and tear of the machine-building machine,
16/81 to replace the wear and tear of
the iron, etc., producers’ machinery, and
(131/3)/81 for the part of
the value to replace the machinery in the raw material,
iron, etc.
And so we might go on calculating to infinity, with ever
smaller fractions, but never able to divide the 12 yards of
linen without a remainder.
Let us briefly resume the course of our inquiry up to
this point.
We said at the start that in the different spheres of
production there are different proportions as between the
newly-added labour (which partly replaces the variable
capital laid out in wages, and partly forms the profit, the
unpaid surplus-labour) and the constant capital to which
this labour is added. We could however assume an
average proportion, for example, a—labour
added, b—constant capital; or we could assume
that the proportion of the latter to the former is 2 : 1 =
2/3 :
1/3. If this holds
good in each production sphere of capital, we went on, then
the labour added (wages and profit together) in one
particular sphere of production can always only buy
one-third of its own product, since wages and profit
together form only one-third of the total labour-time
realised in the product. But the other two-thirds of
the product, which replace his constant capital, also belong
to the capitalist. If he wishes to continue
production, however, he must replace his constant capital,
that is, retransform two-thirds of his product into constant
capital. To do this, he must sell the two-thirds.
But to whom? We have already deducted the one-third
of the product that can be bought with the total of wages
and profit. If this total represents 1 day’s labour or
12 hours, then the part of the product whose value is equal
to the constant capital represents 2 days’ labour or 24
hours. So we assume that [the second] one-third of the
product is bought by profit and wages in another branch of
production, and the last one-third is bought in turn by
profit and wages in a third branch of production. But
then we have exchanged the constant capital of Product I for
wages and profit exclusively, that is, for newly-added
labour, by making the whole labour added to Products
II and III be consumed in the form of Product I. Of
the six working-days contained in Products II and III, in
both newly-added and pre-existing labour, none has been
replaced or bought by the labour contained in either Product
I or in Products II and III. So we had in turn to make
the producers of other products spend all their labour added
on Products II and III, and so on. Finally we had to
come to a halt at a Product X, in which the labour added was
as much as the constant capital of all the earlier products;
but its own constant capital two-thirds larger, would be
unsaleable. Thus we have not come one step forward
with the problem. In the case of Product X, as in the
case of Product I, the question remains: to whom is the part
of the product sold which replaces the constant
capital? Or is the one-third new labour added to the
product to replace the one-third new labour plus the
two-thirds pre-existing labour contained in the
product? Is one-third to be equal to three-thirds?
So from this it became clear that the shifting of the
difficulty from Product I to Product II, etc., in a word,
merely bringing in to the problem the exchange of
commodities, was of no avail.
||290| So we had to pose the
question in a different way.
We assumed that the twelve yards of linen (=36s.=36
hours’ labour) were a product containing 12 hours’ labour or
1 working-day of the weaver (necessary labour and
surplus-labour together, that is, the equivalent of the
total of profit and wages), while two-thirds represented the
value of the constant capital, yarn and machinery, etc.,
contained in the linen. We further assumed, in order
to eliminate any recourse to quibbles and intermediate
transactions, that the linen was of a kind destined only for
individual consumption, and therefore could not serve in
turn as raw material for some new product. By this we
assumed that it was a product that had to be paid for from
wages and pro fit, that it must be exchanged for
revenue. And finally to simplify things we assume that
no part of the profit is reconverted into capital, but that
the whole profit is spent as revenue.
As for the first 4 yards, the first one-third of
the product, equal to the 12 hours’ labour added by the
weaver, we soon settled that. They are resolved into
wages and profit; their value is the same as the value of
the weaver’s total profit and wages. They are
therefore consumed by him and his workmen themselves.
This solution for the four yards is unconditionally
valid. For if profit fit and wages are consumed not in
linen but in some other product, this can only happen
because the producers of some other product consume the part
of it which is consumable by them in linen and not in their
own product. If of the 4 yards of linen, for example,
only 1 is consumed by the linen weaver himself, and 3 yards
in meat, bread, and cloth, then just the same as before, the
value of the 4 yards of linen is consumed by the linen
weavers themselves; only they have consumed
3/4 of this value in the
form of other commodities, while the producers of these
other commodities have consumed in the form of linen the
meat, bread and cloth consumable by them as wages and
profit. <Here, as throughout this inquiry, it is of
course always assumed that the commodity is sold and sold at
its value.//
But now comes the real problem. The weaver’s
constant capital exists now in the form of 8 yards of linen
(=24 hours’ labour=24s.); if he wants to continue
production, he must transform these 8 yards of linen into
money, 24s., and with this 24s. he must buy newly-produced
commodities, to be found on the market, of which his
constant capital consists, To simplify the problem, let it
be assumed that he does not replace his machinery within a
period of years, but that every day, out of the proceeds of
his product, he has to replace in kind the part of the
machinery that is equal to the part of the value of the
machinery worn out each day. He must replace the part
of the product that is equal to the value of the constant
capital it contains with the elements of this constant
capital, or the material conditions of production for his
labour. On the other hand, his prod-not, the linen,
does not enter any other sphere of production as a condition
of production, but passes into individual consumption.
He can therefore replace the part of his product which
represents his constant capital only by exchanging it for
revenue or for the part of the value of the product of other
producers which consists of wages and profit, consequently
of newly-added labour. The problem is thus posed in
its correct form. The question is only: in what
conditions can it be solved?
A difficulty that arose in our first presentation of it
has now been partly overcome. Although in each sphere
of production the labour added is equal to one-third, the
constant capital— on the assumption made—to
two-thirds, this one-third labour added—or the total
value of the revenue (of wages and profit; as already noted
earlier, no account is here taken of the part of the profit
which is again transformed into capital) —is only
consumable in the products of the branches of industry which
work directly for individual consumption. The products
of all other branches of industry can only be consumed as
capital, can only enter into industrial consumption.
||291| The constant capital
represented by the 8 yards (=24 hours=24s.) consists of yarn
(raw material) and machinery. Let us say
3/4 raw material and
1/4 machinery. (Under raw
material we can here also reckon all auxiliary materials
such as oil, coal, etc. But for the sake of simplicity
it is better to disregard these.) The yarn would cost
18s. or 18 hours’ labour=6 yards; the machinery 6s.=6 hours’
labour=2 yards.
If therefore the
weaver uses his 8 yards to buy yarn for 6 yards and machinery for 2 yards, with
his constant capital of 8 yards he has covered not only the constant capital of
the spinner and the loom manufacturer, but also the labour newly added by them.
A part of what appears as the weaver’s constant capital therefore represents
newly-added labour on the part of the spinner and the machinery manufacturer,
and consequently is for them not capital but revenue.
Of the 6 yards of linen, the spinner can himself consume
one-third=2 yards (equal to the labour newly added, profit
and wages). But 4 yards replace for him only flax and
machinery. Say 3 yards for flax, 1 yard for
machinery. He must pass on the payment for
these. Of the 2 yards the machinery manufacturer can
himself consume two-thirds of a yard; but
4/3 only replace for him iron and
wood, in a word, raw material, and the machinery used for
building the machine. Say, of the
4/3 yards, 1 yard for raw material and
1/3 of a yard for machinery.
Of the 12 yards of linen, we have consumed up to this
point:
first, 4 for the weaver, second, 2 for the spinner, and
third, 2/3 for the machine builder;
together 62/3, So
51/3 remain to be accounted for.
And these 51/3 are distributed as
follows:
The spinner has to replace, out of the value of 4 yards,
3 for flax, 1 for machinery.
The machinery manufacturer has to replace, out of the
value of 4/3 yards, 1 for iron, etc.,
1/3 for machinery (what he has himself
used up in building the machines).
The 3 yards for flax are therefore paid by the spinner to
the flax-grower. In the case of the latter, however,
there is the special feature that a part of his constant
capital (namely, seed, manure, etc., in short all products
of the land which he returns to the land) does not enter at
all into circulation, and consequently does not need to be
deducted from the product that he sells; this product on the
contrary expresses only added labour, and consequently
consists entirely of wages and profit (except for the part
which replaces machinery, artificial fertilisers,
etc.). So let us assume as before that one-third of
the total product is labour added; then 1 yard of the 3
would come under this category. Taking as before for
the 2 other yards that one-quarter is for machinery, that
would be 2/4 yard. The other
6/4, on the other hand, would also be
for labour added, since in this part of the flax-grower’s
product there is no constant capital, which he has already
deducted earlier. So 2 2/4 yards
would go for the flax-grower’s wages and profit. What
remains is 2/4 yard for replacement of
machinery. <Thus of the 5 1/3
yards which we had to consume, 22/4
have gone (5 4/12 – 2
6/12 =2 10/12 =
2 5/6 yards).// This
last 2/4 of a yard would therefore be
used by the flax-grower to buy machinery.
The machinery manufacturer’s account would now stand like
this: of the constant capital for the loom he had laid out 1
yard for iron, etc.; 1/3 of a yard for
the wear and tear of the machine-building machine in
producing the loom.
In addition, however, the spinner buys from the machinery
manufacturer spinning machinery for I yard, and the
flax-grower buys from him agricultural implements for
2/4 of a yard. Of these
6/4 yards, the machinery manufacturer
has to consume 1/3 for labour added,
and to expend 2/3 for the constant
capital laid out in the spinning machine and the
agricultural implements. 6/4
however=18/12 So the machine builder
would have 6/12 of a yard ||292| again for consumption,
12/12 or 1 yard to convert into
constant capital. (Of the 2 5/6
yards not yet consumed, 1/2 yard
therefore has gone. 14/6 yards
are left, or 2 2/6, or 2
1/3 yards.)
Of this yard the machinery manufacturer would have to
expend 3/4 on raw material, iron and
wood, etc., 1/4 to pay to himself for
the replacement of the machine-building machine.
So the total account would now stand like this:
|
Machinery manufacturer’s constant capital
|
For the loom: 1 yard for raw material,
1/2 of a yard for wear and tear of
his own machinery.
|
|
For spinning machine and
agricultural implements: 3/4
of a yard for raw material, 1/4 of a
yard for wear and tear of his own machinery.
|
|
Hence equal to 1 3/4 yards for
raw material,
1/3+1/4 for
wear and tear of his own machinery.
|
The 13/4 yards or
7/4 yards therefore buy from the iron
and wood manufacturers iron and wood to this value.
7/4=21/12.
But here a new question arises, In the case of the
flax-grower, the raw material which is part of the constant
capital did not enter into the product he sold, because it
had already been deducted. In this case we must
resolve the total product into labour added and
machinery. If we even assumed that here the added
labour was equal to two-thirds of the product, the machinery
one-third, 14/12 would be
consumable. And 7/12 would
remain as constant capital for machinery. This
7/12 would come back to the machinery
manufacturer.
What was left of the 12 yards would then amount to
1/3+1/4 yard,
which the machinery manufacturer would have to pay to
himself for the wear and tear of his own machinery, and
7/12 of a yard, which the iron and
wood manufacturers return to him for machinery. Hence
1/3+1/4 =
4/12+3/12 =
7/12. In addition, the
7/12 returned by the iron and wood
manufacturers. (Together 14/12
=1 2/12 =1
1/6.)
The iron and wood manufacturers’ machinery and
instruments of labour must be bought from the machinery
manufacturer, just as those of the weaver, the spinner and
the flax-grower. Thus of the
7/12 of a yard, let one-third, equal
to 2/12, be labour added. This
2/12 of a yard can therefore also be
consumed. The remaining 5/12
(actually 4/12 and
(2/3)/12, but there’s no need to be so
exact) represents the constant capital contained in the
woodcutter’s axe and the iron manufacturer’s machinery,
3/4 pig-iron, wood, etc., and
1/4 machinery used up. (Of the
14/12 yards
12/12 is left, or 1 yard=3 hours’
labour=3s.) Therefore of the 1 yard,
1/4 of a yard for replacement of the
machine-building machine and 3/4 of a
yard for wood, iron, etc.
Hence for the wear and tear of the machine-building
machine 7/12 of a yard
+1/4 of a yard =
7/12 + 3/12 =
10/12 of a yard. On the other
hand it would now be quite pointless again to resolve the
3/4 of a yard for wood and iron into
their component parts and to return a part of it once more
to the machinery manufacturer, who would return a part of it
again to the iron ||293| and
wood manufacturers. Something would always be left
over and a progression to infinity.
[(c) Exchange of Capital for
Capital between the Producers of Means of Production.
Annual Product of Labour and the Product of Labour Newly
Added Annually]
Let us then take the problem as it now stands.
10/12 or 5/6
of a yard in value has to be replaced by the machinery
manufacturer himself in the worn-out machine.
3/4 or 9/12 of a
yard represents an equal amount of value in wood and
iron. The machinery manufacturer has given it to the
iron and wood manufacturers, in order to replace his raw
material. We have in hand the residuum of
19/12 or 1 7/12
yards.
The balance of 5/6 of a yard which
the machinery manufacturer keeps for making good his wear
and tear = 15/6,
shillings=15/6 hours’ labour, that is,
2 3/6, or 2
1/2s., or 2 1/2
hours’ labour. The machinery manufacturer cannot
accept any linen for this value; he would himself have to
sell it again, in order with the 2s. 6d. to make good the
wear and tear of his machinery, in a word, to make new
machine-building machines. But to whom is he to sell
it? To producers of other products (other than iron
and wood)? But these producers have consumed in linen
all that they were able to consume in this form. Only
the 4 yards which constitute the weaver’s wages and profit
are exchangeable for other products (apart from those
contained in the constant capital or the labour of which
this capital consists). And we have already accounted
for these 4 yards. Or is he to pay workers with
it? But we have already deducted from his products all
that labour has added to them, and we have taken it as all
consumed in linen,
To put the matter in another way:
|
The weaver has to replace for machinery
|
2 yards | = 6s. | = 6 hours’ labour
|
|
The spinner
|
1 " | =
3 " | = 3
"
|
|
The
flax-grower
|
2/4 " | = 1 1/2 "
| = 1 1/2 "
|
|
The iron and wood producers
|
7/12 " | = 1 3/4 "
| = 1 3/4 "
|
|
Total yards expended on machinery or the part of the
value of the linen which consists of machinery
|
4 1/12yards | = 12 1/4 s. | = 12 1/4 hours’ labour
|
To simplify the calculation, say 4 yards=12s.=12 hours’
labour. Of this, for labour (profit and wages)
one-third = 4/3 yards = 1 1/3
yards.
2 2/3 remain for constant
capital. Of this, 3/4 for raw
material, 1/4 for wear and tear of
machinery. 2 2/3 =
8/3 =
32/12. A quarter of this=
8/12.
This 8/12 of a yard for wear and
tear of machinery is all that the machinery manufacturer is
still burdened with. For he pays
24/12 or 2 yards to the iron and wood
manufacturers for raw material.
||294| It is wrong, then, to
charge the iron and wood manufacturers again for machinery,
since all that they have to replace its machinery, namely
7/12 of a yard, has already been
brought into the machinery manufacturer’s account. In
the latter’s item, the whole of the machinery that they need
for the production of iron and wood has already been
included, and it therefore cannot come a second time into
the reckoning. The last two yards for iron and wood
(the residuum of 2 8/12) consist
therefore entirely of labour, since there is no raw material
used, and can therefore be consumed in linen.
Thus the whole residuum is 8/12 of
a yard or 2/3 of a yard for wear and
tear of the machinery used by the machinery
manufacturer.
The whole problem was partly solved by the fact that the
part of the farmer’s constant capital, which does not
itself consist of labour newly added or in machinery, does
not circulate at all, but is already deducted, replaces
itself in his own production, and therefore also—apart
from the machinery—his whole circulating
product consists of wages and profit and consequently can be
consumed in linen. This was one part of the
solution.
The other part was that what appears in one sphere of
production as constant capital, in other spheres of
production appears as new labour added during the same
year. What in the weaver’s hand appears as constant
capital consists in large part of the revenue of the
spinner, machinery manufacturer, flax-grower and iron and
wood producers (also of the collier, etc.; but for the sake
of simplification this is not brought into it). (This
is so clear that, for example, when the same manufacturer
both spins and weaves, his constant capital seems to be
smaller than that of the weaver and the labour added by him
greater, that is to say, the part of his product which
consists of labour added, revenue, profit and wages.
Thus in the case of the weaver revenue was equal to 4
yards=12s.; constant capital 8 yards=24s. If he both
spins and weaves, his revenue is equal to 6 yards. His
constant capital also equals 6 yards; that is, 2 yards for
loom, 3 yards flax, and I yard spinning machinery.)
Thirdly, however, the solution so far found is that all
producers who supply only raw material or means of
production for the product which finally enters into
individual consumption, cannot consume their
revenue—profit and wages, the [labour] newly
added—in their own product, but they can consume the
part of the value of this product which represents revenue
only in the consumable product, or, what is the same thing,
[they have to exchange it] for a consumable product of other
producers containing the same amount of value. Their
newly-added labour enters into the final product as a
component part of the value, but is only consumed in the
form of the final product, while as a use-value it is
contained in the final product as raw material or machinery
used up.
Hence the part of the problem which now remains to be
solved is reduced to this: What happens to the
2/3 of a yard for the wear and tear
[of the machine-building machine]—not of the machines
used in production, for these represent new labour, that is,
new labour which gives the raw material (which has itself no
raw material that costs anything) the form of new machinery
but— [what happens] to the depreciation of the
machinery manufacturer’s machine-building machine? Or
to put it another way: Under what conditions can the
machinery manufacturer consume the 2/3
of a yard=2s.=2 hours’ labour in linen, and at the same time
replace his machinery? That is the real
question. This takes place in fact. It
necessarily takes place. Hence the problem: how is
this phenomenon to be explained?
||295| Here we leave
entirely out of account the part of the profit which is
transformed into new capital (both circulating and fixed,
variable and constant capital). It has nothing to do
with our problem, for here new variable capital as well as
the new constant capital are created and replaced by
new labour (a part of the surplus-labour).
So putting this case on one side, the total of labour
newly added, in a year for example, is equal to the total of
profit and wages, i.e., equal to the total of the annual
revenue spent on products which enter into individual
consumption, such as food, clothing, heating,
dwelling-house, furniture, etc.
The total of these products going into consumption is
equal in value to the total labour added annually (to the
total value of the revenue), This quantity of labour must be
equal to the total labour contained in these products, both
the added and the pre-existing labour. In these
products not only the labour newly added, but also the
constant capital they contain, must be paid for. Their
value is therefore equal to the total of profit and
wages. If we take linen as the example, then the linen
represents for us the aggregate of the products entering
into individual consumption annually. This linen must
not only be equal to the value of all its elements of value,
but its whole use-value must be consumable by the various
producers who take their share of it. Its whole value
must be resolvable into profit and wages, that is, labour
newly added each year, although it consists of labour added
and constant capital.
This is partly explained, as we have said, by:
First. A part of the constant capital
required for the production of the linen does not enter into
it, either as use-value or as exchange-value, This is the
part of the flax which consists of seed, etc.; the part of
the constant capital of the agricultural product which does
not enter into circulation, but is directly or indirectly
returned to production, to the land. This part
replaces itself, so it does not need to be repaid out of the
linen. <A peasant may sell his whole harvest, say
120 quarters. But then he must buy from another
peasant for example 12 quarters of seed, and the latter has
then to use as seed, out of his 120 quarters, 24 quarters
instead of 12 quarters, 1/5 instead of
1/10 of his product. In both
cases 24 quarters of the 240 quarters are given back to the
land as seed. Of course, this makes a difference in
the circulation. In the first case, where each deducts
one-tenth, 216 quarters enter circulation. In the
second case 120 quarters of the first and 108 quarters of
the second enter circulation, that is, 228 quarters.
As in the previous case, 216 quarters reach the actual
consumers. Here therefore we have an example of the
fact that the total of values as between dealers and dealers
is greater than the total of values as between dealers and
consumers.// (Moreover there is the same difference in all
cases in which a part of the profit is transformed into new
capital; moreover, transaction between dealers and dealers
extend over many years, etc.)
This part [of the raw material required] for the
production of the linen, that is, the consumable products,
therefore does not have to replace a considerable part of
the constant capital required for its production.
Secondly. A large part of the constant
capital required for the linen, that is, for the annual
consumable product, appears at one level as constant
capital, at another level as labour newly added, and
consequently in fact consists of profit and wages, revenue,
for one, while the same sum of value appears as capital for
another. Thus a part of [the weaver’s] constant
capital is reducible to the labour of the spinner, etc.
||296| Thirdly.
In all the intermediate processes that are necessary to
produce the consumable product, a large part of the
products, apart from the raw material and certain auxiliary
materials, never passes into the use-value, but only enters
into the consumable product as a component part of its
value—such as machinery, coal, oil, tallow, leather
belting, etc. In each of these processes which in fact
always only produce the constant capital for the next
stage—in so far as, through the division of social
labour, they take the form of separate branches of
business—the product of each stage is divided into one
part representing the newly-added labour (consisting of
profit and wages, and, with the proviso made above, forms
revenue), and another part which represents the value of the
constant capital consumed. It is therefore clear that
in each of these spheres of production only that part of the
product can be consumed by its own producers which
represents wages and profit—only that part which
remains over after deducting the quantity of products equal
to the value of the constant capital they contain. But
none of these producers consumes any part whatever of the
products of the previous stage, or of the products, of all
the stages, which in fact produce nothing but constant
capital for a further stage.
Thus although the final product—the linen, which
represents all consumable products—consists of
newly-added labour and constant capital, and so the final
producers of this consumable product can only consume that
part of it which consists of the labour last added, of their
total wages and profits, their revenue—nevertheless
all the producers of constant capital consume or realise
their newly-added labour only in the consumable
product. Thus although this consists of labour added
and constant capital, its purchase price consists—in
addition to that part of the product which is equal to the
quantity of labour last added—of the total quantity of
all the labour added in the production of its constant
capital. They realise all added labour in the
consumable product instead of in their own product—so
that in this respect it is the same as if the consumable
product consisted entirely of wages and profit, of labour
added.
From the consumable product, the linen (the exchange of
consumable products for each other and the previous
transformation of the commodities into money makes no
difference), the producers from whose sphere of production
it emerges as a finished product themselves deduct the part
of the product equal to their revenue—equal to the
labour last added by them, equal to the total wages and
profit. With the other part of the consumable product
they pay the component part of the value due to the
producers who have directly supplied them with their
constant capital. All of this part of their consumable
product therefore covers the value of the revenue and
constant capital of the producers of this constant capital
in its nearest stage. The latter however keep only the
part of the consumable product whose value is equal to their
revenue. With the other part they pay in turn the
producers of their constant capital, equal to revenue plus
constant capital. The account, however, can only be
settled if it is only revenue, newly-added labour, not
constant capital, that has to be replaced by the last part
of the linen, the consumable product. For on the
assumption we have made the linen enters only into
consumption and does not in turn form the constant capital
of another phase of production.
This has already been shown to be the case for a part of
the product of agriculture.
In general, it is only products that enter as raw
materials into the final product of which it can be said
that they are consumed as products. Other products
enter into the consumable product only as component parts of
value. The consumable product is bought by revenue,
that is, by wages and profit. Its total value must
therefore be resolvable into wages and profit, that is, into
the labour added in all its stages. The question now
arises: in addition to the part of the product of
agriculture which is returned to ||297| production by its producers
themselves—seed, cattle, manure, etc.—is there
yet another part of the constant capital which does not
enter into the consumable product as a component part of
value, but is replaced in kind in the process of production
itself?
Fixed capital in all its forms can of course only be
considered here to the extent that its value enters into
production and is consumed.
Apart from agriculture (including cattle-raising and fish
farming, and forestry, in which reproduction is artificially
organised)—and so apart from all raw materials for
clothing, actual means of sustenance and a large part of the
products entering into fixed capital in industry, such as
sails, rope, belting, etc.— in mining there is the
partial replacement of constant capital in kind out of the
product, so that the part which enters into circulation does
not have to replace this part of the constant capital.
For example, in coal production some of the coal is used to
work the steam-engine which pumps out water or raises
coal.
The value of the annual product is therefore partly equal
to the part of the labour pre-existing in coal and consumed
in producing the coal, and partly equal to the quantity of
labour added (leaving out of account wear and tear of
machinery, etc.). Of the total product, however, the
part of the constant capital which consists in coal itself
is directly deducted and returned to production. No
one has to replace this part for the producer, because he
replaces it himself. If the productivity of labour has
neither fallen nor risen, then too the part of the value
which this part of the product represents remains unchanged,
and is equal to a definite aliquot part of the quantity of
labour existing in the product—partly pre-existing
labour, partly labour added during the year. In the
other mining industries too there is a partial replacement
of the constant capital in kind.
Waste products—as for example cotton waste and so
on—are fed to the fields as fertiliser or become raw
material for other branches of industry, as for example
linen rags [in the production] of paper. In such
cases, as in the former case, part of an industry’s constant
capital may be directly exchanged for the constant capital
of another industry. For example, cotton for cotton
waste used as fertiliser.
In general, however, there is a cardinal difference
between the production of machines and primary production
(of raw materials: iron, wood, coal) and the other phases of
production: in the latter, there is no interaction between
them. Linen cannot be a part of the spinner’s constant
capital, nor can yarn (as such) be part of the constant
capital of the flax-grower or machinery manufacturer.
But the raw material of machinery— apart from such
agricultural products as leather belting, rope, etc.
—is wood, iron and coal, while on the other hand
machinery in its turn enters as a means of production into
the constant capital of the producers of wood, iron, coal,
etc. In fact, therefore, both replace each other a
part of their constant capital in kind, Here there is
exchange of constant capital for constant capital.
Here it is not merely a question of accounting. The
producer of iron debits the machinery manufacturer for the
wear and tear of the machinery used up in producing the iron
and the machinery manufacturer debits [the producer of iron]
for the wear and tear of his machinery in constructing the
machines. Let the producers of iron and coal be the
same person. First, he himself replaces the coal, as
we have seen. Secondly, the value of his total product
of iron and coal is equal to the value of the labour added
plus the labour pre-existing in the worn-out
machinery. After deducting from this total product the
quantity of iron that replaces the value of the machinery,
the quantity of iron which is left represents the labour
added. The latter part forms the raw material of
manufacturers of machinery, instruments, etc. The
machinery manufacturer pays the iron manufacturer for this
latter part in linen. In exchange for the first part,
he supplies him with machinery to replace the old.
On the other hand, the part of the machinery
manufacturer’s constant capital which represents the wear
and tear of his machine-building machines, instruments,
etc.—and therefore consists neither of raw material
(leaving out of account here the machinery used [in coal and
iron production] ||298| and the
part of the coal which replaces itself) nor of labour added,
and so neither of wages or profit—this wear and tear
is in fact made good by the machinery manufacturer
appropriating for himself one or two of his own machines to
serve as machine-building machines, This part of his product
merely comes to an excess consumption of raw material.
For it does not represent labour newly added, since in the
total product of the labour so many machines are equal to
the value of the added, so many machines are equal to the
value of the raw material, and so many machines are equal to
the part of the value that was contained in machine-building
machines, It is true that this last part does contain labour
added. But in value this is equal to zero, since the
labour contained in the raw material and in the machinery
used up is not reckoned in the group of machines that
represents labour added; and the part which replaces the new
labour and machinery is not reckoned in the second group,
which replaces the raw material; and consequently in the
third part—considered as value—neither labour
added nor raw material is contained, but this group of
machines represents only the wear and tear of the
machinery.
The machinery of the machinery manufacturer himself is
not sold. It is replaced in kind, deducted from the
total product. Consequently the machines which he
sells represent only raw material (which consists only of
labour, if he has already been charged for the wear and tear
of the raw material producer’s machinery) and labour added,
and therefore are resolvable into linen for himself and for
the raw material producer. As for what specially
concerns the relations between the machinery manufacturer
and the producer of raw materials, the latter has deducted,
in respect of the part of his machinery that has been
wasted, a quantity of iron equal to its value. He
exchanges this with the machinery manufacturer, so that each
of them pays the other in kind, and this process has nothing
to do with the division of revenue between them.
So much for this question, to which we shall return in
connection with the circulation of capital.
In reality, the constant capital is replaced by being
constantly produced anew and in part by reproducing
itself. The part of the constant capital which enters
into the consumable product is however paid for out of the
living labour which enters into the non-consumable
products. Because the latter labour is not paid for in
its own products, it can resolve the whole consumable
product into income. A part of the constant capital,
considered as part of the annual product, is only seemingly
constant capital. Another part, although it enters
into the total product, does not enter into the consumable
product either as a component part of its value or as a
use-value, but is replaced in kind, remaining always
incorporated in production.
Here we have considered how the total consumable product
is divided up and resolved into all the component parts of
value and conditions of production that have entered into
it.
But always there are, simultaneously and side by side,
the consumable product (which, in so far as it consists of
wages, is equal to the variable part of capital), the
production of the consumable product, and the production of
all parts of the constant capital required for its
production, whether it enters into it or not. In the
same way, each capital is always simultaneously divided into
constant and variable capital, and although the constant
capital, like the variable, is continuously replaced by new
products, it is always in existence in the same form, so
long as production of the same kind goes on.
||299| The relation between
the machinery manufacturer and the primary
producers—of iron, wood, etc.—is that they in
fact exchange with each other a part of their constant
capital (which has nothing in common with the transformation
of a part of the constant capital of one into revenue for
the other), because their products—although one is a
previous stage for the other— on both sides enter as
means of production into the constant capital of the
other. In return for the machinery which the producer
of iron, wood, etc., needs, he gives the machine builder
iron, wood, etc., to the value of the machine to be
replaced. This part of the machine builder’s constant
capital is for him just the same as seed is for the
peasant. It is part of his annual product which he
replaces in kind for himself and which is not resolved into
revenue for him. On the other hand, what is thus
replaced for the machine builder in the form of raw material
is not only the raw material contained in the iron
producer’s machine, but also the part of the value of this
machine which consists of labour added and wear and tear of
his own machinery. Thus it replaces for him not only
the wear and tear of his own machinery, but can be regarded
as accounting for (replacing) a part of the wear and tear
contained in the other machines.
It is true that this [machine sold] to the producer of
iron also contains component parts of value equal to the raw
material and the labour added. But on the other hand
there is correspondingly less wear and tear to be accounted
for in the other machines. This part of their constant
capital—that is, of the product of their annual labour
which replaces only the part of the value of the constant
capital representing wear and tear—therefore does not
enter into the machines which the machine builder sells to
other industrialists, But as regards the wear and tear in
these other machines, it is in fact replaced for the machine
builder by the above-mentioned two-thirds of a yard of
linen, the equivalent of 2 hours’ labour. With that,
he buys pig-iron, wood, etc., to the same value, and
replaces the wear and tear in another form of his constant
capital— [in the form] of iron. Thus a part of
his raw material replaces for him the value of his wear and
tear, in addition to the value of the raw material.
This raw material, however, as far as the producer of iron,
etc., is concerned, consists only of the labour-time added,
as the machinery of these producers of raw materials (iron,
wood, coal, etc.) has already been accounted for.
Thus all the elements of the linen are resolved into a
sum of quantities of labour equal to the amount of labour
newly added, but not equal to the amount of the total labour
contained in the constant capital and perpetuated by
reproduction.
That the quantity of labour consisting partly of living
labour, partly of pre-existing labour, which forms the total
of commodities which enter each year into individual
consumption, and thus are consumed as revenue, cannot be
greater than the labour added annually, is for that matter a
tautology, For the revenue is equal to the total of profit
and wages, which is equal to the total labour newly added,
and is equal to the total of the commodities which contain
an equal quantity of labour.
The case of iron producer and machine builder is only one
example. Between different spheres of production,
where the products of each enter into the other as means of
production, an exchange in kind takes place too (even though
concealed by a series of money transactions) between the
constant capital of the one and that of the other. In
so far as this is the case, the consumers of the final
product which enters into consumption have not got to
replace this constant capital, since it has already been
replaced. |299||
||304| <For example: in
the manufacture of locomotives, every day the waste amounts
to whole wagon-loads of iron filings. These are
collected and resold (or charged in account) to the same
iron manufacturer who supplied the locomotive manufacturer
with his principal raw material. The iron manufacturer
again gives them solid form, adding new labour to
them. However in the form in which he sends them back
to the locomotive manufacturer, these filings represent the
part of the value of the product which replaces raw
material, In this way not the same filings but constantly a
certain quantity of filings, move hither and thither between
the two factories, This part forms in turn the raw material
for each of the two branches of industry and, considered as
value, only wanders from one shop to the other.
Consequently it does not enter into the final product, but
is a replacement in kind of the constant capital.
In fact, every machine supplied by the machinery
manufacturer, from the standpoint of value, is divided into
raw material, labour added, and wear and tear of machinery,
But the whole total that enters into the production of other
spheres can only be equal in value to the total value of the
machinery minus the part of the constant capital which is
continually passing backwards and forwards between the
machinery manufacturer and the iron manufacturer.
One quarter of wheat sold by a peasant is as dear as
another, and a quarter of wheat that is sold is no cheaper
than one that is returned to the land in the form of
seed. Still, if the product equals 6 quarters, and the
quarter equals £3—each quarter containing
component parts of value for labour added, raw material and
machinery—and if he has to use 1 quarter as seeds, he
would only sell to consumers 5 quarters, equal to
£15. They would therefore not pay for the part
of the value contained in the 1 quarter of seed. And
this is the point: how can the value of the product sold be
equal to all the elements of value contained in
it—labour added and constant capital—and how in
spite of this does the consumer buy the product and yet not
pay for the constant capital?// |304||
||300| <In addition to
the foregoing:
The following quotation shows how little the insipid Say
even understood what the question was:
“In order fully to understand this
subject of revenues, it is necessary to take into
account that the entire value of a product is divided into
revenues for various persons; for the total value of
each product is composed of the profits of the landowners,
of the capitalists and of the craftsmen who have contributed
to bring it into existence. This is why the revenue of
society is equal to the gross value which has been
produced, and not, as the sect of Economists imagines, to
the net product of the land… If the only
revenues in a nation were the excess of the values produced
over the va1ues consumed, this would lead to a truly absurd
result: that a nation which had consumed in the year values
as great as it had produced would have no […]
revenue.” ([Jean-Baptiste Say, Traité
d’économie politique…, troisième
edition], t. II, [Paris, 1817], pp. 63–64.)
In fact, in the year that was past it would have had a
revenue, but it would have none the next year. It is
not true that the annual product of labour, of which
the product of the annual labour forms only one part,
consists of revenue. On the other hand, it is correct
that this is the case with the part of the product which
each year enters into individual consumption. The
revenue, which consists only of added labour, is able to pay
for this product, which consists partly of added and partly
of preexisting labour; that is to say, the labour added in
these products can pay not only for itself but also for the
pre-existing labour, because another part of the
product—which also consists of labour added and
pre-existing labour—replaces only preexisting labour,
only constant capital.//
[11. Additional Points: Smith’s
Confusion on the Question of the Measure of Value.
General Character of the Contradictions in Smith]
<To the points in Adam Smith’s theory just discussed
must be added that in his vacillations on the determination
of value —in addition to the apparent contradiction in
regard to wages —there is also confusion [of ideal: in
so far as he confuses the measure of value as the immanent
measure which at the same time forms the substance of value,
with the measure of value in the sense that money is called
a measure of value. With regard to the latter the
attempt is then made to square the circle —to find a
commodity whose value does not change to serve as a constant
measure for others. On the question of the relation of
the measure of value as money to the determination of value
by labour-time, see the first part of my work. This
confusion is also to be found in Ricardo in certain
passages.// |300||
***
||299| Adam Smith’s
contradictions are of significance because they contain
problems which it is true he does not solve, but which he
reveals by contradicting himself. His correct instinct
in this connection is best shown by the fact that his
successors take opposing stands based on one aspect of his
teaching or the other.
Footnotes
* Marx refers to
Garnier’s French translation of Adam Smith’s work from which
he takes the quotation. All excerpts from Smith’s
Wealth of Nations quoted by Marx in French in the
manuscript are printed in this edition in English as given
in Adam Smith, An Inquiry into the Nature and Causes of
the Wealth of Nations, Oxford University Press (O.U.P.)
(The World’s Classics), London 1928. In two
volumes. Those passages which Marx has taken from
Garnier’s French translation are marked in the
text ”Garnier”. The French extracts used
by Marx are printed in the Appendix.—Ed.
* The manuscript
reads: “Interchange of commodities and distribution
must he kept distinct each other.”—Ed.
* See pp. 41–42 of
the present volume.—Ed.
* In the manuscript:
“The natural price (or necessary
price)”.—Ed.
** In the
manuscript: “so”.—Ed.
*** In the
manuscript: “Man muss immer zwischen den beiden
unterscheiden.”—Ed.
* Marx refers to the
French translation from which he takes these
passages. See Appendix, p. 427.—Ed.
* Not
so.—Ed.
* All the same,
nearer the right view than the others. [This was added
by Marx in pencil.]—Ed.
* The beginning of
the sentence has been translated by Marx into German and
shortened as follows: “Wie Vergleichen des Produkt
und”.—Ed.
** In the
manuscript: “In”.—Ed.
*** In the
manuscript: “all”.—Ed.
**** In the
manuscript: “the”.—Ed.
**** In the
manuscript: “the”.—Ed.
***** In the
manuscript: “Also upon two circumstances hängt
die rate of profit ab”.—Ed.
* In the
manuscript: “return”—Ed.
** In the
manuscript: “whatever”.—Ed.
* In the
manuscript: “master-capitalist”.—Ed.
** In the
manuscript: “wealth”.—Ed.
* As for example
is now the case with the yarn or cloth of the cotton
manufacturers, as a result of the American Civil War.
The mere sale of their product is no guarantee for them that
it will be retransformed, since there is no cotton on the
market.