Theories of Surplus Value, Marx 1861
[CHAPTER XVI]
RICARDO’S THEORY OF PROFIT
[1.
Individual Instances in Which Ricardo Distinguishes
Between Surplus-Value and Profit]
It has already been shown in some detail, that the laws
of surplus-value—or rather of the rate of
surplus-value—(assuming the working-day as given) do
not so directly and simply coincide with, nor are they
applicable to, the laws of profit, as Ricardo supposes.
It has been shown that he wrongly identifies surplus-value
with profit and that these are only identical in so far as
the total capital consists of variable capital or is laid
out directly in wages; and that therefore what Ricardo deals
with under the name of “profit” is in fact
surplus-value. Only in this case can the total product
simply be resolved into wages and surplus-value. Ricardo
evidently shares Smith’s view, that the total value
of the annual product resolves itself into revenues.
Hence also his confusion of value with cost-price.
It is not necessary to repeat here that the rate of
profit is not directly governed by the same laws as the rate
of surplus-value.
Firstly: We have seen that the rate of profit can
rise or fall as a result of a fall or rise in rent,
independently of any change in the value of labour.
Secondly: The absolute amount of profit is equal
to the absolute amount of surplus-value.
The latter,
however, is determined not only by the rate of surplus-value
but just as much by the number of workers employed.
The same
amount of profit is therefore possible, with a falling rate
of surplus-value and a rising number of workers and vice
versa, etc.
Thirdly: With a given rate of
surplus-value, the rate of profit depends on the organic
composition of capital.
Fourthly: With a given surplus-value (the
organic composition of capital per £ 100 is
also assumed to be given) the rate of profit depends on the
relative value of the different parts of the capital,
which may be differently affected, partly by economy of
power etc. in the use of the means of production, partly by
variations in value which may affect one part of capital
while they leave the rest untouched.
Finally, one has to take into account the differences in
the composition of capital arising from the process of
circulation.
||667| Some of the observations that occur in Ricardo’s
writing should have led him to the distinction between
surplus-value and profit.
Because he fails to make this
distinction, he appears in some passages to descend to the
vulgar view—as has already been indicated in the
analysis of Chapter I “On
Value”—the view that profit is a mere
addition over and above the value of the commodity; for
instance when he speaks of the determination of profit on
capital in which the fixed capital predominates,
etc.[1]
This was the source of much nonsense among his successors.
This vulgar view is bound to arise, if the proposition (which in
practice is correct) that on the average, capitals of
equal size yield equal profits or that profit depends on
the size of the capital employed, is not connected by a
series of intermediary links with the general laws of value
etc.: in short, if profit and surplus-value are treated as
identical, which is only correct for the aggregate
capital.
Accordingly Ricardo has no means for determining a
general rate of profit.
Ricardo realises that the rate of profit is
not modified by those variations of the value of
commodities which affect all parts of capital equally
as, for example, variations in the value of money.
He should
therefore have concluded that it is affected by such
variations in the value of commodities which do not
affect all parts of capital equally; that therefore
variations in the rate of profit may occur while the value
of labour remains unchanged, and that even the rate of
profit may move in the opposite direction to variations in
the value of labour.
Above all, however, he should have kept
in mind that here the surplus-product, or what is for
him the same thing, surplus-value, or again the same
thing, surplus-labour, when he is considering it
sub specie profit, is not calculated in proportion to
the variable capital alone, but in proportion to the
total capital advanced.
With reference to a change in the value of money, he
says:
“The variation in the value of money, however
great, makes no difference in the rate of profits;
for suppose the goods of the manufacturer to rise from
£ 1,000 to £ 2,000, or 100 per cent, if his
capital, on which the variations of money have as much
effect as on the value of produce, if his machinery,
buildings, and stock in trade rise also 100 per cent, his
rate of profits will be the same…
“If, with a capital of a given value, he can, by
economy in labour, double the quantity of produce, and it
fall to half its former price, it will bear the same
proportion to the capital that produced it which it did
before and consequently profits will still be at the
same rate.
“If, at the same time that he doubles the quantity
of produce by the employment of the same capital, the value
of money is by any accident lowered one half, the produce
will sell for twice the money value that it did before; but
the capital employed to produce it will also be of twice its
former money value; and therefore in this case too, the
value of the produce will bear the same proportion to the
value of the capital as it did before.” (David
Ricardo, On the Principles of Political Economy, and
Taxation, third edition, London, 1821, pp. 51–52.)
If Ricardo means surplus produce when he writes
produce in the last passage then this is correct.
For the rate of profit is equal to the surplus produce
(value) divided by the capital employed. Thus if the
surplus produce is 10 and the capital 100, the rate of
profit is 10/100, which equals
1/10, which equals 10 per cent. If
however he means the total product, then the way he puts it
is not accurate. In that case by proportion of the value
of the produce to the value of capital, he evidently means
nothing but the excess of the value of the commodity over
the value of the capital advanced. In any case, it is
obvious that here he does not identify profit with
surplus-value or the rate of profit with the rate of
surplus-value, [the latter is] equal to the
surplus-value divided by the value of labour or the
variable capital.
Ricardo says (Chapter XXXII):
“The raw produce of which
commodities are made, is supposed to have fallen in price,
and, therefore, commodities will fall on that account.
True, they will fall, but their fall will not he attended
with any diminution in the money income of the producer.
If he sell his commodity for less money, it is only because
one of the materials from which it is made has fallen in
value. If the clothier sell his cloth for £ 900
instead of £ 1,000, his income will not be less, if the
wool from which it is made, has declined £ 100 in
value” (l.c., p. 518).
(The particular point with which Ricardo is actually
dealing, the effect in a practical case, does not concern us
here.
But a sudden fall in the value of wool would of course
affect (adversely) the money income of those clothiers who
had on their hands a large stock of finished cloth
manufactured at a time when wool was dearer and which has to
be sold after the price ||668| of wool has dropped.)
If, as Ricardo assumes here, the clothiers set in motion
the same amount of labour as before <they could set in
motion a much greater amount of labour because a part of the
capital which was previously expended only on raw material
is now at their disposal and can be expended on raw material
plus labour>, it is clear that their “money
income” taken in absolute terms, “will not be
less” but their rate of profit will be
greater than previously; for—say it was 10 per
cent, i.e., £ 100—the same amount as before
would now have to be reckoned on £ 900 instead of
£ 1,000.
In the first case the rate of profit was 10
per cent.
In the second it is 1/9 or 11 1/9 per cent.
Since
Ricardo moreover presupposes that the raw produce of which
commodities are made has fallen generally, the general rate
of profit would rise and not only the rate of profit in one
branch of production.
It is all the more strange that
Ricardo does not realise this, because he understands it
when the opposite takes place.
For in Chapter VI “On Profits” Ricardo
deals with the case where, as a result of an increase in the
price of necessaries owing to the cultivation of worse land
and the consequent rise in differential rent, firstly wages
rise and secondly all raw produce from the surface of the
earth.
(This assumption is by no means necessary; cotton may
very well fall in price, so can silk and even wool and
linen, although the price of corn may be rising.)
In the first place he says that the surplus-value
(he calls it profit) of the farmer will fall because the
value of the product of the ten men whom he employs,
continues to be £ 720 and from this fund of £
720 he has to hand over more in wages.
And he continues:
“But the rate of profits will fall still
more, because the capital of the farmer …
consists in a great measure of raw produce, such as his corn
and hay-ricks, his unthreshed wheat and barley, his horses
and cows, which would all rise in price in consequence of
the rise of produce.
His absolute profits
would fall from £ 480 to £ 445 15s.; but if from
the cause which I have just stated, his capital should rise
from £ 3,000 to £ 3,200, the rate of his
profits would, when corn was at £ 5 2s. l0d., be
under 14 per cent.
“If a manufacturer had also employed £ 3,000
in his business, he would be obliged in consequence of the
rise of wages, to increase his capital, in order to be
enabled to carry on the same business.
If his commodities
sold before for £ 720 they would continue to sell at
the same price; but the wages of labour, which were
before.
£ 240, would rise when corn was at £ 5
2s. l0d., to £ 274 5s.
In the first case he would have
a balance of £ 480 as profit on £ 3,000, in the
second he would have a profit only of £ 445 15s., on
an increased capital, and therefore his profits would
conform to the altered rate of those of the farmer”
(l.c., pp. 116–17).
In this passage, therefore, Ricardo distinguishes between
absolute profit (equal to surplus-value) and
rate of profit and also shows that the rate of profit
falls more as a result of the change in the value of the
capital advanced, than the absolute profit (surplus-value)
falls as a result of the rise in the value of labour.
The
rate of profit would have also fallen, if the value pf
labour [had] remained the same, because the
same absolute profit would have to be calculated on a
greater capital.
The reverse result, i.e., a rise in the
rate of profit (as distinct from a rise in surplus-value or
absolute profit), would take place in the first instance
cited from him, where the value of the raw produce falls.
It
is evident, therefore, that rises and falls in the rate of
profit may also be brought about by circumstances other than
the rise and fall in the absolute profit and the rise and
fall in its rate, reckoned on the capital laid out in
wages.
In connection with the last quoted passage Ricardo
writes:
“Articles of jewellery, of iron, of plate, and of
copper, would not rise, because none of the raw
produce from the surface of the earth enters into their
composition” (l. c., p. 117).
The prices of these commodities would not rise, but the
rate of profit in these branches of production would rise
above that in the others.
For in the latter, a smaller
surplus-value (because of the rise in wages) would
correspond to a capital outlay that had grown in value for
two reasons: firstly, because the outlay in wages had
increased; secondly, because the outlay in raw materials had
increased.
In the second case [i.e. jewellery etc.] ||669|
there is a smaller surplus-value on a capital outlay in
which only the variable part has grown because of the rise
in wages.
In these passages, Ricardo himself throws overboard his
whole theory of profit, which is based on the false
identification of the rate of surplus-value with the rate of
profit.
“In every case, agricultural, as well as
manufacturing profits are lowered by a rise in the price
of raw produce, if it be accompanied by a rise of
wages” (l. c., pp. 113–14).
It follows from what Ricardo himself has said, that, even
if [the rise in the price of raw produce] is not accompanied
by a rise of wages, the rate of profit would be
lowered by an increase of that part of the advanced capital
which consists of raw produce.
“Suppose the price of silks, velvets, furniture,
and any other commodities, not required by the labourer, to
rise in consequence of more labour being expended on
them, would not that affect profits? Certainly not: for
nothing can affect profits but a rise in wages; silks
and velvets are not consumed by the labourer, and therefore
cannot raise wages” (l. c., p. 118).
The rate of profit in these particular spheres of
production would certainly fall, although the value of
labour—wages—remained the same.
The raw material
used by the silk manufacturers, piano manufacturers,
furniture manufacturers, etc. would have become dearer, and
therefore the proportion borne by the same surplus-value to
the capital laid out would have fallen and hence the rate of
profit.
And the general rate of profit consists of
the average of the particular rates of profit in all
branches of business.
Or, in order to make the same average
profit as before, these manufacturers would raise the price
of their commodities.
Such a nominal rise in prices does not
directly affect the rate of profit, but the distribution of
profit.
Ricardo returns once more to the case considered above,
where the surplus-value (absolute profit) falls, because the
price of the necessaries (and along with these, also rent)
rises.
“I must again observe that the rate of
profits would fall much more rapidly than I have
estimated in my calculation: for the value of the
produce being what I have stated it under the
circumstances supposed, the value of the farmer’s
stock would be greatly increased from its necessarily
consisting of many of the commodities which had risen in
value.
Before corn could rise from £ 4 to £
12, his capital would probably be doubled in
exchangeable value, and be worth £ 6,000 instead of
£ 3,000.
If then his profit were £ 180, or 6 per
cent on his original capital, profits would not at
that time be really at a higher rate than 3 per cent;
for £ 6,000 at 3 per cent gives £ 180; and on
those terms only could a new farmer with £6,000
money in his pocket enter into the farming business.
“Many trades would derive some advantage,
more or less; from the same source.
The brewer, the
distiller, the clothier, the linen manufacturer, would be
partly compensated for the diminution of their profits,
by the rise in the value of their stock of raw and finished
materials; but a manufacturer of hardware, of jewellery,
and of many other commodities, as welt as those whose
capitals uniformly consisted of money, would be subject to
the whole fall in the rate of profits, without any
compensation whatever” (l. c., pp. 123–24).
What is important here is only something of which Ricardo
is not aware, namely, that he throws overboard his
identification of profit with surplus-value and [admits]
that the rate of profit can be affected by a variation in
the value of the constant capital independently of the value
of labour.
Moreover, his illustration is only partially
correct.
The advantage which the farmer, clothier etc. would
derive from the rise in price of the stock of commodities
they have on hand and on the market, would of course cease
as soon as they had sold these commodities.
The increased
value of their capital would similarly no longer represent a
gain for them, when this capital was used up and had to be
replaced.
They would then all find themselves in the
position of the new farmer cited by Ricardo himself, who
would have to advance a capital of £ 6,000 in order to
make a profit of 3 per cent.
On the other hand, ||XIII-670|
the jeweller, manufacturer of hardware, money-dealer
etc.—although at first they would not [receive] any
compensation for their losses—would realise a rate of
profit of more than 3 per cent, for only the capital laid
out in wages would have risen in value whereas their
constant capital remained unchanged.
One further point of importance in connection with this
compensation of the falling profit by the rise in value of
the capital, mentioned by Ricardo, is that for the
capitalist—and generally, as far as the division of
the product of annual labour is concerned—it is a
question not only of the distribution of the product among
the various shareholders in the revenue, but also of the
division of this product into capital and revenue.
[2.] Formation of the General Rate of Profit.
(Average Profit or “Usual Profit”)
[a) The Starting-Point of the Ricardian Theory of Profit
Is the Antecedent Predetermined Average Rate of Profit]
Ricardo is by no means theoretically clear here.
“I have already remarked, that the market
price of a commodity may exceed its natural or
necessary price, as it may be produced in less abundance
than the new demand for it requires.
This, however, is but a
temporary effect.
The high profits on capital
employed in producing that commodity, will naturally attract
capital to that trade; and as soon as the requisite funds
are supplied, and the quantity of the commodity is duly
increased, its price will fall, and the profits of
the trade will conform to the general level.
A fall
in the general rate of profits is by no means
incompatible with a partial rise of profits in particular
employments.
It is through the inequality of profits, that
capital is moved from one employment to
another.
Whilst then general profits are falling,
and gradually settling at a lower level in consequence of
the rise of wages, and the increasing difficulty of
supplying the increasing population with necessaries, the
profits of the farmer may, for an interval of some little
duration, be above the former level.
An extraordinary
stimulus may be also given for a certain time, to a
particular branch of foreign and colonial trade(l.c.,
pp. 118–19).
“It should be recollected that prices always vary
in the market, and in the first instance, through the
comparative stale of demand and supply.
Although cloth could
be furnished at 40s. per yard, and give the usual profits
of stock, it may rise to 60 or 80s, from a general
change of fashion… The makers of cloth will for a
time have unusual profits, but capital will naturally flow
to that manufacture, till the supply and demand are again at
their fair level, when the price of cloth will again sink to
40s., its natural or necessary price.
In the same manner,
with every increased demand for corn, it may rise so high as
to afford more than the general profits to the farmer.
If
there be plenty of fertile land, the price of corn will
again fall to its former standard, after the requisite
quantity of capital has been employed in producing it, and
profits will be as before; but if there be not plenty of
fertile land, if, to produce this additional quantity, more
than the usual quantity of capital and labour be required,
corn will not fall to its former level.
Its natural price
will be raised, and the farmer, instead of obtaining
permanently larger profits, will find himself obliged to be
satisfied with the diminished rate which is the inevitable
consequence of the rise of wages, produced by the rise of
necessaries” (l.c., pp. 119–20).
If the working-day is given (or if only such
differences occur in the working-day in different trades as
are compensated by the particular characteristics of the
different kinds of labour) then the general rate of
surplus-value, i.e., of surplus-labour, is given
since wages are on the average the same, Ricardo is
preoccupied with this idea, and he confuses the general
rate of surplus-value with the general rate of
profit.
I have shown that with the same general rate
of surplus-value, the rates of profit in
different branches of production must be very different, if
the commodities are to be sold at their respective
values.
The general rate of profit is formed through the
total surplus-value produced being calculated on the total
capital of society (of the class of capitalists).
Each
capital, therefore, in each particular branch, represents a
portion of a total capital of the same ||671|
organic composition, both as regards constant and
variable capital, and circulating and fixed capital.
As such
a portion, it draws its dividends from the surplus-value
created by the aggregate capital, in accordance with its
size.
The surplus-value thus distributed, the amount of
surplus-value which falls to the share of a block of capital
of given size, for example £ 100, during a given
period of time, for example one year, constitutes the
average profit or the general rate of profit,
and as such it enters into the costs of production of every
sphere of production.
If this share [per 100] is 15, then
the usual profit equals 15 per cent and the cost-price is
£115.
It can be less if, for instance, only a part of
the capital advanced enters as wear and tear into the
process of the creation of value.
But it is always equal to
the capital consumed +15 [per cent] , the average profit on
the capital advanced.
If in one case £ 100 entered
into the product and in another only £ 50, then in the
first case the cost-price would be 100+15=115 and in the
second case it would be 50+15=65; thus both capitals would
have sold their commodities at the same cost-price,
i.e., at a price which yielded the same rate of profit to
both.
It is evident, that the emergence, realisation,
creation of the general rate of profit necessitates
the transformation of values into cost-prices
that are different from these values.
Ricardo on the
contrary assumes the identity of values and cost-prices,
because he confuses the rate of profit with the rate of
surplus-value.
Hence he has not the faintest notion of the
general change which takes place in the prices of
commodities, in the course of the establishment of a general
rate of profit, before there can be any talk of a general
rate of profit.
He accepts this rate of profit as something
pre-existent which, therefore, even plays a part in his
determination of value.
(See Chapter I “On
Value”.) Having postulated the general rate of
profit, he only concerns himself with the exceptional
modifications in prices which are necessary for the
maintenance, for the continued existence of this
general rate of profit.
He does not realise at all
that in order to create the general rate of profit
values must first be transformed into cost-prices and that
therefore, when he presupposes a general rate of profit, he
is no longer dealing directly with the values of
commodities.
Moreover, the passage under consideration, only
[expresses] the Smithian concept and even this in a
one-sided way, because Ricardo is preoccupied with his
notion of a general rate of surplus-value.
According to him, the rate of profit rises above the
[average] level only in particular branches of
production, because there the market-price rises above the
natural price owing to the relation between supply and
demand, under-production or over-production.
Competition,
influx of new capital into one branch of production or
withdrawal of old capital from another, will then equalise
market-price and natural price and reduce the profit
of the particular branch to the general level.
Here the real
level of profit is assumed as constant and
predetermined, and it is only a question of reducing
the profit to this level in particular spheres of production
in which it has risen above or fallen below it, as a result
of the action of supply and demand.
Ricardo, moreover,
always assumes that the commodities whose prices yield more
than the average profit stand above their value and
that those which yield less than the average profit stand
below their value.
If competition makes their
market-value conform to their value, then the
level is established.
According to Ricardo, the level itself can only
rise or fall if wages fall or rise (for a relatively long
period), that is to say, if the rate of relative
surplus-value falls or rises; and this occurs without
any change in prices.
(Yet Ricardo himself admits here that
there can be very significant variations in prices in
different spheres .of production, according to the ratio of
circulating and fixed capital.)
But even when a general rate of profit is
established and therefore cost-prices, the rate of
profit in particular branches may rise, because the
hours of work, in them are longer and
consequently the rate of absolute surplus-value
rises.
That competition between the workers cannot level
this out, is proved by the intervention of the
state.
The rate of profit will rise in these particular
spheres without the market-price rising above the natural
price.
Competition between capitals, however, can and in the
long run will prevent that this excess profit accrues
entirely to the capitalists in these particular fields.
They will have to reduce the prices of their commodities below
their “natural prices”, or the other spheres
will raise their prices a little (or if they do not
actually raise them, because a fall in value of these
commodities may supervene,
then ||672| at any rate they will
not lower them as much as the development of the productive
power of labour in their own branches of production
required).
The general level will rise and the cost-prices
will change.
Furthermore : if a new branch of production comes into
being in which a disproportionate amount of living labour is
employed in relation to accumulated labour, in which
therefore the composition of capital is far below the
average composition which determines the average profit, the
relations of supply and demand in this new trade may make it
possible to sell its output above its cost-price, at
a price approximating more closely to its actual
value.
Competition can level this out, only through the
raising of the general level [of profit] , because
capital on the whole realises, sets in motion, a greater
quantity of unpaid surplus-labour.
The relations of
supply and demand do not, in the first instance as Ricardo
maintains, cause the commodity to be sold above its
value, but merely cause it to be sold above its
cost-price, at a price approximating to its value.
The equalisation can therefore bring about not its reduction
to the old level, but the establishment of a new
level.
[b) Ricardo’s Mistakes Regarding the Influence of
Colonial Trade, and Foreign Trade in General, on the Rate of
Profit]
The same applies, for example, to colonial trade,
where as a result of slavery and the bounty of nature, the
value of labour is lower than in the old country, or perhaps
because, in fact or in law, landed property has not
developed there.
If capitals from the mother country can be
freely transferred to this new trade, then they will reduce
the specific excess profit in this trade, but will raise the
general level of profit (as Adam Smith observes quite
correctly).
On this point, Ricardo always helps himself out with the
phrase: But in the old trades the quantity of labour
employed has nevertheless remained the same, and so have
wages.
The general rate of profit is, however, determined by
the ratio of unpaid labour to paid labour and to the capital
advanced not in this or that sphere of the economy, but in
all spheres to which the capital may be freely
transferred.
The ratio may stay the same in nine-tenths; but
if it alters in one-tenth, then the general rate of profit
in the ten-tenths must change.
Whenever there is an increase
in the quantity of unpaid labour set in motion by a capital
of a given size, the effect of competition can only be that
capitals of equal size draw equal dividends, equal shares in
this increased surplus-labour; but not that the dividend of
each individual capital remains the same or is reduced to
its former share in surplus-labour, despite the increase of
surplus-labour in proportion to the total capital
advanced.
If Ricardo makes this assumption he has no grounds
whatsoever for contesting Adam Smith’s view that the rate of
profit is reduced merely by the growing competition between
capitals due to their accumulation.
For he himself assumes
here that the rate of profit is reduced simply by
competition, although the rate of surplus-value is
increasing. This is indeed connected with his second false
assumption, that (leaving out of account the lowering or
raising of wages) the rate of profit can never rise or fall,
except as a result of temporary deviations of the
market-price from the natural price.
And what is natural
price?
That price which is equal to the capital outlay plus
the average profit.
Thus one arrives again at the assumption
that average profit can only fall or rise in the same way as
the relative surplus-value.
Ricardo is therefore wrong when, contradicting Adam
Smith,
“Any change from one foreign trade to another, or
from home to foreign trade, cannot, in my opinion, affect
the rate of profits” (l.c., p. 413).
He is equally wrong in supposing that the rate of profit
does not affect cost-prices because it does not affect
values.
Ricardo is wrong in thinking that if, in consequence of
particularly favourable circumstances, profits in a branch
of foreign trade [rise above the general level,] the general
level [of profits] must always be re-established by reducing
[these profits] to the former level and not by raising the
general level of profits.
“They contend, that the equality of profits will be
brought about by the general rise of profits; and I am of
opinion, that the profits of the favoured trade will
speedily subside to the general level” (l.c.,
pp. 132–33).
Because of his completely wrong conception of the rate of
profit, Ricardo misunderstands entirely the influence of
foreign trade, when it does not directly lower the price of
the labourers’ food.
He does not see how enormously
important it is for England, for example,
to secure ||673|
cheaper raw materials for industry, and that in this case,
as I have shown previously, the rate of profit rises
although prices fall, whereas in the reverse case,
with rising prices, the rate of profit can fall, even
if wages remain the same in both cases.
“It is not, therefore, in consequence of the
extension of the market that the rate of profit is
raised” (l. c., p. 136).
The rate of profit does not depend on the price of the
individual commodity but on the amount of surplus-labour
which can be realised with a given capital.
Elsewhere
Ricardo also fails to recognise the importance of the
market because he does not understand the nature of
money.
* * *
||673| (In connection with the above it must be noted
that Ricardo commits all these blunders, because he attempts
to carry through his identification of the rate of
surplus-value with the rate of profit by means of forced
abstractions.
The vulgar mob has therefore concluded that
theoretical truths are abstractions which are at variance
with reality, instead of seeing, on the contrary, that
Ricardo does not carry true abstract thinking far enough and
is therefore driven into false abstraction. |673||
[3.] Law of the Diminishing Rate of Profit
[a) Wrong Presuppositions in the Ricardian Conception of
the Diminishing Rate of Profit]
This is one of the most important points in the Ricardian
system.
The rate of profit has a tendency to fall.
Why?
Adam Smith says: As a result of the growing accumulation and the
growing competition between capitals which accompanies it.
Ricardo retorts: Competition can level out profits in
the different spheres of production (we have seen above that
he is not consistent in this); but it cannot lower the
general rate of profit.
This would only be possible if, as a
result of the accumulation of capital, the capital grew so
much more rapidly than the population, that the demand for
labour were constantly greater than its supply, and
therefore wages—both nominal and real wages and in
terms of use-value—were constantly rising in value and
in use-value.
This is not the case.
Ricardo is not an
optimist who believes such fairy-tales.
But because for Ricardo the rate of profit and the
rate of surplus-value— that is, the relative
surplus-value, since he assumes the length of the
working-day to be constant—are identical terms, a
permanent fall in profit or the tendency of profit to fall
can only be explained as the result of the same
causes that bring about a permanent fall or tendency to
fall in the rate of surplus-value, i.e., in that part
of the day during which the worker does not work for himself
but for the capitalist.
What are these causes?
If the length
of the working-day is assumed to remain constant, then the
part of it during which the worker works for nothing for the
capitalist can only fall, diminish, if the part during which
he works for himself grows.
And this is only possible
(assuming that labour is paid at its value), if the
value of the necessaries—the means of
subsistence on which the worker spends his wages—
increases.
But as a result of the development of the
productivity of labour, the value of industrial commodities
is constantly decreasing.
The diminishing rate of profit can
therefore only be explained by the fact that the value of
food, the principal component part of the means of
subsistence, is constantly rising.
This happens because
agriculture is becoming less productive.
This is the same
presupposition which, according to Ricardo’s interpretation,
explains the existence and growth of rent.
The continuous
fall in profits is thus bound up with the continuous rise in
the rate of rent.
I have already shown that Ricardo’s view
of rent is wrong.
This then cuts out one of the grounds for
his explanation of the fall in the rate of profits.
But secondly, it rests on the false assumption that the rate
of surplus-value and the rate of profit are
identical, that therefore a fall in the rate of profit is
identical with a fall in the rate of surplus-value, which in
fact could only be explained in Ricardo’s way.
And this puts
an end to his theory.
The rate of profit falls, although the
rate of surplus-value remains the same or rises, because the
proportion of variable capital to constant capital decreases
with the development of the productive power of labour.
The
rate of profit thus falls, not because labour becomes less
productive, but because it becomes more productive.
Not
because the worker is less exploited, but because he is more
exploited, whether the absolute surplus-time grows or, when
the state prevents this, the relative surplus-time grows,
for capitalist production is inseparable from falling
relative value of labour.
Thus Ricardo’s theory rests on two false
presuppositions:
1.
The false supposition that the existence and growth of
rent is determined by the diminishing productivity of
agriculture;
2.
The false assumption that the rate of profit is equal
to the rate of relative surplus-value and can only rise or
fall in inverse proportion to a fall or rise in wages.
||674| I shall now place together the statements in which
Ricardo expounds the view that has just been described.
[b) Analysis of Ricardo’s Thesis that the Increasing Rent
Gradually Absorbs the Profit]
First, however, some comments on the way in which, given
his concept of rent, Ricardo thinks that rent gradually
swallows up the rate of profit.
We shall use the tables on page 574, but with the
necessary modifications.
In these tables it is assumed that the capital employed
consists of £ 60c+£ 40v, the surplus-value is 50
per cent, the value of the product is therefore
£ 120, whatever the productivity of labour.
Of this
£ 10 was profit and £ 10 absolute rent.
Say, the
£ 40 represents wages for 20 men (for a week’s labour
for example or rather, because of the rate of profit, say, a
year’s labour; but this does not matter here at
all).
According to Table A, where land I determines
the market-value, the number of tons is 60, therefore 60
tons=£ 120, 1 ton=120/60=£
2.
The wages, £ 40, are thus equal to 20 tons or
quarters of grain.
This then is the necessary wage for the
number of workers employed by the capital of £
100.
Now if it were necessary to descend to an inferior type
of soil, where a capital of £ 110 (£ 60 constant
capital and the 20 workers which this sets in motion, that
is, £ 60 constant capital and £ 50 variable
capital) was required, in order to produce 48 tons.
In this
case the surplus-value would be £ 10, and the price
per ton would be £ 2 1/2.
If we descended to an even
worse type of land where £ 120 would be equal to 40
tons, the price per ton would be 120/40=£ 3.
In this
case there would be no surplus-value on the worse type of
land.
What the 20 men produce is always equal to the value
of £ 60 (£ 3 equals a working-day of a given
length).
Thus if wages grow from £ 40 to £ 60,
the surplus-value disappears altogether.
It is assumed
throughout that one quarter is the necessary wage for one
man.
Assume that in both these cases a capital of only £
100 is to be laid out.
Or, which is the same thing,
whatever capital may be laid out, what is the proportion for
100?
For instead of calculating that, if the same number of
workers and the same constant capital is employed as before,
the capital outlay will amount to 110 or 120, we shall
calculate on the basis of the same organic composition (not
measured in value but in amount of labour employed and
amount of constant capital) how much constant capital and
wages a capital of £ 100 contains (in order to keep to
the comparison of 100 with the other classes).
The
proportion 110:60=100:54 6/11 and 110:50=100:45 5/11.
20 men
set in motion £60 constant capital; so how many [men]
set in motion 54 6/11?
The situation is as follows : The value obtained from
employing a number of workers (say 20) is £ 60, In
this case 20 quarters or tons, equal to £ 40, will
fall to the share of the workers employed, if the value of
the ton or quarter is £ 2.
If the value of a ton rises
to £ 3, the surplus-value disappears.
If it rises to 2
1/2, then that half of the surplus-value disappears, which
constituted the absolute rent.
In the first case, where a capital of £ 120
(60c+60v) is laid out the product amounts to £
120, that is 40 tons (40X3), In the second case, where a
capital of £ 110 (60c and 50v is laid out the product
amounts to £ 120, which is 48 tons (48X2 1/2).
In the first case, if the capital laid out were £
100 (50c and 50v) the product would come to £ 100,
i.e., 33 1/3 tons (3X33 1/3=100).
Moreover, since only the
land has deteriorated while the capital has undergone no
change, the proportionate number [of workers] who set in
motion the constant capital of £ 50 will be the same
as that previously setting in motion the capital of £
60.
Thus if the latter was set in motion by 20 men (who
received £ 40 while the value of 1 ton was £ 2)
it will now be set in motion by 16 2/3 men, who receive
£ 50 since the value of a ton has risen to £
3.
As before, 1 man receives 1 ton or 1 quarter equal to
£ 3, for 16 2/3X3=50.
If the
value created by 16 2/3 men is £ 50, then that created
by 20 men is £ 60.
Thus the assumption that a day’s
labour of 20 men is equal to £ 60 remains
unchanged.
Now let us take the second case.
With a capital outlay of
£ 100, the product is £ 109 1/11, equal to 43
7/11 tons (2 1/2X43
7/11=109 1/11).
The constant capital is £
54 6/11 and the variable £ 45 5/11.
How many men does
the £ 45 5/11 represent?
18 2/11 men, ||675|
for if the value of a day’s labour of 20 men equals £
60, then that of 18 2/11 men equals £ 54 6/11 hence
the value of the product is £ 109 1/11.
It can be seen that in both cases the same capital sets
in motion fewer men who, however, cost more.
They work for
the same length of time, but the surplus-labour [time]
decreases or disappears altogether, because they produce a
smaller amount of product in the same time (and this product
consists of their necessaries) , therefore they use
more labour-time for the production of 1 ton or 1 quarter
although they work the same length of time as
before.
In his calculations, Ricardo always presupposes that the
capital must set in motion more labour and that
therefore a greater capital, i.e., £ 120 or
£ 110, must be laid out instead of the previous
£ 100.
This is only correct if the same
quantity is to be produced, i.e., 60 tons in the cases
cited above, instead of 40 tons being produced in case I,
with an outlay of £ 120, and 48 in case II with an
outlay of £ 110.
With an outlay of £ 100,
therefore, 33 1/3 tons are produced in case I and 43 7/11
tons in case II.
Ricardo thus departs from the correct view
point, which is not that more workers must be employed in
order to create the same product, but that a given number of
workers create a smaller product, a greater share of which
is in turn taken up by wages.
We shall now compile two tables, firstly Table A
from page 574 and the new table which follows from the data
given above.
|
[Class]
|
Capital £
|
[Number of] tons
|
TV [Total value] £
|
MV [Mar-ket value] per ton £
|
IV [Indi-vidual value] per ton
£
|
DV [Differential value] per ton
£
|
CP [Cost price] per ton £
|
AR [Absolute rent] £
|
DR [Differential rent] £
|
AR [Absolute rent] tons
|
|
I
|
100
|
60
|
120
|
2
|
2
|
0
|
1 5/6
|
10
|
0
|
5
|
|
II
|
100
|
65
|
130
|
2
|
1 11/13
|
2/13
|
1 9/13
|
10
|
10
|
5
|
|
III
|
100
|
75
|
150
|
2
|
1 3/5
|
2/5
|
1 7/15
|
10
|
30
|
5
|
|
|
300
|
200
|
400
|
|
|
|
|
30
|
40
|
15
|
|
[Class]
|
DR [Differ-ential rent] tons
|
Rental £
|
Rental tons
|
Composition of capital
|
Rate of surplus-value per cent
|
Number of workers
|
Wages £
|
Wages tons
|
Rate of profit per cent
|
|
I
|
0
|
10
|
5
|
60c+40v
|
50
|
20
|
40
|
20
|
10
|
|
II
|
5
|
20
|
10
|
60c+40v
|
50
|
20
|
40
|
20
|
10
|
|
III
|
15
|
40
|
20
|
60c+40v
|
50
|
20
|
40
|
20
|
10
|
|
|
20
|
70
|
35
|
|
|
|
|
|
|
If this table were constructed in the reverse direction,
according to Ricardo’s descending line: that is beginning
from III and if at the same time one assumed that the more
fertile land which is cultivated first, pays no rent, then
we would, in the first place, have a capital of £ 100
in III, [which] produces a value of £ 120, consisting
of £ 60 constant capital and £ 60 newly-added
labour.
According to Ricardo, one would further have to
assume, that the rate of profit stood at a higher level than
entered in Table A, since, when the ton of coal
(quarter of wheat) was £ 2, the 20 men received 20
tons, equal to £ 40; now that, as a result of the fall
in the value, the ton is equal to £ 1 9/15, or £
1 12s., the 20 men receive only £ 32 (equal to 20
tons).
The capital advanced to employ the same number of
workers would amount to £ 60c and £
32v=£ 92 and the produced value would be
£ 120, since the value of the work carried out by the
20 men equals £ 60 as before.
Accordingly, a capital
of £ 100 would produce a value of £ 130 10/23,
for 92:120=100:130 10/23
(or 23:30=100:130 10/23).
Moreover this
capital of £ 100 would be composed as follows: £
65 5/23c and £ 34
18/23v.
Thus the capital would be
£ 65 5/23c+£ 34
18/23v; the value of the product
would amount to £ 130 10/23.
The number of
workers would be 21 17/23 and the rate of surplus-value
87 1/2 per cent.
1. So we would have:
|
[Class]
|
Capital £
|
Number of tons
|
TV [Total Value] £
|
MV [Market] value per ton £
|
IV [Individual value] per ton
£
|
DV [Differential value] per ton
£
|
|
III
|
100
|
81 12/23
|
130 20/23
|
1 3/5
|
1 3/5
|
0
|
|
Rent £
|
Profit £
|
Rate of Profit per cent
|
Composition of capital
|
Rate of Surplus value per cent
|
Number of workers
|
|
0
|
30 10/23
|
30 10/23
|
65 5/23c + 34 18/23v
|
87 1/2
|
21 17/23
|
Expressed in tons, wages would be equal to 21 17/23 tons
and profit to 19 1/46 tons.
||676| Continuing on the Ricardian assumption, let us now
suppose that as a result of the increasing population, the
market-price rises so high that class II must be cultivated,
where the value per ton is £ 1 11/13.
In this case it is impossible to assume as Ricardo wants
that the 21 17/23 workers produce always the same value,
i.e., £ 65 5/23 (wages added to surplus-value).
For
the number of workers whom III can employ, and
therefore exploit, decreases—according to his own
assumption—hence also the total amount of
surplus-value.
At the same time, the composition of the agricultural
capital always remains the same.
Whatever their wages may
be, 20 workers are always required (with a given length of
the working-day) in order to set in motion £ 60c.
Since these 20 workers receive 20 tons and the ton is
equal to £ 1 11/13, 20 workers cost £ 20
(1+11/13) =£ 20+£ l6 12/13=£ 36 12/13.
The value which these 20 workers produce, whatever the
productivity of their labour, equals [£] 60; thus the
capital advanced amounts to £ 96 12/13, the value [of
the product] is £ 120, and profit £ 23 1/13.
The
profit on a capital of £ 100 will therefore be
[£] 23 17/21 and the composition: £ 61
19/21c+£
382/21v.
20 40/63 workers [are]
employed.
Since the total value is £ 123 17/21, and the
individual value per ton in class III is £ 1 3/5, of
how many tons does the product consist?
77 8/21 tons.
The
rate of surplus-value is 62 1/2 per cent.
But III sells the ton at £ 1 11/13, This results in
a differential value of 4 12/13 s.
or £ 16/65 per ton,
and on 77 8/21 tons it amounts to 77 8/21 X
16/65 =£ 19 1/21.
Instead of selling its product at £ 123 17/21, III
sells at £ 123 17/21+£ 19 1/21=£ 142
6/7.
The £ 19 1/21 constitutes the rent.
Thus we would have the following for III :
|
[Class]
|
Capital £
|
[Number of] tons
|
[ATV] Actual total value £
|
[TMV] Total market value £
|
MV [Market value per ton] £
|
IV [Individual value per ton] £
|
|
III
|
100
|
77 8/21
|
123 17/21
|
142 6/7
|
1 11/13
|
1 3/5
|
|
DV Differential value [per ton]
|
Rent £
|
Rent in tons
|
Rate of profit per cent
|
Composition of capital
|
Rate of surplus-value per cent
|
Number of workers
|
|
[+£16/65=]
+412/13s.
|
19 1/21
|
10 20/63
|
23 17/21
|
61 19/21c+38 2/21v
|
62 1/2
|
20 40/63
|
The wages measured in tons are 20 40/63 tons.
And the
profit is 12 113/126 tons.
We now pass on to class II; there is no rent
here.
Market-value and individual value are equal.
The
number of tons produced by II is 67 4/63.
Thus we have the following for II:
|
[Class]
|
Capital £
|
[Number of] tons
|
TV [Total value] £
|
MV [Market value per ton] £
|
IV [Individual value per ton] £
|
|
II
|
100
|
67 4/63
|
123 17/21
|
1 11/13
|
1 11/23
|
|
DV [Differential value per ton]
|
Rent £
|
Rate of profit per cent
|
Composition of capital
|
Rate of surplus-value per cent
|
Number of workers
|
|
0
|
0
|
23 17/21
|
61 19/21c + 38 2/21v
|
62 1/2
|
20 40/63
|
Wages measured in tons are 20 40/63 and profit is 12
113/126tons.
||677| 2.
For the second case, in which class II and rent
comes into existence, we have the following:
|
[Class]
|
Capital £
|
[Number of] tons
|
[ATV] Actual total value £
|
[TMV] Total market value £
|
MV [Market value per ton] £
|
IV [Individual value per ton] £
|
DV [Differential value per ton] £
|
|
III
|
100
|
77 8/21
|
123 17/21
|
142 6/7
|
1 11/13
|
1 3/5
|
[+£16/65=] +4 12/13s.
|
|
II
|
100
|
67 4/63
|
123 17/21
|
123 17/21
|
1 11/13
|
1 11/13
|
0
|
|
Composition of capital
|
Number of workers
|
Rate of surplus-value per cent
|
Rate of profit per cent
|
Wages in tons
|
Profit in tons
|
Rent £
|
Rent in tons
|
|
61 19/21c+ 38 2/21v
|
20 40/63
|
62 1/2
|
23 17/21
|
20 40/63
|
12 113/126
|
19 1/21
|
10 20/63
|
|
61 19/21c+ 38 2/21v
|
20 40/63
|
62 1/2
|
23 17/21
|
20 40/63
|
12 113/126
|
0
|
0
|
Let us now pass on to the third case and, like Ricardo,
let us assume that mine I, a poorer mine, must and can be
worked, because the market-value has risen to £
2.
Since twenty workers are required for a constant capital
of £ 60 and their wages are now £ 40, we have
the same composition of capital as in Table A page
574, i.e., £ 60c+£ 40v, and as the value
produced by the 20 workers is always equal to £ 60,
the total value of the product produced by a capital of
£ 100 is £ 120, whatever its productivity.
The
rate of profit in this case is 20 per cent and the
surplus-value 50 per cent.
Measured in tons, the profit is
10 tons.
We must now see what changes occur in III and II as
a result of this change in the market-value and the
introduction of I, which determines the rate of profit.
Although III works the most fertile land he can with
£ 100 only employ 20 workers, costing him £ 40,
for a constant capital of £ 60 requires 20 workers.
The number of workers employed with a capital of £ 100
therefore falls to 20.
And the actual total value of the
product is now £ 120.
But how many tons have been
produced by III when the individual value of one ton is
equal to £ 19/15?
75 tons, since 120 divided by 24/15
(£ 19/15)=75.
The number of tons produced by III
decreases because he can employ less labour with the
same capital, not more (as Ricardo wrongly declares,
because he always considers merely how much labour is
required in order to create the same output; and not
how much living labour can be employed with the new
composition of capital though this is the only important
point).
But he sells these 75 tons at £ 150 (instead
of at £ 120, which is their value) and so the rent
rises to £ 30 in III.
So far as II is concerned, the value of the product here
is also £ 120 etc.
But, as the individual value per
ton is £ 1 11/13, 65 tons are produced (for 120
divided by 24/13 (1 11/13)=65).
In short, we arrive here at
Table A from page 574.
But since for our purpose we
need new headings here, now that I is introduced and the
market-value has risen to £ 2 we set out the table
anew.
3. [Third Case:]
|
[Class]
|
Capital £
|
[Number of] tons
|
ATV [Actual total value] £
|
TMV [Total market-value] £
|
MV [Market-value per ton] £
|
IV [Individual value per ton] £
|
DV [Differential value per ton] £
|
|
III
|
100
|
75
|
120
|
150
|
2
|
1 3/5
|
[£2/5=]8s.
|
|
II
|
100
|
65
|
120
|
130
|
2
|
1 11/13
|
[£2/13=]31/13s.
|
|
I
|
100
|
60
|
120
|
120
|
2
|
2
|
0
|
|
Composition of capital
|
Number of workers
|
Rate of surplus-value per cent
|
Rate of profit per cent
|
Wages in tons
|
Profit in tons
|
Rent £
|
Rent in tons
|
|
60 c + 40 v
|
20
|
50
|
20
|
20
|
10
|
30
|
15
|
|
60 c + 40 v
|
20
|
50
|
20
|
20
|
10
|
10
|
5
|
|
60 c + 40 v
|
20
|
50
|
20
|
20
|
10
|
0
|
0
|
|
|
|
|
|
|
|
40
|
20
|
||678| In short, this case III corresponds to Table
A page 574 (apart from absolute rent which appears as
a part of profit here) only the order is reversed.
Let us now go on to the newly assumed cases.
First of all the class which still yields a profit.
Let
it be called Ib.
With a capital of £ 100 it only
yields 43 7/11 tons.
The value of a ton has risen to £ 2 1/2.
The
composition of the capital is [£]
546/11c+[£] 45
5/11v.
The value of the product is
£ 109 1/11.
£ 45 5/11 is enough to pay 18 2/11
men.
And since the value of a day’s labour of 20 men is
£ 60, that of 18 2/11 men is [£] 54 6/11.
The
value of the product is therefore [£] 109 1/11.
The
rate of profit is £ 9 1/11, that is, 3 7/11
tons.
The rate of surplus-value is 20 per cent.
Since the organic composition of the capitals in III, II,
I is the same as in Ib and they must pay the same wages,
they too can employ only 18 2/11 men with £ 100, these
men produce a total value of [£] 54 6/11, and
therefore a surplus-value of 20 per cent and a rate of
profit of 9 1/11 per cent as in Ib.
The total value of the
product here, as in Ib, is £ 109 1/11.
But since the individual value of a ton in III is £
1 3/5, III produces (or its product is equal to) £ 109
1/11 divided by 1 3/5 or 24/15=68 2/11 tons.
Moreover, the
difference between the market-value of a ton and the
individual value amounts to £ 2 1/2 -£ 1
3/5.
That is £ 2 l0s.-£ 1 12s.=18s.
And on 68
2/11 tons this amounts to 18(68+2/11)s.=1,227
3/11s.=£ 617 3/11s.
Instead of selling at £ 109 1/11, III sells at
£170 9 5/11s.
And this excess equals the rent of
III.
This rent, expressed in tons, is 24 6/11 tons.
Since the individual value of a ton in II is £ 1
11/13, II produces [£] 109 1/11 divided by 1 11/13 and
this is 59 1/11 tons.
The difference between the
market-value of one ton in II and its individual value is
£ 2 1/2 -£ 1 11/13 which is £ 17/26.
And
on 59 1/11 tons, this amounts to £38 7/11.
And this is
the rent.
The total market-value [of the product] amounts
to £ 147 8/11.
The rent expressed in tons is 15 5/11
tons.
Finally, since the individual value of a ton in I is
£ 2, £ 109 1/11 is equal to 54 6/11 tons.
The
difference between the market-value and the individual-value
is £ 2 1/2 -£ 2=10s.
And on 54 6/11 tons, this
amounts to (59+6/11) l0s.=590s .+60/11s. =£27+5
5/11s.
The total market-value [of the
product] is therefore £ 136 7
3/11s.
And the value of the rent
expressed in tons is 10 10/11 tons.
Bringing together all the data for case 4, one gets the
following:
||679| 4.
[Fourth Case:]
|
[Class]
|
Capital £
|
[Number of] tons
|
ATV [Actual total value] £
|
TMV [Total market-value] £
|
MV [Market-value per ton] £
|
IV [Individual value per ton] £
|
DV [Differential value per ton] £
|
|
III
|
100
|
68 2/11
|
109 1/11
|
[£1705/11=] £170 91/11s.
|
2 1/2
|
1 3/5
|
[£9/10]=18s.
|
|
II
|
100
|
59 1/11
|
109 1/11
|
[£147 8/11=] £147 146/11s.
|
2 1/2
|
1 11/13
|
[£17/26=] 131/13s.
|
|
I
|
100
|
54 6/11
|
109 1/11
|
[£136 4/11=] £136 73/11s.
|
2 1/2
|
2
|
[£1/2=]10s.
|
|
Ib
|
100
|
43 7/11
|
109 1/11
|
[£109 1/11 [=£109 19/11s.
|
2 1/2
|
2 1/2
|
0
|
|
Composition of capital
|
Number of workers
|
[Rate of] surplus-value per cent
|
Rate of profit per cent
|
Wages [in] tons
|
Profit [in] tons
|
Rent £
|
Rent [in] tons
|
|
54 6/11c+45 5/11v
|
18 2/11
|
20
|
9 1/11
|
18 2/11
|
3 7/11
|
[£61 4/11=] £61 7 3/11s.
|
24 6/11
|
|
54 6/11c+45 5/11v
|
18 2/11
|
20
|
9 1/11
|
18 2/11
|
3 7/11
|
[£38 7/11=] £38 12 8/11s.
|
15 5/11
|
|
54 6/11c+45 5/11v
|
18 2/11
|
20
|
9 1/11
|
18 2/11
|
3 7/11
|
[£27 3/11=] £27 5 5/11s.
|
10 10/11
|
|
54 6/11c+45 5/11v
|
18 2/11
|
20
|
9 1/11
|
18 2/11
|
3 7/11
|
0
|
0
|
Finally let us look at the last case in which, according
to Ricardo, the entire profit, disappears and there
is no surplus-value.
In this case the value of the product rises to £ 3,
so that if 20 men are employed, their wage is £ 60
which is equal to the value produced by them.
The
composition of the capital is £ 50c+£ 50v.
Now
16 2/3 men are employed.
If the value produced by 20
men is £ 60, then that produced by 16 2/3 men is
£ 50.
The wages, there-fore, swallow up the whole
value.
Now, as before, a man receives 1 ton.
The value of
the product is £ 100 and therefore the number of tons
produced is 33 1/3 tons, of which one-half merely replaces
the value of the constant capital and the other half the
value of the variable capital.
Since in III, the individual value of the ton is £
1 3/5 or £ 24/15, how many tons does III produce?
100
divided by 24/15, i.e., 62 1/2 tons, whose value is £
100.
The difference, however, between market-value and
individual value is £ 3-£ 1 3/5=£ 1 6/15
or £ 1 2/5.
On 62 1/2 tons this amounts to £ 87
1/2 .
Hence the total market-value of the product is £
187 1/2 .
And the rent in tons is 29 1/6 tons.
In II the individual value of a ton is £ 1
11/13.
Hence the differential value is £ 3-£ 1
11/13=£ 1 2/13.
Since the individual value of a ton is
here £ 1 11/13 or £ 24/13, the capital of
£ 100 produces (100 divided by 24/13) 54 1/6 tons.
On
this number of tons, that difference amounts to £ 62
l0s.
And the [total] market-value of the product is £
162 l0s.
Expressed in tons, the rent is 20 5/6 tons.
In I the individual value of a ton is £ 2.
The
differential value therefore equals £ 3-£
2=£ 1.
Since the individual value of a ton is £
2 here, a capital of £ 100 produces 50 tons.
This
makes a difference of £ 50.
The [total] market-value
of the product is £ 150 and the rent in tons is 16 2/3
tons.
We now come to Ib, which until now has not carried a
rent.
Here the individual value is £ 2 1/2.
Hence
differential value equals 3–2 1/2=£ 1/2 or l0s.
And
since the individual value of a ton is here equal to £
2 1/2 or £ 5/2, £ 100 produces 40 tons.
The
differential value on these is £ 20, so that the total
market-value [of the product] amounts to £ 120.
And
the rent expressed in tons is 6 2/3 tons.
Let us now construct case 5 in which, according to
Ricardo, profit disappears.
||680| 5. [Fifth Case:]
|
[Class]
|
Capital £
|
[Number of] tons
|
ATV [Actual total value] £
|
TMV [Total market-value] £
|
MV [Market-value per ton] £
|
IV [Individual value per ton] £
|
DV [Differential value per ton] £
|
|
III
|
100
|
62 1/2
|
100
|
187 1/2
|
3
|
1 3/5
|
1 2/5
|
|
II
|
100
|
54 1/6
|
100
|
162 1/2
|
3
|
1 11/13
|
1 2/13
|
|
I
|
100
|
50
|
100
|
150
|
3
|
2
|
1
|
|
Ib
|
100
|
40
|
100
|
120
|
3
|
2 1/2
|
1/2
|
|
Ia
|
100
|
33 1/3
|
100
|
100
|
3
|
3
|
0
|
|
Composition of capital
|
Number of workers
|
Rate of surplus-value per cent
|
Rate of profit per cent
|
Wages in tons
|
Rent £
|
Rent in tons
|
|
50c + 50v
|
16 2/3
|
0
|
0
|
16 2/3
|
87 1/2
|
29 1/6
|
|
50c + 50v
|
16 2/3
|
0
|
0
|
16 2/3
|
62 1/2
|
20 5/6
|
|
50c + 50v
|
16 2/3
|
0
|
0
|
16 2/3
|
50
|
16 2/3
|
|
50c + 50v
|
16 2/3
|
0
|
0
|
16 2/3
|
20
|
6 2/3
|
|
50c + 50v
|
16 2/3
|
0
|
0
|
16 2/3
|
0
|
0
|
On the following page I shall now put all five cases in
tabular form.|680||
||681–82| The Movement of the Rent
According to Ricardo with Certain Corrections
|
[Class]
|
Capital £
|
[Number of] tons
|
Actual total value £
|
Total market-value £
|
Market value per ton £
|
Individual value per ton £
|
Differential value per ton £
|
Composition of capital
|
Number of workers
|
Rate of surplus-value per cent
|
Profit £
|
Profit in tons
|
Wages in tons
|
Money rent £
|
Rent in tons
|
|
A. Only the best class, III, is cultivated.
Non-existence of rent.
Only the most fertile land or mine is cultivated.
|
|
III
|
100
|
81 12/23
|
130 10/23
|
130 10/23
|
1 3/5
|
1 3/5
|
0
|
65 5/23c + 34 18/23v
|
21 17/23
|
87 1/2
|
30 10/23
|
19 1/46
|
21 17/23
|
0
|
0
|
|
B.
Second class, II, is added.
Rent comes into
existence on land(mine) III
|
|
III
|
100
|
77 8/21
|
123 17/21
|
142 6/7
|
1 11/13
|
1 3/5
|
[16/65=] 4 12/13s.
|
61 19/21c + 38 2/21v
|
20 40/63
|
62 1/2
|
23 17/21
|
12 113/126
|
20 40/63
|
19 1/21
|
10 20/63
|
|
I
|
100
|
67 4/63
|
123 17/21
|
123 17/21
|
1 11/13
|
1 11/13
|
0
|
61 19/21c + 38 2/21v
|
20 40/63
|
62 1/2
|
23 17/21
|
12 113/126
|
20 40/63
|
0
|
0
|
|
Total
|
200
|
144 4/9
|
247 13/21
|
266 2/3
|
|
|
|
|
41 17/23
|
|
47 13/21
|
25 50/63
|
41 17/63
|
19 1/21
|
10 20/63
|
|
C.
Third class, I[6], is added.
Rent comes into existence on land (mine) II
|
|
III
|
100
|
75
|
120
|
150
|
2
|
1 3/5
|
[£2/5=]8s.
|
60c + 40v
|
20
|
50
|
20
|
10
|
20
|
30
|
15
|
|
II
|
100
|
65
|
120
|
130
|
2
|
1 11/13
|
[£2/13=] 3 1/13s.
|
60c + 40v
|
20
|
50
|
20
|
10
|
20
|
10
|
5
|
|
I
|
100
|
60
|
120
|
120
|
2
|
2
|
0
|
60c + 40v
|
20
|
50
|
20
|
10
|
20
|
0
|
0
|
|
Total
|
300
|
200
|
360
|
400
|
|
|
|
|
60
|
|
60
|
30
|
60
|
40
|
20
|
|
D.
Fourth class, Ib, is added.
Rent comes into
existence on land (mine) I
|
|
III
|
100
|
68 2/11
|
109 1/11
|
[£170 5/11=] £170 9 1/11s.
|
2 1/2
|
1 3/5
|
[£9/10=] 18s.
|
54 6/11c + 45 5/11v
|
18 2/11
|
20
|
9 1/11
|
3 7/11
|
18 2/11
|
[£61 4/11=] £61 7 3/11s.
|
24 6/11
|
|
II
|
100
|
59 1/11
|
109 1/11
|
[£147 5/11=] £147 146/11s.
|
2 1/2
|
1 11/13
|
[£17/26=] 13 1/13s.
|
54 6/11c + 45 5/11v
|
18 2/11
|
20
|
9 1/11
|
3 7/11
|
18 2/11
|
[£38 7/11=] £38 128/11s.
|
15 5/11
|
|
I
|
100
|
54 6/11
|
109 1/11
|
[£136 4/11=] £136 7 3/11s.
|
2 1/2
|
2
|
[£1/2=] 10s.
|
54 6/11c + 45 5/11v
|
18 2/11
|
20
|
9 1/11
|
3 7/11
|
18 2/11
|
[£27 3/11=] £27 5 5/11s.
|
10 10/11
|
|
Ib
|
100
|
43 7/11
|
109 1/11
|
[£109 1/11=] £109 1 9/11s.
|
2 1/2
|
2 1/2
|
0
|
54 6/11c + 45 5/11v
|
18 2/11
|
20
|
9 1/11
|
3 7/11
|
18 2/11
|
0
|
0
|
|
Total
|
400
|
225 5/11[7]
|
436 4/11
|
[£563 7/11=]
£563 12 8/11s.
|
|
|
|
|
72 8/11
|
|
36 4/11
|
14 6/11
|
72 8/11
|
|
|
|
E.
Fifth class, Ib, is added.
Surplus-value and profit
disappear altogether.
|
|
III
|
100
|
62 1/2
|
100
|
187 1/2
|
3
|
1 3/5
|
1 2/5
|
50c+50v
|
16 2/3
|
0
|
0
|
0
|
16 2/3
|
87 1/2
|
29 1/6
|
|
II
|
100
|
54 1/6
|
100
|
162 1/2
|
3
|
1 11/13
|
1 2/13
|
50c+50v
|
16 2/3
|
0
|
0
|
0
|
16 2/3
|
62 1/2
|
20 5/6
|
|
I
|
100
|
50
|
100
|
150
|
3
|
2
|
1
|
50c+50v
|
16 2/3
|
0
|
0
|
0
|
16 2/3
|
50
|
16 2/3
|
|
Ib
|
100
|
40
|
100
|
120
|
3
|
2 1/2
|
1/2
|
50c+50v
|
16 2/3
|
0
|
0
|
0
|
16 2/3
|
20
|
6 2/3
|
|
Ia
|
100
|
33 1/3
|
100
|
100
|
3
|
3
|
0
|
50c+50v
|
16 2/3
|
0
|
0
|
0
|
16 2/3
|
0
|
0
|
|
Total
|
500
|
240
|
500
|
720
|
|
|
|
|
83 1/3
|
|
|
|
83 1/3
|
220
|
73 1/3
|
[c) Transformation of a Part of Profit and a Part of
Capital into Rent.
The Magnitude of Rent Varies in
Accordance with the Amount of Labour Employed in
Agriculture]
||683| If in the first place we examine Table E on
the previous page, we see that the position in the last
class, Ia, is very clear.
In this case wages swallow up the
whole product and the whole value of the [newly-added]
labour.
Surplus-value is non-existent, hence there is
neither profit nor rent.
The value of the product is equal
to the value of the capital advanced, so that the
workers—who are here in possession of their own
capital—can invariably reproduce their wages and the
conditions of their labour, but no more.
In this last class
it cannot be said that the rent swallows up the
profit.
There is no rent and no profit because there is no
surplus-value.
Wages swallow up the surplus-value and
therefore the profit.
In the four other classes the position is prima
facie by no means clear.
If there is no surplus-value,
how can rent exist?
Moreover, the productivity of labour on
the types of land Ib, I, II and III has not altered at
all.
The non-existence of surplus-value must
therefore be sheer illusion.
Furthermore, another phenomenon becomes apparent and
this, prima facie, is equally inexplicable.
The rent
in tons for III amounts to 29 1/6 tons or quarters, whereas
in Table A, where only land III was cultivated, where
there was no rent and where, moreover, 21 17/23 men were
employed whereas now only 16 2/3 men are employed, the
profit (which absorbed the entire surplus-value) only
amounted to 19 1/46 tons.
The same contradiction is apparent in II, where the rent
in Table E amounts to 20 5/6
tons or quarters while in Table B the profit, which
absorbed the entire surplus-value (20
40/63 men being employed instead of 16
2/3 men now), amounted to only 12
113/126 tons or quarters.
Similarly in I, where the rent in Table E is 16
2/3 tons or quarters, while in Table
C the profit of I, which absorbs the entire
surplus-value, is only 10 tons (20 men being employed,
instead of the present 16 2/3).
Finally in Ib, where the rent in Table E is 6
2/3 tons or quarters, while the profit
of Ib in Table D, where the profit absorbed the
entire surplus-value, was only 3 7/11
tons or quarters (while 18 2/11 men
were employed instead of the 16 2/3
now being employed).
It is, however, clear, that whereas the rise in
market-value above the individual value of the products of
III, II, I, Ib can alter the distribution of the product,
shifting it from one class of shareholders to the other, it
can by no means increase the product which represents the
surplus-value over and above the wages.
Since the
productivity of the various types of land has remained the
same, as has the productivity of capital, how can III to Ib
become more productive in tons or quarters through the entry
into the market of the less productive type of land or mine
Ia?
The riddle is solved in the following manner:
If a day’s labour of 20 men produces £ 60, then
that of 16 2/3 men produces £ 50.
And since in land of
class III, the labour-time contained in £ 1 3/5 or
£ 8/5 is represented in 1 ton or 1 quarter, £ 50
will be represented in 3 11/4 tons or quarters.
16 2/3 tons
or quarters have to be deducted from this for wages, thus
leaving 14 7/12 as surplus-value.
Furthermore, because the market-value of a ton has risen
from £ 1 3/5 or £ 8/5 to £ 3, 16 2/3 tons
or quarters out of the product of 62 1/2 tons or quarters,
will suffice to replace the value of the constant
capital.
On the other hand, so long as the ton or quarter
produced on III itself determined the market-value, and the
latter was therefore equal to its individual value, 31 1/4
tons or quarters were required in order to replace a
constant capital of £ 50.
Instead of the 31 1/4 tons
or quarters—the part of the product which was
necessary to replace the capital when the value of a ton was
£ 1 3/5—only 16 2/3 are
now required.
Thus 31 1/4–16 2/3 tons or quarters,
||684| i.e., 14 7/12 tons or quarters, become available and
fall to the share of rent.
If one now adds the surplus-value produced by 16 2/3
workers with a constant capital of £ 50 on III, which
amounts to 14 7/12 tons or quarters, to 14 7/12 tons or
quarters, the part of the product which instead of replacing
the constant capital now takes on the form of
surplus-produce, then the total surplus-produce amounts to
28 14/12 tons or quarters =29 2/12=29 1/6 quarters or
tons.
And this is exactly the ton or corn rent of III in
Table E.
The apparent contradiction in the amount of
ton or corn rent in classes II, I, Ib in Table E is
solved in exactly the same way.
Thus it becomes evident that the differential
rent—which arises on the better types of land owing to
the difference between market-value and individual value of
the products raised on them— in its material
form as rent in kind, surplus-product, rent in
tons or corn in the above example, is made up of two
elements and due to two
transformations.
(Firstly:) The surplus-product which
represents the surplus-labour of the workers or the
surplus-value, is changed from the form of profit to the
form of rent, and therefore falls to the landlord instead of
the capitalist.
Secondly: a part of the product which
previously—when the product of the better type of land
or mine was being sold at its own value—was needed to
replace the value of the constant capital, is now,
when each portion of the product possesses a higher
market-value, free and appears in the form of
surplus-product, thus falling to the landlord instead of the
capitalist.
The rent in kind in so far as it is differential
rent comes into being as the result of two processes: the
transformation of the surplus-produce into rent, and not
into profit, and the transformation of a portion of
the product which was previously allotted for the
replacement of the value of the constant capital into
surplus-product, and thus into rent.
The latter
circumstance, that a part of the product is converted into
rent instead of capital, has been overlooked by Ricardo and
all his followers.
They only see the transformation of
surplus-product into rent, but not the transformation of a
part of the product which previously fell to the share of
capital (not of profit) into surplus-product.
The nominal value of the surplus-product or
differential rent thus constituted, is determined
(according to the presupposition made) by the value of the
product produced on the worst land or in the worst mine.
But this market-value only instigates the different
distribution of this product, it does not bring it
about.
These same two elements [are present] in all excess
profit, for instance, if as a result of new machinery etc.,
a cheaply produced product is sold at a higher market-value
than its own value.
A part of the surplus-labour of the
workers appears as surplus-product (excess profit) instead
of as profit.
And a part of the product which—if the
product were sold at its own lower value—would have to
replace the value of the capitalist’s constant capital, now
becomes free, has not got to replace anything, becomes
surplus-product and therefore swells the profit.
|684||
* * *
||688| {Incidentally, when speaking of the law of the
falling rate of profit in the course of the
development of capitalist production, we mean by profit, the
total sum of surplus-value which is seized in the first
place by industrial capitalist, [irrespective of] how he may
have to share this later with the money-lending capitalist
(in the form of interest) and the landlord (in the form of
rent).
Thus here the rate of profit is equal to
surplus-value divided by the capital outlay.
The rate of
profit in this sense may fall, although, for instance, the
industrial profit rises proportionately to interest or vice
versa, or although rent rises proportionately to industrial
profit or vice versa.
If P is the profit, P’
the industrial profit, I interest and R rent,
then P=P’+I+R.
And it is clear, that whatever the
absolute magnitude of P—P’, I, R can increase
or decrease as compared with one another, independently of
the magnitude of P or the rise and fall of
P.
The reciprocal rise of P’, I and R
only represents an altered distribution of P among
different persons.
A further examination of the
circumstances on which this distribution of P depends
but which does not coincide with a rise or fall of P
itself, does not belong here, but into a consideration of
the competition between capitals.
That, however, R
can rise to a level higher even than that of P, if it
were only divided into P’ and I, is
therefore—as has already been explained—due to
an illusion which arises from the fact that a part of
the product whose value is rising, becomes free and is
converted into rent instead of being reconverted into
constant capital.} |688||
* * *
||684| It was assumed
throughout this discussion, that the product whose price
(according to market-value) had risen did not enter in kind
into the composition of the constant capital, but only into
wages, only into the variable capital. If the former
were the case, Ricardo says that this would cause the rate
of profit to fall even more and the rent to rise. This
has to be examined.
We have assumed until now, that the value of the
product has to replace the value of the constant capital,
i.e., the £ 50 in the case cited above.
Thus if 1 ton
or quarter costs £3, it is obvious that not so many
tons or quarters are required for the replacement of this
value than would be needed if the ton or quarter cost only
£ 1 9/15.
But supposing that the coal or the corn or
whatever other product of the earth, the product produced by
agricultural capital, itself enters in kind into the
formation of the constant capital.
Let us assume for
instance that it makes up half of the constant capital.
In
this case it is clear that whatever the price of the coal or
the corn ||685| a constant capital of definite size, in
other words, one which is set in motion by a definite number
of workers, always requires a definite portion of the total
product in kind for its replacement—since the
composition of agricultural capital has, according to the
assumption, remained unchanged in its proportionate
amounts of accumulated and living labour.
If for example, half the constant capital consists of
coal or corn and half of other commodities, then the
constant capital of £ 50 will consist of £ 25 of
other commodities and £ 25 (or 15 5/8 quarters or
tons) [coal or corn] , when the value of a ton is £
8/5 or £ 1 3/5.
And however the market-value of a ton
or a quarter may change, 16 2/3 men require a constant
capital of £ 25 plus 15 5/8 quarters or tons, for the
nature of the constant capital remains the same, and so does
the proportionate number of workers required to set it in
motion.
Now if, as in Table E, the value of a ton or
quarter rises to £ 3, then the constant capital
required for the 16 2/3 men would be £ 25+£ 3
(15+5/8)=£ 25+£ 45+£ 15/8=£71
7/8.
And since the 16 2/3 men cost £ 50, they would
require a total capital outlay of £ 71 7/8+£
50=£ 121 7/8.
The correlation of values within the agricultural
capital would have changed while organic composition
remained the same.
It would be £71 7/8c+£
50v (for 16 2/3 workers).
For [£] 100 the composition
would be £ 58 38/39c+£ 41
1/39v.
Slightly more than 13 2/3
workers (that is, leaving out of account the fraction 1/117)
Since 16 2/3 workers set in motion 15 5/8
tons or quarters constant capital, 13 79/117 workers
set in motion 12 32/39 tons or quarters, equal to £ 38
6/13.
The remainder of the constant capital, equal to
£ 20 20/39, would consist of other
commodities.
Whatever the circumstances, 12 32/39 tons or
quarters would always have to be deducted from the product
in order to replace that part of constant capital into which
they enter in kind.
Since the value produced by 20 workers
equals £ 60, that produced by 13 79/117 equals £
41 1/39.
Wages in Table E, however, also amount to
£ 41 1/39.
Therefore no surplus-value.
The total number of tons would be [51 11/13, of which] 12
32/39 tons are needed to replace [part of the constant
capital in kind]; a further 13 79/117 are for the workers; 6
98/117 tons, at £ 3 a ton, are used to replace the
remainder of the constant capital.
That is altogether 33 1/3
tons.
This would leave 17 37/39 tons for the rent.
To shorten the matter, let us take the most extreme case,
the one most favourable to Ricardo, i.e., that the constant
capital, just as the variable, consists purely of
agricultural produce whose value rises to £ 3 per
quarter or ton, when class la governs the market.
The technological composition of the capital remains the
same; that is, the ratio between living labour or
number of workers (since the normal working-day has been
assumed to be constant) represented by the variable capital
and the quantity of the instruments of labour
required, which now, according to our assumption, consist of
tons of coal or quarters of corn, remains constant for a
given number of workers.
Since with the original composition of the capital, of
£ 60c+£ 40v, and the price per ton of £ 2,
£ 40v represented 20 workers or 20 quarters, or tons,
£ 60c represented 30 tons; and since these 20 workers
produced 75 tons on III, 13 1/3 workers (and £ 40v is
equal to 13 1/3tons or workers if the ton costs £ 3)
produce 50 tons and set in motion a constant capital
of 60/3 ||686| equal to 20 tons or quarters.
Moreover, since 20 workers produce a value of £ 60,
13 1/3[workers] produce £ 40.
Since the capitalist must pay £ 60 for the 20 tons
and £ 40 for the 13 1/3workers, but the latter only
produce a value of £ 40, the value of the product is
£ 100; the outlay is £ 100.
Surplus-value and
profit are nil.
But because the productivity of III has remained the
same, as has already been said, 13 1/3men produce 50 tons or
quarters.
The outlay in kind of tons, or quarters, however,
only amounts to 20 tons for constant capital and 13 1/3tons
for wages, i.e., 33 1/3 tons.
The 50 tons thus leave a
surplus-product of 16 2/3 and this forms the rent.
But what do the 16 2/3 represent?
Since the value of the product is [£] 100
and the product itself equals 50 tons, the value of the ton
produced here would in fact be £ 2, which is
100/50.
And so long as the product in kind is greater than
what is required for the replacement of the capital in kind,
the individual value of a ton must remain smaller than its
market-value according to this criterion.
The farmer must pay £60 in order to replace the 20
tons [constant capital], and he reckons the 20 tons at
£ 3, since this is the market-value per ton and a ton
is sold at this price.
Similarly he must pay £ 40 for
the 13 1/3 workers, or for the tons or quarters which he
pays to the workers.
Thus the workers only receive 13
1/3tons in the transaction.
In actual fact, however, so far as class III is
concerned, the 20 tons cost £ 40 and the 13 1/3cost
only £ 26 2/3, But the 13 1/3workers produce a value
of £ 40, and therefore a surplus-value of £
131/3.
At £ 2 per ton, this amounts to 64/6 or 62/3
tons.
And since the 20 tons [constant capital] cost only
£ 40 on III, this leaves an excess of £ 20 equal
to 10 tons.
The 16 2/3 tons rent are thus equal to 6 2/3 tons
surplus-value which is converted into rent and 10 tons
capital which is converted into rent.
But because the
market-value per ton has risen to £ 3, the 20 tons
cost the farmer £60 and the 13 1/3cost him £ 40,
while the 16 2/3 tons, that is the excess of the
market-value over the [individual] value of his product,
appear as rent, and [cost] £ 50.
How many tons are produced by 13 1/3men in class II?
20
men produce 65 here, 13 1/3[men] therefore 43 1/3 tons.
The
value of the product is £ 100, as above.
Of the 43 1/3
tons, however, 33 1/3 are required for the replacement of
the capital.
This leaves 43 1/3-33 1/3=l0 tons as
surplus-product or rent.
But this rent of 10 tons can be explained as follows: the
value of the product of II is £ 100, the product
amounts to 43 1/3 [tons], thus the value of a ton is 100/43
1/3 =£ 2 4/13.
The 13 1/3workers therefore cost
£ 30 10/13, and this leaves a surplus-value of £
9 3/13.
Moreover, the 20 tons constant capital cost
[£] 46 2/13 and of the [£] 60 that are paid for
this, there remain [£] 1311/13.
Together with the
surplus-value this comes to £ 23 1/13, which is
correct to the last farthing.
Only in class Ia, where in fact 33 1/3 tons or quarters,
that is the total product, is required in kind to replace
constant capital and wages, there is neither surplus-value,
nor surplus-product, nor profit, nor rent.
So long as this
is not the case, so long as the product is greater than is
necessary to replace the capital in kind, there will be
conversion of profit (surplus-value) and capital into
rent.
Conversion of capital into rent takes place when a
part of the product is freed, which, with a lower value,
would have had to replace the capital, or [when] a part of
the product which would have been converted into capital and
surplus-value falls to rent.
At the same time it is evident that if constant capital
becomes dearer as a result of dearer agricultural produce,
the rent is very much reduced, for example, the rent of III
and II [is reduced] from 50 tons, equal to £ 150 with
a market-value of £ 3, to 26 2/3 tons, i.e., almost to
half.
Such a reduction is inevitable ||687| since the number
of workers employed with the same capital of £ 100 is
reduced for two reasons, firstly, because wages rise, i.e.,
the value of the variable capital rises, secondly, because
the value of the means of production, the constant capital,
rises.
In itself, the rise in wages necessitates that out of
the £ 100 less can be laid out in labour, hence
relatively less (if the value of the commodities that enter
into the constant capital remains the same) can be laid out
in constant capital; thus £ 100 represents less
accumulated and less living labour.
In addition, however,
the rise in the value, of the commodities which enter into
the constant capital, reduces the amount of accumulated
labour and for this reason of living labour, which can be
employed for the same sum of money, as the technological
ratio between accumulated and living labour remains the
same.
But since, with the same productivity of the land and
a given technological composition of the capital, the total
product depends on the quantity of labour employed, as the
latter decreases, so the rent must also decrease.
This only becomes evident when profit
disappears.
So long as there is a profit, the rent can
increase despite the absolute decrease in the product in
all classes, as shown in the table on page 681.
It is
after all obvious that as soon as rent alone exists, the
decrease in the product, hence in the surplus-product, must
hit rent itself.
This would occur more rapidly at the
outset, if the value of the constant capital increased with
that of variable capital.
But this apart, the table on page 681 shows that with
declining fertility in agriculture, the growth of
differential rent is always accompanied, even on the
better classes of land, by a diminishing volume of total
product in proportion to a capital outlay of a definite
size, say £ 100.
Ricardo has no inkling of this.
The
rate of profit decreases, because the same capital, say
£ 100, sets in motion less labour and pays more
for this labour, thus yielding an ever smaller surplus.
The
actual product, however, like the surplus-value, depends on
the number of workers employed by the capital, when the
productivity is given.
This is overlooked by Ricardo.
He
also ignores the manner in which the rent is formed: not
only by transforming surplus-value into rent, but also
capital into surplus-value.
Of course this is only an
apparent transformation of capital into surplus-value.
Each
particle of surplus-produce would represent surplus-value or
surplus-labour, if the market-value were determined by the
value of the product of III etc.
Ricardo, moreover, only
considers that in order to produce the same volume of
product, more labour has to be employed, but disregards the
fact that with the same capital, an ever diminishing
quantity of living labour is employed, of which an ever
greater part is necessary labour and an ever smaller part
surplus-labour, and this is the decisive factor for the
determination of both the rate of profit and the quantity of
product produced.
All this considered, it must be said that even if rent is
taken to be purely differential rent, Ricardo has not made
the slightest advance over his predecessors.
His important
achievement in this field is, as De Quincey pointed out, the
scientific formulation of the question.
In solving it
Ricardo accepts the traditional views.
Namely :
“The innovation that Ricardo introduced into the
theory of rent, is that he resolves it into the
question whether it really invalidates the law of
value.”9
(Thomas de Quincey,
The Logic of Political Economy, Edinburgh and London,
1844, p. 158.)
On page 163 of the same work, De Quincey says
further:
“Rent is […] that portion of the produce
from the soil (or from any agency of
production) which is paid to the landlord for the
use of its differential powers, as measured by
comparison with those of similar agencies operating on the
same market.”
Furthermore on page 176:
The objections against Ricardo are that the owners of No,
l will not give it away for nothing.
But in the
period (this mythical period), when only No, 1 is
being cultivated “no separate class of occupants
and tenants distinct from the class of owners
||688| can have been formed”.
So according to De Quincey this law of landownership [is
valid] so long as there is no landownership in the modern
sense of the word.
Now to the relevant quotations from Ricardo.
[d) Historical Illustration of the Rise in the Rate of
Profit with a Simultaneous Rise in the Prices of
Agricultural Products.
The Possibility of an Increasing
Productivity of Labour in Agriculture]
(First the following note on differential rent: In
reality, the ascending and descending lines alternate, run
across one another and intertwine.
But it cannot by any means be said that if for individual
short periods (such as 1797–1813) the descending line
clearly predominates, that because of this, the rate
of profit must fall (in so far, that is, as the latter is
determined by the rate of surplus-value).
Rather I believe
that during that period, the rate of profit in England rose
by way of exception, despite the greatly increased prices of
wheat and agricultural produce generally.
I do not know of
any English statistician who does not share this view on the
rise in the rate of profit during that period.
Individual
economists, such as Chalmers, Blake, etc. have advanced
special theories based on this fact.
Moreover I must add
that it is foolish to attempt to explain the rise in the
price of wheat during that period by the depreciation of
money.
No one who has studied the history of the prices of
commodities during that period, can agree with this.
Besides, the rise in prices begins much earlier and reaches
a high level before any kind of depreciation of money
occurs.
As soon as it appears it must simply be allowed
for.
If one asks why the rate of profit rose despite the
rising corn prices, this is to be explained from the
following circumstances:
Prolongation of the working-day, the direct consequence
of the newly introduced machinery; depreciation of the
manufactured goods and colonial commodities which enter into
the consumption of the workers; reduction of wages (although
the nominal wage rose) below their traditional
average level <this fact is acknowledged for that period;
J. P. Stirling in The Philosophy of Trade etc.,
Edinburgh, 1846, who, on the whole, accepts Ricardo’s theory
of rent, seeks, however, to prove that the immediate
consequence of a permanent (that is, not accidental,
dependent on the seasons) rise in the price of corn, is
always reduction in the average wage>; finally, the rise
in the rate of profit was due to rising nominal
prices of commodities, because loans and government
expenditure increased the demand for capital even more
rapidly than its supply, and this enabled the manufacturers
to retrieve part of the product paid to the landowning
rentiers and other persons who have a fixed income in the
form of rent etc.
This transaction is of no concern to us
here, where we are considering the basic relationships, and
therefore are concerned only with three classes: landlords,
capitalists and workmen.
On the other hand it plays a
significant part in practice, under appropriate
circumstances as Blake has shown.) |688||
* * *
||689|
{Mr. Hallett from Brighton exhibited “pedigree nursery
wheat” at the 1862 exhibition.
“Mr. Hallett insists that ears of corn, like
racehorses, must he carefully reared, instead of, as is done
ordinarily, grown in higgledy-piggledy fashion, with no
regard to the theory of natural selection. In
illustration of what good education may do, even with wheat,
some remarkable examples are given. In 1857,
Mr. Hallett, planted [the grains of] an ear of the first
quality of the red wheat, exactly 4
3/8 inches long, and containing 47
grains. From the product of the small crops ensuing,
he again selected, in 1858, the finest ear, 6
1/2 inches long, and with 79 grains;
and this was repeated, in 1859, again with the best
offspring, this time 7 3/4 inches
long, and containing 91 grains. The next year, 1860,
was a had season for agricultural education, and the wheat
refused to grow any bigger and better; but the year after,
1861, the best ear came to be 8 3/4
inches long, with no less than 123 grains on the single
stalk. Thus the wheat had increased, in five years, to
very nearly double its size, and to a threefold amount of
productiveness in number of grains. These results were
obtained by what Mr. Hallett calls the ‘natural
system’ of cultivating wheat; that is, the planting of
single grains at such a distance—about 9 inches from
each other—every way—as to afford each
sufficient space for full development…” He
asserts that the corn produce of England may be doubled by
adopting ‘pedigree wheat’ and the ‘natural
system’ of cultivation. He states that from
single grains, planted at the proper time, one only on each
square foot of ground, he obtained plants consisting of 23
ears on the average, with about 36 grains in each ear.
The produce of an acre at this rate was, accurately counted,
1,001,880 ears of wheat; while, when sown in the ordinary
fashion, with an expenditure of more than 20 times the
amount of seed, the crop amounted to only 934,120 ears of
corn, or 67,760 ears less…”[10]}
[e) Ricardo’s Explanation for the Fall in the Rate of
Profit and Its Connection with His Theory of Rent]
[Ricardo establishes the fall in the rate of profit as
follows:]
“With the progress of society the natural price
of labour has always a tendency to rise, because one
of the principal commodities by which its natural price is
regulated, has a tendency to become dearer, from the greater
difficulty of producing it.
As, however, the
improvements in agriculture, the discovery of new markets,
whence provisions may be imported, may for a time counteract
the tendency to a rise in the price of necessaries, and may
even occasion their natural price to fall, so will the same
causes produce the correspondent effects on the natural
price of labour.
“The natural price of all commodities, excepting
raw produce and labour, has a tendency to fall, in the
progress of wealth and population; for though, on one hand,
they are enhanced in real value, from the rise in the
natural price of the raw material of which they are made,
this is more than counterbalanced by the improvements in
machinery, by the better division and distribution of
labour, and by the increasing skill, both in
science and art, of the producers.” ([David
Ricardo, On the Principles of Political Economy,
and Taxation, third edition, London, 1821,]
pp. 86–87.)
“As population increases, these necessaries will be
constantly rising in price, because more labour will be
necessary to produce them… Instead, therefore,
of the money wages of labour falling, they would rise; but
they would not rise sufficiently to enable the labourer to
purchase as many comforts and necessaries as he did before
the rise in price of those commodities…
“Notwithstanding, then, that the labourer would be
really worse paid, yet this increase in his wages would
necessarily diminish the profits of the manufacturer;
for his goods would sell at no higher price and yet the
expense of producing them would be
increased…
“It appears, then, that the same cause which
raises rent […] the increasing difficulty of
providing an additional quantity of food with the same
proportional quantity of labour, will also raise wages;
and therefore if money be of an unvarying value, both rent
and wages will have a tendency to rise with the progress of
wealth and population.
“But there is this essential difference between the
rise of rent and the rise of wages.
The rise in the money
value of rent is accompanied ||690| by an increased share of
the produce; not only is the landlord’s money rent greater,
but his corn rent also… The fate of the labourer
will be less happy; he will receive more money wages, it is
true, but his corn wages will be reduced; and not only his
command of corn, but his general condition will be
deteriorated, by his finding it more difficult to maintain
the market rate of wages above their natural rate”
(l. c., pp. 96–98).
Supposing[10]
corn and manufactured goods always to sell at the same price, profits would be
high or low in proportion as wages were low or high.
But suppose corn to rise in price because more labour is
necessary to produce it; that cause will not raise the price
of manufactured goods in the production of which no
additional quantity of labour is required… if,
as is absolutely certain, wages should rise with the rise of
corn, then their profits[11] would
necessarily fall” (l.c., p. 108).
But it may be asked, “…whether the farmer
at least would not have the same rate of profits,
although he should pay an additional sum for wages?
Certainly not: for he will not only have to pay, in common
with the manufacturer, an increase of wages to each labourer
he employs, but he will be obliged either to pay rent, or
to employ an additional number of labourers to obtain the
same produce; and the rise in the price of raw
produce[12] will be proportioned only to
that rent, or that additional number, and will not
compensate him for the rise of wages” (l. c.,
p. 108).
“We have shewn that in early stages of
society, both the landlord’s and the labourer’s share of
the value of the produce of the earth, would be but
small; and that it would increase in proportion to the
progress of wealth, and the difficulty of procuring
food” (l.c., p. 109).
These “early stages of society” are a
peculiar bourgeois fantasy.
In these early stages, the labourer is either slave or self-supporting peasant, etc.
In the first case he belongs to the landlord, together with the
land; in the second case he is his own landlord.
In neither case does any capitalist stand between the landlord and the labourer.
The subjugation of agriculture to
capitalist production, and hence the transformation
of slaves or peasants into wage-labourers and the
intervention of the capitalist between landlord and
labourer—which is only the final result of capitalist
production—is regarded by Ricardo as a phenomenon
belonging to the “early stages of society”.
“The natural tendency of profits then
is to fall; for, in the progress of society and wealth, the
additional quantity of food required is obtained by the
sacrifice of more and more labour. This tendency, this
gravitation as it were of profits, is happily checked at
repeated intervals by the improvements in machinery,
connected with the production of necessaries, as well as by
discoveries in the science of agriculture which enable us to
relinquish a portion of labour before required, and
therefore to lower the price of the prime necessary of the
labourer” (l.c., pp. 120–21).
In the following sentence, Ricardo says in plain terms
that by rate of profit he understands the rate of
surplus-value:
“Although a greater value is produced, a
greater proportion of what remains of that value,
after paying rent, is consumed by the producers, and it
is this, and this alone, which regulates
profits” (l.c., p. 127).
In other words, apart from rent, the rate of profit is
equal to the excess of the value of the commodity over the
value of the labour which is paid during its production, or
that part of its value which is consumed by the
producers. [In this context] Ricardo calls only
the workers producers. He assumes that the produced
value is produced by them. He thus defines
surplus-value here, as that part of the value created by the
workers which the capitalist retains.(1)
But if Ricardo identifies rate of surplus-value with rate
of profit—and at the same time assumes, as he does,
that the working-day is of given length—then the
tendency of the rate of profit to fall can only be explained
by the same factors which make the rate of surplus-value
fall.
But, with a given working-day, the rate of
surplus-value can only fall if the rate of wages is rising permanently.
This is only possible if the value of necessaries is rising permanently.
And this only if agriculture is constantly deteriorating, in other words, if
Ricardo’s theory of rent is accepted.
Since Ricardo
identifies rate of surplus-value with rate of profit, ||691|
and since the rate of surplus-value can only be reckoned in
relation to variable capital, capital laid out in wages,
Ricardo, like Adam Smith, assumes that the value of the
whole product—after deduction of rent—is
divided between workmen and capitalists, into wages and profit.
This means that he makes the false presupposition
that the whole of the capital advanced consists only of variable capital.
Thus, for example, after the passage quoted above, he goes on:
“When poor lands are taken into cultivation, or
when more capital and labour are expended on the old land,
with a less return of produce, the effect must be permanent.
A greater proportion of that part of the produce
which remains to be divided, after paying rent, between the
owners of stock and the labourers, will be apportioned to
the latter” (l.c., pp. 127–28).
The passage continues:
“Each man may, and probably will, have a less
absolute quantity; but as more labourers are employed in
proportion to the whole produce retained by the farmer, the
value of a greater proportion of the whole produce will be
absorbed by wages, and consequently the value of a smaller
proportion will be devoted to profits” (l.c.,
p. 128).
And shortly before:
“The remaining quantity of the produce of the land,
after the landlord and labourer are paid, necessarily
belongs to the farmer, and constitutes the profits of his
stock” (l.c., p. 110).
At the end of the section (Chapter VI) “On
Profits”, Ricardo says that his thesis on the
fall of profits remains true, even if— which is
wrong—it were assumed, that the prices of
commodities rose with a rise in the money wages of the
labourers.
“In the Chapter on Wages, we have endeavoured to
shew that the money price of commodities would not be
raised by a rise of wages...
But if it were otherwise, if the prices of commodities were permanently raised by high
wages, the proposition would not be less true, which asserts
that high wages invariably affect the employers of labour,
by depriving them of a portion of their real
profits.
Supposing the hatter, the hosier, and the shoemaker
each paid £ 10 more wages in the manufacture of a
particular quantity of their commodities, and that the price
of hats, stockings, and shoes, rose by a sum sufficient to
repay the manufacturer the £ 10; their situation
would be no better than if no suck rise took place.
If the hosier sold his stockings for £ 110 instead of
£ 100, his profits would be precisely the same money
amount as before; but as he would obtain in exchange for
this equal sum, one-tenth less of hats, shoes and every
other commodity, and as he could with his former amount
of savings” (that is with the same capital)
“employ fewer labourers at the increased wages,
and purchase fewer raw materials at the increased prices, he
would be in no better situation than if his money profits
had been really diminished in amount, and every thing had
remained at its former price” (l.c., p. 129).
Whereas elsewhere in his argument Ricardo always only
stressed that in order to produce the same quantity of
product on worse land, more labourers have to be
paid, here at last he stresses what is decisive for the rate
of profit, namely, that with the same amount of capital
fewer labourers are employed at increased wages.
Apart from this, he is not quite right in what he says.
It makes no difference to the capitalist, if the price
of hats etc. rises by 10 per cent, but the landlord would
have to give up more of his rent.
His rent may have risen for example, from £ 10 to £ 20.
But he gets proportionately fewer hats etc. for his £ 20 than for
the £ 10.
Ricardo says quite rightly :
“In an improving state of society, the net produce
of land is always diminishing in proportion to its gross
produce” (l. c., p. 198).
By this he means that the rent diminishes in an improving state of society.
The real reason is that in an improving state of society, the variable capital decreases in
proportion to the constant capital. |691||
||692| That with the
progress of production, the constant capital grows in
proportion to the variable, Ricardo himself admits, but only
in the form that the fixed capital grows in proportion to
the circulating.
“In rich and powerful countries, where large
capitals are invested in machinery, more distress will be
experienced from a revulsion in trade, than in poorer
countries where there is proportionally a muck smaller
amount of fixed, and a muck larger amount of circulating
capital, and where consequently more work is done by
the labour of men.
It is not so difficult to withdraw a circulating as a fixed capital, from any employment in which
it may be engaged.
It is often impossible to divert the
machinery which may have been erected for one manufacture,
to the purposes of another; but the clothing, the food, and
the lodging of the labourer in one employment may be devoted
to the support of the labourer in another;”
(here, therefore, circulating capital comprises only
variable capital, capital laid out in wages)
“or the same labourer may receive the same food,
clothing and lodging, whilst his employment is changed.
This, however, is an evil to which a rich nation
must submit; and it would not be more reasonable to complain
of it, than it would be in a rich merchant to lament that
his ship was exposed to the dangers of the sea, whilst his
poor neighbour’s cottage was safe from all such
hazard” (l. c., p. 311).
Ricardo himself mentions one reason for the rise in rent,
which is quite independent of the rise in the price of
agricultural produce :
“Whatever capital becomes fixed on the land, must
necessarily be the landlord’s, and not the tenant’s,
at the expiration of the lease.
Whatever compensation the
landlord may receive for this capital, on re-letting his
land, will appear in the form of rent; but no rent
will be paid, if, with a given capital, more corn can be
obtained from abroad, than can be grown on this land at
home” (l.c., p. 315, note).
On the same subject Ricardo says:
“In a former part of this work, I have noticed the
difference between rent, properly so called, and the
remuneration paid to the landlord under that name, for the
advantages which the expenditure of his capital has procured
to his tenant; but I did not perhaps sufficiently
distinguish the difference which would arise from the
different modes in which this capital might be applied.
As a
part of this capital, when once expended in the improvement
of a farm, is inseparably amalgamated with the land, and
tends to increase its productive powers, the remuneration
paid to the landlord for its use is strictly of the nature
of rent, and is subject to all the laws of rent.
Whether the improvement be made at the expense of the
landlord or the tenant, it will not be undertaken in the
first instance, unless there is a strong probability that
the return will at least be equal to the profit that
can be made by the disposition of any other equal capital;
but when once made, the return obtained will ever after
be wholly of the nature of rent, and will he subject to
all the variations of rent.
Some of these expenses, however, only give advantages to the land for a limited period, and
do not add permanently to its productive powers: being
bestowed on buildings, and other perishable improvements,
they require to be constantly renewed, and therefore do not
obtain for the landlord any permanent addition to his real
rent” (l.c., p. 306, note).
Ricardo says:
“In all countries, and all times, profits
depend on the quantity of labour requisite to provide
necessaries for the labourers, on that land or with that
capital which yields no rent” (l.c., p. 128).
According to this, the profit of the farmer on that
land—the worst land, which according to Ricardo pays
no rent—regulates the general rate of profit.
The reasoning is this: the product of the worst land is sold at
its value and pays no rent.
We see here exactly, therefore, how much surplus-value remains for the capitalist
after deduction of the value of that part of the product
which is merely an equivalent for the worker.
And this surplus-value is the profit.
This is based on the assumption
that cost-price and value are identical, that
this product, because it is sold at its cost-price, is sold
at its value.
This is incorrect, historically and theoretically.
I have shown that, where there is capitalist production and where
landed property exists, the land or mine of the worst type
cannot pay a rent, because the corn is sold below its
[individual] value if it is sold at the market-value,
which is not regulated by it.
For the market-value only covers its cost-price.
But what regulates this cost-price?
The rate of profit of the non-agricultural
capital, into whose determination the price of corn
naturally enters as well, however far removed the latter may
be from being its sole determinant.
Ricardo’s assertion
would only be correct if values and cost-prices were ||693|
identical.
Historically too, as the capitalist mode of
production appears later in agriculture than in industry,
agricultural profit is determined by industrial profit, and
not the other way about.
The only correct point is that on
the land which pays a profit but no rent, which sells its
product at the cost-price, the average rate of profits
becomes apparent, is tangibly presented, but this
does not mean at all that the average profit is thereby
regulated; that would be a very different matter.
The rate of profit can fall, without any rise in
the rate of interest and rate of rent.
“From the account which has been
given of the profits of stock, it will appear, that no
accumulation of capital will permanently lower
profits,(2) unless there be some
permanent cause for the rise of wages… If
the necessaries of the workman could be constantly increased
with the same facility, there could be no permanent
alteration in the rate of profit or wages,” (this
should read: in the rate of surplus-value and the value of
labour) “to whatever amount capital might be
accumulated. Adam Smith, however, uniformly
ascribes the fall of profits to the accumulation of
capital, and to the competition which will result from
it, without ever adverting to the increasing difficulty
of providing food for the additional number of labourers
which the additional capital will employ” (l. c.,
pp. 338–39).
The whole thing would only be right if profit were equal
to surplus-value.
Thus Adam Smith says that the rate of profit falls with
the accumulation of capital, because of the growing
competition between the capitalists; Ricardo says that it
does so because of the growing deterioration of agriculture
(increased price of necessaries).
We have refuted his view, which would only be correct if rate of surplus-value and
rate of profit were identical, and therefore the rate of
profit could not fall unless the rate of wages rose,
provided the working-day remained unchanged.
Adam Smith’s view rests on his compounding value out of wages, profits
and rents (in accordance with his false view, which he
himself refuted).
According to him, the accumulation of
capitals forces the reduction in arbitrary
profits—for which there is no inherent
measure—through the reduction in the prices of
commodities; profits, according to this conception, being
merely a nominal addition to the prices of commodities.
Ricardo is of course theoretically right when he
maintains, in opposition to Adam Smith, that the
accumulation of capitals does not alter the determination of
the value of commodities; but Ricardo is quite wrong when he
seeks to refute Adam Smith by asserting that
over-production in one country is impossible.
Ricardo denies the plethora of capital, which later became an
established axiom in English political economy.
Firstly he overlooks that in reality, where not only the
capitalist confronts the workman, but capitalist, workman,
landlord, moneyed interest, [people receiving] fixed incomes
from the state etc., confront one another, the fall in the
prices of commodities which hits both the industrial
capitalist and the workman, benefits the other classes.
Secondly he overlooks that the output level is by no
means arbitrarily chosen, but the more capitalist production
develops, the more it is forced to produce on a scale which
has nothing to do with the immediate demand but depends on a
constant expansion of the world market.
He has recourse to Say’s trite assumption, that the capitalist produces not for
the sake of profit, surplus-value, but produces use-value
directly for consumption— for his own consumption.
He overlooks the fact that the commodity has to be converted
into money.
The demand of the workers does not suffice,
since profit arises precisely from the fact that the demand
of the workers is smaller than the value of their product,
and that it [profit] is all the greater the smaller,
relatively, is this demand.
The demand of the capitalists among themselves is equally insufficient.
Over-production does not call forth a constant fall in profit, but
periodic over-production recurs constantly.
It is followed by periods of under-production etc.
Over-production arises precisely from the fact that the mass of the people
can never consume more than the average quantity of
necessaries, that their consumption therefore does not grow
correspondingly with the productivity of labour.
But the whole of this section belongs to the competition of
capitals.
All that Ricardo says on this isn’t worth a rap.
(This is contained in Chapter XXI, “Effects of Accumulation on Profits and
Interest”.)
“There is only one case, and that will be
temporary, in which the accumulation of capital with
a low price of food may be attended with a fall of profits;
and that is, when the funds for the maintenance of labour
increase much more rapidly than population;—wages will
then be high, and profits low” (l. c., p. 343).
[In the same chapter] Ricardo directs against Say
the following ironical remarks on the relation between
profits and interest:
“M. Say allows, that the rate of interest depends
on the rate of profits; but it does not therefore follow,
that the rate of profits depends on the rate of interest.
One is the cause, the other the effect, and it is
impossible for any circumstances to make them change
places” (l.c., p. 353, note).
However, the same causes which bring down profits can
make interest rise, and vice versa.
[In the Chapter “On Colonial Trade” Ricardo
writes:]
“M. Say acknowledges that the cost of
production is the foundation of price, and yet in
various parts of his book he maintains that price is
regulated by the proportion which demand bears to
supply” (l. c., p. 411).
Ricardo should have seen from this that ||694| the
cost of production is something very different from
the quantity of labour employed for the production of a
commodity.
Instead he continues:
“The real and ultimate regulator of the relative
value of any two commodities, is the cost of their
production” (l. c., p. 411).
“And does not Adam Smith agree in this
opinion” (that prices are regulated neither by wages
nor profits) “when he says, that ‘the
prices of commodities, or the value of gold
and silver as compared with commodities, depends upon the
proportion between the quantity of labour which is
necessary in order to bring a certain quantity of gold and
silver to market, and that which is necessary to bring
thither a certain quantity of any other sort of
goods?’ That quantity will not be affected, whether
profits be high or low, or wages low or high.
How then can prices be raised by high profits?” (l. c.,
pp. 413–14).
In the passage quoted, Adam Smith means by prices
nothing other than the monetary expression of the values of commodities.
That these and the gold and silver against which they exchange, are determined by the
relative quantities of labour required for producing those
two sorts of commodities <commodities on the one side,
gold and silver on the other>, in no way contradicts the
fact that the actual prices of commodities, i.e.,
their cost-prices “… can […] be raised
by high profits” [l.c., p. 414].
Although not all prices simultaneously, as Smith thinks.
But as a result of high profits, some commodities will rise higher above their
value, than if the average profits were low, while another
group of commodities will sink to a smaller extent below
their value.
Author’s Footnotes
(1)||691| Regarding the origin
of surplus-value [Ricardo says]:
“In the form of money … capital is
productive of no profit; in the form of materials,
machinery, and food, for which it might be exchanged, it
would be productive of revenue… “ (l.c.,
p. 267).
“The capital of the stockholder ||692| can
never be made productive—it is, in fact, no
capital.
If he were to sell his stock, and employ the
capital he obtained for it, productively, he could only do
so by detaching the capital of the buyer of his stock from a
productive employment” (l.c., p. 289,
note). |692||
(2) By profits Ricardo means here that part
of surplus-value which the capitalist appropriates, but by
no means the [entire] surplus-value; and wrong as it is to
say that accumulation can cause the surplus-value to fall,
so it is right that accumulation can cause a fall in
profit.
Editors’ Footnotes
1
See this volumne, pp. 181–82—Ed.
6In the manuscript: “III”—obviously a slip of the pen—Ed
7
In the manuscript: “4/11”—obviously a slip of the pen—Ed
8
Marx gives here, in his own words, a brief summary of the idea developed by De
Quincey.—Ed.
9
The source of this quotation has not been established.—Ed
10
In the manuscript: “Suppose”.—Ed.
11
i.e., the profits of manufacturers.—Ed.
12
In the manuscript: “of the raw produce”.—Ed.