Exchange of Revenue and Capital

//To be distinguished: 1) The part of the revenue which is transformed into new capital; that is, the part of the profit which is itself again capitalised. Here we leave this entirely out of account — it belongs to the section on accumulation. 2) The revenue which is exchanged with capital consumed in production, so that by means of this exchange not new capital is formed, but old capital replaced — in a word, the old capital is conserved. In this inquiry, therefore, we can put the part of the revenue which is transformed into new capital as equal to nil, and treat the subject as if all revenue covers either revenue or capital consumed.

The whole amount of the annual product is therefore divided into 2 parts: one part is consumed as revenue, the other part replaces in natura the constant capital consumed.

Revenue is exchanged for revenue, when for example the producers of linen exchange a portion of that part of their product — the linen — which represents their profits and wages, their revenue, for corn that represents a portion of the profits and [IX-380] wages of farmers. Here therefore there is the exchange of linen for corn, those two commodities which both enter into individual consumption — exchange of revenue in the form of linen for revenue in the form of corn. There is absolutely no difficulty in this. If consumable products*^[7] are produced in proportions corresponding to needs, which means also that the proportional amounts of social labour required for their production are proportionately distributed //which of course is never exactly the case, there being constant deviations, disproportions, which as such are adjusted; but in such a way that the continuous movement towards adjustment itself presupposes continuous disproportion//, then revenue, for example in the form of linen, exists in the exact quantity in which it is required as an article of consumption, therefore in which it is replaced by the articles of consumption of other producers. What the producer of linen consumes in corn, etc., the farmers and others consume in linen. The part of his product which represents revenue, which he exchanges for other commodities (articles of consumption), is thus taken in exchange as an article of consumption by the producers of these other commodities. What he consumes in the product of others, these others consume in his product.

It may be noted in passing: that no more necessary labour time is employed on a product than is required by society — that is to say, no more time than on the average is required for the production of this commodity — is the result of capitalist production, which even continuously reduces the minimum of necessary labour time. But in order to do so, it must constantly produce on a rising scale.

If 1 yard of linen costs only 1 hour and this is the necessary labour time that society has to use to satisfy its need for 1 yard of linen, it by no means follows from this that if 12 million yards are produced — that is, 12 million hours' labour, or what is the same thing, 1 million days' labour— 1 million labourers being employed as linen weavers, society [needs] to employ such a part of its labour time "necessarily" on the weaving of linen. If the necessary labour time is given, and therefore also that a certain quantity of linen can be produced in one day, the question arises how many such days are to be used in the production of linen? The labour time used on the total of particular products, in a year for example, is equal to a definite quantity of this use value — for example, 1 yard of linen (say=l day's labour) — multiplied by the number of days' labour used in all. The total quantity of labour time used in a particular branch of production may be under or over the correct proportion to the total available social labour, although each aliquot part of the product contains only the labour time necessary for its production, or although each aliquot part of the labour time used was necessary to make the corresponding aliquot part of the total product.

From this standpoint, the necessary labour time acquires another meaning. The question is, in what quantities the necessary labour time itself is distributed among the various spheres of production. Competition constantly regulates this distribution, just as it equally constantly disorganises it. If too large a quantity of social labour time is used in one branch, the equivalent can be paid only, as if the corresponding quantity had been used. The total product — i.e., the value of the total product — is in this case not equal to the labour time contained in it, but=the proportional amount of labour time which would have been used had the total product been in proportion to the products in the other spheres. But inasmuch as the price of the total product falls below its value, the price of each aliquot part of it falls. If 6,000 yards of linen instead of 4,000 are produced, and if the value of the 6,000 yards is 12,000s. they are sold for 8,000. The price of each yard is l'/ss. instead of 2 — 7s below its value. It therefore amounts to the same thing as if 7s too much labour time had been used to produce 1 yard. Assuming that the commodity has use value, the fall of its price below its value therefore shows that, although each part of the product has cost only the socially necessary labour time //here it is assumed that the conditions of production remain unchanged//, a superfluous — more than necessary — total quantity of social labour has been employed in this one branch.

The sinking of the relative value of the commodity as a result of altered [IX-381] conditions of production is something entirely different; this piece of linen on the market has cost 2s., = 1 day's labour, for example. But it can be reproduced every day for Is. Since now the value is determined by the socially necessary labour time, not by the labour time used by the individual producer, the day that the producer has used for the production of the 1 yard now only=7ä the socially determined day. The fall of the price of his yard from 2s. to Is.—that is, of its price below the value it has cost him — shows merely a change in the conditions of production, that is, a change in the necessary labour time itself. On the other hand, if the production costs of the linen remain the same while those of all other articles rise — with the exception of gold, in short, the material of money; or even [if the rise applies to] certain articles such as wheat, copper, etc., in a word, to articles which do not enter into the component parts of the linen — then 1 yard of linen would = 2s. as before. Its price would not fall, but its relative value expressed in wheat, copper, etc., would have fallen.

Of the part of the revenue in one branch of production (which produces consumable commodities) which is consumed in the revenue of another branch of production, it can be said that the demand is equal to its own supply (in so far as production is kept in the right proportion). It is the same as if each branch itself consumed that part of its revenue. Here there is only a formal metamorphosis of the commodity: C—M—C. Linen — money— wheat.

Both commodities which are exchanged here represent only a part of the new labour added in the year. But in the first place it is clear that this exchange — in which two producers mutually consume a part of their product which represents revenue in each other's commodities — only takes place in those branches of production which produce consumable articles, articles which enter directly into individual consumption, in which consequently revenue can be spent as revenue. Secondly, it is just as clear: that only regarding this part of the exchange of products it is true that the producer's supply=the demand for other products which he wishes to consume. Here in fact it is only a question of a simple exchange of commodities. Instead of producing his means of subsistence himself, he produces the means of subsistence for another, who produces his. No relation between revenue and capital enters into this. Revenue in one form of consumable articles is exchanged against revenue in another form of consumable articles, and so in fact consumable articles are exchanged for consumable articles. What determines their process of exchange is not that both are revenue, but that both are consumable articles. Their formal determination as revenue does not come into this at all. It shows itself however in the use value of the interchangeable commodities, in that both enter into individual consumption; which in turn however means no more than that one part of consumable products is exchanged for another part of consumable products.

The form of revenue can only intervene or make itself manifest where the form of capital confronts it. But even in this case what Say^[58] and other vulgar economists assert is not true — that if A cannot sell his linen or can only sell it under its price — i.e., the part of his linen which he wishes to consume himself as revenue — then this happens because B, C, etc., have produced too little wheat, meat, etc. It may be because they have not produced enough of these. But it may also be because A has produced too much linen. For assuming that B, C, etc., have enough wheat, etc., to buy all A's linen, they nevertheless do not buy it, because only a definite quantity of linen is consumed by them. Or it may also be because A has produced more linen than the part of their revenue which can be spent on clothing materials altogether—-that is, absolutely, because each person can expend as revenue only a definite quantity of his own product, and A's production of linen presupposes a greater amount of revenue than in total there is. It is ridiculous, however, when it is only a matter of the exchange of revenue against revenue, to suppose that what is wanted is not the use value of the product but the quantity of this use value, thus once again forgetting that this exchange concerns only the satisfaction of needs, not, as in exchange value, the quantity.

But everyone will prefer to have a large rather than a small quantity of an article. If this is supposed to solve the difficulty, then [IX-382] it is absolutely impossible to understand why the producer of linen, instead of exchanging his linen for other articles of consumption and piling these up en masse, does not carry out the simpler process of enjoying a part of his revenue in his superfluous linen. Why does he at all transform his revenue from the form of linen into other forms? Because he has to satisfy other needs than the need for linen. Why does he himself consume only a certain part of the linen? Because only a quantitatively determined part of the linen has use value for him. The same thing, however, holds for B, C, etc. If B sells wine and C books and D mirrors, each may prefer to consume the surplus of his revenue in his own product — wine, books, mirrors — rather than in linen. Thus it cannot be said that, necessarily, too little wine, books and mirrors have been produced because A cannot transform his revenue in the form of linen (or cannot transform it at its value) into wine, books and mirrors. It is still more ridiculous, however, when this exchange of revenue against revenue — this one section of the commodity exchange — is passed off as the whole of commodity exchange.

We have thus disposed of one part of the product. A part of the consumable products changes hands between the producers of these consumable products themselves. Each consumes a part of his revenue (profit and wages) in the other's consumable product instead of in his own consumable product, and in fact he can only do this in so far as there is the reciprocal consumption by the other of someone else's consumable product instead of his own. It is the same as if each had consumed that part of his consumable product which represents his own revenue.

For all the rest of the products, however, complicated relations intervene, and it is only here that the commodities exchanged confront each other as revenue and capital, and not only as revenue.

First a distinction has to be made. In all branches of production a part of the total product represents revenue, labour added (during the year), profit and wages. //Rent, interest, etc., are parts of profit; the income of the State good-for-nothings is part of profit and wages; the income of other unproductive labourers is the part of profit and wages which they buy with their unproductive labours — it therefore does not increase the product existing as profit and wages, but only determines how much of it they consume, and how much is consumed by the labourers and capitalists themselves.// But only in one section of the spheres of production can the part of the product representing revenue enter directly in natura into the revenue, or in its use value be consumed as revenue. All products which are only means of production cannot be consumed in natura, in their immediate form, as revenue, but only their value. This however must be consumed in the branches of production which produce directly consumable articles. A part of the means of production may be immediate articles of consumption — it may be one or the other according to the use made of it, as for example a horse, a cart, etc. A part of the immediate articles of consumption may be means of production, like corn for spirits, wheat for seed, and so on. Almost all articles of consumption can re-enter the production process as excrements of consumption, as for example worn-out and half-rotten rags of linen in the manufacture of paper. But no one produces linen in order that it should become, as rags, the raw material for paper. It only gets this form after the linen weaver's product as such has entered consumption. Only as excrement of this consumption, as residuum and product of the consumption process, can it then go into a new production sphere as means of production. This CASE, therefore, is not relevant here.

The products therefore — of which the aliquot part that represents revenue cana be consumed by their own producers as value, but not as use value (so that they must sell the part for example of their machines which represents wages and profit in order to consume it, [as they] cannot directly satisfy any individual need with it as a machine) — [these products] can just as little be consumed by the producers of other products; they cannot enter

^[11] The manuscript has "rannol".— F.d.

into their individual consumption, and hence cannot form part of the products on which they spend their revenue, since this would be in contradiction to the use value of these commodities: their use value by the nature of the case excludes individual consumption. The producers of these unconsumable products, therefore, can only consume their exchange value; that is to say, they must first transform them into money in order to retransform this money into consumable commodities. But to whom are they [IX-383] to sell them? To producers of other individually unconsumable products? Then they would merely have one unconsumable product in the place of the other. It is however presupposed that this part of the products forms their revenue; that they sell these commodities in order to consume their value in consumable products. For that reason they can only sell them to the producers of products that can be consumed individually.

This part of the commodity exchange represents exchange of one man's capital for another man's revenue, and of one man's revenue for another man's capital. Only one part of the total product of the producer of consumable products represents revenue; the other part represents constant capital. He can neither himself consume the latter, nor can he exchange it for the consumable products made by others. He can neither consume in

natura the use value of this part of the product, nor can he consume its value by exchanging it for other consumable products. He must on the contrary transform it again into the natural elements of his constant capital. He must consume industrially this part of his product, that is, use it as means of production. But in its use value his product is only capable of entering individual consumption; he cannot therefore transform it again in natura into his own elements of production. Its use value excludes industrial consumption. So he can only industrially consume its value. It is otherwise with the producers of the elements of production of his product. He can neither consume in natura this part of his product, nor can he consume its value by selling it for other products that can be consumed individually. Just as little as this part of his product can enter into his own revenue, can it be replaced out of the revenue of producers of other individually consumable products; since this would only be possible if he exchanged his product for their product and so consumed the value of his product, which cannot happen. But since this part of his product, as well as the other part which he can consume as revenue, by its use value can only be consumed as revenue, must enter into individual consumption and cannot replace constant capital, it must enter into the revenue of the producers of unconsumable products — it must be exchanged against that part of their products whose value they can consume, or in other words which represents their revenue.

If we look at this exchange from the standpoint of each of the people exchanging, for A, the producer of the consumable product, it represents a transformation of capital into capital. He transforms the part of his total product which is equal to the value of the constant capital it contains back again into the natural form in which it can function as constant capital. Both before and after the exchange it represents, in its value, only constant capital. For B, the producer of the product that cannot be consumed, it is the reverse: the exchange represents merely the transformation of revenue from one form into another. He transforms the part of his total product which forms his revenue, = the part of the total product which represents labour newly added, his own labour (capitalist and labourer)—into the natural form in which only he can consume it as revenue. Both before and after the exchange it represents, in its value, only his revenue.

If we look at the relation from both sides, then A exchanges his constant capital for B's revenue, and B exchanges his revenue for A's constant capital. B's revenue replaces A's constant capital, and A's constant capital replaces B's revenue.

In the exchange itself //irrespective of the purposes of those carrying it out// only commodities confront each other — and a simple exchange of commodities takes place — the relation between which is merely that of commodities, the designations of revenue and capital having no significance here. Only the different use value of these commodities shows that one lot can only serve for industrial consumption, and the other only for individual consumption, can only enter into this consumption. The various practical uses of the various use values of various commodities, however, concern their consumption and do not affect the process of their exchange as commodities. It is quite a different thing when the capitalist's capital is transformed into wages, and labour is transformed into capital. Here the commodities do not confront each other as simple commodities, but capital as capital. In the exchange we have just been considering sellers and buyers face each other only as sellers and buyers, only as simple commodity owners.

It is further clear that the whole of the product destined for individual consumption or the whole product entering into individual consumption, in so far as it enters into it, can only be

10-176 exchanged for revenue. The fact that it cannot be industrially consumed means precisely that it can only be consumed as revenue, i.e., only individually. //As noted above, we here abstract from the transformation of profit into capital.^[2]//

If A is a producer of a product that can only be individually consumed, let his revenue be equal to Vs of his total product, his constant capital to ^[2]/^[3]. The assumption implies that he himself consumes the first '/s, whether he [IX-384] consumes it all himself in natura or only partly or not at all, or whether he consumes its value in other articles of consumption; the sellers of these articles of consumption then consume their own revenue in A's product. So the part of the consumable product which represents the revenue of the producers of consumable products is consumed by them either directly, or indirectly, through exchanging among themselves the products to be consumed by them; in regard to this part, therefore, where revenue is exchanged for revenue—here it is the same as if A represented the producers of all consumable products. He himself consumes '/s of this aggregate amount, the aliquot part which represents his revenue. This part, however, represents exactly the quantity of labour which during the year category A has added to its constant capital, and this quantity is equal to the total sum of wages and profits produced by category A during the year.

The other ^[2]/^[3] of category A's total product are equal to the value of the constant capital, and must therefore be replaced by the product of the annual labour of category B, which supplies products that ARE INCONSUMABLE and only enter into industrial consumption, as means of production into the production process. But as these ^[2]/^[3] of A's total product, just the same as the first '/s, must enter into individual consumption, it is taken by the producers of category B, in exchange for the part of their product which represents their revenue. Category A has therefore exchanged the constant part of its total product for its original natural form, exchanged it retransformed for the newly delivered products of category B; but category B has only paid for it with that part of its product which represents its revenue but which it can only consume in the products of A. It has thus in fact paid with its newly added labour, which is completely represented by the part of B's product that is exchanged for the last ^[2]/3 of A's product. Thus A's total product is exchanged for revenue, or passes entirely into individual consumption. On the other hand (on the assumption that the transformation of revenue into capital is here left out of account, being taken as=0) the total revenue of society is also expended on product A; for the producers of A consume their revenue in A, and so do the producers of category B. And there is no other category besides these two.

The total product A is consumed, although it contains ^[2]/$ constant capital, which cannot be consumed by the producers of A but must be retransformed into the natural form of their elements of production. The total product A is equal to the total revenue of society. The total revenue of society, however, represents the total labour time which it has added during the year to the existing constant capital. Now although the total product A consists of newly added labour only as to l/s, and as to ^[2]/s of past labour that has to be replaced, it can be bought in its entirety by newly added labour, because ^[2]I$ of this total annual labour must be consumed not in their own products but in the products of A. A is replaced by Is more newly added labour than it itself contains, because these ^[2]/s are labour newly added in B, and B can only consume it individually in A, just as A can only consume the same ^[2]k industrially in B. Thus the total product of A can in the first place be entirely consumed as revenue, and at the same time its constant capital can be replaced. Or rather it can only be entirely consumed as revenue because ^[2]h of it are replaced by the producers of constant capital, who cannot consume in natura the part of their product representing revenue, but are obliged to consume it in A, that is, through exchanging it for ^[2]/3 of A.

We have thus disposed of the final ^[2]h of A.

It is clear that it makes no difference if a third category C exists, whose products are consumable both industrially and individually; for example, corn, by men or by cattle or as seed or as bread; vehicles, horses, cattle, etc. In so far as these products enter into individual consumption they must be consumed as revenue, direct or indirect, by their own producers, or by the producers (direct or indirect) of the part of the constant capital contained in them. They therefore come under A. In so far as they do not enter into individual consumption, they come under B.

The process of this second kind of exchange, where it is not revenue that is exchanged against revenue but capital against revenue — in which the whole constant capital must in the end be resolved into revenue, that is, into newly added labour — can be thought of in two ways. Let A's product be for example linen. The ^[2]1s of the linen which are=to the constant capital of A (or its value) pay for yarn, machinery and matières instrumentales. But the yarn manufacturer and the manufacturer of machinery [IX-385] can only consume as much of this product as represents their own revenue. The linen manufacturer pays the whole price of the yarn and machinery with these ^[2]/ä of his product. By so doing he has thus replaced for the spinner and the machinery manufacturer their total product which entered into the linen as constant capital. But this total product is itself=to the constant capital and revenue— one part being equal to the labour added by the spinner and machinery manufacturer, and another part representing the value of their own means of production,that is, for the spinner flax, oil, machinery, coal, etc., and for the machinery manufacturer coal, iron, machinery, etc. A's constant capital, =^[2]/ä, has thus replaced the total product of the spinner and machinery manufacturer, their constant capital + the labour newly added by them — their capital + their revenue. But they can only consume their revenue in A. After deducting the part of the ^[2]/^[3] of A which = their revenue, with the rest they pay for their raw materials and machinery. According to our assumption, however, the latter need not replace any constant capital. Only so much of their product can enter into product A — and therefore also into the products which are means of production for A — as A can pay for. But A can only pay with his ^[2]/ä for as much as B can buy with his revenue, i.e., as much as the product exchanged by B contains revenue, newly added labour. If the producers of the final elements of production of A had to sell to the spinner a quantity of their product which represented a part of their own constant capital — that is, which represented more than the labour they had added to their constant capital — then they could not accept payment in A, because they cannot consume one part of this product. Consequently what takes place is the opposite.

Let us trace the stages in reverse. Let us assume that the total linen = 12 days. The product of the flax-grower, of the iron manufacturer, etc., =4 days; this product is sold to the spinner and the machinery manufacturer, who in turn add 4 days to it; these sell it to the weaver, who again adds 4 days. The linen weaver can thus himself consume V3 of his product; 8 days replace his constant capital for him and pay for the product of the spinner and machinery manufacturer; these can consume 4 of the 8 days, and with the other 4 they pay the flax-grower, etc., and thus replace their constant capital; the last-named have only their labour to replace with the last 4 days in linen.

The revenue, although it is assumed to be of the same size,=4 days, in all 3 cases, is of different proportions in the products of the 3 classes of producers who participate in producing product A. For the linen weaver, it is V3 of his product, = ^[1]/s of 12; for the spinner and for the machinery manufacturer it is equal to V2 of his product, = ^[1]/2 of 8; for the flax-grower it is equal to his product,=4. In relation to the total product it is however exactly the same, = '/s of 12, =4. But for the weaver, the labour newly added by spinner, machinery manufacturer and flax-grower takes the form of constant capital. For the spinner and machinery manufacturer, the total product represents the labour newly added by themselves and by the flax-grower, the labour time of the flax-grower appearing as constant capital. For the flax-grower, this phenomenon of constant capital has ceased to exist. Because of this, the spinner for example can use machinery, or constant capital in general, in the same proportions as the weaver. For example, V3. But in the first place the amount (the total amount) of the capital employed in spinning must be smaller than that used in weaving, since its total product enters as constant capital into weaving. Secondly, if the spinner also has the proportion of '/3'-^[2]/3, his constant capital would = ^[16]/s, his added labour would be equal to ^[8]/s; the former would be equal to 57s days' labour, the latter to 2^[2]/3. In this case there would be proportionately more days' labour contained in the branch which supplies him with flax, etc. He would then have to pay 57s for newly added labour, instead of 4 days.

It is self-evident that only that part of category A's constant capital has to be replaced by new labour which enters into the valorisation process of A, that is, is consumed by A during the labour process. The whole of the raw material and the matières instrumentales enter into it, and the wear and tear of the fixed capital. The other part of the fixed capital does not enter into it, and therefore has not got to be replaced.

A large part of the existing constant capital — large as regards the relation of the fixed capital to the total capital — does not therefore require to be replaced annually by new labour. For that reason the (absolute) amount may be considerable, but nevertheless it is not large in relation to the total (annual) product. This entire part of the constant capital, in A and B, which enters into the determination of the rate of profit (with a given surplus value), does not enter as a determining element into the current reproduction of the fixed capital. The larger this part in relation to the total capital — the greater the scale on which present, already existing, fixed capital is employed in production — the greater the current v o l u m e of reproduction will be that is used for the replacement of the worn-out fixed capital, but the smaller relatively will be the proportional amount, in relation to the total capital.

Let the reproduction period (the average) for all kinds of fixed capital be 10 years. [IX-386] Let us assume that the different kinds of fixed capital have a turnover of 20, 17, 15, 12, 11, 10, 8, 6, 4, 3, 2, 1, ^[4]/Ô and ^[2]/6 years (14 kinds), so that the fixed capital has an average turnover of 10 years.^[59]

On the average, therefore, the capital would have to be replaced in 10 years. If the total fixed capital amounted to Vio of the total capital, then only Vio of the former, hence only Vioo of the total capital, would have to be replaced annually.

If it amounted to Vs. then '/so of the total capital would have to be replaced annually.

But let us now compare fixed capitals with different reproduction periods — the capital with a 20-year period, for example, in contrast to the capital with a period of Vs of a year.

Only /^[2]o of the fixed capital which is reproduced in 20 years has to be replaced annually. So that if it amounts to V2 of the total capital, only V40 of the total capital has to be replaced annually, and if it amounts even to ^[4]/s of the total capital, only ^[4]/ioo=I/25 of the total capital has to be replaced annually. On the other hand, if the capital which has a reproduction period of ^[2]/6 of a year — that is, turns over 3 times a year — amounts to only Vio of the capital, then the fixed capital has to be replaced 3 times a year, so that ^[3]/io of the capital has to be replaced annually, nearly Vs of the total capital. On the average, the larger the fixed capital in proportion to the total capital, the longer is its relative (not absolute) period of reproduction; and the smaller it is, the shorter its relative period of reproduction. Implements form a much smaller part of handicraft capital than machinery does of machine-production capital. But handicraft implements wear out much more quickly than machinery.

Although the absolute magnitude of its reproduction — or its wear and tear — grows with the absolute size of the fixed capital, as a rule its proportional magnitude falls, IN SO FAR as its period of turnover, its duration, as a rule increases in proportion to its size. This proves among other things that the quantity of labour reproducing machinery or fixed capital is not at all proportional to the labour which originally produced these machines (conditions of production remaining the same), since only the annual wear and tear has to be replaced. If the productivity of labour rises — as it constantly does in this branch of production — the quantity of labour required for the reproduction of this part of the constant capital diminishes still more. However, account has to be taken of the means of consumption daily used by the machine (which however have nothing directly to do with the labour employed in the machine-building industry itself). But machinery, which needs merely coal and a little oil or tallow, lives on an infinitely stricter diet than the labourer — not only the labourer whom it replaces, but the labourer who built the machine itself.

We have now disposed of the product of the entire category A and of a part of category B's product. A is completely consumed: V3 by its own producers, ^[2]/j by the producers of B, who cannot consume their own revenue in their own product. The ^[2]/ä of A, in which they consume the part of the value of their product which represents revenue, at the same time replace their constant capital in natura for the producers of A, that is, provide them with the commodities which they consume industrially. But with the consumption of A's entire product, and with ^[2]/$ of it replaced by B in the form of constant capital, we have also disposed of the entire part of the product which represents the labour newly added annually. This labour cannot therefore buy any other part of the total product. In fact, the whole of the labour added annually (leaving out of account the capitalisation of profit) = the labour contained in A. For '/s of A which is consumed by its own producers represents the labour newly added by them during the year to the I«, of A which represent A's constant capital. They have performed no labour apart from this, which they consume in their own product. And the other ^[2]/ä of A, which are replaced by B's product and consumed by the producers of B, represent all the labour time which the producers of B have added to their own constant capital. They have added no more in labour, and there is nothing more for them to [IX-387] consume.

In its use value, product A represents the whole part of the annual total product which enters annually into individual consumption. In its exchange value, it represents the total quantity of labour newly added by the producers during the year.

Thus, however, we have as residuum a third part of the total product whose constituent parts, when exchanged, can represent neither the exchange of revenue against revenue nor of capital against revenue and vice versa. This is the part of product B which represents B's constant capital. This part is not included in B's revenue and therefore cannot be replaced by or exchanged against product A, and therefore also cannot enter as a constituent part into A's constant capital. This part is likewise consumed, industrially consumed, to the extent that it enters not only into the labour process but also into the valorisation process of B. This part, therefore, like all other parts of the total product, must be replaced in the proportion in which it forms a component part of the total product, and indeed it must be replaced in natura by new products of the same sort. On the other hand, it is not replaced by any new labour. For the total quantity of newly added labour=the labour time contained in A, which is completely replaced only by B consuming his revenue in ^[2]/3 of A and supplying to A in exchange all the means of production which are consumed in A and must be replaced. For the first '/s of A, which is consumed by its own producers, consists only — as exchange value — of the labour newly added by themselves, and it contains no constant capital.

Let us now examine this residuum. It consists of the constant capital which enters into raw materials, secondly of the constant capital which enters into the formation of the fixed capital, and thirdly of the constant capital which enters into matières instrumentales.

First, the raw materials. Their constant capital consists in the first place of fixed capital, machinery, instruments of labour and buildings, and perhaps matières instrumentales, which are means of consumption for the machinery employed. In regard to the directly consumable part of the raw materials — such ,as cattle, corn, grapes, and such like — this difficulty does not arise. In this aspect they belong to class A. This part of the constant capital contained in them enters into the ^[2]/^[3] of the constant part of A, which is exchanged as capital against the unconsumable products of B or in which B consumes his revenue. This holds good too in general for those raw materials which cannot be consumed directly, in so far as they enter in natura into the consumable product itself, however many intermediate stages they may pass through in the processes of production. The part of flax that is transformed into yarn and later into linen enters in its entirety into the consumable product.

But a part of these vegetative raw materials, such as timber, flax, hemp, leather and so on, partly enters directly into the components of the fixed capital itself, and partly into the matières instrumentales for the fixed capital. For example, in the form of oil, tallow, etc.

Secondly, however, seed [belongs to the constant capital expended for the production of raw materials]. Vegetative materials and animals reproduce themselves. Vegetation and generation. By seed we mean actual seed, and in addition fodder which reverts to the land as dung, pedigree cattle, etc. This large part of the annual product — or of the constant part of the annual product — itself serves directly as material for regeneration, it reproduces itself.

Non-vegetative raw materials. Metals, stones, etc. Their value consists of only 2 parts, since here there is no seed — which represents the raw materials of agriculture. Their value consists only of added labour and machinery consumed (including the means of consumption for the machinery). In addition therefore to the part of the product which represents newly added labour and is hence included in the exchange of B for the ^[2]/Î of A, there is nothing to be replaced but the wear and tear of the fixed capital and its means of consumption (such as coal, oil, etc.). But these raw materials form the principal component part of the constant capital, of the fixed capital (machinery, instruments of labour, buildings, etc.). They therefore replace their constant capital in

natura by exchange.

[IX-388] Secondly, the fixed capital (machinery, buildings, instruments of labour, containers of all kinds).

Their constant capital consists of: 1) their raw materials, metals, stones, raw materials such as timber, leather belting, rope, etc. But though these raw materials form the raw material for them, they themselves enter as means of labour into the production of these raw materials. Hence they replace themselves in natura. The iron producer has to replace machinery, the machine builder iron. In quarrying there is wear and tear of machinery, but in factory buildings there is wear and tear of building stone, etc. 2) The wear and tear of machine-building machinery, which within a certain period has to be replaced by a new product of the same kind. But the product of the same kind can, of course, replace itself. 3) The means of consumption for the machine (matières instrumentales). Machinery consumes coal, but coal consumes machinery, and so on. In the form of containers, tubes, pipes, etc., machinery of all kinds enters into the production of the means of consumption for machinery, as in the case of tallow, soap, gas (for lighting). Therefore also in these cases the products of these spheres enter reciprocally into each other's constant capital, and consequently replace each other in natura.

If beasts of burden are included among machines, what has to be replaced in their case is fodder and in certain conditions stabling (buildings). But if fodder enters into the production of cattle, so do cattle into the production of fodder.

In the third place, matières instrumentales. Some of these require raw materials, like oil, soap, tallow, gas, etc. On the other hand, in the form of fertilisers, etc., they in turn enter in part into the production of these raw materials. Coal is required for making gas, but gas lighting is used in producing coal, etc. Other matières instrumentales consist only of labour added and fixed capital (machinery, containers, etc.). Coal must replace the wear and tear of the steam-engine used to produce it. But the steam-engine consumes coal. Coal itself enters into the means of production of coal. Thus it replaces itself in natura. Transport by rail enters into the production costs of coal, but coal in turn enters into the production costs of the locomotive.

Later on, there is something special to be added about chemical factories, all of which plus ou moins" produce matières instrumentales, such as the raw material of containers (for example, glass, porcelain), as well as articles which enter directly into consumption.

All colouring materials are matières instrumentales. But they enter into the product not only as to their value, as for example coal consumed enters into COTTON; but they reproduce themselves in the form of the product (its colours).

Matières instrumentales are either means of consumption for machinery—in this case either fuel for the prime mover, or means of reducing the friction of the operating machinery, such as tallow, soap, oil, etc.—or they are matières instrumentales for buildings, like cement, etc. Or they are matières instrumentales for carrying on the production process in general, such as lighting, heating, etc. (in this case they are matières instrumentales required by the labourers themselves to enable them to work).

Or they are matières instrumentales which enter into the formation of the raw materials as do all types of fertilisers and all chemical products consumed by the raw materials.

Or they are matières instrumentales which enter into the finished product — colouring matter, polishing materials, and so on.

The result is therefore: A replaces his own constant capital, [equal to] ^[2]/s, [of the product], by exchange with that part of B's unconsumable product which represents B's revenue — that is, the labour added in category B during the year. But A does not replace B's constant capital. B for his part must replace this constant capital in natura by new products of the same sort. But B has no labour time over

^[1] in a greater or smaller degree.— Ed.

to replace them with. For all the new labour time added by him forms his revenue, and is therefore represented by the part of B's product which enters as constant capital into A. How then is B's constant capital replaced?

Partly by his own reproduction (vegetative or animal), as in all agriculture and stock-raising; partly by exchange in natura of parts of one constant capital for parts of another constant capital, because the product of one sphere enters as raw material or means of production into the other sphere, and vice versa; that is, because the products of the various spheres of production, the [IX-389] various sorts of constant capital, enter reciprocally in natura into each other's sphere as conditions of production.^[36]

The producers of unconsumable products are the producers of constant capital for the producers of consumable products. But at the same time their products serve them reciprocally as elements or factors of their own constant capital. That is to say, they consume each other's products industrially.

The whole product A is consumed. Therefore also the whole of the constant capital it contains. The producers of A consume V3 of A, the producers of the unconsumable products B consume /a of A. A's constant capital is replaced by the products of B which form B's revenue. This is in fact the only part of the constant capital that is replaced by newly added labour; and it is replaced by it because the quantity of products B that is the newly added labour in B, is not consumed by B, but on the contrary is industrially consumed by A, while B consumes individually the Is, of A.

Let A = 3 days' labour; his constant capital, on our assumption, = 2 days' labour. B replaces the product of ^[2]/ä of A, and so supplies unconsumable products=2 days' labour. Now 3 days' labour have been consumed, and 2 are left. In other words, the 2 days of past labour in A are replaced by 2 days of newly added labour in B, but only because the 2 days of newly added labour in B consume their value in A and not in product B itself.

B's constant capital, in so far as it has entered into the total product B, must likewise be replaced in natura by new products of the same sort — that is, by products which are required for industrial consumption by B. But it is not replaced by new labour time, although it is replaced by the products of the labour time newly applied during the year.

Let the constant capital in B's total product be ^[2]/s. Then if the newly added labour ( = the sum of wages and profit)=l, the past labour which served it as material and means of labour=2. How then are these 2 replaced? The proportion of constant and variable capital may vary considerably within the various spheres of production of B. But on our assumption the average is as ^[1]/3'-^[2]/s, or 1:2. Each of the producers of B is now faced by /s of his product, such as coal, iron, flax, machinery, cattle, wheat (i.e., the part of his cattle and wheat that does not enter into consumption), etc., whose elements of production must be replaced, or which must be reconverted into the natural form of their elements of production. But all these products themselves re-enter industrial consumption. The wheat (as seed) is in turn also its own raw material, and a part of the cattle produced replaces what has been consumed, that is, itself. In these spheres of production of B (agriculture and stock-raising) only this part of their product therefore replaces their own constant capital in its natural form. A part of this product, therefore, does not go into circulation (at least need not go into circulation, and can only do so in a formal sense). Others of these products, such as flax, hemp, etc., coal, iron, timber, machinery, in part enter into their own production as means of production, in the same way as seed in agriculture; for example, coal in the production of coal, and machinery in the production of machinery. A part of the product consisting of machinery and coal, and in fact a part of that part of this product which represents its constant capital, thus replaces itself and merely changes its place [in the process of production]. It changes from a product into its own means of production.

Another part of these and of other products reciprocally enter into each other as elements of production — machinery into iron and timber, timber and iron into machinery, oil into machinery and machinery into oil, coal into iron, iron (tram-rails, etc.) into coal, and so on. In so far as the ^[2]/s of these products of B are not self-replacing in this way — that is, do not come back in their natural form into their own production, so that a part of B is directly consumed industrially by its own producers, just as a part of A is directly consumed individually by its own producers — the products of the producers of B replace each other reciprocally as means of production. The product of a goes into b's industrial consumption and the product of b into a's industrial consumption; or in a roundabout way, a's product into b's industrial consumption, b's product into that of c, and that of c into that of a. What therefore is consumed as constant capital in one of B's spheres of production is newly produced in another; but what is consumed in the latter is produced in the former. What in one sphere passes from the form of machinery and coal into the form of iron, passes in the other from the form of iron and coal into machinery, and so on.

[IX-390] What has to be done is to replace B's constant capital in its natural form. If we consider B's total product, it represents the entire constant capital in all its natural forms. And where the product of one particular sphere of B cannot replace its own constant capital in natura purchase and sale, a change of hands, puts everything here in its proper place again.

Here, therefore, there is replacement of constant capital by constant capital; in so far as this does not occur directly and without exchange, here therefore there is exchange of capital for capital, that is, of products for products on the basis of their use value; the products enter reciprocally into their respective production processes, so that each of them is industrially consumed by the producers of the other.

This part of the capital resolves neither in profit nor in wages. It contains no newly added labour. It is not exchanged against revenue. It is neither directly nor indirectly paid for by consumers. It makes no difference whether this reciprocal replacement of capitals is carried through with the aid of merchants (that is, by merchant capitals) or not.

But since these products are new (machinery, iron, coal, timber, etc., which reciprocally replace each other), since they are the products of the last year's labour — thus the wheat which serves as seed is just as much a product of new labour as the wheat which passes into consumption, etc.—how can it be said that no newly added labour is contained in these products? And moreover isn't their form striking evidence to the contrary? Even if not in the case of wheat or cattle, surely in the case of a machine, its form bears witness to the labour which has transformed it from iron, etc., into a machine, and so forth.

This problem has been solved earlier.^[35] It is not necessary to go into it here again.

//Adam Smith's statement that the TRADE between DEALERS AND DEALERS must be=to the TRADE between DEALERS and CONSUMERS^[36] (by which he means direct, not industrial, consumers, since he himself includes industrial consumers among DEALERS) is therefore wrong. It is based on his false assertion that the whole product consists of revenue, and in fact only means that the part of the commodity exchange which is equal to the EXCHANGE BETWEEN CAPITAL AND REVENUE is equal to the TOTAL EXCHANGE OF COMMODITIES. A S the assertion is wrong, the practical applications Tooke made of it for the circulation of money are also wrong (especially the relation between the quantity of money circulating between DEALERS and the quantity of money circulating between DEALERS and CONSUMERS).60

Let us take as the final DEALER confronting the CONSUMER the merchant who buys the product of A; this product is bought from him by the revenue of A, = '/3 of A, and by the revenue of B,=^[2]/3 of A. These replace his merchant capital for him. The total of their revenues must cover his capital. (The profit which the rascal makes must be accounted for by his retaining a part of A for himself, and selling a smaller part of A for the value of A. Whether the rascal is thought of as a necessary agent of production or as a sybaritic intermediary does not in any way alter the case.) This EXCHANGE between DEALER and CONSUMER of A covers in value the EXCHANGE between the DEALER in A and all the producers of A, and consequently all DEALINGS between these producers among themselves.

The merchant buys the linen. This is the last DEALING between DEALER and DEALER. T h e linen weaver buys yarn, machinery, coal, etc. This is the last but one DEALING between DEALER and DEALERS. T h e spinner buys flax, machinery, coal, etc. This is the last DEALING but two between DEALER and DEALERS. T h e flax-grower and machine builder buy machines, iron, etc., and so on. But the DEALINGS between the producers of flax, machinery, iron, coal, to replace their constant capital, and the value of these DEALINGS, do not enter into the DEALINGS which A's product passes through, whether as the exchange of revenue for revenue, or as the exchange of revenue for constant capital. These DEALINGS — not those between the producers of B and the producers of A, but those between the producers of B — have not to be replaced by the buyer of A to the seller of A, any more than the value of this part of B enters into the value of A. These DEALINGS too require money, and are carried out through merchants. But the part of the circulation of money which exclusively belongs to this sphere is completely separate from that between DEALERS and CONSUMERS.//

[IX-391] Two questions are still to be solved: 1) In our investigation u p to now wages have been treated as revenue, without being distinguished from profit. How far in this connection have we to take account of the fact that wages are at the same time part of the circulating capital of the capitalist?

2) U p to now it has been assumed that the total revenue is spent as revenue. T h e ALTERATION that comes in when a part of the revenue, of the profit, is capitalised, has therefore to be considered. This in fact coincides with the examination of the process of accumulation — but not in its formal aspect. That a part of the product which represents SURPLUS VALUE is reconverted, partly into wages and partly into constant capital, presents no difficulty. Here we have to examine how this affects the exchange of commodities under the headings previously considered — under which it can be examined in relation for its bearers, that is to say, as exchange of revenue for revenue, exchange of revenue for capital, or finally, exchange of capital for capital.//

//This intermezzo has therefore to be completed in this historico-critical section, as occasion warrants.^[61]//

Ferrier (F. L. A.) (sous inspecteur des douanes*): Du Gouvernement considéré dans ses rapports avec le commerce, Paris, 1805. (This was the main source for Friedrich List. ) This fellow eulogises the Bonapartist system of prohibitions, etc. In fact the Government (therefore also State officials — those unproductive labourers) is in his view important, as a MANAGER directly intervening in production. This customs officer is consequently extremely angry with Adam Smith for calling State officials unproductive.

"The principles which Smith has laid down in regard to the economy of nations have as their basis a distinction between productive and unproductive labour...."c

//Because in fact he wants the largest possible part to be spent as capital, i.e., in exchange for productive labour, and the smallest possible part as revenue, in exchange for unproductive labour.//

"This distinction is in essence false. There is no unproductive labour" (p. 141). "There is therefore economy and prodigality on the part of nations; but a nation is only prodigal or economic in its relations with other peoples, and it is from this standpoint that the question should be considered" (I.e., p. 143).

In a moment we shall quote for comparison the context of the passage from Adam Smith which Ferrier regards with such abomination.

"There is an economy on the part of nations, but it is very different from what Smith recommends," Ferrier says. "It consists in not buying foreign products except in so far as a nation can pay for them with its own. It consists sometimes in doing without them altogether" (I.e., pp. [174,] 175).c HB. I, Ch. VI, (ed. Garnier, t. I, pp. 108, 109) [Vol. I, p. 92]^[14]

Adam Smith says at the end of this chapter which deals with "des parties constituantes du prix des marchandises"":

"As in a civilised country there are but few commodities of which the exchangeable value arises from labour only, rent and profit contributing largely to that of the far greater part of them, so the annual produce of its labour will always be sufficient to purchase or command a much greater quantity of labour than what was employed in raising, preparing, and bringing that produce to market. If the society were annually to employ all the labour which it can annually purchase, as the quantity of labour would increase greatly every year, so the produce of every succeeding year would be of vastly greater value than that of the foregoing. But there is no country in which the whole annual produce is employed in maintaining the industrious. The idle everywhere consume a great part of it; and, according to the different proportions in which it is annually divided between those two different orders of people, its ordinary or average value must either annually increase or diminish, or continue the same from one year to another."

There is confusion of all kinds in this passage, in which Smith is in fact trying to solve the problem of accumulation.

First, once again there is the wrong assumption that the "exchangeable value" of the annual product of labour, and so also "the annual produce of labour", resolves itself into wages and profits (including rents).^[62] We will not deal again with this nonsense. We only observe: the amount of the annual product — or of the funds, the STOCKS of commodities which are the annual product of labour — consists for the most part [IX-392] of commodities in

natura which can only enter as elements into constant capital //raw materials, seed, machinery, etc.//, which can only be consumed industrially. The very use value of these commodities (and they form the larger part of the commodities entering into constant capital) shows that they are not suitable for individual consumption; that therefore revenue cannot be expended on them, whether it is wages, profit or rent. A part of the raw materials (in so far as it is not required for the reproduction of raw materials themselves, or in so far as it does not enter into the fixed capital as matière instrumentale or directly as a component part) will, it is true, later on be given a consumable form, but only through the labour of the current year. As a product of the previous year's labour these raw materials themselves form no part of revenue. It is only the consumable part of the product that can be consumed, can enter into individual consumption and thus form revenue. But even a part of the consumable product cannot be consumed without making reproduction impossible. One part even of the consumable part of commodities therefore must be deducted which must be consumed industrially, that is, it must serve as material of labour, as seed, etc., not as means of subsistence, whether for labourers or for capitalists. This part of the product therefore has d'abord to be deducted from Adam Smith's calculation — or rather has to be added to it. If the productivity of labour remains the same, then this part of the product which does not consist of revenue remains the same from year to year; provided that, with the productivity of labour remaining the same, the same quantity of labour time as before is employed.

On the assumption therefore that a greater quantity of labour than before is used each year, we have to see what happens to the constant capital. In short: in order to employ a greater quantity of labour, it is not enough either that a greater quantity of labour should be available, or that a greater quantity should be paid for, that is, more should be spent in wages; but the means of labour — raw material and fixed capital — must also be there in order to absorb a greater quantity of labour. Hence this point is still to be discussed after the points raised by Adam Smith have been cleared up.

So then, once more [we take] his first sentence:

"As in a civilised country there are but few commodities of which the exchangeable value arises from labour only, rent and profit contributing largely to that of the far greater part of them, so the annual produce of its labour will always be sufficient to purchase or command a much greater quantity of labour than what was employed in raising, preparing, and bringing that produce to market" (in other words, to produce it).

Here different things are obviously mixed up. Not only living labour, living labour employed during the current year, enters into the exchangeable value of the total annual product, but also past labour, product of the labour of past years. Not only labour in living form, but labour in objectified form. The exchangeable value of the product=the total labour time which it contains, a part of which consisted of living labour and a part of objectified labour.

Let the proportion of the former to the latter be as l/s'.^[2]/s, 1:2. Then the value of the total product = 3, of which 2 are objectified labour time and 1 living labour time. The value of the total product can therefore buy more living labour than is contained in it, on the assumption that objectified labour and living labour are exchanged for each other as equivalents, that a definite quantity of objectified labour commanded only a quantity of living labour equal to itself. For the product=3 days' labour; but the living labour time contained in it= 1 day's labour only. 1 day's living labour sufficed to produce the product (in fact, only to give the final form to its elements). But 3 days' labour is contained in it. Therefore if it was exchanged entirely against living labour time, if it was employed only "to purchase or command" quantities of living labour, it would be able to command, to purchase, 3 days' labour.

This however is evidently not what Adam Smith has in mind, and would be a quite useless premiss for him. What he means is that a large part of the exchangeable value of the product does not resolve itself (or as he wrongly expresses it, because of a confusion of ideas noted earlier^[63]) into wages, but into profits and rents, or, as we will say to simplify things, into profits. In other words, the part of the value of the product which=the quantity of labour added during the last year — thus IN FACT the part of the product which in the proper meaning of the word is the product of last year's labour — pays first the labourers and secondly enters into the capitalist's revenue, his fund for consumption. This whole part of the total product arises from labour, and indeed exclusively from labour; but it consists of paid and unpaid labour. The wages are equal to the total of the paid labour, the profits [IX-393] to the total of the unpaid labour. If therefore this total product was expended in wages, it could naturally set in motion a greater quantity of labour than that of which it was the product; and in fact the proportion in which the product can set in motion more labour time than it itself contains depends exactly on the proportion in which the working day is divided into paid and unpaid labour time.

Let us assume that the proportion is such that the labourer produces or reproduces his wages in 6 hours, that is, in half a day. Then the other 6 hours or the other half day forms the SURPLUS. Thus for example of a product which contained 100 days' labour, =£50 (when the day's labour=10s., making 100 days' labour = 1,000s., or £50), there would be £25 for wages and £25 for profit (rent). With the £25,=50 days' labour, 100 labourers would have been paid, who would have worked precisely half their labour time for nothing or for their MASTERS. If therefore the whole product (of the 100 days' labour) were to be expended in wages, then 200 labourers could be set in motion with the £50, each of whom would receive as wages 5s. or half the product of his labour as before. The product of these labourers would=£100 (that is, 200 days' labour=2,000s.=£100), with which 400 labourers (5s. the labourer, making 2,000s.) could be set in motion, whose product would =£200, and so on.

And this is what Adam Smith means by saying that "the annual produce of labour" will always be sufficient "to purchase or command a much greater quantity of labour" than what was employed to produce the product. (If the labourer were paid the whole product of his labour, that is, £50 for 100 days' labour, then the £50 too could only set in motion 100 days' labour.) And so Smith goes on to say:

"If the society were annually to employ all the labour which it can annually purchase, as the quantity of labour would increase greatly every year, so the produce of every succeeding year would be of vastly greater value than that of the foregoing." a

A part of this product however is consumed by the owners of profit and rent; a part by their parasites. The part of the product that can be expended again in (productive) labour is consequently determined by the part of the product which the capitalists, landlords and their parasites (that is the unproductive labourers) do not themselves consume.

But nevertheless there is always a new fund (a new fund of wages) to set in motion, with the previous year's product, a greater quantity of labourers in the current year. And as the value of the annual product is determined by the quantity of labour time employed, the value of the annual product will grow each year.

Of course it would be of no use to have the fund "to purchase or command" a "much greater quantity of labour" than in the previous year unless a greater quantity of labour was on the market. It is of no use to me to have more money to buy a commodity, unless more of this commodity is on the market. Let us assume that the £50 set in motion, instead of the 100 as before (who received £25), not 200 but only 150 labourers, while the capitalists themselves consumed £12 10s. instead of £25. The 150 labourers (=£37 10s.) would perform 150 days' labour^,500s.=£75. But if the quantity of labourers available were, as before, only 100, instead of £25 as before, they would receive £37 10s. as wages, though their product [would amount to] only £50 as before. Thus the revenue of the capitalist would have fallen from £25 to £12 10s., because wages had risen by 50%. Adam Smith knows, however, that an increasing quantity of labour will be available. Partly [due to] the annual increase of the population (though this is supposed to be provided for in the old wages), partly unemployed paupers, or half-employed labourers, etc. Then the large numbers of unproductive labourers, pan ,)(

•' See this volume, p. 152.-- Kd.

whom can be transformed into productive labourers by a different way of using the SURPLUS PRODUCE. Finally the same number of labourers can perform a greater quantity of labour. And whether I pay 125 labourers instead of 100, or whether the 100 work 15 hours a day instead of 12, WOULD BE QUITE THE SAME THING.

It is incidentally an error of Adam Smith's — directly connected with his analysis of the total product into revenue — to say that with the increase of the productive capital — or with the growth of the part of the annual product which is destined for reproduction— the labour employed (the living labour, the part of capital expended in wages) must increase in the same proportion.

[IX-394] Thus first Adam Smith has a fund of consumable means of subsistence, which can "purchase or command" a greater quantity of labour this year than the foregoing year; he has more labour; and at the same time more means of subsistence for this labour. Now we must see how this ADDITIONAL QUANTITY OF LABOUR is to be realised.//

Had Adam Smith adhered with full consciousness to the analysis of SURPLUS VALUE which in substance is to be found in his work — which is created only in the exchange of capital against wage labour—-it would have followed that productive labour is only that which is exchanged against capital: never labour which is" exchanged with revenue as such. In order for revenue to be exchanged against productive labour, it must first be transformed into capital.

But taking as his starting-point one aspect of the traditional view — that productive labour is labour which directly produces material wealth of any kind — and at the same time combining with this his distinction in so far as it is based on the exchange of either capital for labour or of revenue for labour, with Smith the following became possible: T h e kind of labour for which capital is exchanged is always productive (it always creates material wealth, etc.). T h e kind of labour which is exchanged for revenue may be productive or it may not; but the spender of revenue as a rule prefers to set in motion directly unproductive labour RATHER than productive. One can see how Adam Smith, by this compound of his two distinctions, very much weakens and blunts the principal distinction.^[3]

The following quotation shows that Adam Smith does not take the fixation of labour in a purely external sense; among the various component parts of the fixed capital is enumerated:

"4), of the acquired and useful abilities of all the inhabitants and members of the society. The acquisition of such talents, by the maintenance of the acquirer during his education, apprenticeship or study, always costs a real expense, which is a capital fixed and realised, as it were, in his person. Those talents, as they make a part of his fortune, so do they likewise that of the society to which he belongs. The improved dexterity of a workman may be considered in the same light as a machine or instrument of trade which facilitates and abridges labour, and which, though it costs a certain expense, repays that expense with a profit" ([Garnier,] I.e., t. II, l.II, ch. I, pp. 204, 205) [Vol. II, p. 12].

The strange origin of accumulation and its necessity:

"In that rude state of society, in which there is no division of labour, in which exchanges are seldom made, and in which every man provides every thing for himself, it is not necessary that any stock should be accumulated, or stored up beforehand, in order to carry on the business of the society"

(that is, after assuming qu'il n'y pas de société").

"Every man endeavours to supply, by his own industry, his own occasional wants, as they occur. When he is hungry, he goes to the forest to hunt etc." ([Garnier,] t. Il, pp. 191, 192) (l.II, Introduction) [Vol. II, p. 1]. "But when the division of labour has once been thoroughly introduced, the produce of a man's own labour can supply but a very small part of his occasional wants. The far greater part of them are supplied by the produce of other men's labour, or, what is the same thing, the price of the produce of his own. But this purchase cannot be made till such time as the produce of his own labour has not only been completed, but sold"

(Even in the first case he could not eat the hare before he had killed it, and he could not kill it before he had produced for himself the classical "arc"h or SOMETHING SIMILAR. The only thing that seems to be added in CASE II is therefore not the necessity of a stock OF ANY SORT, but the "time ... as the produce of his own labour has been sold".)

"A stock of goods of different kinds, therefore, must be stored up somewhere, sufficient to maintain him, and to supply him with the materials and tools of his work, till such time at least as both these events can be brought about. A weaver cannot apply himself entirely to his peculiar business, unless there is beforehand stored up somewhere, either in his own possession, or in that of some other person, a stock sufficient to maintain him, and to supply him with the materials and tools of his work, till he has not only completed, but sold his web. This accumulation must evidently be previous to his applying his industry for so long a time to such a peculiar business.... The accumulation of s t o c k must, in the nature of things, be previous to the division of labour" ([Garnier,] I.e., pp. 192-93) [Vol. II, p. 2].

(On the other hand, according to what he has stated at the beginning, it appears that no accumulation OF CAPITAL takes place before the DIVISION OF LABOUR, just as there is no DIVISION OF LABOUR before the ACCUMUT ATION OF CAPITAL.)

"Labour can be more and more subdivided in proportion only as stock is previously more and more accumulated. The quantity of materials which the same number of people can work up, increases in a great proportion as labour comes to be more and more subdivided; and as the operations of each workman are gradually reduced to a greater degree of simplicity, a variety of new machines come to be invented for facilitating and [IX-395] abridging these operations. As the division of labour advances, therefore, in order to give constant employment to an equal number of workmen, an equal stock of provisions, and a greater stock of materials and tools than what would have been necessary in a ruder state of things, must be accumulated beforehand" ([Garnier,] I.e., pp. 193-94) [Vol. II, pp. 2-3]. "As the accumulation of stock is previously necessary for carrying on this great improvement in the productive powers of labour, so that accumulation naturally leads to this improvement. The person who employs his stock in maintaining labour, necessarily wishes to employ it in such a manner as to produce as great a quantity of work as possible. He endeavours, therefore, both to make among his workmen the most proper distribution of employment, and to furnish them with the best machines which he can either invent or afford to purchase. His abilities, in both these respects, are generally in proportion to the extent of his stock, or to the number of people whom it can employ. The quantity of industry, therefore, not only increases in every country with the increase of the stock which employs it, but, in consequence of that increase, the same quantity of industry produces a much greater quantity of work" ([Garnier,] pp. 194-95) [Vol. II, p. 3].

Adam Smith treats the objects which are already in the fund for consumption in exactly the same way as PRODUCTIVE and UNPRODUCTIVE

LABOUR. FOR INSTANCE:

"A dwelling-house, as such, contributes nothing to the revenue of its inhabitant; and though it is, no doubt, extremely useful to him, it is as his clothes and household furniture are useful to him, which, however, make a part of his expense, and not of his revenue" ([Garnier,] I.e., t. II, 1. II, ch. I, pp. 201, 202) [Vol. II, p. 9]. On the other hand, fixed capital includes "all those profitable buildings which are the means of procuring a revenue, not only to their proprietor who lets them for a rent, but to the person who possesses them, and pays that rent for them; such as shops, warehouses, workhouses, farm-houses, with all their necessary buildings, stables, granaries, etc. These are very different from mere dwelling-houses. They are a sort of instruments of trade" ([Garnier,] I.e., 1. II,•' ch. I, pp. 203, 204) [Vol. II, p. 11].

"All such improvements in mechanics, as enable the same number of workmen to perforin an equal quantity of work with cheaper and simpler machinery than had been usual before, are always regarded as advantageous to every society. A certain quantity of materials, and [the labour] of a certain number of workmen, which had before been employed in supporting a more complex and expensive machinery, can now be applied to augment the quantity of work which that or any othei machinery is useful only for performing" ([Garnier,] I.e., t. II, 1. II, ch. II, pp. 216, 217) [Vol. II, pp. 20-21].

land and labour, the real revenue of every society" ([Garnier,] I.e., t. II, 1. II, ch. II, pp. 226, 227) [Vol. II, p. 28].

Metallic money forced out of the country by bank-notes and by paper money in general — if spent "in purchasing foreign goods for home consumption"—buys either luxury products such as foreign wines, foreign silks, etc., in a word, "goods ... likely to be consumed by idle people, who produce nothing ... or ... they may purchase an additional stock of materials, tools, and provisions, in order to maintain and employ an additional number of industrious people, who reproduce, with a profit, the value of their annual consumption" ([Garnier,] t. II, 1. II, eh. II, pp. 231, 232) [Vol. II, p. 32].a

The first manner OF EMPLOYMENT, says Smith, promotes prodigality, "increases expense and consumption, without increasing production, or establishing any permanent fund for supporting that expense, and is in every respect hurtful to the society" ([Gamier,] I.e., t. II, p. 232) [Vol. II, p. 32].a On the other hand "employed in the second way, it promotes industry; and though it increases the consumption of the society, it provides a permanent fund for supporting that consumption; the people who consume reproducing, with a profit, the whole value of their annual consumption" ([Garnier,] t. Il, 1. II, ch. II, p. 232) [Vol. II, p. 33].

"The quantity of industry which any capital can employ, must evidently be equal to the number of workmen whom it can supply with materials, tools, and a maintenance suitable to the nature of the work" ([Garnier,] l.c.,1. II, ch. II, p. 235) [Vol. II, p. 34].

[IX-396] In Book II, Ch. Ill ([Garnier,] I.e., t. II, p. 314 sqq.) [Vol. II, p. 96 sqq.] we find:

"Both productive and unproductive labourers, and those who do not labour at all, are all equally maintained by the annual produce of the land and labour of the country. This produce ... must have certain limits. According, therefore, as a smaller or greater proportion of it is in any one year employed in maintaining unproductive hands, the more in the one case, and the less in the other, will remain for the productive, and the next year's produce will be greater or smaller accordingly....

"Though the whole annual produce of the land and labour of every country is ... ultimately destined for supplying the consumption of its inhabitants, and for procuring a revenue to them; yet when it first comes either from the ground, or from the hands of the productive labourers, it naturally divides itself into two parts. One of them, and frequently the largest, is, in the first place, destined for replacing a capital, or for renewing the provisions, materials, and finished work, which had been withdrawn from a capital; the other for constituting a revenue either to the owner of this capital, as the profit of his stock, or to some other person, as the rent of his land....

" That part of the annual produce of the land and labour of any country which replaces a capital, never is immediately employed to maintain any but productive hands. It pays the wages of productive labour only. That which is immediately destined for constituting a revenue ... may maintain indifferently either productive or unproductive hands....

"Unproductive labourers, and those who do not labour at all, are all maintained by revenue; either, first, by that part of the annual produce which is originally destined for constituting a revenue to some particular persons, either as the revenue^[3] of land, or as the profits of stock; or, secondly, by that part which, though originally destined for replacing a capital, and for maintaining productive labourers only, yet when it comes into their hands, whatever part of it is over and above their necessary subsistence, may be employed in maintaining indifferently either productive or unproductive hands. Thus even the common workman, if his wages are considerable, may maintain a menial servant; or he may sometimes go to a play or a puppet-show, and so contribute his share towards maintaining one set of unproductive labourers; or finally he may pay some taxes, and thus help to maintain another set ... equally unproductive. No part of the annual produce, however, which had been originally destined to replace a capital, is ever directed towards maintaining unproductive hands, till after it has put into motion its full complement of productive labour.... The workman must have earned his wages by work done, before he can employ any part of them in this manner.... The rent of land and the profits of stock are everywhere ... the principal sources from which unproductive hands derive their subsistence." These two sorts of revenue "might both maintain indifferently, either productive or unproductive hands. They seem, however, to have some predilection for the latter....

"The proportion, therefore, between the productive and unproductive hands, depends very much in every country upon the proportion between that part of the annual produce, which, as soon as it comes either from the ground, or from the hands of the productive labourers, is destined for replacing a capital, and that which is destined for constituting a revenue, either as rent or as profit. This proportion is very different in rich from what it is in poor countries."

Smith then contrasts

the "very large, frequently the largest, portion of the produce of the land" which "in the opulent countries of Europe is destined for replacing the capital of the rich and independent farmer" with "the prevalency of the feudal government", when "a very small portion of the produce was sufficient to replace the capital employed in cultivation...".

It is the same with commerce and manufactures. Large capitals are now employed in them, formerly very small capitals, but they "yielded very large profits. The rate of interest was nowhere less than 10 per cent, and their profits must have been sufficient to afford this great interest. At present, the rate of interest, in the improved parts of Europe, is nowhere higher than 6 per cent; and in some of the most improved, it is so low as 4, 3, and 2 per cent. Though that part of the revenue of the inhabitants which is derived from the profits of stock, is always much greater in rich than in poor countries, it is because the stock is much greater; in proportion to the stock, the profits are generally much less.

"That part of the annual produce, therefore, which, as soon as it comes either from the ground, or from the hands of the productive labourers, is destined for replacing a [IX-397] capital, is not only much greater in rich than in poor countries, but bears a much greater proportion to that which is immediately destined for constituting a revenue either as rent or as profit. The funds destined for the maintenance of productive labour are not only much greater in the former than in the latter, but bear a much greater proportion to those which, though they may be employed to maintain either productive or unproductive hands, have generally a predilection for the latter. " b (Smith falls into the error of identifying the size of the productive capital with the size of that part of it which is destined to provide subsistence for productive labour. But IN FACT large-scale industry, as he knew it, was as yet only in its beginnings.)

"The proportion between those different funds necessarily determines in every country the general character of the inhabitants as to industry or idleness." Thus he says for example: in English and Dutch manufacturing towns "where the inferior ranks of people are chiefly maintained by the employment of capital, they are in general industrious, sober, and thriving". On the other hand, in "towns which are principally supported by the residence of a court, and in which the inferior ranks of people are chiefly maintained by the spending of revenue, they are in general idle, dissolute, and poor; as at Rome, Versailles",^[3] etc.

"The proportion between the sum of capitals and that of revenue, therefore, seems everywhere to regulate the proportion between industry and idleness. Wherever capital predominates, industry prevails: wherever revenue, idleness. Every increase or diminution of capital, therefore, naturally tends to increase or diminish the real quantity of industry, the number of productive hands, and consequently the exchangeable value of the annual produce of the land and labour of the country, the real wealth and revenue of all its inhabitants....

"What is annually saved is as regularly consumed as what is annually spent, and nearly in the same time too; but it is consumed by a different set of people. The first portion of revenue by idle guests and menial servants, who leave nothing behind them in return for their consumption. The second [portion] by labourers'^[3]

who reproduce, with a profit, the value of their annual consumption.... The consumption is the same, but the consumers are different...."c

Hence Smith's homilies (further on [Gamier,] I.e., 1. II, ch. Ill, pp. 328, 329 sqq.) [Vol. II, pp. 107, 108, 109] on

the frugal man, who by his annual savings provides something like a public workhouse for an additional number of productive hands, and thus "establishes, as it were, a perpetual fund for the maintenance of an equal number of productive hands", while the prodigal diminishes "the funds destined for the employment of productive labour.... If the quantity of food and clothing, which were thus" (as a result of the prodigal's prodigality) "consumed by unproductive, had been distributed among productive hands, they would have reproduced, together with a profit, the full value of their consumption...".^[11]

The conclusion of this moral tale is that these (frugality and prodigality) average out among private individuals, that IN FACT " la sagesse" e prevails.

Great nations "are never impoverished by private, though they sometimes are by public prodigality and misconduct. The whole, or almost the whole public revenue is, in most countries, employed in maintaining unproductive hands. [These include] the people of the court (p. 336) [Vol. II, p. 113], the church, fleets and armies, who in time of peace produce nothing, and in time of war acquire nothing which can compensate the expense of maintaining them, even while the war lasts. Such people, as they themselves produce nothing, are all maintained by the produce of other men's labour. When multiplied, therefore, to an unnecessary number, they may in a particular year consume so great a share of this produce, as not to leave a sufficiency for maintaining the productive labourers, who should reproduce it next year..." [Gamier, t. II, pp. 314-36] [Vol. II, pp. 113-14].^[14]

Book II, Ch. IV:

"The demand for productive labour, by the increase of the funds which are destined for maintaining it, grows every day greater and greater. Labourers easily find [IX-398] employment, but the owners of capitals find it difficult to get labourers to employ. Their competition raises the wages of labour, and sinks the profits of stock" ([Garnier,] I.e., t. II, p. 359) [Vol. II, p. 132].

In Book II, Ch. V ([Gamier,] t. II, p. 369 sqq.) [Vol. II, p. 141 et seq.] "Of the Different Employment of Capitals", Smith classifies them according as they employ more or less productive labour, and, CONSEQUENTLY, raise "the exchangeable value" of the annual product. First agriculture. Then manufacture. Then commerce, and finally retail trade. This is the order of precedence in which they mettent en activité des quantités de travail productif." Here too we get a completely new definition of productive labourers:

"The persons whose capitals are employed in any of those four ways, are themselves productive labourers. Their labour, when properly directed, fixes and realises itself in the subject or vendible commodity upon which it is bestowed, and generally adds to its price the value at least of their own maintenance and consumption" ([Garnier,] I.e., p. 374) [Vol. II, p. 146].

//On the whole he sees their productivity in the fact that they put into motion productive labour.// He says of the farmer:

"No equal capital puts into motion a greater quantity of productive labour than that of the farmer. Not only his labouring servants, but his labouring cattle are productive labourers" [Gamier, t. II, p. 376] [Vol. II, p. 148].

So in the end the ox too is a productive labourer.

Lauderdale (Earl of): An Inquiry into the Nature and Origin of Public Wealth etc., London, 1804. (The French translation: Recherches sur la nature et l'origine de la richesse publique etc. by Lagentie de Lavaïsse, Paris, 1808).

Lauderdale's apologetic justification of profit will be examined only later on, in Section III.^[29] It regards profit as arising from capitals themselves, because they "supplant" labour. They are paid for doing what otherwise, without them, the hand of man would have to do, or could not do at all.

("Now it will be seen that the profit of capital always derives either from its supplanting a portion of labour which would otherwise have to be performed by the hand of man; or from its performing a portion of labour which is beyond the reach of the personal exertion of man to accomplish" (p. 119) [p. 161].)⁽¹⁾

The "Earl" is a great enemy of Smith's doctrine of accumulation and saving. Also of his distinction between productive and unproductive labourers; but according to him what Smith calls "productive powers of labour" are only the "productive power of capital". He flatly denies the derivation of SURPLUS VALUE put forward by Smith, on the following grounds:

"If this, however, was a just and accurate idea of the profit of capital, it would follow that the profit of stock must be a derivative, and not an original source of wealth⁽²⁾; and capital could not therefore be considered as a source of wealth, its profit being only a transfer from the pocket of the labourer into that of the proprietor of stock" (I.e., pp. 116-17) [pp. 157-58],⁽³⁾

It is clear that on these premisses he picks on the most superficial points in his polemic against Smith. Thus he says:

"Thus the same labour may appear either productive or unproductive, according to the use subsequently made of the commodity on which it was bestowed. If my cook, e.g., makes a tart which I immediately consume, he is considered as an unproductive labourer; and the act of making the tart is unproductive labour; because that service has perished at the moment of its performance; but if the same labour is performed in a pastry cook's shop, it becomes productive labour" (I.e., p. 110) [pp. 149-50].

(Garnier has the copyright in this argument, as his edition and notes on Smith appeared in 1802, two years before Lauderdale.)

"This extraordinary distinction, founded on the mere durability of the services performed, classes as unproductive labourers some of those who are occupied in rendering the most important services to society. Thus the sovereign, and all who are employed in the maintenance of religion, the justice, or the defence of the State, as well as those whose skill ... are occupied in superintending the health and education of the society, are alike deemed unproductive labourers" (I.e., pp. [110-] 11) [p. 151]. (Or, as Adam Smith [Garnier,] t. Il, 1. II, ch. Ill, p. 313) [Vol. II, p. 95] presents the elegant sequence: "churchmen, lawyers, physicians, men of letters of all kinds; players, buffoons, musicians, opera-singers, opera-dancers, etc.") "If exchangeable value is to be considered as the basis of wealth,—it is needless to use much argument to explain the errors of this doctrine. [IX-399] The practice of mankind, in estimating these services, if we can judge by what is paid for them, bears sufficient testimony of its inaccuracy" [pp. 151-52].

F u r t h e r :

"The labour of the manufacturer fixes and realises itself in some vendible commodity.... Neither the labour performed by the menial servant, nor that of which the necessity is supplanted by circulating capital," //by this he means money// "do naturally stock, or store themselves up in such a manner as to be transferred from one to another for a defined value. The profit of the one and the other alike arises from saving the labour of the owner or master. The similarity is indeed such, that it is natural to suppose the same circumstances which led the one to be deemed unproductive, would naturally create the same impression with relation to the other" //and thereupon he quotes Smith, 1. II, ch. II,^[64]// (Lauderdale, I.e., pp. 144-45) [pp. 195-97].

T h u s w e w o u l d h a v e t h e succession: Ferrier , G a m i e r , L a u d e r -d a l e , Ganilh . T h e latter p h r a s e a b o u t t h e "saving of labour"^[3] is p a r t i c u l a r l y h a r d r i d d e n by Tocqueville. A f t e r G a m i e r a p p e a r e d t h e i n a n e J e a n Baptiste Say's Traité d'économie politique. H e r e p r o a c h e s S m i t h in that

"he refuses the name of products to the results of these activities.^[13] He gives the labour spent on them the name unproductive" (3rd ed., [Vol. I,] p. 117).

Smith does not at all deny that "these activities" produce a "result", a "product" of some kind. He even expressly mentions

"the protection, security, and defence of the commonwealth" as "the effect of their labour this year" (the labour of the servants of the public) (Smith, [Garnier,] t. Il, 1. II, ch. Ill, p. 313) [Vol. II, p. 95].

Say for his part sticks to S m i t h ' s s e c o n d a r y definition, t h a t

these "services" and their product "generally perish in the very instant of their performance", "in the very instant of their production" (Smith, l.c.).c

M r . Say calls these c o n s u m e d " s e r v i c e s " , o r t h e i r p r o d u c t s , results — i n a w o r d , t h e i r u s e v a l u e —

"immaterial products or values, which are consumed in the instant of their production" [p. 116].

Instead of calling t h e m " u n p r o d u c t i v e " , h e calls t h e m " p r o d u c -tive of i m m a t e r i a l p r o d u c t s " . H e gives t h e m a n o t h e r n a m e . B u t t h e n h e d e c l a r e s f u r t h e r :

"that they do not serve to augment the national capital" (Vol. I, p. 119). "A nation in which there were a multitude of musicians, priests and officials, might be pleasantly entertained, well educated and governed admirably well, but that would be all. Its capital would not receive any direct increase from all the labour of these industrious men, because their products would be consumed as fast as they were created" (I.e., p. 119).

T h u s M r . Say d e c l a r e s t h e s e l a b o u r s t o b e unproductive in the most restricted sense used by Smith. But at the same time he wants to appropriate Garnier's "step forward". Hence he invents a new name for unproductive labours. This is his kind of originality, his kind of productivity and way of making discoveries. And with his customary logic, he refutes himself again. He says:

"It is impossible to accept the view of Mr. Gamier, who concludes from the fact that the labour of physicians, lawyers and other similar persons is productive, that it is as advantageous for a nation to increase it as any other labour" (I.e., p. 120).

And why not, if one kind of labour is as productive as the other, and the increase of productive labour is in general "advantageous for a nation"? Why is it not as advantageous to increase this kind of labour as any other? Because, Say replies with his characteristic profundity, because it is not at all advantageous to increase productive labour of any kind above the need for this labour. But then surely Gamier is right. For it is equally advantageous — that is, equally disadvantageous — to increase the one kind of labours as to increase the other kind above a certain quantity.

"The case is the same," Say continues, "as with physical labour expended on a product beyond what is necessary to make it."

(Not more joiner's labour should be employed to make a table than is necessary for the production of the table. Or to patch up a sick body, not more than is necessary to cure it. So LAWYERS and physicians should perform only the necessary labour for the production of their immaterial product.)

"The labour which is productive of immaterial products, like all other labour, is only productive up to the point at which it increases the utility, and consequently the value"

(that is, the use value, but Say mistakes the utility for the exchange value)

"of a product: beyond this point, it is a purely unproductive labour" (I.e., p. 120).

Say's logic is therefore this: It is not so useful for a nation to increase the "producers of immaterial products" as to increase the producers of material products. Proof: it is absolutely useless to increase the producers of any kind of product, whether material or immaterial, beyond what is necessary. Therefore it is more useful to increase the useless producers of material products than those of immaterial products. It does not follow in both cases that it is useless to increase these producers, but only the producers of a particular kind in their corresponding branch of production.

[According to Say,] too many material products cannot [IX-400] be produced, nor can too many immaterial. But variatio delectat? So different kinds must be produced in both departments. And moreover Mr. Say teaches:

"Sluggishness in the sale of some products arises from the scarcity of some others" [I.e., p. 438].

Therefore there can never be too many tables produced, but at most perhaps too few dishes to be put on the tables. If physicians increase too much in number, what is wrong is not that their SERVICES are available in superfluity, but perhaps that the SERVICES of other producers of immaterial products are in short supply — for example, prostitutes (see I.e., p. 123, where the industries of street-porters, prostitutes, etc., are grouped together, and where Say ventures to assert that the "apprenticeship" for a prostitute "amounts to nothing").

In the end, the scales come down on the side of the "unproductive labourers". With given conditions of production, it is known exactly how many labourers are needed to make a table, how great the quantity of a particular kind of labour must be in order to make a particular product. With many "immaterial products" this is not the case. The quantity of labour required to achieve a particular result is as CONJECTURAL as the result itself. Twenty priests together perhaps bring about the conversion that one fails to make; 6 physicians consulting together perhaps discover the remedy that one alone cannot find. In a bench of judges perhaps more justice is produced than by a single judge who has no control but himself. The number of soldiers required to protect a country, of police to keep up order in it, of officials "to govern it" well, etc.—all these things are problematical and are very often discussed for example in the English Parliament; although how much spinning labour is needed to spin 1,000 lbs of twist is known very exactly in England. As for other "productive" labourers of this kind, the concept of them includes the fact that the utility which they produce depends only on their number, consists in their number itself. For example, lackeys, who should bear witness to their MASTER'S wealth and elegance. The greater the number of them, the greater the effect they are supposed to "produce". Thus Mr. Say sticks to his point: "unproductive labourers" can never be sufficiently increased in numbers.

Mr. G. Gamier had published in Paris in 1796 Abrégé élémentaire des principes de l'économie politique. Along with the Physiocratic view that agriculture alone is productive another is to be found (which to a great extent explains his polemic against Adam Smith), namely, that consumption (strongly represented by the "unproductive labourers") is the source of production, and that the volume of the latter is to be measured by the volume of the former. The unproductive labourers satisfy artificial needs and consume material products, and are thus in every way useful. He also polemises, therefore, against economy (thrift). On p. xiii of his preface we find:

"The fortune of an individual is enlarged by saving; the public fortune, on the contrary, derives its increase from the increase of consumption."

And on p. 240, in the chapter on public debts:

"The improvement and extension of agriculture and consequently the progress of industry and commerce have no other cause than the extension of artificial needs."

From this he concludes that public debts are a good thing, in that they increase these needs.^[3]

Le comte Destutt de Tracy: Élémens d'idéologie, IVe et Ve parties. Traité de la volonté et de ses effets, Paris, 1826 ([First edition] 1815).

"AU useful labour is really productive, and the whole labouring class of society equally deserves the name productive" (p. 87).

But in this productive class he distinguishes

"the labouring class which directly produces all our wealth" (p. 88) — that is, what Smith calls THE PRODUCTIVE LABOURERS. As against these, the sterile class consists of the rich, who consume their rent of land or rent on money. They are the idle

class.

"The real sterile class is the class of idlers, who do nothing but live what is called nobly on the products of labours performed before them, whether these products are realised in landed property which they farm out, that is to say, which they lease to a labourer, or whether they consist in money or goods that they lend for a return, which also means to lease them. Those are the real drones of the hive (fruges consumere natib)" (p. 87); these idlers "can expend nothing but their revenue. If they break into [IX-401] their funds, nothing replaces them; and their consumption, increased for the moment, ceases for ever" (p. 237).

"This revenue is ... only a deduction from the products of activity of the industrious citizens" (p. 236).

How then does it stand with the labourers whom these idlers directly employ? In so far as they consume commodities, they do not consume actual labour, but the products of the productive labourers. Here therefore we are dealing with labourers for whose labour the idlers directly exchange their revenue, that is, with labourers who draw their wages directly from revenue, not from capital.

"Since the men to whom it" (the revenue) "belongs are idle, it is obvious that they do not direct any productive labour. All these labourers whom they pay are intended only to procure some enjoyment for them. No doubt these enjoyments are of different kinds.... The expenditure of all this class of men ... feeds a numerous population whose existence it makes possible, but one whose labour is completely sterile.... Some of it may be more or less fruitful, e.g. the construction of a house, the improvement of a landed estate; but these are particular cases when for the time being they cause productive labour to be performed.^[65] Apart from these minor exceptions, the whole consumption of this species of capitalists is absolutely pure loss from the standpoint of reproduction, and an equally great diminution of the wealth that has been acquired" (p. 236).a

//Real political economy à la Smith treats the CAPITALIST only as personified capital, M—C—M, agent of production. But who is to consume the products? The labourers?—Quod non}' The capitalist himself? Then he is acting as a big idle consumer and not as a capitalist. The owners of land and money rents? They do not reproduce their consumption, and thereby are harmful to wealth. Nevertheless, there are also two correct aspects in this contradictory view, which regards the capitalist only as a real hoarder, not an illusory one like the hoarder proper: 1) capital (and hence the capitalist, its personification) is treated only as an agent for the development of the productive forces and of production; 2) it expresses the standpoint of emerging capitalist society, to which what matters is exchange value, not use value; wealth, not enjoyment. The enjoyment of wealth seems to it a superfluous luxury, until it itself learns to combine exploitation and consumption and to subordinate itself to the enjoyment of wealth.//

"To find how these revenues" (on which the idlers live) "have been formed it is always necessary to go back to the industrial capitalists" (p. 237, note).

The industrial capitalists—the 2nd sort of capitalists—

"include all the entrepreneurs in any industry whatever, that is to say, all the persons who, having capitals, ... employ their talent and their labour in turning them to account themselves instead of hiring them to others, and who consequently live neither on wages nor on revenues but on profits" (p. 237).

In Destutt it is quite clear — as with Adam Smith before him — that what on the surface is glorification of the productive labourer is in fact only glorification of the industrial capitalist in contrast to LANDLORDS and SUCH MOWED CAPITALISTS as live only on their revenue.

"They have ... in their hands almost all the wealth of society.... It is not only the income from this wealth that they spend annually, but even the fund itself, and sometimes many times in the year, when the course of business is rapid enough to make this possible. For since in their capacity as industrialists they spend only in order that the money shall come back to them with a profit, the more they can do so on this condition, the greater their profits" (pp. 237-38).

As for their personal consumption, it is the same as that of the idle capitalists. But it is

"in total moderate, because industrialists are usually unassuming" (p. 238). But it is different with their industrial consumption, "it is nothing less than final; it returns to them with profits" (I.e.). Their profit must be large enough not only for their "personal consumption, but also" for "the rent of land and the interest on money which they obtain from the idle capitalists" ([p.] 238).

Destutt is right on this. Rents of land and interest on money are only "deductions" from industrial profit, portions of the latter given by the industrial capitalist from his gross profit to LANDLORDS

a n d MONEYED CAPITALISTS.

"The revenues of the rich idlers are only rents taken from industry; it is industry alone that creates them" (p. 248). The industrial capitalists "rent their" (that is, the idle capitalists') "land, their houses and their money, and they make use of them in such a way as to draw profits from them higher than this rent" [p. 237]. That is, the rent which they pay to the idlers, which therefore is only a part of this profit. This rent that they thus pay to the idlers is "the sole revenue of these idlers and the sole fund for their annual expenditures" (p. 238).

U p to here, ALL RIGHT. But how then does it stand with the wage labourers (the productive labourers, who are employed by the industrial capitalists)?

"These have no other treasure but their everyday labour. This labour obtains wages for them.... But whence come these wages? It is clear that they come from the properties of those [IX-402] to whom the wage labourers sell their labour, that is to say, from the funds which are in their possession beforehand, and which are nothing but the accumulated products of labours previously performed. It follows from this that the consumption paid for by this wealth is the consumption of the wage labourers, in the sense that it is they whom it maintains, but at bottom it is not they who pay it, or at least they only pay for it with funds existing beforehand in the hands of • those who employ them. Their consumption should therefore be regarded as having been made by those who hire them. They only receive with one hand and return with the other.... It is therefore necessary to regard not only all that they" (the wage labourers) "spend but even all that they receive as the real expenditure and consumption of those who buy their labour. That is so true that in order to see whether this consumption is more or less destructive of wealth that has been acquired, or even if it tends to increase it ... it is necessary to know what use the capitalists make of the labour that they buy" (pp. 234-35).

VERY WELL. And whence come the profits of the entrepreneurs which enable them to pay revenue to themselves and to the idle capitalists, etc.?

"I will be asked how these industrial entrepreneurs can make such large profits, and whence they can draw them? I reply that it is through their selling everything that they produce at a higher price than it has cost them to produce" (p. 239).

And to whom do they sell everything at a higher price than it costs them?

"They sell it, "1) to themselves, for the whole part of their consumption destined for the satisfaction of their needs, which they pay for with a portion of their profits;

"2) to the wage labourers, both those whom they pay and those paid by the idle capitalists; in this way they draw back from these labourers their total wages, apart from any small economies which these may be able to make;

"3) to the idle capitalists, who pay them with the part of their revenue which they have not already given to the labourers directly employed by them, so that all the rent which they annually pay to the idle capitalists comes back to them in one or other of these ways" (I.e., [p.] 239).

Let us now have a look at these 3 categories of sales.

1) The industrial capitalists themselves consume one part of their product (or profit). They cannot possibly enrich themselves by swindling themselves and selling their products to themselves at a dearer price than they themselves have paid for them. Nor can any one of them swindle the others in this way. If A sells his product, which the industrial capitalist B consumes, at too dear a price, then B sells his product, which the industrial capitalist A consumes, at too dear a price. It is the same thing as if A and B had sold their products to each other at their real value. Category 1 shows us how the capitalists spend a part of their profit; it does not show us whence they draw the profit. In any case they make no profit by "selling to one another everything that they produce at a higher price than it has cost them to produce".

2) They can likewise draw no profit from the part of the product which they sell to their labourers above the production costs. It is presupposed that the whole consumption of the labourers is IN FACT "the consumption of those who buy their labour". Moreover Destutt rubs this in by remarking that the capitalists, by selling their products to the wage labourers (their own and those of the idle capitalists), only "draw back their total wages". And in fact not even the total, but after deducting their economies. It is all the same whether they sell the products to them cheap or dear, since they always only get back what they have given them, and, as said above, the wage labourers only "receive with one hand and return with the other". First the capitalist pays money to the labourer as wages. Then he sells him his product "too dear", and by so doing draws the money back again. But as the labourer cannot pay back to the capitalist more money than he has received from him, so the capitalist can never sell his products to him dearer than he has paid him for his labour. He can always only get back from him as much money for the sale of his products as the money he has given him for his labour. Not a farthing more. How then can his money increase through this "circulation"?

[IX-403] In addition to this, there is another absurdity in Destutt. Capitalist C pays the labourer L a weekly wage of £1, and then draws back the £1 for himself again by selling him commodities for £1. By this means, Tracy thinks, he has drawn back to himself the total of the wages paid. But first he gives the labourer £1. And then he gives him commodities for £1. So what in fact he has given him is £2: £1 in commodities and £1 in money. Of this £2, he takes back £1 in the form of money. Therefore in fact he has not drawn back a FARTHING of the £1 wage. And if he intended to enrich himself by this kind of "drawing back" the wages (instead of by the labourer giving him back in labour what he advanced to him in commodities), he would soon come to his senses.

Here, therefore, the noble Destutt confuses the circulation of money with the real circulation of commodities. Because the capitalist, instead of giving the labourer directly commodities to the value of £1, gives him £1, with which the labourer then decides as he likes which commodities he wants to buy, and returns to the capitalist in the form of money the draft he had given him on his merchandise — after he, the labourer, has appropriated his aliquot share of the merchandise — Destutt imagines that the capitalist "draws back" the wages,a because the same piece of money flows back to him. And on the same page Mr. Destutt remarks that the phenomenon of circulation is "mal connu" h (p. 239). Totally unknown to himself, at any rate. If Destutt had not explained "the drawing back of the total wages" a in this peculiar way, the nonsense might at least have been conceivable in a way we shall mention now.

(But before that, a further illustration of his sapience. If I go into a shop and the shopkeeper gives me £1 and I then use this £1 to buy commodities to the value of £1 in his shop, he then draws back the £1 again. No one will assert that he has enriched himself by this operation. Instead of £1 in money and £1 in commodities he now has only £1 in money left. Even if his commodity was only worth 10s. and he sold it to me for £1, in this case too he is 10s. poorer than he was before the sale, even though he has drawn back the whole of one pound sterling.)

If C, the capitalist, gives the labourer £1 wages, and afterwards sells him commodities to the value of 10s. for £1, he would certainly have made a profit of 10s. because he had sold the commodities to the labourer 10s. too dear. But from Mr. Destutt's point of view even so it could not be understood how any profit from this transaction arises for C. (The profit arises from the fact that he has paid him less wages — in fact has given the labourer a smaller aliquot part of the product in exchange for his labour— than he gives him nominally.) If he gave the labourer 10s. and sold his commodity for 10s., he would be just as rich as if he gives him £1 and sells him his 10s. commodity for £1. Moreover, Destutt bases his argument on the assumption of necessary wages. In the best case any profit here would only be explained by the labourer having been cheated over his wages.

This CASE 2 therefore shows that Destutt has absolutely forgotten what a productive labourer is, and has not the slightest idea of the source of profit. At most it could be said that the capitalist makes a profit by raising the price of the products above their value, in so far as he sells them not to his own wage labourers but to the wage labourers of idle capitalists. But since the consumption of unproductive labourers is in fact only a part of the consumption of idle capitalists, we come now to case 3.

3) The industrial capitalist sells his products "too dear", above their value, to the

"idle capitalists, who pay him with the part of their revenue which they have not already given to the labourers directly employed by them, so that all the rent which they annually pay to the idle capitalists comes back to them" (the industrial capitalists) "in one or other of these ways".

Here again there is the childish conception of the rent, etc., coming back, as there was above of the drawing back of the total wages. For example, C pays £100 rent of land or interest on money to I (the idle capitalist). The £100 are means of payment for C. They are means of purchase for I, who with them draws £100 of commodities from C's warehouse. Thus the £100 return to C as the transformed form of his commodity. But he has £100 less in commodities than before. Instead of giving them direct to I, he has given him £100 in money, with which the latter buys £100 of his commodities. But he buys these £100 worth of commodities with C's money, not with his own funds. And Tracy imagines that in this way the rent which C has paid over to I comes back to C. What imbecility! First absurdity.

Secondly, Destutt himself has told us that rent of land and interest on money are only deductions from the industrial capitalist's profit, and therefore only quotas of profit given away to the idler. On the assumption that C drew back this whole quota [IX-404] to himself by some sort of trick, though not in one or other of the ways DESCRIBED BY TRACY — in other words, that capitalist C paid no rent at all, neither to the LANDLORD nor to the MONIED capitalist — he would retain his whole profit, but the question is precisely how to explain whence he derived the profit, how he has made it, how it arose. As this cannot be explained by his having or retaining it without giving a quota of it to LANDLORD and MONIED capitalist, just as little can it be explained by the fact that the quota of profit which he has given away to the idler under one category or another is entirely or partially, in one way or another, dragged back by him from the hand of the idler into his own hand again. Second absurdity!⁽⁴⁾

Let us disregard these absurdities. C has to pay I — the idler — rent to the amount of £100 for the land or the capital that he has rented (loué) from him. He pays the £100 out of profit (whence the latter arises we do not yet know). Then he sells his products to I, which are consumed either by I directly or through his RETAINERS (the unproductive wage labourers), and he sells them to him too dear, for example, 25% above their value. He sells him products worth £80 for £100. In this transaction C undoubtedly makes a profit of £20. He has given I a draft for £100 worth of commodities. When the latter presents the draft, he gives his commodities only to the value of £80, by fixing the nominal price of his goods 25% above their value. Even if I would be satisfied with consuming commodities worth £80 and paying £100 for them, C's profit could never rise above 25%. The prices and the fraud would be repeated every year. But I wants to consume to the value of £100. If he is a landlord, que faire⁽⁵⁾? He mortgages property to C for £25, in exchange for which C gives him commodities worth £20 — for he sells his commodities at 25% (V4) above their value. If he is a money-lender, he hands over to C £25 of his capital, in exchange for which C gives him commodities worth £20.

Let us assume that the capital (or value of the land) was lent at 5%. Then it amounted to £2,000. Now it amounts to only £1,975. His rents are now £98 s/4- And so it would go on, with I constantly consuming commodities to the real value of £100, but his rents constantly falling, because in order to have commodities to the value of £100 he must always consume an ever greater part of his capital itself. Thus bit by bit C would get the whole of I's capital into his own hands, and the rents of it together with the capital — that is to say, along with the capital itself he would appropriate that portion of the profit which he makes from borrowed capital. Mr. Destutt evidently has this process in view, for he continues:

"But I will be told, if that is so and if industrial entrepreneurs in effect reap each year more than they have sown, in a very short time they must have attracted to themselves the whole public fortune, and soon there would be nothing left in a State but wage labourers without funds, and capitalist entrepreneurs. That is true, and things would in fact be so if the entrepreneurs or their heirs did not take the course of resting as they grow wealthy, and did not thus continually go to recruit the class of idle capitalists; and even in spite of this frequent emigration, it still happens that when industry has been at work in a country for some time without too great disturbances, its capitals are always being augmented not only because of the growth of the total wealth, but also in a much greater proportion.... It might be added this effect would be felt even more strongly but for the immense levies that all governments impose each year on the industrious class by means of taxes" (pp. 240-41).

And Mr. Destutt is quite right up TO A CERTAIN POINT, although not at all in what he wants to explain. In the period of the declining Middle Ages and rising capitalist production the rapid enrichment of the industrial capitalists is in part to be explained by the direct fleecing of the LANDLORDS. With the fall in the value of money resulting from the discoveries in America, the farmers paid the landlords the old rent in nominal, not in real terms, while the MANUFACTURERS sold them commodities above their value — not just at the higher value of the money. Similarly in all countries, as for example the Asiatic, where the principal revenue of the country is in the hands of LANDLORDS, princes, etc., in the form of rent, the MANUFACTURERS, few in number and therefore not restricted by competition, sell them their commodities at monopoly prices, and in this way appropriate a part of their revenue; they enrich themselves [IX-405] not only by selling to them "unpaid" labour, but by selling the commodities at over the quantity of labour contained in them. Only Mr. Destutt is again wrong if he believes that money-lenders let themselves be fleeced in this way. On the contrary, they SHARE, through the high interest they draw, in those high profits, in that fleecing, directly and indirectly.

The following passage shows that this phenomenon was in Mr. Destutt's mind:

"One has only to see how weak they" (the industrial capitalists) "were throughout all Europe three or four centuries ago, in comparison with the immense wealth of all the powerful men of those days, and how today they have increased and grown in number, while the others have diminished" (I.e., p. 241).

What Mr. Destutt wanted to explain to us was the profits and the high profits of industrial capital. He has explained it in two ways. First, because the money which these capitalists pay out in the form of wages and rents flows back to them again, since these wages and rents buy products from them. In fact, what this explains is only why they do not pay wages and rents twice, first in the form of money, and secondly in the form of commodities to the same amount in money. The second explanation is that they sell their commodities above their price, they sell them too dear, first to themselves, thus cheating themselves; secondly to the labourers, thus again cheating themselves, as Mr. Destutt tells us that

the consumption of the wage labourers "should be regardtd as having been made by those who hire them" (p. 235);

finally, in the third place, to the gentlemen living on rents, whom they fleece, and this would in fact explain why the industrial capitalists always keep for themselves a larger part of their profit, instead of giving it away to the idlers. It would show why the distribution of the total profit between the industrial and non-industrial capitalists is increasingly to the advantage of the former at the cost of the latter. It would not help one iota to an understanding of whence this total profit comes. Let us assume that the industrial capitalists had got the whole of it for themselves, the question remains, where does it come from?

Therefore Destutt has not only given no answer, but he has only revealed that he thinks the reflux of the money is a reflux of the commodity itself. This reflux of money means only that the capitalists first pay wages and rents in money, instead of paying them in commodities; that their commodities are bought with this money and hence they have paid in commodities in this roundabout way. This money therefore constantly flows back to them, but only to the extent that commodities to the same money value are definitively taken from them and fall to the share of the consumption of the wage labourers and drawers of rent.

Mr. Destutt (in a really French way — similar exclamations of astonishment about himself are to be found in Proudhon) is altogether astonished at

the "clarity" which this "way of looking at the consumption of our wealth ... sheds on the whole progress of society. Whence comes this consistency and this lucidity? From the fact that we have lighted upon the truth. This recalls the effect of those mirrors in which objects are outlined clearly and in their right proportions when one is in the right spot from which to view them, and in which everything appears confused and disjointed when one is too near or too far" (pp. 242-43).

Later, quite incidentally, Mr. Destutt recalls (from Adam Smith) the real course of things, which however in essence he only repeats as a phrase which he has not understood — as otherwise he (this Member of the Institute of France^[66]) would have been unable to shed the streams of light referred to above.

"Whence come their revenues to these idle men? Is it not from the rent which those who set their capitals to work pay to them out of their profits, that is to say, those who use their funds to pay labour which produces more than it costs, in a word, the men of industry?"

(Aha! So the rents (and also their own profits) which the industrial capitalists pay to the idle capitalists for the funds borrowed from the latter come from their using these funds to pay wages to labour "which produces more than it costs"; that is to say, therefore, whose product has more value than is paid to them [wage labourers]—in other words, profit comes from what the wage labourers produce over and above what they cost; a surplus product which the industrial capitalist appropriates for himself, and of which he gives away only one part to those receiving rent from land and interest on money.)

Mr. Destutt concludes from this: not that we must go back to these productive labourers, but that we must go back to the capitalists who set them in motion.

"It is these who reallv maintain even the labourers employed by the others" (p. 246).

To be sure; inasmuch as they directly exploit labour, and the idle capitalists only do it THROUGH THEIR AGENCY. And in this sense it is correct [IX-406] to regard industrial capital as the source of wealth.

"We must therefore always go back to these" (the industrial capitalists) "in order to find the source of all wealth" (p. 246).

"In the course of time, wealth has accumulated in greater or less quantity, because the result of previous labours has not been entirely consumed as soon as produced. Some of the possessors of this wealth are content to draw a rent from it and consume it. These are those whom we have called idle. The other more active ones set to wotk both their own funds and those which they borrow. They employ them to pay labour which reproduces them with a profit."

//Hence, therefore, not only the reproduction of this fund, but [the production] of the SURPLUS, which forms profit. II

"With this profit they pay for their own consumption and defray that of others. By these consumptions themselves" (their own and that of the idlers? Here again the same absurdity) "their funds come back to them somewhat increased, and they start again. That is what constitutes circulation" (pp. 246-47).

The inquiry into the "productive labourer", and the result that only one whose buyer is an industrial capitalist is a productive labourer — one whose labour produces profit for its immediate buyer — led Mr. Destutt to the conclusion that in fact the industrial capitalists are the sole productive labourers in the higher meaning of the word.

"They who live on profits" (the industrial capitalists) "maintain all the others and alone augment the public fortune and create all our means of enjoyment. That must be so, because labour is the source of all wealth and because they alone give a useful direction to current labour, by making a useful application of accumulated labour" (p. 242).

That they give "a useful direction to current labour" in fact means only that they employ useful labour, labour which results in use values. But that they make "useful application of accumulated labour"—if it is not to mean the same thing again, that they make industrial use of accumulated wealth for the production of use values — means that they make "useful application of accumulated labour" by buying with it more current labour than is contained in it. In the passage just cited Destutt naively epitomises the contradictions which make up the essence of capitalist production. Because labour is the source of all wealth, capital is the source of all wealth; the actual propagator of wealth is not he who labours, but he who makes a profit out of another's labour. The productive powers of labour are the productive powers of capital.

"Our faculties are our only original wealth; our labour produces all other wealth, and all labour properly directed is productive" (p. 243).

Hence, according to Destutt, it follows as a matter of course that the industrial capitalists

"maintain all the others and alone augment the public fortune and create all our means of enjoyment".

Our faculties (facultés) are our only original wealth, therefore the labour capacity is not wealth. Labour produces all other wealth, that means: it produces wealth for all others except for itself, and it itself is not wealth, but only its product is wealth. All labour properly directed is productive; that means: all productive labour, all labour which yields profit to the capitalist, is properly directed.

The following remarks of Destutt — which refer not to the different classes of consumers, but to the different nature of the articles of consumption—are a very good paraphrase of Adam Smith's views in Book II, Ch. Ill, at the end of which he inquires into what kind of (unproductive) expenditure, that is to say, of individual consumption, consumption of revenue, is more or less advantageous. He opens this inquiry (Gamier, t. II, p. 345) [Vol. II, p. 122] with the words:

"As frugality increases, and prodigality diminishes, the public capital, so the conduct of those whose expense just equals their revenue, without either accumulating or encroaching, neither increases nor diminishes it. Some modes of expense, however, seem to contribute more to the growth of public opulence than others."

Destutt summarises Smith's exposition as follows:

"If consumption is very different according to the kind of consumer, it varies also according to the nature of the things consumed. All indeed represent labour, but its value is fixed more securely in some than in others. As much trouble may have been taken in making a firework as in finding and cutting a diamond, and consequently one may have as much value as the other. But when I have bought, paid for and used both, at the end of half an hour I shall have nothing left of the first, and the second can still be a resource for my grandchildren a century later.... It is the same with what [IX-407] are called" (that is, by Say) "immaterial products. An invention is of eternal utility. An intellectual work, a picture also have a utility that is more or less durable, while that of a ball, a concert, a play is instantaneous and disappears immediately. The same can be said of the personal services of doctors, lawyers, soldiers, domestic servants, and in general of all who are called employed persons. Their utility is that of the moment of need.... The most ruinous consumption is the quickest, because it is that which destroys more labour in the same time, or an equal quantity of labour in less time; in comparison with it, consumption which is slower is a kind of treasuring up, since it leaves to times to come the enjoyment of part of the present sacrifices ... everyone knows that it is more economical to get, for the same price, a coat that will last three years than a similar one which will only last three months" (pp. 243-44).

Most of the writers who contested Smith's view of productive and unproductive labour regard consumption as a necessary spur to production. For this reason they regard the wage labourers who live on revenue — the unproductive labourers whose hire does not produce wealth, but is itself a new consumption of wealth — as equally productive even of material wealth as the productive labourers, since they widen the FIELD OF MATERIAL CONSUMPTION and therewith the FIELD OF PRODUCTION. This was therefore for the most part apologetics from the standpoint of bourgeois economy, partly for the rich idlers and the "unproductive labourers" whose services they consume, partly for "strong governments" whose expenditure is heavy, for the increase of the State debts, for holders of church and State benefices, holders of sinecures, etc. For these "unproductive labourers"—whose services figure in the expenses of the idle rich — all have in common the fact that although they produce "immaterial products", they consume "material products", that is, products of the productive labourers.

Other economists, like Malthus, admit the distinction between productive labourers and unproductive, but prove to the industrial capitalist that the latter are as necessary to him as the former, even for the production of material wealth.

To say that production and consumption are identical or that consumption is the purpose of all production or that production is the precondition of all consumption, is of no help in this connection. What — apart from the tendentious purpose — is at the bottom of the whole dispute is rather this:

The labourer's consumption on the average is only equal to his production costs, it is not equal to his output. He therefore produces the whole surplus for others, and so this whole part of his production is production for others. Moreover, the industrial capitalist who drives the labourer to this overproduction (i.e., production over and above his own subsistence needs) and makes use of all expedients to increase it to the greatest extent possible — to increase this relative overproduction as distinct from the necessary production — directly appropriates the surplus product for himself. But as personified capital he produces for the sake of production, he wants to accumulate wealth for the sake of the accumulation of wealth. In so far as he is a mere functionary of capital, that is, an agent of capitalist production, what matters to him is exchange value and the increase of exchange value, not use value and its increase. What he is concerned with is the increase of abstract wealth, the rising appropriation of the labour of others. He is dominated by the same absolute drive to enrich himself as the hoarder, except that he does not satisfy it in the illusory form of building up a treasure of gold and silver, but in the creation of capital, which is real production. If the labourer's overproduction is production for others, the production of the normal capitalist, of the industrial capitalist as he ought to be, is production for the sake of production. It is true that the more his wealth grows, the more he falls behind this ideal, and becomes extravagant, even if only to show off his wealth. But he is always enjoying wealth with a guilty conscience, with frugality and thrift at the back of his mind. In spite of all his prodigality he remains, like the hoarder, essentially avaricious.

When Sismondi says that the development of the productive powers of labour makes it possible for the labourer to obtain ever-increasing enjoyments, but that these very enjoyments, if put at his disposal, would make him unfit for labour (as a wage labourer) //Sismondi says:

"Because of the progress made by industry and science, each labourer is able to produce each day much more than he needs to consume. But at the same time as his labour produces wealth, this wealth, if he was called upon to enjoy it, would make him little fitted for labour" (Nouveaux principes..., Vol. I, p. 85)//,

it is equally true that the industrial capitalist becomes more or less unable to fulfil his function as soon as he personifies the enjoyment of wealth, as soon as he wants the accumulation of pleasures instead of the pleasure of accumulation.

He is therefore also a producer of overproduction, production for others. Over against this overproduction on one side must be placed overconsumption on the other, production for the sake of production must be confronted by consumption for the sake of consumption. What the industrial capitalist has to surrender to landlords, the State, creditors of the State, the church, and so forth, who only consume revenue, [IX-408] is an absolute diminution of his wealth, but it keeps his lust for enrichment going and thus preserves his capitalist soul. If the landlords, money-lenders, etc., were to consume their revenue also in productive instead of unproductive labour, the purpose would not be achieved. They themselves would become industrial capitalists, instead of representing the function of consumption as such. With regard to this point we shall examine later an extremely comical dispute between a Ricardian and a Malthusian.^[6]

Production and consumption are in their nature inseparable. From this it follows that since in the system of capitalist production they are in fact separated, their unity is restored through their opposition — that if A must produce for B, B must consume for A. Just as we find with every individual capitalist that pour sa part^[3] he favours prodigality on the part of those who are CO-PARTNERS with him in his revenue, so the older Mercantile system as a whole depends on the idea that a nation must be frugal as regards itself, but must produce luxuries for foreign nations to enjoy. The idea here is always: on the one side, production for production, therefore on the other side consumption of foreign production. This idea of the Mercantile system is expressed for example by Dr. Paley, Moral Philosophy, Vol. II, Ch. XI:

"A laborious, frugal people, ministering to the demands of an opulent, luxurious nations."^[68]

"They" (our politicians, Gamier, etc.), says Destutt, "put forward as a general principle that consumption is the cause of production, that therefore it is good for it to be very plentiful. They declare that it is this which constitutes a great difference between public economy and the economy of individuals" (I.e., pp. 249-50).

One more fine phrase:

"The poor nations are those where the people are comfortably off; and the rich nations, those where the people are generally poor" (I.e., p. 231).

Henri Storch, Cours d'économie politique etc., edited by Jean Baptiste Say, Paris, 1823 (lectures read to Grand Duke Nicholas, concluded in 1815), Vol. III.

After Gamier, Storch is in fact the first writer to polemise against Adam Smith's distinction between productive and unproductive labour on a new basis.

He distinguishes the "internal goods or the elements of civilisation", with the laws of whose production the "theory of civilisation" has to concern itself, from material goods, component parts of material production (I.e., Vol. Ill, p. 217).

("It is evident that man only attains to the production of wealth in so far as he is endowed with internal goods, that is to say, in so far as he has developed his physical, intellectual and moral faculties, which implies the means for their development such as social institutions, etc. Thus the more civilised a people, the more its national wealth can grow." The reverse is also true (I.e., Vol. I, p. 136).

Against Smith:

"Smith ... excludes from productive labours all those which do not contribute directly to the production of wealth; but also he only considers the national wealth.... His error is not to have distinguished non-material values from wealth" (Vol. Ill, p. 218).⁽⁶⁾

And that is really all there is to it. The distinction between productive labours and unproductive labours is of decisive importance for what Smith was considering: the production of material wealth, and in fact one definite form of that production, the capitalist mode of production. In intellectual production another kind of labour appears as productive. But Smith does not take it into consideration. Finally, the interaction and the inner connection between the two kinds of production also do not fall within the field he is considering; moreover, they can only lead to something more than empty phrases when material production is examined sub sua propria specie.⁽⁷⁾ In so far as he speaks of workers who are not directly productive, this is only to the extent that they participate directly in the consumption of material wealth but not in its production.

With Storch himself the Theorie de la civilisation does not get beyond trivial phrases, although some ingenious observations slip in here and there — for example, that the material division of labour is the precondition for the division of intellectual labour. How much that must be the case, how little he had even formulated for himself the task, let alone its solution, is apparent from one single circumstance. In order to examine the connection between intellectual [IX-409] production and material production it is above all necessary to grasp the latter itself not as a general category but in definite historical form. Thus for example different kinds of intellectual production correspond to the capitalist mode of production and to the mode of production of the Middle Ages. If material production itself is not conceived in its specific historical form, it is impossible to understand what is specific in the intellectual production corresponding to it and the reciprocal influence of one on the other. Otherwise one cannot get beyond inanities. This because of the talk about "civilisation".

Further: from the specific form of material production arises in the first place a specific structure of society, in the second place a specific relation of men to nature. Their State system and their intellectual outlook is determined by both. Therefore also the kind of their intellectual production.

Finally, under intellectual production Storch also includes all kinds of professional activities of the ruling class, who carry out social functions as business. The existence of these strata, like the function they perform, can only be understood from the specific historical structure of their production relations.

Because Storch does not conceive material production itself historically—because he conceives it as production of material goods in general, not as a definite historically developed and specific form of this production — he deprives himself of the basis on which alone can be understood partly the ideological component parts of the ruling class partly the free intellectual production of this particular social formation. He cannot get beyond meaningless general phrases. Consequently, the relation is not so simple as he presupposes. For instance, capitalist production is hostile to certain branches of intellectual production, for example, art and poetry. If this is left out of account, it opens the way to the illusion of the French in the eighteenth century which has been so beautifully satirised by Lessing.^[69] Because we are further ahead than the ancients in mechanics, etc., why shouldn't we be able to make an epic too? And the Henriade^[10] in place of the Iliadl

Storch, however, rightly stresses — with special reference to Gamier, who was actually the father of this attack on Smith — that Smith's opponents had set about it the wrong way.

"What do Smith's critics do? Far from establishing this distinction" (between non-material values and wealth), "they succeed in confusing these two kinds of value that are so evidently different."

(They assert that the production of intellectual products or the production of services is material production.)

"In regarding non-material labour as productive, they assume it is productive of wealth" (that is, directly), "that is to say, of material and exchangeable values, while it produces only non-material and immediate values; they assume that the products of non-material labour are subject to the same laws as those of material labour: and yet the former are governed by other principles than the latter" (Vol. Ill, p. 218).*

The following passages from Storch are to be noted as having been copied from him by later authors:

"From the fact that internal goods are in part the product of services, the conclusion has been drawn that they are no more lasting than the services themselves, and that they were necessarily consumed as they were produced" (Vol. Ill, p. 234). "The original goods, far from being destroyed by the use made of them, expand and grow with use, so that even the consumption of them augments their value" (I.e., p. 236). "Internal goods are susceptible of being accumulated like wealth, and of forming capitals that can be used in reproduction", etc.^[3] (I.e., p. 236). "Material labour must be divided up and its products must be accumulated before the dividing up of non-material labour can be thought of" (p. 241).

These are nothing but general superficial analogies and relations between intellectual and material wealth. So for example is his observation that undeveloped nations borrow their intellectual capitals from abroad, just as materially undeveloped nations borrow their material capitals (I.e., p. 306); and that the division of non-material labour depends on the demand for it, in a word, on the market, etc. (p. 246).

Here are the passages which have actually been copied:

[IX-410] "The production of internal goods, far from diminishing the national wealth by the consumption of material products it requires, is on the contrary a powerful means of increasing it; as the production of wealth, in its turn, is an equally powerful means of increasing civilisation" (I.e., p. 517). "It is the equilibrium of the two kinds of production that causes the advance of national prosperity" (I.e., p. 521).

According to Storch, the physician produces health (but also illness), professors and writers produce les lumières^[3] (but also obscurantism), poets, painters, etc., produce goûth (but also bad taste), moralists, etc., produce moeurs,c preachers religion, the sovereign's labour security, and so on (pp. 247-50). It can just as well be said that illness produces physicians, stupidity produces professors and writers, lack of taste poets and painters, immorality moralists, superstition preachers and general insecurity produces the sovereign. This way of saying in fact that all these activities, these SERVICES, produce a real or imaginary use value is repeated by later writers in order to prove that they are productive workers in Smith's sense, that is to say, that they directly produce not products sui generisd but products of material labour and consequently immediate wealth. In Storch there is not yet this nonsense, which for that matter can be reduced to the followinge:

1) that the various functions in bourgeois society mutually presuppose each other;

2) that the contradictions in material production make necessary a superstructure of ideological strata, whose activity — whether good or bad — is good, because it is necessary;

3) that all functions are in the service of the capitalist, and work out to his "benefit";

4) that even the most sublime intellectual productions should merely be granted recognition, and apologies for them made to the bourgeoisie, that they are presented as, and falsely proved to be, direct producers of material wealth.

W. Nassau Senior, Principes fondamentaux de l'économie politique, translated by Jean Arrivabene, Paris, 1836.

Nassau Senior mounts his high horse:

"According to Smith, the lawgiver of the Hebrews was an unproductive labourer" (I.e., p. 198).f

Was it Moses of Egypt or Moses Mendelssohn? Moses would have been very grateful to Mr. Senior for calling him a "productive labourer" in the Smithian sense. These people are so dominated by their fixed bourgeois ideas that they would think they were insulting Aristotle or Julius Caesar if they called them "unproductive labourers". Aristotle and Caesar would have regarded even the title "labourers" as an insult.

"Does not the doctor who, by a prescription, heals a sick child and thus assures him many years of life, produce a durable result?" (I.e.)

Rubbish! If the child dies, the result is no less durable. And if the child is no better after treatment, the doctor's SERVICE has to be paid for just the same. According to Nassau doctors should only be paid in so far as they cure, and lawyers in so far as they win lawsuits, and soldiers in so far as they are victorious.

But now he gets really lofty:

"Did the Dutch produce temporary results by fighting against the tyranny of the Spaniards, or the English by revolting against a tyranny that threatened to be even more terrible?" (I.e., p. 198).

Belletristic trash! Dutch and English revolted at their own cost. No one paid them for labouring "in revolution". But with either productive or unproductive labourers there is always a buyer and seller of labour. Hence what rubbish!

These insipid literary flourishes used by these fellows when they polemise against Smith show only that they are representatives of the "educated capitalist", while Smith was the interpreter of the frankly brutal bourgeois parvenu. The educated bourgeois and his mouthpiece are both so stupid that they measure the effect of every activity by its [IX-411] effect on the purse. On the other hand, they are so educated that they grant recognition even to functions and activities that have nothing to do with the production of wealth; and indeed they grant them recognition because they too "indirectly" increase, etc., their wealth, in a word, fulfil a "useful" function for wealth.

Man himself is the basis of his material production, as of any other production that he carries on. All circumstances, therefore, which affect man, the subject of production, plus ou moins^[3] modify all his functions and activities, and therefore too his functions and activities as the creator of material wealth, of commodities. In this respect it can in fact be shown that all human relations and functions, however and in whatever form they may appear, influence material production and have a more or less decisive influence on it.

"There are countries where it is quite impossible for people to work the land unless there are soldiers to protect them. Well, according to Smith's classification, the harvest is not produced by the joint labour of the man who guides the plough and of the man at his side with arms in hand; according to him, the ploughman alone is a productive labourer, and the soldier's activity is unproductive" (I.e., p. 202).

First, that is not true. Smith would say that the soldier's protective care is productive of defence, but not of the corn. If order was restored in the country, the ploughman would produce the corn just as before, without being compelled to produce the maintenance, and therefore the life, of the SOLDIERS INTO THE BARGAIN. The SOLDIER belongs to the faux frais de production* in the same way as a large part of the unproductive labourers who produce nothing themselves, either intellectual or material, but who are useful and necessary only because of the faulty social relations — they owe their existence to SOCIAL EVILS.b

However, Nassau might say: if a machine is invented that makes 19 out of 20 labourers superfluous, then these 19 too are faux frais de production. But the soldier can drop out although the material conditions of production, the conditions of agriculture as such, remain unchanged. The 19 labourers can only drop out if the labour of the 1 remaining LABOURER becomes 20 times more productive, that is to say, only through a revolution in the actual material conditions of production. Moreover, Buchanan already observes:

* "If the soldier, for example, be termed a productive labourer because his labour is subservient to production, the productive labourer might, by the same rule, lay claim to military honours; as it is certain that without his assistance no army could ever take the field to fight battles or to gain victories" * (D. Buchanan, Observations on the Subjects Treated of in Dr. Smith's Inquiry etc., Edinburgh, 1814, p. 132).

"The wealth of a nation does not depend on a numerical proportion between those who produce services and those who produce values, but on the proportion between them that is most fitted to render the labour of each more efficacious" (Senior, I.e., p. 204).

Smith never denied this, as he wants to reduce the "necessary" unproductive labourers like State officials, LAWYERS, priests, etc., to the extent in which their services are indispensable. And this is in any case the "proportion" in which they make the labour of productive labourers most efficacious. As for the other "unproductive labourers", whose labours are only bought voluntarily by anyone in order to enjoy their SERVICES, that is, as an article of consumption of his own choice, different cases must be distinguished. If the number of these labourers living on revenue is large in proportion to the "productive" labourers, it is, either, because the amount of wealth is small in general or it is of a one-sided character — for example the medieval barons with their RETAINERS. Instead of consuming manufactured goods on any considerable scale, they and their RETAINERS consumed their agricultural products. When instead of these products they began to consume manufactured goods, the RETAINERS had to be set to labour. The number of those living on revenue was only large because a large part of the annual product was not reproductively consumed. Along with this, the total population was small. Or, the number of those living on revenue is large, • because the productivity of the productive labourers is large, and therefore their SURPLUS PRODUCE WHICH THE RETAINERS FEED UPON. In this case the labour of the productive labourers is not productive because there are so many RETAINERS, but on the contrary — there are so many RETAINERS because the labour of the productive labourers is so productive.

Taking two countries with equal populations and an equal development of the productive powers of labour, it would always be true to say, with Adam Smith, that the wealth of the two countries must be measured according to the proportion of productive and of unproductive labourers. For that means only that in the country which has a relatively greater number of productive labourers, a relatively greater amount of the annual revenue is reproductively consumed, and consequently a greater mass of VALUES is produced annually.^[3] Therefore Mr. Senior has only paraphrased a statement of [IX-412] Adam's, instead of counterposing it with A NOVELTY. Moreover, he himself here makes the distinction between the producers of SERVICES and the producers of values, and so it is the same with him as with most of those who polemise against the Smithian distinction — they accept and themselves use this distinction, at the same time as they reject it.

It is characteristic that all "unproductive" economists, who achieve nothing in their own speciality, [come out] against the distinction between productive labour and unproductive labour. However, in relation to the bourgeois, it is on the one hand an expression of their servility that they present all functions as serving the production of wealth for him; then on the other hand, they present the bourgeois world as the best of all possible worlds, in which everything is useful, and the bourgeois himself is so educated that he understands this.

In relation to the labourers, it is quite all right that the unproductive ones consume the great mass [of products], since they contribute just as much as the labourers to the production of wealth even though IN THEIR OWN WAY.

Finally however Nassau blurts out, showing that he has not understood one word of the essential distinction made by Smith:

"It seems, in truth, that in this case Smith's attention was entirely absorbed by the position of the big owners, the only ones to whom his observations on the unproductive classes can in general be applied. I do not know how otherwise to account for his supposition that capital is only employed to maintain productive labourers, while unproductive labourers live from revenue. The greater number of those whom he calls preeminently unproductive — teachers, and those who govern the State — are maintained at the expense of capital, that is to say, by means of what is spent in advance for reproduction" (I.e., pp. 204-05).

This, IN FACT, is past all understanding. Mr. Nassau's discovery that State and schoolmasters live at the cost of capital and not at the cost of revenue needs no further commentary. Does Mr. Senior mean by it that they live on profit from capital, and in this sense at the expense of capital? If so, he only forgets that revenue from capital is not capital itself, and that this revenue, the result of capitalist production, is not spent in advance for reproduction, of which on the contrary it is the result.^[3] Or does he mean that it is so because certain taxes enter into the production costs of particular commodities? That is, enter into the expenses of certain branches of production? Then he should know that this is only a form of levying taxes on revenue.

With reference to Storch Nassau Senior, the sophist, also remarks:

"Mr. Storch is doubtless in error when he expressly asserts that these results" (health, good taste, etc.) "like other things which have value, form part of the revenue of those who possess them, and that they are also exchangeable" (that is, in so far as they can be sold by their producers). "If this was so, if good taste, morality, religion, were really things which could be bought, wealth would have an importance very different from that ... given to it by the economists. What we buy is not health, knowledge or piety. The doctor, the priest, the teacher ... can only produce the instruments by means of which with greater or less certainty and perfection, these ulterior results will be produced.... If in each particular case the most suitable means to obtain success have been employed, the producer of these means has a right to a reward, even when he has not succeeded or when he has not produced the results expected. The exchange is completed as soon as the advice or the lesson has been given and the payment for it has been received" (I.e., pp. 288-89).

Finally, the great Nassau himself adopts the Smithian distinction. For in fact he distinguishes between "productive consumption and unproductive consumption" (p. 206) instead of between productive and unproductive labour. But the object of consumption is either a commodity — which is not referred to here — or direct labour.

Consumption would be productive if it employed labour that either reproduced labour capacity itself (which for example the schoolmaster's or the physician's labour might do) or reproduced the value of the commodities with which it was bought. The consumption of labour which accomplished neither the one nor the other of these would be unproductive. And indeed Smith says: the labour which can only be consumed productively (i.e., industrially) I call productive labour, and that which can be consumed unproductively, whose consumption is by its nature not industrial consumption, I call unproductive labour. Mr. Senior has therefore proved his genius by nova vocabula rerum?

In general, Nassau copies from Storch.

[IX-413] P. Rossi, Cours d'économie politique (année 1836-1837), published in Brussels, 1843. Here is wisdom!

"The indirect means" (of production) "include everything that furthers production, everything which tends to remove an obstacle, to make production more active, more speedy, easier. " b (Earlier, p. 268, he says: "There are direct and indirect means of production. That is to say, there are means which are a cause sine qua non of the effect in question, forces which make this production. There are others which contribute to production, but do not make it. The former can act even by themselves, the latter can only help the former to produce", p. 268.) "...The whole labour of government is an indirect means of production.... The man who has made this hat must surely recognise that the gendarme who goes by in the street, the judge who sits in his court, the gaoler who takes over a criminal and keeps him in prison, the army which defends the frontier against enemy invasions, contribute to production" (p. 272).

What a pleasure it must be for the hatter, that everyone gets moving so that he can produce and sell this hatc! Inasmuch as he makes these gaolers, etc., contribute indirectly, not directly, to material production, Rossi IN FACT makes the same DISTINCTION as Adam (lecture XII).

In the following lecture XIII, Rossi takes the field ex professod

against Smith — indeed rather [like] his predecessors.

The erroneous distinction between productive labourers and unproductive labourers, he says, arises for 3 reasons.

1) "Among the buyers, some buy products or labour for their own direct consumption; others only buy them in order to sell the new products that they obtain by means of the products and the labour that they have acquired. The determining factor for the former is the use value; for the latter, the exchange value." But in paying attention only to exchange value, one falls into Smith's error. "My servant's labour is unproductive for me: let us admit that for a moment; is it unproductive for him?" (I.e., p[p. 275,] 276).⁽⁸⁾

As all capitalist production rests on the direct purchase of labour in order to appropriate a part of it without purchase in the process of production; which part however is sold in the product — since this is the basis of existence of capital, its concept — is not the distinction between labour which produces capital and that which does not produce it the basis for an understanding of the process of capitalist production? Smith does not deny that the servant's labour is productive for him. Every service is productive for its seller. To swear false oaths is productive for the person who does it for cash. Forging documents is productive for anyone paid to do it. A murder is productive for a man who gets paid for doing it. The trade of sycophant, informer, toady, parasite, lickspittle, is productive for people who do not perform these "SERVICES" gratis. Hence [according to Rossi] they are "productive labourers", producers not only of wealth but of capital. The thief, too, who pays himself — just as the law-courts and the State do—

"employs his energy, uses it in a particular way, produces a result which satisfies a human need" [p. 275],

i.e., the need of the thief and perhaps also that of his wife and children. Consequently [he is a] productive labourer if it is merely a question of producing a "result" which satisfies a "need", or as in the cases mentioned above, if selling his "SERVICES" is enough to make them "productive".

2) "A second error has been not to distinguish between direct production and indirect production. That is why Adam Smith thinks that a magistrate is not productive." But if production is almost impossible" (without the magistrate's labour) "is it not clear that this labour contributes to it, if not by direct and material co-operation, at least by an indirect action which cannot be left out of account?" (I.e., p. 276).

It is precisely this labour which participates indirectly in production (and it forms only a part of unproductive labour) that we call unproductive labour. Otherwise we would have to say that since the magistrate is absolutely unable to live without the peasant, therefore the peasant is an indirect producer of justice! And so on. Utter nonsense! There is yet another point of view bearing on the division of labour, with which we shall deal later.

"The three principal facts of the phenomenon of production have not been carefully distinguished: the force or productive means,the application of this force, the result"

We buy a clock at a clockmaker's; we are only interested in the result of the labour. The same applies when we buy a coat at the tailor's. But:

"There are still people, men of the old school, who do not understand things in this way. They make a workman come to their home and get him to make such-and-such a piece of clothing, giving him the material and everything he needs for this labour. What is it that these people buy? They buy a force" //but also an application of this force//, "a means to produce results of some kind at their peril and risk.... The object of the contract is the purchase of a force."

(The point here is only that these "men of the old school" make use of a mode of production that has nothing in common with the capitalist mode, and in which all development of labour's productive powers, such as capitalist production brings with it, is impossible. It is characteristic that for Rossi e tutti quanti" such a specific distinction is inessential.)

"In the case of a servant, I buy a force capable of doing a hundred different things. The results it produces depend on the use that I make of the force" (p. 276).b

All this has nothing to do with the matter.

[IX-414] 3) "One buys or hires ... a definite application of a force.... You do not buy a product, you do not buy the result that you have in view. Will the lawyer's pleading win your case? Who knows? What is certain, what passes between you and your lawyer, is that, for a certain value, he will go on a certain day to a certain place to speak on your behalf, to apply his intellectual powers in your interests" (p. 276).t

//One further point on this. In lecture XII, p. 273, Rossi says:

"I am far from seeing producers only in those who pass their lives in making cotton cloth or shoes. I honour labour, whatever it may be ... but this respect should not be the exclusive privilege of the manual labourer."

Adam Smith does not do this. For him, a person who produces a book, a painting, a musical composition or a statue, is a "productive labourer" in the second sense, although the person who improvises, recites, plays a musical instrument, etc. is not. And Adam Smith treats SERVICES, in so far as they directly enter into production, as materialised in the product, both the labour of the MANUAL LABOURER and that of the MANAGER, clerk, engineer, and even of the scientist in so far as he is an inventor, an INDOOR OR OUTDOOR LABOURER for the workshop. In dealing with the division of labour, Smith explains how these operations are distributed among different persons; and that the product, the commodity, is the result of their co-operative labour, not of the labour of any individual among them. But the "intellectual" labourers à la Rossi are anxious to justify the large SHARE which they draw out of material production.//

After this discourse, Rossi continues:

"Thus in exchange transactions attention is fixed on one or other of the three principal facts of production. But can these different forms of exchange deprive certain products of the character of wealth and deprive the exertions of a class of producers of the quality of being productive labours? Clearly, there is no link between these ideas such as would justify a deduction of this kind. Because instead of buying the result, I buy the force necessary to produce it, why should the action of the force not be productive and the product not be wealth? Take again the example of the tailor. Whether one buys ready-made clothes from a tailor, or whether one gets them from a jobbing tailor who has been given the material and a wage, as far as the results are concerned the two actions are perfectly similar. No one will say that the former is a productive labour and the latter an unproductive labour; only in the second case the man who wants a coat has been his own entrepreneur. Well, from the standpoint of productive forces what difference is there between the jobbing tailor you have brought to your home and your domestic servant? None" (I.e., p. 277).

Here we have the quintessence of the whole superwise and would-be profound windbag! When Adam Smith, in his second and more superficial presentation, distinguishes between productive and unproductive labour, according to whether it is or is not directly realised in a vendible commodity for the buyer, he calls the tailor productive in both cases. But according to his more profound definition the latter is an "unproductive labourer". Rossi only shows that he "evidently" does not understand Adam Smith.

That the "forms of exchange" seem to Rossi to be a matter of complete indifference is just as if a physiologist were to say that particular forms of life are a matter of indifference, they are all only forms of organic matter. It is precisely these forms that are alone of importance when the question is the specific character of a social mode of production. A coat is a coat. But have it made in the first form of exchange, and you have capitalist production and modern bourgeois society; in the second, and you have a form of handicraft which is compatible even with Asiatic relations or those of the Middle Ages, etc. And these forms are decisive for material wealth itself.

A coat is a coat — that is Rossi's wisdom. But in the first case the jobbing tailor produces not only a coat, he produces capital; therefore also profit; he produces his master as a capitalist and himself as a wage labourer. When I have a coat made for me at home by a jobbing tailor, for me to wear, that no more makes me my own entrepreneur (in the sense of an economic category) than it makes the entrepreneur tailor an entrepreneur when [IX-415] he himself wears and consumes a coat made by his workmen. In one case the purchaser of tailoring labour and the jobbing tailor confront each other as mere buyers and sellers. One pays money and the other supplies the commodity into whose use value my money is transformed. In this transaction there is no difference at all from my buying the coat in a shop. Buyer and seller confront each other simply as such. In the other case, on the contrary, they confront each other as capital and wage labour. As for the domestic servant, he has the same determinate form as the jobbing tailor No. II, whom I buy for the sake of the use value of his labour. Both are simply buyers and sellers. But the way in which the use value is enjoyed in this case in addition brings in a patriarchal form of relation, a relation of master and servant, which modifies the relation [between buying and selling] in its content, though not in its economic form, and makes it distasteful.

For that matter Rossi only repeats in other phrases what Garnier said:

"When Smith wrote that nothing remained of the servant's labour, he was mistaken to a greater extent, we must say, than an Adam Smith should be mistaken. A manufacturer manages himself a large manufactory which requires very active and very assiduous supervision.... This man, not wanting to have unproductive labourers around him, has no servants. He is then compelled to serve himself.... What becomes of his productive labour during the time that he has to devote to this so-called unproductive labour? Is it not evident that your serving people perform a labour which enables you to apply yourself to a labour more appropriate to your abilities? Then how can it be said that no trace remains of their services? There remains everything that you do and that you could not have done if they had not replaced you in the service of your person and your home" (I.e., p. 277).

This is once more the labour-saving idea of Gamier, Lauderdale and Ganilh.^[3] According to this, unproductive labours would only be productive in so far as they save labour and leave more time for a person's own labour, whether he is an industrial capitalist or an unproductive labourer, who can perform a more valuable labour through this replacement by a less valuable labour. A large part of the unproductive labourers who would be excluded by this are MENIAL SERVANTS (in so far as they represent only luxuries), and all unproductive labourers who produce merely enjoyment and whose labour I can only enjoy in so far as I use just as much

•a See this volume, pp. 80, 164.— Ed.

time to enjoy it as its seller uses to produce it, to provide it for me. In both cases there can be no talk of "saving" labour. Finally, even really labour-saving personal services would only be productive in so far as their consumer is a producer. If he is an idle capitalist, they only save him the labour of doing anything at all: like a slut having her hair curled or her nails cut instead of doing it herself, or a FOXHUNTER employing a stable-lad instead of being his own stable-lad, or someone who is just a glutton keeping a cook instead of cooking for himself.

Then these labourers would include too those who, according to Storch (I.e. [p. 250]), produce "leisure", through which a man gets free time for pleasure, intellectual labour, etc. The policeman saves me the time of being my own gendarme, the soldier of defending myself, the government official of governing myself, the shoe cleaner of cleaning my shoes myself, the priest the time required for thinking, and so on.

What is correct in this matter is— the division of labour. Everyone, apart from his productive labour or the exploitation of productive labour, would have a number of functions to fulfil which would not be productive and would in part enter into the costs of consumption. (The real productive labourers have to bear these consumption costs themselves and to perform their unproductive labour themselves.) If these "SERVICES" are pleasant, then sometimes the master performs them for the servant, as the jus primae noctis^[1]

shows, or as is shown by the labour of ruling, etc., which the masters have always taken on themselves. This in no way obliterates the distinction between productive and unproductive labour, but this distinction itself appears as a result of the division of labour and thus furthers the general productivity of the labourers by making unproductive labour the exclusive function of one section of labourers and productive labour the exclusive function of another section.

But even the labour of a number of MENIAL SERVANTS for mere show, to satisfy vanity, "is not unproductive". Why? Because it produces something, the satisfaction of vanity, OSTENTATION, the exhibition of wealth (I.e., p. 277). Here once again we meet the nonsense that every kind of SERVICE produces something — the courtesan sensual pleasure, the murderer homicide, etc.b Moreover Smith said that every form of this trash has its value. All that is missing [IX-416] is that these SERVICES are rendered gratis. That is not the point in question. But even if they are rendered gratis, they will not increase (material) wealth by a single farthing. Then the belletristic piffle:

"The singer (they claim), when he has finished singing, leaves us nothing.—He leaves us a memory!" (Very fine!) "When you have drunk champagne, what remains?... Whether the consumption does or does not follow closely on the act of production, whether it takes place more or less rapidly, will bring about different economic results, but the fact of consumption, of whatever kind it may be, cannot deprive the product of its character as wealth. There are non-material products which are of greater durability than certain material products. A palace lasts a long time, but the Iliad is a source of even more durable pleasures" (pp. 277-78).

What bosh!

In the sense in which he is here speaking of wealth, as use value, it is precisely consumption, whether slow or rapid (its length depends on its own nature and on the nature of the object), and only consumption, that makes the product wealth at all. Use value has only value for use, and its existence for use is only its existence as an object for consumption, its existence in consumption. Drinking champagne, although this may produce a "hangover", is as little productive consumption as listening to music, although this may leave behind "a memory". If the music is good and if the listener understands music, the consumption of music is more sublime than the consumption of champagne, although the production of the latter is a "productive labour" and the production of the former is not.

If we consider all the twaddle against Smith's distinction between productive and unproductive labour, we find that Gamier, and perhaps also Lauderdale and Ganilh (though the latter said nothing new), exhausted [these polemics]. Those who came later (apart from Storch's unsuccessful effort) [produced] merely pretentious literary arguments, learned prattle. Gamier is the economist of the Directory and the Consulate, Ferrier and Ganilh are the economists of the Empire. On the other hand Lauderdale, the Earl, was far more concerned to make apologies for consumers by presenting them as the producers of "unproductive labour". The glorification of servility and flunkeyism, of TAX GATHERERS and parasites, runs through the lot of them. Compared with these, the rough cynical character of classical political economy stands out as a critique of existing conditions.

One of the most fanatic Malthusians is the REVEREND Thomas Chalmers, who thinks that the only means for curing all social ills is the religious education of the labouring class (by which he means ramming down their throats the Malthusian population theory with edifying Christian priestly trimmings); at the same time he is a great defender of all ABUSES, OF WASTEFUL EXPENDITURE by the State, of fat livings for the clergy and of wild extravagance on the part of the rich. H e laments (p. 260 sqq.) the spirit of the time, the "HARD AND HUNGER-BITTEN ECONOMY"; and he wants heavy TAXES, a good deal to eat for the "higher" and unproductive workers, clergymen and so on (I.e.). Naturally, he blusters about the Smithian distinction. H e devoted a whole chapter to it (Ch. XI) which contains nothing new except that parsimony, etc., only harms "the productive labourers", but whose tendency is exemplified in the following summing up:

This * "distinction seems to be nugatory, and withal, mischievous in application"* (I.e., p. 344).

And in what does this MISCHIEF consist?

* "We have entered at so much length into this argument, because we think the political economy of our days bears a hard and hostile aspect towards an ecclesiastical establishment; and we have no doubt, that to this, the hurtful distinction^[71] of Smith has largely contributed" * (Thomas Chalmers, Professor of Divinity, On Political Economy, in Connexion with the Moral State and Moral Prospects of Society, 2nd ed., London, 1832, p. 346).

By the "ECCLESIASTICAL ESTABLISHMENT" the cleric means his own church, the CHURCH OF England AS BY LAW "ESTABLISHED". Moreover he was one of the fellows who HAD FOSTERED this "ESTABLISHMENT" UPON IRELAND. T h e parson is at least plain spoken.

[IX-417] Before we finish with Adam Smith, we will cite two further passages, the first, in which he gives vent to his hatred of the unproductive GOVERNMENT; the second, in which he aims to explain why the advance of industry, etc., presupposes free labour. Concerning Smith's hatred of the clergy.^[72]

T h e first passage runs:

* "It is the highest impertinence and presumption, therefore, in kings and ministers, to pretend to watch over the economy of private people, and to restrain their expense, either by sumptuary laws, or by prohibiting the importation of foreign luxuries. They are themselves always, and without any exception, the greatest spendthrifts in the society. Let them look well after their own expense, and they may safely trust private people with theirs. If their own extravagance does not ruin the State, that of their subjects never will" * (ed. McCulloch, B. II, Ch. Ill, p. 122).

And once more the following passage^[13]:

permanent subject, or vendible commodity.... The sovereign, for example, with all the officers both of justice and war who are under him, the whole army and navy, are unproductive labourers. They are the servants of the public, and are maintained by a part of the annual produce of the industry of other people... In the same class must be ranked ... churchmen, lawyers, physicians, men of letters of all kinds; players, buffoons, musicians, opera-singers, opera-dancers, etc."* (I.e., pp. 94, 95).

This is the language of the still revolutionary bourgeoisie, which has not yet subjected to itself the whole of society, the State, etc. All these illustrious and time-honoured occupations — sovereign, judge, officer, priest, etc.,—with all the old ideological castes to which they give rise, their men of letters, their teachers and priests, are from an economic standpoint put on the same level as the swarm of their own lackeys and jesters maintained by the bourgeoisie and by idle wealth — the landed nobility and idle capitalists. They are mere SERVANTS of the public, just as the others are their SERVANTS. They live on the PRODUCE OF OTHER PEOPLES INDUSTRY, therefore they must be reduced to the smallest possible number. State, church, etc., are only justified in so far as they are committees to superintend or administer the common interests of the productive bourgeoisie; and their costs — since by their nature these costs belong to the faux frais de production—must be reduced to the indispensable minimum. This view is of historical interest in sharp contrast partly to the standpoint of antiquity, when material productive labour bore the stigma of slavery and was regarded merely as a pedestal for the idle citizen, and partly to the standpoint of the absolute or aristocratic-constitutional monarchy which arose from the disintegration of the Middle Ages — as Montesquieu, still captive to these ideas, so naively expressed them in the following passage (Esprit des lois, B. VII, Ch. IV [p. 171]):

"If the rich do not spend much, the poor will perish of hunger." ⁽⁹⁾

When on the other hand the bourgeoisie has won the battle, and has partly itself taken over the State, partly made a compromise with its former possessors, and has likewise given recognition to the ideological castes as flesh of its flesh and everywhere transformed them into its functionaries, of like nature to itself; when it itself no longer confronts these as the representative of productive labour, but when the real productive labourers rise against it and moreover tell it that it lives on OTHER PEOPLES INDUSTRY; when it is enlightened enough not to be entirely absorbed in production, but to want also to consume "in an enlightened way"; when the intellectual labours themselves are more and more performed in its service and enter into the service of capitalist production — then things take a new turn, and the bourgeoisie tries to justify "economically", from its own standpoint, what at an earlier stage it had criticised and fought against. Its spokesmen and conscience-salvers in this LINE are the Garniers, etc. In addition to this, these economists, who themselves are priests, professors, etc., are eager to prove their "productive" usefulness, to justify their wages "economically".

[IX-418] The second passage, referring to slavery, runs (ed. Gamier, 1. IV, ch. IX, pp. 549, 550 [551]) [Vol. Ill, pp. 154-56]^[14]:

"Such occupations" (as artificer and manufacturer) "were considered" (in several of the ancient states) "as fit only for slaves, and the free citizens of the State were prohibited from exercising them. Even in those States where no such prohibition took place, as in Athens and Rome, the great body of the people were in effect excluded from all the trades which are now commonly exercised by the lower sort of the inhabitants of towns. Such trades were, at Rome and Athens, all occupied by the slaves of the rich, who exercised them for the benefit of their masters, whose wealth, power, and protection, made it almost impossible for a poor freeman to find a market for his work, when it came into competition with that of the slaves of the rich. Slaves, however, are very seldom inventive; and all the most important improvements, either in machinery, or in the arrangement and distribution of work, which facilitate and abridge labour have been the discoveries of freemen. Should a slave propose any improvement of this kind, his master would be very apt to consider the proposal as the suggestion of laziness, and of a desire to save his own labour at the master's expense. The poor slave, instead of reward would probably meet with much abuse, perhaps with some punishment. In the manufactures carried on by slaves, therefore, more labour must generally have been employed to execute the same quantity of work, than in those carried on by freemen. The work of the former must, upon that account, generally have been dearer than that of the latter. The Hungarian mines, it is remarked by Mr. Montesquieu, though not richer, have always been wrought with less expense, and therefore with more profit, than the Turkish mines in their neighbourhood. The Turkish mines are wrought by slaves; and the arms of those slaves are the only machines which the Turks have ever thought of employing. The Hungarian mines are wrought by freemen, who employ a great deal of machinery, by which they facilitate and abridge their own labour. From the very little that is known about the price of manufactures in the times of the Greeks and Romans, it would appear that those of the finer sort were excessively dear" (I.e., t. III).

Adam Smith himself says, ([Garnier,] I.e., t. Ill, 1. IV, ch. I, p. 5) [Vol. II, pp. 239-40]:

might be accumulated for ages together, to the incredible augmentation of the real wealth of the country."

The man of the Monetary system raves about gold and silver because they are money, the independent, tangible [form of] existence of exchange value; and [a form of] its existence that is indestructible, everlasting — in so far as they are not allowed to become means of circulation, the merely transient form of the exchange value of commodities. The ACCUMULATION of gold and silver, piling it up, hoarding it, is therefore his way of growing rich. And as I showed in the quotation from Petty, other commodities are themselves valued according to the degree in which they are more or less durable, that is, remain exchange value.

Now in the first place Adam Smith repeats this idea of the relatively greater or less durability of commodities in the section where he speaks of consumption which is more or less advantageous for the formation of wealth, according as it is consumption of less or more durable articles of consumption.^[74] Here therefore the Monetary system peeps through; and necessarily so, since even in direct consumption there is the mental reservation that the [IX-419] article of consumption remains wealth, a commodity, therefore a unity of use value and exchange value; and the latter depends on the degree to which the use value is durable, that is, on how slowly consumption deprives it of the possibility of being a commodity or bearer of exchange value.

Secondly, in his second distinction between productive and unproductive LABOUR he completely returns — in a wider form — to the distinction made by the Monetary system.

Productive * labour "fixes and realises itself in some particular subject or vendible commodity, which lasts for some time at least after that labour is past. It is, as it were, a certain quantity of labour stocked and stored up, to be employed, if necessary, upon some other occasion." *

On the other hand, the unproductive LABOUR'S results or * services "generally perish in the very instant of their performance, and seldom leave any trace or value behind them, for which an equal quantity of service could afterwards be procured" * ([ed. McCulloch,] Vol. II, B. II, Ch. Ill, p. 94).

Thus Smith makes the same difference between commodities and SERVICES as the Monetary system did between gold and silver and the other commodities. With Smith too the distinction is made from the point of view of ACCUMULATION — no longer however in the form of hoarding, but in the real form of reproduction. The commodity perishes in consumption, but then it reproduces in turn a commodity of higher value; or, if it is not so used, it is itself value, with which another commodity can be bought. It is the nature of the product of labour that it exists in a plus ou moins durable, and therefore again salable, use value; in a use value in which it is a VENDIBLE COMMODITY, a bearer of exchange value, a commodity, or, in essence, money. The SERVICES of unproductive labourers do not again become money. I can neither pay debts nor buy commodities nor buy labour which produces surplus value with the services for which I pay the lawyer, doctor, priest, musician, etc., the statesman or the soldier, etc. They have gone, like perishable articles of consumption.

Thus au fond* Smith says the same thing as the Monetary system. For them, only that labour is productive which produces money, gold and silver. For Smith, only that labour is productive which produces money for its buyer; although he discerns the money character in all commodities in spite of its mask, while the Monetary system sees it only in the commodity which is the independent existence of exchange value.

This distinction is founded on the nature , of bourgeois production itself, since wealth is not the equivalent of use value, but only the commodity is wealth, use value as bearer of exchange value, as money. What the Monetary system did not understand is how this money is made and is multiplied through the consumption of commodities, and not through their transformation into gold and silver — in which they are crystallised as independent exchange value, in which however they not only lose their use value, but do not alter the magnitude of their value.

---

Endnotes

[7] Marx is referring to the vicious circle in Adam Smith's doctrine of the "natural price of wages", which he had discussed in the manuscript of 1861-63 (see present edition, Vol. 30, p. 401).—8

[58] Marx is referring to Say's Lettres à M. Malthus... (Paris, 1820, p. 15), in which the author advanced the opinion that the Italian market was flooded with English goods because of the insufficient production of Italian goods exchangeable for English ones. This reasoning is reproduced in an anonymous pamphlet An Inquiry into those Principles..., London, 1821, p. 15. See also this volume, pp. 164-66.—133

a Sep îrii« volume, p. 130.— Ed.

10*

[16] Marx discussed concentration of capital as a prerequisite for raising labour productivity in Notebook IV of the manuscript of 1861-63 (present edition, Vol. 30, pp. 294-96).—26

[8] See this volume, pp. 389-400 and pp. XIII — 711, XIV — 818, 821-822, 840-841 of the manuscript of 1861-63 (present edition, Vol. 32).—8

[59] Marx takes the round figure 10 so as to simplify further calculations. From the figures cited in the text (110 years as the total of the turnover periods for 14 different kinds of fixed capital), the average turnover period of fixed capital would work out not at 10 but only at 7.86 years, assuming that all the 14 kinds are of the same magnitude. However, Marx points out below that the turnover period of fixed capital usually grows proportionately to its size.—142

[35] Up to this point, Marx used the letter x to designate the product considered as use value, and the letter z, the value of the product. From here onwards he uses x for value, and z for use value.—85

a See this volume, pp. 84-94, 113-14.— Ed.

[61] Marx considers the question of the exchange of revenue for capital on pp. XIV — 854-857 of the manuscript of 1861-63 (present edition, Vol. 32). Some of the questions relating to this intermezzo are considered by Marx on pp. XIII — 694-732 of the manuscript, as well as in Notebook X (this volume, pp. 204-39). Accumulation as extended reproduction is examined on p. XVIII — 1102 et seq. (present edition, Vol. 33).—151

a Sub-inspector of Customs.— Ed. h F. List, Das nationale System der politischen Oekonomie, Vol. I, Stuttgart and Tübingen, 1841.— Ed. r Marx quotes Ferrier partly in French, partly in German.— Ed.

[62] Marx analyses this question in Notebook VI of the manuscript of 1861-63 (see present edition, Vol. 30, pp. 402-08).—152

a The component parts of the price of commodities.— Ed.

11-176

[63] See present edition, Vol. 30, pp. 400-02.—154

a See this volume, pp. 11-29.— Ed.

H e continues: a That there is no society.— Ed. b Bow.— Ed

"The whole expense of maintaining the fixed capital is ... necessarily excluded from the neat revenue of the society" ([Garnier,] I.e., t. II, 1. II, ch. II, p. 218) [Vol. II, p. 21]. "Every saving, therefore, in the expense of maintaining the fixed capital, which does not diminish the productive powers of labour, must increase the fund which puts industry into motion, and consequently the annual produce of •' The manuscript has " 1 . I".— Ed.

a Marx quotes Smith partly in French, partly in German.— Ed.

a Smith has "rent" here.— Ed. b Marx quotes Smith partly in French, partly in German, with some alterations.— Ed

a Marx quotes Smith partly in French, partly in German, with some alterations.— Ed. b Smith has "labourers, manufaeturers, and artificers".— Ed c Marx quotes Smith partly in French, partly in German, with some alterations.— Ed d Marx quotes Smith partly in French, partly in German.— Ed c Wisdom.— Ed

[29] Marx is referring to part three of his work, "Third Chapter. Capital in General". In the Draft Plan of the Chapter on Capital drawn up in 1860, this part is entitled "III. Capital and Profit" (see present edition, Vol. 29, p. 516). The beginning of this work is to be found on pp. XVI —973-1021 and XVII — 1022-1028 of the manuscript (see present edition, Vol. 33).—70, 162, 282, 397

a Set in motion quantities of productive labour.— Ed.

(1) The page references in square brackets are to the English edition mentioned by Marx above.— Ed.

(2) Lauderdale has "revenue".— Ed.

(3) Marx quotes Lauderdale partly in German, partly in French.— Ed.

[64] The reference is to the following passage: "The gold and silver money, which circulates in any country, and by means of which the produce of its land and labour is annually circulated and distributed to the proper consumers, is, in the same manner as the ready money of the dealer, all dead stock. It is a very valuable part of the capital of the country, which produces nothing to the country" (A. Smith, Recherches..., Vol. 2, Paris, 1802, p. 290). In McCulloch's edition (see Note 14) it is to be found in Volume II on pp. 77-78.—164

a See this volume, pp. 80, 193.— Ed b E.g., those of the physician, actor, etc.— Ed c See this volume, p. 19.— Ed.

a A change is diverting.— Ed.

a Marx wrote this sentence in French. See this volume, pp. 35, 79-84, 94-97.— Ed. b Born to consume the fruits (Horace, Epistolae, Liber primus, Epistola II, 27).— Ed.

[65] The above two sentences are Marx's rendering of Destutt's: "One can find certain expenses among these that are more or less fruitful, like, for example, the building of a house or the improvement of a landed property; but these are particular cases that put consumers of this kind momentarily back into the class of those who direct profitable enterprises and hire productive labour."—168

a Marx quotes Destutt partlv in German, partly in French.— Ed. b But they don't.— Ed

12-176

a See this volume, p. 170.— Ed h Little known.— Ed 12*

(4) In the manuscript Marx crossed out the following text here: " 'Whence come their revenues to these idle men? Put these two absurdities aside. Is it not from the rent which those who set their capitals to work pay to them out of their profits?' (p. 246). Mr. Destutt, therefore, explains the origin of these profits from which rent is paid not by the fact that with this rent products are again bought by the industrialist." The quotation is reproduced on p. 176 of this volume.— Ed

(5) What is he to do? — Ed

[66] The Institute of France (l'Institut de France) is the country's most authoritative centre dealing with the arts and sciences. It comprises a number of leading academies, including the Académie Française. Destutt de Tracy was member of the Académie des sciences morales et politiques.—176

[6] The Economists was the name given to the Physiocrats in France during the second half of the 18th and first half of the 19th centuries. By the 1850s the name acquired a more general meaning and ceased to designate exponents of a particular economic doctrine.— 7, 116

a As to him.— Ed.

[68] Marx quotes in French from William Paley's book The Principles of Moral and Political Philosophy according to Malthus' Essai sur le principe de population... Translated from the 5th English edition by P. Prévost and G. Prévost. 3rd enlarged French edition. Vol. 4, Paris, Geneva, 1836, p. 109.—181

(6) Marx quotes Storch partly in French, partly in German.— Ed.

(7) In its own form.— Ed.

[69] Marx is referring to the polemic against Voltaire in Lessing's Hamburgische Dramaturgie ( 1767-69).— 182

[10] Marx examines the Mercantilists' views in Notebook VI of the manuscript of

a Marx quotes Storch partly in German, partly in French.— Ed.

a Enlightenment.— Ed. b Good taste.— Ed. c Morals.— Ed. d Of their own kind.— Ed. e The manuscript has "to two things".— Ed ! Here and below Marx quotes Senior in French.— Ed

a More or less.— Ed. 13-176

a Overhead costs of production.— Ed. b See this volume, p. 16.— Ed.

a Cf. this volume, p. 127.— Ed 13*

a Marx comments Senior partly in French.— Ed.

a Giving things new names.— Ed. b Marx quotes Rossi in French with some alterations.— Ed. c Here and below, in his comments on Rossi, Marx uses French words and phrases.— Ed d Avowedly.— Ed.

(8) Marx quotes Rossi partly in French, partly in German.— Ed.

a And all the rest.— Ed. h Marx quotes Rossi partly in French, partly in German, with some altera-tions.— Ed.

a The right of the first night.— Ed. b See this volume, p. 190.— Ed.

[71] In Rossi this sentence reads: "If Smith had reflected, he would not have said that the labour of a magistrate is, in truth, honourable, useful, necessary work, but that it is not productive."—190

[72] On Adam Smith's hatred of the clergy, see Capital, Vol. I, Ch. XXV (see present edition, Vol. 35).—196

* "The labour of some of the most respectable orders of society is, like that of menial servants, unproductive of any value,"* //it has VALUE, and therefore costs an equivalent, but it produces no VALUE// * "and does not fix or realise itself in any a Chalmers has "definition".— Ed. b See this volume, pp. 16, 17, 163.— Ed

(9) Marx quotes in French.— Ed

"Mr. Locke remarks a distinction between money and other movable goods. All other movable goods, he says, are of so consumable a nature, that the wealth which consists in them cannot be much depended on.... Money, on the contrary, is a steady friend" and so on (I.e., t. Ill, p. 5). And again ([Gamier,] I.e., pp. 24-25) [Vol. II, pp. 253-54]: "Consumable commodities, it is said, are soon destroyed; whereas gold and silver are of a more durable nature, and were it not for this continual exportation,

[74] See A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book II, Ch. Ill, the last six paragraphs. See also this volume, p. 178.—199

[11] 1861-63 (see present edition, Vol. 30, pp. 348-52). See also this volume, pp. 33-35.—10, 38 1 ' The reference is to Factories. Return to an Address of the Honourable the House of Commons, dated 24 April 1861. Ordered by the House of Commons, to be printed, 11 February 1862. Marx analyses the facts contained in this document on pp. XIX — 1187-1198, 1215-1218 of the manuscript of 1861-63 (present edition, Vol. 33).—12, 96

[2] The entries below were made by Marx on the inside covers of notebooks VIII-XII of the manuscript of 1861-63. The table of contents of Notebook \ II is published in Volume 30, p. 347, and its text in Volume 30 and in this volume. The tables of contents had been corrected several times. Marx's original plan was to analyse Adam Smith's doctrine in notebooks VII and VIII and then to pass on to Necker and Ricardo. But later he rejected this scheme. He also proposed to examine Ricardo's views in Notebook X, first after the analysis of Linguet and then of Bray. In the contents of Notebook XI, point "g) Rodbertus" was originally followed by point "h) Ricardo". Later Marx inserted several other points preceding that on Ricardo, probably after the notebooks had been filled in. In Notebook XII, next to the line "5) Theories of Surplus Value", Marx wrote in pencil without the mark of insertion, "(CIRCULATING AND FIXED CAPITAL p. 643) in Ricardo". The last two points in the contents of this notebook were later crossed out in pencil and replaced with "Theories of COST PRICE". The inside cover of Notebook IX has a note "Mercantilists (408)" made in pencil later. Written on the inside cover of Notebook XI are a number of quotations (see this volume, pp. 579-80). Alongside the contents, the inside cover of Notebook XII contains Marx's notes and quotations (see this volume, p. 580).—6

[3] This is in fact not the conclusion but only the continuation of the section on Smith. The conclusion of this section can be found in Notebook IX.—6

[1] Theories of Surplus Value, on which Marx began work in March 1862, constituted the fifth, concluding section of the first chapter of his research into capital, "The Production Process of Capital". The original intention was to examine absolute and relative surplus value in their combination. Theories of Surplus Value was to be an historical survey included in the chapter on surplus value, similar to the historical notes introducing the chapters on commodity and on money in A Contribution to the Critique of Political Economy. However, during the work, the character of the manuscript of Theories of Surplus Value had changed substantially. Both in its length and content, it surpassed the tasks the author had originally set himself. Marx not only considered the views of bourgeois economists but also put forward a number of major theoretical propositions. Theories of Surplus Value were published in English for the first time, in an abridged form, in: K. Marx, Theories of Surplus Value. A selection from the volumes published between 1905 and 1910 as Theorien über den Mehrwert, edited by Karl Kautsky, taken from Karl Marx's preliminary manuscript for the projected fourth volume of Capital. Translated from the German by G. A. Bonner and Emile Burns. Lawrence & Wishart, London, 1951. The work was first published in full between 1963 and 1971: K. Marx, Theories of Surplus-Value (Vol. IV of Capital), Part I, Foreign Languages Publishing House, Moscow, 1963; Part II, Progress Publishers, Moscow, 1968; Part III, Progress Publishers, Moscow, 1971. This volume contains the sequel to Marx's Theories of Surplus Value. The first five notebooks of the Economic Manuscript of 1861-63 and the beginning of Theories of Surplus Value (Notebook VI and part of Notebook VII), in which Marx critically analyses the views of James Steuart, the Physiocrats, and Adam Smith's determinations of value, are to be found in Volume 30 of the present edition.—6

[4] Marx gave an in-depth analysis of the problem of productive and unproductive labour on pp. XXI — 1317-1331 of the manuscript of 1861-63 (present edition, Vol. 34).—7

[36] Marx uses the terms contained in a quotation from Adam Smith cited earlier in the manuscript (see present edition, Vol. 30, pp. 429-30). On the replacement of the part of constant capital which does not enter into circulation, see also Vol. 30, pp. 431-32, 444-45.-87, 147, 149

[14] Here Marx quotes from Recherches sur la nature et les causes de la richesse des nations, Paris, 1802, Garnier's translation of Adam Smith's work. Marx made excerpts from it in Paris in the spring of 1844. In the present volume all quotations from Garnier's translation are given according to the English edition (A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, by J. R. MacCulloch. In four volumes. Edinburgh, London, 1828), with the pages indicated in brackets, and Marx's wording respected. Marx widely used the 1828 edition when working on the manuscript of 1861-63.—18, 152, 162, 198, 239, 439

[13] By its substance the text in double oblique lines belongs not to p. VII — 300 but to p. VII — 299 of the manuscript of 1861-63 (see present edition, Vol. 30, pp. 450-51).—13