1) Opposition to the Economists ( Based on the Ricardian Theory)
During the Ricardian period of political economy its antithesis, communism (Owen) and socialism (Fourier, St. Simon, the latter only IN HIS FIRST BEGINNINGS), [comes] also [into being]. According to our plan,(1) however, we are here concerned only with that opposition which takes as its starting-point the premisses of the economists.[108] It will be seen from the works which we quote that in fact they all derive from the Ricardian form.
1) The Source and Remedy of the National Difficulties etc. A Letter to Lord John Russell, London, 1821 ( anonymous)
This scarcely known pamphlet (ABOUT 40 PAGES) [which appeared] at a time when MacCulloch, "THIS INCREDIBLE COBBLER",[109] began to make a stir, contains an important advance on Ricardo. It bluntly describes SURPLUS VALUE — or "profit", as Ricardo calls it (often also "SURPLUS PRODUCE"), or "INTEREST", as the author of the pamphlet terms it — as "SURPLUS LABOUR", the labour which the worker performs gratis, the labour he performs over and above the quantity of labour by which the value of his labour capacity is replaced, i.e. by which he produces an equivalent for his WAGES. Important as it was to reduce VALUE to LABOUR, it was equally important to present SURPLUS VALUE, which manifests itself in SURPLUS PRODUCE, as SURPLUS LABOUR. This was in fact already stated by Adam Smith(1) and constitutes one of the main elements in Ricardo's argumentation. But nowhere did he clearly express it and record it in an absolute form.
Whereas the only concern of Ricardo and others is to understand the conditions of capitalist production, and to assert them as the absolute forms of production, the pamphlet and the other works of this kind to be mentioned seize on the mysteries of capitalist production which have been brought to light in order to combat the latter from the standpoint of the industrial proletariat.
* "Whatever may be due to the capitalist" * (from the viewpoint of capital) * "he can only receive the surplus labour of the labourer; for the labourer must live" * (I.e., [p.] 23).
To be sure, these conditions of life, the minimum on which the worker can live, and consequendy also the quantity of surplus labour which can be squeezed out of him, are relative magnitudes.
bread he was obliged to retain for the maintenance of himself and family the labour of Monday and Tuesday, he will, on potatoes, receive only the half of Monday; and the remaining half of Monday and the whole of Tuesday are available either for the service of the state or the capitalist"* ([p.] 26).a
Here profit, etc., is reduced directly to appropriation of the labour time for which the worker receives no equivalent.
* "It is admitted that the interest paid to the capitalists, whether in the nature of rents, interests of money, or profits of trade, is paid out of the labour of others" * ([p.] 23).
RENT, money interest, industrial profit, are thus merely different forms of "INTEREST OF CAPITAL", which again is reduced to the "SURPLUS LABOUR OF THE LABOURER". This SURPLUS LABOUR takes the form of SURPLUS PRODUCE. The capitalist is the possessor b of the SURPLUS LABOUR or of the SURPLUS PRODUCE.
T h e SURPLUS PRODUCE is capital.
* "Suppose ... there is no surplus labour, consequently, nothing that can be allowed to accumulate as capital"* ([p.] 4).
And immediately after this he says:
* "the possessors of [the] surplus produce or capital" * (I.e.).
The author says, in a quite different sense from the whining Ricardians:
* "The natural and necessary consequence of an increased capital, is its decreasing value"* ([pp. 21-]22).
And in reference to Ricardo:
* "Why set out by telling us that no accumulation of capital will lower profits, because nothing will lower profits but increased wages, when it appears that if population does not increase with capital, wages would increase from the [disproportion between capital and labour; and if population does increase, wages would increase from the difficulty of procuring food" * ([p.] 23).
[XIV-853] If the value of capital, that is, the interest of capital, i.e. the SURPLUS LABOUR which it commands, which it appropriates, did not decrease when the AMOUNT of capital increases, the [accumulation of] interest from interest would follow in geometrical progression,' and just as, calculated in money (see Priced), this presupposes an impossible accumulation (RATE OF ACCUMULATION), SO, reduced to its real element — labour, it would swallow u p not only the SURPLUS LABOUR, but also the NECESSARY LABOUR as "being due " to capital. (We shall return to Price's fantasy in the section on REVENUE AND ITS SOURCES."0)
* "If it were possible to continue to increase capital and keep up the value of capital, which is proved by the interest of money continuing the same, the interest to be paid for capital would soon exceed the whole produce of labour. ...capital tends in more than arithmetical progression to increase capital. It is admitted that the interest paid to the capitalists, whether in the nature of rents, interests of money, or profits of trade, is paid out of the labour of others. Consequendy, if capital go on accumulating, the labour to be given for the use of the capital must go on increasing, interest paid for capital continuing the same, till all the labour of all the labourers of the society is engrossed by the capitalist. But this is impossible to happen: for whatever may be due to the capitalist, he can only receive the surplus labour of the labourer; for the labourer must live" * ([p.] 23).
But it is not clear to him how the VALUE OF CAPITAL DECREASES. He himself says, when dealing with Ricardo, that this recurs because wages rise when capital accumulates more rapidly than the POPULATION grows, or because the value of WAGES (not their QUANTITY) increases when the population grows more rapidly than capital accumulates (or even if population increases simultaneously) as a result of decreasing productivity of agriculture. But how does he explain it? He does not accept the latter alternative; he assumes that WAGES are reduced more and more to the minimum possible. [A reduction of interest on capital] can only take place, [he] says, because the portion of capital which is exchanged for living labour declines relatively, although the worker is exploited more than, or just as much as, before.
In any case, it is a step forward that the nonsense about the geometrical progression of interest is reduced to its true sense, that is, nonsense.(2)
There are, incidentally, according to the pamphleteer, two ways in which the growth of SURPLUS PRODUCE or SURPLUS LABOUR prevents capital from being forced to give a steadily growing share of its plunder back to the workers.
The first is the conversion of SURPLUS PRODUCE into fixed capital, which prevents the LABOUR fund — or the part of the product consumed by the worker — from necessarily increasing with the accumulation OF CAPITAL.
The second is foreign trade, which enables the capitalist to exchange the SURPLUS PRODUCE for foreign luxury articles and thus to consume it himself. In this way, even that part of the product which exists as NECESSARIES may quite well increase without the need for it to be returned to the workers in the form of a proportionate increase in WAGES.
It should be noted that the first way — which is only effective for a time and then neutralises its own effect (at least as regards the fixed capital consisting of machinery, etc., itself used in the production of NECESSARIES)—implies the transformation of SURPLUS PRODUCE into capital, whereas the 2nd way implies consumption of an ever increasing portion of the surplus PRODUCE by the Capitalists — increasing consumption on the part of the capitalists, and not the reconversion of SURPLUS PRODUCE into capital. If the same SURPLUS PRODUCE were to remain in the form in which it immediately exists, a larger part of it would have to be exchanged with the workers as variable capital. The result would be an increase in wages and a reduction in the amount of absolute or relative SURPLUS VALUE. Here is the real secret of the necessity for increasing consumption by "the rich", advocated by Malthus, in order that the part of the product which is exchanged for labour and converted into capital, should have great value, yield large profits, absorb a large amount of surplus labour.(3) He does not however propose that the industrial capitalists themselves should increase their consumption, but [allots] this FUNCTION to LANDLORDS, SINECURISTS, etc., because the urge for accumulation and the urge for EXPENDITURE, if united in the same person, would play tricks on each other. It is here also that the erroneousness of the view of Barton, Ricardo,(4) and others stands out. Wages are not determined by that portion of the total product that is either consumed as, or can be converted into, variable capital, but by that part of it which is actually converted into variable capital. A part can be consumed by RETAINERS even in its natural form, another can be consumed in the shape of luxury products by means of foreign trade, etc.
Our pamphleteer overlooks two things: As a result of the introduction of machinery, a mass of workers is constantly being thrown out of employment, [a section of] the POPULATION is thus MADE REDUNDANT; the SURPLUS PRODUCE therefore finds fresh labour for which it can be exchanged without any increase in population and without any need to extend the absolute labour time. Let us assume that 500 workers were employed previously, whereas now there are 300 workers, who perform relatively more surplus labour. The 200 can be employed by the surplus PRODUCE as soon as it has increased sufficiently. One portion of the old [variable] capital is converted into fixed capital, the other gives employment to fewer workers but extracts from them more SURPLUS VALUE in relation to their number a n d in particular also more SURPLUS PRODUCE. The remaining 200 are material created for the purpose of capitalising additional SURPLUS PRODUCE.
[XIV-853a] The transformation of NECESSARIES into LUXURIES by means of foreign trade, as interpreted in the pamphlet, is correct in itself:
1) because it puts an end to the nonsensical idea that wages depend on the amount of NECESSARIES produced, as if these NECESSARIES had to be consumed in this form by the producers or even by the whole body of people engaged in production, in other words as if they must be turned back into variable capital or "circulating capital", as it is termed by Barton and Ricardo;
2) because it determines the whole social pattern of backward nations — for example, the SLAVE-HOLDING STATES in the United States of North America (see Cairnes*) or Poland, etc. (as was already understood by old Busch* unless he stole the idea from Steuart)—which are associated with a world market based on capitalist production. N o matter how large the SURPLUS PRODUCE they extract from the SURPLUS LABOUR of their SLAVES in the simple form of COTTON or CORN, they can adhere to this simple, undifferentiated LABOUR because foreign trade enables them [to convert] these simple products into any kind of use value.
The assertion that the portion of the annual product which MUST
BE EXPENDED as WAGES depends on the size of the "CIRCULATING CAPITAL", would be al pari[1] to the assertion that, when a large part of the product consists of "buildings", and houses for workers are built in large numbers relative to the size of the working population, the workers must consequently live in cheap and well-built houses because the supply of houses increases more quickly than the d e m a n d for them.
It is correct, on the other hand, that, if the SURPLUS PRODUCE is large a n d the large part of it is to be employed as capital, then there must be an increase in the demand for labour and therefore also in that part of the SURPLUS PRODUCE which is exchanged for WAGES (provided large numbers of workers did not have to be thrown out of work in order to obtain a SURPLUS PRODUCE of this size). At all events, it is not the absolute size of the SURPLUS PRODUCE (in whatever form it may exist, even that OF NECESSARIES) which necessarily requires it TO be EXPENDED as variable capital and which consequently causes an increase in wages, but it is the desire to capitalise which results in a large part of the surplus PRODUCE being laid out in variable capital, and this would consequently make wages grow with the accumulation of capital if machinery did not constantly make [a section of] the population REDUNDANT and if an ever greater portion of capital (in particular as a result of foreign trade) were not exchanged for capital, not for labour. The portion of SURPLUS PRODUCE which is already produced directly in a form in which it can only serve as capital, and that portion of it which acquires this form as a result of foreign trade, grow more rapidly than the portion which must be exchanged against IMMEDIATE LABOUR.
The proposition that wages depend on EXISTING CAPITAL and that therefore a rapid accumulation of capital is the sole means by which wages are made to rise, amounts to this:
On the one hand, to a tautology, if we disregard the form in which the conditions of labour exist as capital. How rapidly the number of workers can be increased without worsening their living conditions depends on the productivity of labour which a given number of workers perform. The more raw materials, tools and means of subsistence they produce, the greater the means at their disposal not only to bring up their children so long as these cannot work themselves, but to realise the labour of the new, growing generation, and consequently to make the growth of population keep up with, and even OUTDO, the growth of production, since with the growth of the population, the [workers'] skill increases, division of labour grows, the possibility [for using] machinery grows, constant capital grows, in short, the productivity of labour grows.
While the growth of population depends on the productivity of labour, the productivity of labour depends on the growth of population. It is a case of reciprocity. But this, expressed in capitalist terms, signifies that the means of subsistence of the working population depend on the productivity of capital, on the largest possible portion of their product confronting them as a force which commands their labour. Ricardo himself expresses the matter correctly — I mean the tautology — when he makes WAGES depend on the productivity of capital, and the latter dependent on the productivity of labour.(5) That labour depends on the growth of capital signifies nothing more than, on the one hand, the tautology [XIV-854] that the increase in the means of subsistence and the means of employment of the population depends on the productivity of the population's own labour and, secondly, expressed in capitalist terms, that it depends on the fact that the population's own product confronts them as- alien property and that as a consequence, their own productivity confronts them as the productivity of the things which they create.
In practice this means that the worker must appropriate the smallest possible part of his product in order that the largest possible part of it may confront him as capital; he must surrender as much as possible to the capitalist gratis, in order that the latter's means for purchasing his labour anew — with what has been taken away from the worker without compensation — may increase as much as possible. In this case it can happen that, if the capitalist has made the worker work a great deal for nothing, he may then, in exchange for what he has received for. nothing, allow the worker to do a little less work for nothing. However, since this prevents the achievement of what is aimed at, namely, accumulation of capital as rapidly as possible, the worker must live in such CIRCUMSTANCES that this reduction in the amount of labour he performs for nothing is in turn counteracted by a growth of the working population, either relatively as a result of the use of machinery, or absolutely as a result of early marriage. (It is the same relationship which is derided by the RICARDIANS when the MALTHUSIANS preach it between LANDLORDS and capitalists.) The workers must relinquish the largest possible part of their product to capital without receiving anything in return, so as, when conditions are more favourable, to buy back with new labour a part of the product so relinquished. However, since the conditions for the favourable change are at the same time counteracted by this favourable change, it can only be temporary and must turn again into its own opposite.
3) What applies to the transformation of NECESSARIES into LUXURIES by means of foreign trade, applies in general to luxury production, whose unlimited diversification and expansion depends, however, on foreign trade. Although the workers engaged in luxury production produce capital for their EMPLOYERS, their product, in natura, cannot be turned back into capital, either constant or variable capital.
Luxury products, apart from those which are sent abroad to be exchanged for NECESSARIES which enter into variable capital either in whole or in part, simply constitute surplus labour and moreover surplus labour which is immediately IN THAT SHAPE OF SURPLUS PRODUCE which the rich consume as REVENUE. But they do not represent only the surplus labour of the workers who produce them. On the average, these perform the same surplus labour as the workers in other branches of industry. But in the same way as Vs of the product, which contains Vs of the surplus labour, can be considered as the embodiment of this surplus labour, and the remaining [2]/s as reproduction of the capital advanced, so the surplus labour of the producers of the NECESSARIES which constitutes the WAGES of the producers of LUXURIES can also be considered as the necessary labour of the working class as a whole. Their surplus labour consists 1) of that part of the NECESSARIES which is consumed by the capitalists and their RETAINERS; and 2) of the total amount of LUXURIES. With regard to the individual capitalist or DIFFERENT TRADES the matter appears quite different. For the capitalist, one part of the LUXURIES CREATED by him represents merely an equivalent for the capital laid out.
If too large a part of surplus labour is embodied directly in LUXURIES, then clearly, accumulation and the DEGREE OF reproduction will stagnate, because too small a part is reconverted into capital. If too small a part is embodied in luxuries, then the accumulation of capital (that is, of that part of the SURPLUS PRODUCE which can in natura serve as capital again) will proceed more rapidly than increase in population, and the rate of profit will fall, unless a foreign market for NECESSARIES exists.
In the exchange between capital and REVENUE(6) I have regarded wages, too, as REVENUE and in general have merely examined the relationship of constant capital to REVENUE. The fact that the REVENUE of the worker appears at the same time as variable capital is important only in so far as in the accumulation of capital — the formation of new capital — the surplus consisting of means of subsistence (NECESSARIES) in the possession of the capitalist producing them can be exchanged directly for the surplus consisting of raw materials or machinery in the possession of the capitalist producing constant capital. Here one form of REVENUE is exchanged for the other, [XIV-855] and, once the exchange is EFFECTED, the REVENUE of A is converted into the constant capital of B and the REVENUE of B into the variable capital of A.
In considering this circulation, reproduction and manner of replacement of the different capitals, etc., one must d'abord(7)
disregard foreign trade.
Secondly, it is necessary to distinguish between the two aspects of the phenomenon:
1) Reproduction on the existing scale, 2) reproduction on an extended scale, or accumulation; transformation of REVENUE into capital.
Ad 1) I have shown: That what the .producers of the means of subsistence have to replace is 1) their constant capital, 2) their variable capital. The part of the value of their product in excess of these two constitutes the SURPLUS
PRODUCE, t h e MATERIAL EXISTENCE OF SURPLUS VALUE, WHICH IN ITS TURN IS ONLY
THE REPRESENTATIVE OF SURPLUS LABOUR. Variable capital, that part of their product which represents it, is made up of WAGES, the REVENUE of the worker. This part already exists here in the natural form in which it serves as variable capital once again. With this part, the equivalent reproduced by the worker, the labour of the worker is bought once again. This is the exchange of capital for IMMEDIATE LABOUR. The worker receives this part in the form of money with which he buys back his own product, or other products of the same category. This is the exchange of the different portions of the variable part of capital for one another after the worker has in the form of money received an assignment to his quota. This is exchange of one part of newly added labour for another part within the same category (means of subsistence).
The part of the SURPLUS PRODUCE (newly added labour) consumed by the capitalists (who produce means of subsistence) themselves, is either consumed by them in natura or they exchange one type of SURPLUS PRODUCE existing in consumable form against another type. This is the exchange of REVENUE for REVENUE, both of them consisting of newly added labour.
We cannot really speak of exchange between REVENUE and capital in the above transaction. Capital (NECESSARIES) is exchanged against labour (labour capacity). This is therefore not an exchange of REVENUE for capital. It is true that as soon as the worker receives his WAGES, he consumes them. But what he exchanges for capital is not his REVENUE, but his labour.
The 3rd part, constant capital, is exchanged for a part of. the product of those manufacturers who produce constant capital; namely, for that part which represents newly added labour. This consists of an equivalent for the WAGES (that is, of variable capital) and of the SURPLUS PRODUCE, the SURPLUS VALUE, the REVENUE of the capitalists which exists in a form in which it can only be consumed industrially and not individually. On the one hand, this is therefore exchange of the variable capital of these producers for a part of the means of subsistence which constitute constant capital. In fact they exchange a part of their product which constitutes variable capital but exists in the form of constant capital, for a part of the product of those manufacturers who produce the means of subsistence, a part which constitutes constant capital but exists in the form of variable capital. Here newly added labour is exchanged for constant capital.
On the other hand, that part of the product which represents SURPLUS PRODUCE but exists in the form of constant capital is exchanged for a portion of the means of subsistence which represents constant capital for its producers. Here REVENUE is exchanged for capital. The REVENUE of the capitalists who produce constant capital is exchanged for the means of subsistence and replaces the constant capital of the capitalists who produce the means of subsistence.
Finally, a part of the product of the capitalists who produce constant capital, namely, that part which itself represents constant capital, is replaced partly in natura, partly through barter (concealed by money) between the producers of constant capital.
It is assumed in all this that the scale of reproduction=the original scale of production.
If we enquire now what part of the total annual product is made up of newly added labour, then the calculation is quite simple.
A) Consumable articles, which consist of 3 parts. [Firstly,] the REVENUE of the capitalists=the SURPLUS LABOUR added during the year.
Secondly, wages, i.e. variable capital which is equal to the newly added labour by which the workers have reproduced their WAGES.
Finally, the third part, raw materials, machinery, etc. This is constant capital, that part of the -value of the product which is only retained, not produced. That is, it is not labour newly added during the course of the year.
[XIV-856] If we call constant capital c, variable capital v, and SURPLUS PRODUCE, the REVENUE r, then this category consists of:
c (which constitutes a part of the product) is merely retained value and does not consist of newly added labour; on the other hand, v + r consist of labour newly added during the course of the year.
The total product (or its value) P" after deduction of c, therefore, consists of newly added labour.
Thus the product of category A,
P" — c'= the labour newly added during the course of the year. B) Articles for industrial consumption.
Here also v" + r" are made u p of newly added labour. But not c", the constant capital which operates in this sphere. But v" + rn = c' for which they are exchanged, c' is transformed into variable capital and REVENUE for B. O n the other hand, v" and r[11]
are transformed into c[1], into constant capital for A.
T h e product of category Pb, Pb — cn =the labour newly added during the course of the year. But Pb — c" = c', for the whole product of Pb after deduction of c[11], the constant capital employed in this category, is exchanged for c .
After vn + rn have been exchanged for c', the matter can be presented as follows:
Pa consists solely of newly added labour, the product of which is divided between profits and WAGES, that is, it constitutes the EQUIVALENT OF NECESSARY LABOUR and the EQUIVALENT OF SURPLUS LABOUR. For the v" + r" which now replace c' are equal to the newly added labour in category B.
T h u s the whole product of P"—not only its SURPLUS PRODUCE, but also its variable capital a n d its constant capital — consists of the products of labour newly added during the course of the year.
O n the other hand, Pb can be regarded in such a way that it does not represent any part of the newly added labour, but merely old labour which is retained. For its part c[11] does not represent newly added labour. Neither does the part c' which it has received in exchange for v[11] + ru, for this c[1] represents the constant capital laid out in A, and not newly added labour.
The whole part of the annual product which, as variable capital, constitutes the REVENUE of the workers and as SURPLUS PRODUCE constitutes the consumption fund of the capitalists, therefore can be resolved into newly added labour, whereas the remaining part of the product, which represents constant capital, can be resolved into nothing but old labour which has been retained and simply replaces constant capital.
Consequently, just as it is correct to say that the whole portion of the annual product which is consumed as REVENUE WAGES and PROFITS (together with the BRANCHES OF PROFIT, RENT, INTEREST, etc., as well as the WAGES of the UNPRODUCTIVE LABOURERS) consists of newly added labour, so it is false to assert that the total annual product can be resolved into REVENUE, WAGES and PROFITS and thus merely into portions of newly added labour. A part of the annual product can be resolved into constant capital, which regarded as value does not constitute newly added labour and, as regards USE, does not form part of either WAGES or PROFITS. Regarded as value it represents ACCUMULATED LABOUR in the real sense of the word, and its use value is the USE of this ACCUMULATED PREVIOUS LABOUR. On the other hand, it is equally correct that the labour added during the year is not represented entirely by that part of the product which can be resolved into WAGES and PROFITS. For these WAGES and PROFITS buy SERVICES, that is, labour which does not enter into the product of which WAGES and PROFITS form [a part]. These SERVICES are labour which is used up in the consumption of the product and does not enter into its immediate production.
[XIV-857] Ad 2). It is a different matter with regard to accumulation, transformation of REVENUE into capital, reproduction on an extended scale, in so far as this latter does not simply result from more productive employment of the old capital. Here the whole new capital consists of newly added labour, that is, of SURPLUS labour in the form of profit, etc. But although it is correct that here the entire element in new production arises from and consists of newly added labour — which is a part of the SURPLUS LABOUR of the LABOURERS — it is wrong to assume, as the economists do, that, when it is converted into capital, it can be resolved into variable capital alone, that is, WAGES. Let us suppose for example that a part of the SURPLUS PRODUCE of the FARMER is exchanged for a part of the SURPLUS PRODUCE of the machine manufacturer. It is then possible that the latter will convert the corn into variable capital and employ more workers, directly or indirectly. On the other hand, the FARMER has converted a part of his SURPLUS PRODUCE into constant capital, and it is possible that, as a result of this conversion, he will discharge some of his old workers instead of taking on new ones. The FARMER may cultivate more land. In this case, a part of his corn will be converted not into WAGES, but into constant capital, etc.
It is precisely accumulation which reveals clearly that everything — i.e. REVENUE, variable capital and constant capital — is nothing but appropriated alien labour; and that both the conditions of labour with which the worker works, and the equivalent he receives for his labour, consist of labour performed by the worker and appropriated by the capitalist, who has not given any equivalent for it.
[The same applies] even to original accumulation. Let us assume that I have saved £500 from my WAGES. In fact, therefore, this sum represents not only accumulated labour but, in contrast to the "accumulated labour" of the capitalist, my own labour accumulated by me and for me. I convert the £500 into capital, buy raw material, etc., and take on workers. Profit is, say, 20%, that is, £100 a year. In 5 years I shall have "eaten up" my capital in the form of REVENUE (provided new accumulation does not continuously take place and the £100 is consumed). In the 6th year, my capital of £500 itself consists of other people's labour appropriated without any equivalent. If, on the other hand, I had always accumulated V2 of the profit made, the process would have been slower, for I would not have consumed so much and would have accumulated more rapidly.
Capital
First year 500 Second year 550 Third year 605 Fourth year 665 Fifth year 731 Sixth year 804
Profit Consumed
100 50 110 55 121 60 133 66 146 73 160 80
384 Seventh year 884 176
472 Eighth year 972 194 97
569
My capital will have been almost doubled by the 8th year although I have consumed more than my original capital. The capital of 972 does not contain a single FARTHING of paid labour or of labour for which I have returned any kind of equivalent. I have consumed my entire original capital in the form of REVENUE, that is, I have received an equivalent for it, which I have consumed. The new capital consists solely of the appropriated labour of other people.
In considering surplus value as such, the original form of the product, HENCE of the SURPLUS PRODUCE, is of no consequence. It becomes important when considering the actual process of reproduction, partly in order to understand its forms, and partly in order to grasp the influence of luxury production, etc., on reproduction. Here is another example of how use value as such acquires economic significance.
[XIV-858] Now to return to our pamphlet.
cease from productive labour. But the possessors of the surplus produce, or capital, will neither maintain the population the following year in idleness, nor allow the produce to perish; they will employ them upon something not directly and immediately productive, for instance, in the erection of machinery, etc. But the third year, the whole population may again return to productive labour, and the machinery erected in the last year coming now into operation,* it is evident the produce will be greater than the first year's produce for the PRODUCE of the MACHINERY IN ADDITION. This SURPLUS PRODUCE,[3] that is an even larger amount, MUST PERISH OR BE PUT TO USE AS BEFORE; and this USANCE again adds to the PRODUCTIVE POWER of the s o c i e t y till MEN MUST CEASE FROM PRODUCTIVE LABOUR FOR A TIME, OR THE PRODUCE OF THEIR LABOUR MUST PERISH. T h i s is the PALPABLE CONSEQUENCE IN THE SIMPLEST STATE OF SOCIETY" ( [ p p . ] 4 - 5 ) . b
* "The demand of other countries is limited, not only by our power to produce, but by their power to produce,"*
/ / This is the answer to Say's assertion that we do not produce too much, but they produce too little.[44] THEIR POWER to PRODUCE IS NOT
NECESSARILY EQUAL TO OUR POWER TO PRODUCE.//
* "for do what you will, in a series of years the whole world can take little more of us, than we take of the world, so that all your foreign trade, of which there is so much talking, never did, never could, nor ever can, add one shilling, or one doit to the wealth of the country, as for every bale of silk, chest of tea, pipe of wine that ever was imported, something of equal value was exported; and even the profits made by our merchants in their foreign trade are paid by the consumer of the return goods here" ([pp.] 17-18).
"Foreign trade is mere barter and exchange for the convenience and enjoyment of the capitalist: he has not a hundred bodies, nor a hundred legs: he cannot consume, in cloth and cotton stockings, all the cloth and cotton stockings that are manufactured; therefore they are exchanged for wines and silks; but those wines and silks represent the surplus labour of our own population, as much as the cloths and cottons, and in this way the destructive power of the capitalist is increased beyond all bounds: by foreign trade the capitalists contrive to outwit nature, who had put a 1,000 natural limits to their exactions, and to their wishes to exact; there is no limit now, either to their power, or desires" * (I.e., [p.] 18).
One sees that he accepts Ricardo's teaching on FOREIGN TRADE. In Ricardo's work its only purpose is to support his theory of value or to demonstrate that his views on foreign trade are not at variance with it. But the pamphlet stresses that it is not only NATIONAL LABOUR, but also NATIONAL SURPLUS LABOUR which is embodied in the outcome of
FOREIGN TRADE.
If SURPLUS LABOUR or surplus VALUE were represented only in the national SURPLUS PRODUCE, then the increase of value for the sake of value and therefore the EXACTION OF SURPLUS LABOUR would be restricted by the limited, narrow circle of use values in which the value of labour would be represented. But it is foreign TRADE which develops its [the surplus value's] real nature as value by developing the labour embodied in it as social labour which manifests itself in an unlimited range of different use values, and this in fact gives meaning to abstract wealth.
*"It is the infinite variety of wants, and of the kinds of commodities"* //and therefore also the * infinite variety of real labour, which produces those different kinds of commodities// "necessary to their gratification, which alone renders the passion for wealth" //and hence the passion for appropriating other people's labour// "indefinite and insatiable" (Wakefield's edition* of Adam Smith, [An Inquiry into the Nature and Causes of the Wealth of Nations,] Vol. I, London, 1835,1S
p. 64, note).
But it is only FOREIGN TRADE, the development of the market to a world market, which causes money to develop into world money and abstract labour into social labour. Abstract wealth, value, money, HENCE abstract labour, develop in the measure that concrete labour becomes a totality of different modes of labour embracing the world market. Capitalist production rests on the value or the development of the labour embodied in the product as social labour. But this is only [possible] on the basis of FOREIGN TRADE and of the world market. This is at once the precondition and the result of capitalist production.
[XIV-859] The pamphlet is no theoretical treatise. [It is a] protest against the false reasons given by the economists for the DISTRESS and the "NATIONAL DIFFICULTIES" of the times. It does not, consequently, make the claim that its conception of SURPLUS VALUE as SURPLUS LABOUR carries with it a general criticism of the entire system of economic categories, nor can this be expected of it. The author stands rather on Ricardian ground and is only consistent in stating one of the consequences inherent in the system itself and he advances it in the interests of the working class against capital.
For the rest, the author remains a captive of the economic categories as he finds them. Just as in the case of Ricardo the confusion of SURPLUS VALUE with profit leads to undesirable contradictions, so in his case the fact that he christens SURPLUS VALUE the
INTEREST OF CAPITAL. To be sure, he is in advance of Ricardo in that he first of all reduces all SURPLUS VALUE to SURPLUS LABOUR, and when he calls SURPLUS VALUE INTEREST OF CAPITAL, he at the same time emphasises that by this he understands the general form of SURPLUS LABOUR in contrast to its particular forms — rent, interest of money and industrial profit.
He thus distinguishes the general form of SURPLUS LABOUR or SURPLUS VALUE from their particular forms, something which neither Ricardo nor Adam Smith [does], at least not consciously or consistendy. But on the other hand, he applies the name of one of these particular forms — INTEREST — to the general form. And this suffices to make him relapse into economic SLANG.
* "The progress of increasing capital would, in established societies, be marked by the decreasing interest of money, or, what comes to the same, the decreasing quantity of the labour of others that would be given for its use" * ([p.] 6).
This passage reminds one of Carey.a But with him it is not THE
LABOURER WHO USES CAPITAL, BUT CAPITAL WHICH USES LABOUR. S i n c e b y INTEREST he understands SURPLUS LABOUR IN ANY FORM, the matter of the .REMEDY OF OUR "NATIONAL DIFFICULTIES" amounts to an increase in wages; for the reduction OF INTEREST means a reduction of SURPLUS LABOUR. However, what he really means is that in the exchange of capital for labour the appropriation of alien labour should be reduced or that the worker should appropriate more of his own labour and capital less.
Reduction of SURPLUS LABOUR can mean two things: Less work should be performed over and above the time which is necessary to reproduce the labour capacity, that is, to create an equivalent for WAGES;
or, less of the total quantity of labour should assume the form of SURPLUS uiBouR, that is, the form of time worked gratis for the capitalist; therefore less of the product in which labour manifests itself should take the form of SURPLUS PRODUCE; in other words, the worker should receive more of his own product and less of it should go to the capitalist.
The author is not quite clear about this himself, as can be seen from the following passage which is really the last word in this matter as far as the pamphlet is concerned:
A nation is really rich only if no interest is paid for the use of capital; if the working day is only 6 hours rather than twelve.b WEALTH IS DISPOSABLE TIME AND NOTHING MORE ([p.] 6). Since what is understood by interest here is profit, rent, interest on money — in short, all the forms of surplus value — and since, according to the author himself, capital is nothing but the PRODUCE
OF LABOUR, ACCUMULATED LABOUR WHICH IS ABLE TO EXACT IN EXCHANGE FOR ITSELF
NOT ONLY AN EQUAL QUANTITY OF LABOUR, BUT SURPLUS LABOUR, a c c o r d i n g t O him the phrase: capital bears no interest, therefore means that capital [XIV-860] does not exist. The product is not transformed into capital. No SURPLUS PRODUCE and no SURPLUS LABOUR exist. Only then is a nation really rich.
This can mean however: There is no PRODUCE and no LABOUR over and above the product and the LABOUR required for the reproduction of the workers. Or, they [the workers] themselves appropriate this surplus'either of the product or of the LABOUR.
That the author does not simply mean the latter is, however, clear from the fact that the words "no interest [is paid] for the use of capital" are juxtaposed to [the proposition that] "A nation is really rich if the working day is 6 hours rather than twelve";
" WEALTH IS DISPOSABLE TIME, AND NOTHING MORE " .
This can now mean: If everybody has to work, if the contradiction between those who have to work too much and those who are idlers disappears— and this would in any case be the result of capital ceasing to exist, of the product ceasing to provide a title to alien SURPLUS LABOUR—and if, in addition, the development of the productive forces brought about by capital is taken into account, society will produce the necessary ABUNDANCE in 6 hours, [producing] more than it does now in 12, and, moreover, all will have 6 hours of "DISPOSABLE TIME", that is, real wealth; time which will not be absorbed in direct productive labour, but will be available for ENJOYMENT, for leisure, thus giving scope for free activity and development. Time is scope for the development of man's FACULTIES, etc. It will be recalled that the economists themselves justify the SLAVE LABOUR of the WAGE LABOURERS by saying that it creates leisure, free time for others, for another section of society — and thereby also for the society of WAGE LABOURERS.
Or it can also mean: The workers now work 6 hours more than the time (now) required for their own reproduction. (This can hardly be the author's view, since he describes what they use now as an inhuman minimum.) If capital ceases to exist, then the workers will work for 6 hours only and the idlers will have to work the same amount of time. The material wealth of all would thus be depressed to the level of the workers. But all would have DISPOSABLE TIME, that is, free time for their development.
The author himself is obviously not clear about this. NEVERTHELESS, there remains the fine statement:
Ricardo himself, in the CHAPTER entided "Value and Riches, Their Distinctive Properties",* also says that real wealth consists in producing the greatest possible amount of VALUES IN USE having the least possible VALUE. This means, in other words, that the greatest possible ABUNDANCE OF MATERIAL WEALTH is created in the shortest possible labour time. Here also, the "DISPOSABLE TIME" and the enjoyment of that which is produced in the labour time of others, [appear] as the true WEALTH, but like everything in capitalist production — and consequently in its interpreters—[it appears] in the form of a contradiction. In Ricardo's work the contradiction between RICHES and VALUE later [appears] in the form that the net product should be as large as possible in relation to the gross product, which again, in this contradictory form, amounts to saying that those classes in society whose time is only partly or not at all absorbed in material production although they enjoy its fruits, should be as numerous as possible in comparison with those classes whose time is totally absorbed in material production and whose consumption is, as a consequence, a mere ITEM in production costs, a mere condition for their existence as beasts of burden. There is always the wish that the smallest possible portion of society should be doomed to the slavery of labour, to forced labour. This is the utmost that can be accomplished from the capitalist standpoint.
The author puts an end to this. TIME OF LABOUR, even if exchange value is eliminated, always remains the creative substance of wealth and the measure of the cost of its production. But FREE TIME, DISPOSABLE TIME, is wealth itself, partly for the enjoyment of the product, partly for FREE ACTIVITY which — unlike LABOUR — is not determined by a compelling extraneous purpose which must be fulfilled, and the fulfilment of which is regarded as a natural necessity or a social duty, according to one's inclination.
It is self-evident that if TIME OF LABOUR is reduced to a normal length and, furthermore, labour is no longer performed for someone else, but for myself, and, at the same time, the social contradictions between MASTER AND MEN, etc., being abolished, it acquires a quite different, a free character, it becomes real social labour, and finally the basis of DISPOSABLE TIME—the TIME OF LABOUR of a MAN who has also DISPOSABLE TIME, must be of a much higher quality than that of the beast of burden.
2) Piercy Ravenstone, M. A., Thoughts on the Funding System, and its Effects, London, 1824
A most remarkable work. The author of the pamphlet discussed above understands SURPLUS VALUE in its original form, i.e. that of SURPLUS LABOUR. Consequendy his attention is mainly centred on the extent of labour time. In particular, the conception of SURPLUS LABOUR or VALUE in its absolute form; the extension of labour time beyond that required for the reproduction of the labourer himself, not the reduction of NECESSARY LABOUR as a result of the development of the productive powers of labour.
The reduction of this NECESSARY LABOUR is the principal aspect examined by Ricardo, but in the way it is carried out in capitalist production, namely, as a means for extending the amount of labour time accruing to capital. This pamphlet, on the contrary, declares that the final aim is the reduction of the producers' labour time and the cessation of labour for the POSSESSOR OF SURPLUS PRODUCE.
Ravenstone seems to assume the working day as given. Hence, what he is particularly interested in — just as was also the author of the pamphlet previously discussed, so that the theoretical questions only crop up incidentally — is RELATIVE SURPLUS VALUE or the SURPLUS PRODUCE (which accrues to capital) as a result of the development of the productive power of labour. As is usual with those who adopt this standpoint, SURPLUS LABOUR is conceived here more in the form of SURPLUS PRODUCE, whereas in the previous pamphlet, SURPLUS PRODUCE is conceived more in the form of SURPLUS LABOUR.
* "To teach that the wealth and power of a nation depend on its capital, is to make industry ancillary to riches, to make men subservient to property" * ([p.] 7).
The opposition evoked by the Ricardian theory — on [the basis of] its own assumptions — has the following characteristic feature.
To the same extent as political economy developed — and this development finds its most trenchant expression in Ricardo, as far as fundamental principles are concerned — it presented labour as the sole element of value and the only creator of use value, and the development of the productive forces as the only real means for increasing wealth; the greatest possible development of the productive powers of labour as the economic basis of society. This is, in fact, the foundation of capitalist production. Ricardo's work,(1)
in particular, since it demonstrates that the law of value is not invalidated either by landed property or by capitalist accumulation, etc., is, in reality, only concerned with eliminating all contradictions or phenomena which appear to run counter to this conception. But in the same measure as it is understood that labour is the sole source of exchange value and the active source of use value, "capital" is likewise conceived by the same economists, in particular by Ricardo (and even more by Torrens, Malthus, Bailey, and others after him), as the regulator of production, the source of wealth and the aim of production, whereas labour is regarded as wage labour, whose representative and real instrument is inevitably a pauper (to which Malthus' theory of population contributed), a mere production cost and instrument of production dependent on a minimum wage and forced to drop even below this minimum as soon as the existing quantity of labour is "superfluous" for capital. In this contradiction, political economy merely expressed the essence of capitalist production or, if you like, of wage labour, of labour alienated from itself, which stands confronted by the wealth it has created as alien wealth, by its own productive power as the productive power of its product, by its enrichment as its own impoverishment and by its social power as the power of society. But this definite, specific, historical form of social labour, as it appears in capitalist production, is proclaimed by these economists as the general, eternal form, as something determined by nature and these relations of production as the absolutely (not historically) necessary, natural and reasonable relations of social labour. Their thoughts being entirely confined within the bounds of capitalist production, they assert that the contradictory form in which social labour manifests itself there, is just as necessary as the form itself freed from this contradiction. Since in the selfsame breath they proclaim, on the one hand, labour as such (for them, labour is synonymous with wage labour) and on the other, capital as such — that is, the poverty of the workers and the wealth of the non-workers — to be the sole source of wealth, they are perpetually involved in absolute contradictions without being in the slightest degree aware of them. (Sismondi was epoch-making in political economy because he had an inkling of this contradiction.") Ricardo's phrase "LABOUR OR CAPITAL" b reveals in a most striking fashion both the contradiction inherent in the terms and the naivety with which they are stated to be identical.
Since the same real development which provided bourgeois political economy with this striking theoretical expression, un-folded the real contradictions contained in it, especially the contradiction between the growing wealth of the English "nation" and the growing misery of the workers, and since moreover these contradictions are given a theoretically compelling if unconscious expression in the Ricardian theory, etc., it was natural for those [XV-862] thinkers who rallied to the side of the proletariat to seize on this contradiction, for which they found the theoretical ground already prepared. Labour is the sole source of exchange value and the only active creator of use value. This is what you say. On the other hand, you say that capital is everything, and the worker is nothing or a mere production cost of capital. You have refuted yourselves. Capital is nothing but defrauding of the worker. Labour is everything.
This, in fact, is the ultimate meaning of all the writings which defend the interests of the proletariat from the Ricardian standpoint basing themselves on his assumptions. Just as little as he [Ricardo] understands the identity of capital and labour in his own system, do they understand the contradiction they describe. That is why the most important among them — Hodgskin, for-example — accept all the economic preconditions of capitalist production as eternal forms and only desire to eliminate capital, which is both the basis and necessary consequence [of these preconditions] .a
Ravenstone's main idea is as follows: The development of the productive powers of labour creates capital or PROPERTY, in other words a SURPLUS PRODUCE FOR "IDLERS",b non-workersc; and indeed the more the productive power of labour develops, the more it produces this, its parasitical excrescence which sucks it dry. Whether the title to this SURPLUS PRODUCE accrues to the non-worker because he already possesses wealth, or because he possesses land, landed property, does not affect the case. Both are capital, that is, mastery over the product of other people's labour. For Ravenstone PROPERTY0 is merely appropriation of the products of other people's labour and this is only possible in so far as and in the degree that productive industry develops. By productive industry Ravenstone understands industry which produces NECESSARIES. UNPRODUCTIVE INDUSTRY, the INDUSTRY OF CONSUMPTION,[1]^[1] is a consequence of the development of capital, or PROPERTY. Ravenstone appears ascetic like the author of the pamphlet discussed above.(2) In this respect he himself remains a captive of the notions set forth by the economists. Without capital, without PROPERTY, the NECESSARIES of the workers would be produced in abundance, but there would be no luxury industry. Or it can also be said that Ravenstone, like the author of the pamphlet discussed above, understands or at least in fact admits the historical necessity of capital; since capital, according to the author of the pamphlet, produces surplus labour over and above the labour strictly necessary for the maintenance [of the worker] and at the same time leads to the creation of machinery (what he calls fixed capital) and gives rise to foreign trade, the world market, in order to utilise the SURPLUS PRODUCE filched from the workers partly to increase productive power, partly to give this SURPLUS PRODUCE the most diverse forms of use value far removed from those required by necessity. Similarly, according to Ravenstone, no "CONVENIENCES", no machinery, no luxury products would be produced without CAPITAL and PROPERTY, neither would the development of the natural sciences have taken place, nor the literary and artistic productions which owe their existence to leisure or the urge of the wealthy to receive an equivalent for their "SURPLUS PRODUCE" from the non-workers.
Ravenstone and the pamphleteer do not say this in justification of capital, but simply seize on it as a point of attack because all this is done in opposition to the workers and not for them. But in fact they thus admit that this is a result of capitalist production, which is therefore a historical form of social development, even though it stands in contradiction to that part of the population which constitutes the basis of that whole development. In this respect they share the narrow-mindedness of the economists (although from a diametrically opposite position) for they confuse the contradictory form of this development with its content. The latter wish to perpetuate the contradiction on account of its results. The former are determined to sacrifice the fruits which have developed within this antagonistic form, in order to get rid of the contradiction. This distinguishes their opposition to political economy from that of contemporary people like Owen(3); likewise from that of Sismondi, who harks back to antiquated forms of the contradiction in order to be rid of it in its acute form.(4) It is the "WANTS" of the poor which "CONSTITUTE HIS" (the rich man's) "WEALTH.... When all were equal, none would labour for another. *The necessaries of life would be overabundant whilst its comforts were entirely wanting" ([p.] 10).
"The industry which produces is the parent of property; that which aids consumption is its child" ([p.] 12).
"The growth of property, this greater ability to maintain idle men, and unproductive industry, that in political economy is called capital" ([p.] 13).
"As the destination of property is expense, as without that it is wholly useless to its owner, its existence is intimately connected with that [XV-863] of the industry of consumption" (I.e.).
"If each man's labour were but enough to procure his own food, there could be no property, and no part of a people's industry could be turned away to work for the wants of the imagination" ([pp.] 14-15).
"In every stage of society, as increased numbers and better contrivances add to each man's power of production, the number of those who labour is gradually diminished... Property grows from the improvement of the means of production; its sole business is [the] encouragement of idleness. When each man's labour is barely sufficient for his own subsistence, as there can be no property, there will be no idle men. When one man's labour can maintain five, there will be four idle men for one employed in production: in no other way can the produce be consumed. ...the object of society is to magnify the idle at the expense of the industrious, to create power out of plenty"* ([p.] 11).
(With regard to RENT he says (not quite correctly, for it is precisely here that it is necessary to explain why [rent] accrues TO
THE LANDLORD and not TO THE FARMER, THE INDUSTRIAL CAPITALIST) what applies to SURPLUS VALUE in general, in so far as it develops as a result of the increase in the productive power of labour.
peculation ... if it encourage fraud and meanness; if it clothe quackery and pretension in the garb of wisdom; if it turn a whole people in[to] a nation of jobbers ... if it break down all the prejudices of rank and birth to render money the only distinction among men... it destroys the perpetuity of property"* ([pp.] 51-52).
3) Labour Defended against the Claims of Capital; or, the Unproductiveness of Capital Proved. By a Labourer, London, 1825
4) Thomas Hodgskin, Popular Political Economy. Four Lectures Delivered at the London Mechanics’ Institution, London, 1827
The anonymous first work is also by Hodgskin. Whereas the PAMPHLETS mentioned previously and a series of similar ones have disappeared without trace, these writings, especially the first one, made a considerable stir and are still regarded as belonging to the major works of English political economy (cf. John Lalor, Money and Morals, London, 1852 [pp. XXIV and 319-22]). We shall consider each of these works in turn.
Labour Defended etc. As the title indicates, the author wishes to prove the " UNPRODUCTIVENESS OF CAPITAL". Ricardo does not assert that capital is PRODUCTIVE OF VALUE. It only adds its own value to the product, and its own value depends on the labour time required for its reproduction. It only has value as ACCUMULATED LABOUR (or rather [XV-864], REALISED LABOUR) and it only adds this — its value — to the product in which it is embodied. It is true that he is inconsistent when discussing the general rate of profit. But this is precisely the contradiction which his opponents attacked.
As far as the productivity of capital in relation to use value is concerned, this is construed by Smith, Ricardo and others, and by political economists in general, as meaning nothing else than that products of previous useful work serve anew as means of production, as objects of labour, instruments of labour and means of subsistence for the worker. The objective conditions of labour do not face the worker, as in the primitive stages, as mere natural objects (as such, they are never capital), but as natural objects already transformed by human activity. But in this sense the word "capital" is quite superfluous and meaningless. Wheat is nourish-ing not because it is capital but because it is wheat. The use value of wool derives from the fact that it is wool, not capital. In the same way, the action of the steam engine has nothing in common with its existence as capital. It would do exactly the same work if it were not "capital" and if it belonged, not to the factory owner, but to the workers. All these things serve in the real labour process because of the relationship which exists between them as use values—not as exchange values and still less as capital — and the labour which is embodied in them. Their productivity in the real labour process, or rather the productivity of the labour materialised in them, is due to their nature as objective conditions of real labour and not to their social existence as alienated, independent conditions which confront the worker and are embodied in the capitalist, the MASTER over living labour. It is as WEALTH, as Hopkins (not our Hodgskin) rightly says,(1) and not as "NET" WEALTH, as PRODUCE and not as "NET" PRODUCE, that they are here consumed and used. It is true that the particular social form of these things in relation to labour and their real determinateness as factors of the labour process are as confused and inseparably interwoven with one another in the minds of the economists as they are in the mind of the capitalist. Nevertheless, as soon as they analyse the labour process, they are compelled to abandon the term capital completely and to speak of material of labour, means of labour, and means of subsistence.[1] [3] But the determinate form of the product as material, instrument and means of subsistence of the worker expresses nothing but the relationship of these objective conditions to labour; labour itself appears as the activity which dominates them. It says however nothing at all about [the relationship of] labour and capital, only about the relationship of the purposeful activity of men to their own products in the process of reproduction. They neither cease to be products of labour nor mere objects which are at the disposal of labour. They merely express the relationship in which labour appropriates the objective world which it has created itself, at any rate in this form; but they do not by any means express any other domination of these things over labour, apart from the fact that activity must be appropriate to the material, OTHERWISE IT WOULD NOT BE purposeful activity, labour.
One can only speak of the productivity of capital if one regards capital as the embodiment of definite social relations of production. But if it is conceived in this way, then the historically transitory character of these relations becomes at once evident, and the general recognition of this fact is incompatible with the continued existence of this relationship, which itself creates the means for its abolition.
But the economists do not regard capital as such a relationship because they cannot admit its relative character, and do not understand it either. They simply express in theoretical terms the notions of the practical men who are engrossed in capitalist production, dominated by it and interested in it.
In his polemic, Hodgskin himself starts out from a standpoint which is economically narrow-minded.[3] In so far as they [the economists] define capital as an eternal production relation, they reduce it to the general relations of labour, to its material conditions, relations which are common to all modes of production and .do not express the specific nature of capital. In so far as they hold that capital produces "value", the best of them and Ricardo included, admit that it does not produce any value which it has not previously received and constantly continues to receive from labour, since the value of a product is determined by the labour time necessary to reproduce it, that is, its value is the result of living, present labour and not of past labour. And as Ricardo emphasises, increase in the productivity of labour is marked by the continuous devaluation of the products of past labour. On the other hand, the economists continually mix up the definite, specific form in which these things constitute capital with their nature as things and as simple elements of every labour process. The mystification contained in capital — as EMPLOYER OF LABOUR(2)—is not explained by them, but it is constantly expressed by them unconsciously, for it is inseparable from the material aspect of capital.
[XV-867](3) The first pamphlet(4) draws the correct conclusions from Ricardo and reduces SURPLUS VALUE to SURPLUS LABOUR. This is in contrast to Ricardo's opponents and followers who continue to adhere to his confusion of SURPLUS VALUE with profit.
In opposition to them, the second pamphlet(5) defines relative SURPLUS VALUE more exactly as being dependent on the level of development of the productive power of labour. Ricardo says the same thing, but he avoids the conclusion drawn by the second pamphlet, namely, that the increase in the productive power of labour only increases capital, the wealth of others which dominates labour.
Finally, the third pamphlet3 bursts forth with the general statement, which is the inevitable consequence of Ricardo's presentation — that capital is unproductive. This is in contrast to Torrens, Malthus and others who, taking one aspect of the Ricardian theory as their point of departure, turn Ricardo's statement that labour is the creator of value into the opposite— that capital is the creator of value. The pamphlet, moreover, disputes [the statement]—which recurs in all of them, from Smith to Malthus, especially in the latter where it is elevated into an absolute dogma (ditto in the case of James Mill)—that labour is absolutely dependent on the amount of capital available, as this is the condition of its existence.
Pamphlet No. 1 ends with the statement:
* "Wealth is nothing but disposable time."* b
According to Hodgskin, CIRCULATING CAPITAL is nothing but the juxtaposition of the different kinds of social labour (COEXISTING LABOUR) and accumulation is nothing but the amassing of the productive powers of social labour, so that the accumulation of the skill and knowledge (SCIENTIFIC POWER) of the workers themselves is the chief [form of] accumulation, and infinitely more important than the accumulation — which goes hand in hand with it and merely represents it — of the existing objective conditions of this accumulated activity. These objective conditions are only nominally accumulated and must be constantly produced anew and consumed anew.
* "Productive capital and skilled labour are one." "Capital and a labouring population are precisely synonymous" * [Labour Defended against the Claims of Capital..., p. 33].
These are simply further elaborations of Galiani's [thesis]:
"The real wealth ... is man" (Delia Moneta, Custodi, Parte Moderna, t. Ill, [p.] 229).'
The whole objective world, the "world of commodities", vanishes here as a mere aspect, as the merely passing activity, constantly performed anew, of socially producing men. Compare this "idealism" with the crude, material fetishism into which the Ricardian theory develops "IN [the writings of] THIS INCREDIBLE COBBLER",[109] McCulloch, where not only the difference between man and animal disappears but even the difference between a living organism and an inanimate object. And then let them say that as against the lofty idealism of bourgeois political economy, the proletarian opposition has been preaching a crude materialism directed exclusively towards the satisfaction of coarse appetites.
In his investigations into the productivity of capital, Hodgskin is remiss in that he does not distinguish between how far it is a question of producing use values or exchange values.
Further — but this has historical justification — he takes capital as it is defined by the economists. On the one hand (in so far as it operates in the real process of labour) as a merely physical condition of labour, and therefore of importance only as a material element of labour, and (in the process of valorisation) nothing more than the quantity of labour measured by time, that is, nothing different from this quantity of labour itself. On the other hand, although in fact, in so far as it appears in the real process of production, it is a mere name for, and rechristening of, labour itself, it is represented as the power dominating and engendering labour, as the basis of the productivity of labour and as wealth alien to labour. And this without any intermediate links. This is how he found it. And he counterposes the real aspect of economic development to its bourgeois humbug.
""'Capital is a sort of cabalistic word, like church or state, or any other of those general terms which are invented by those who fleece the rest of mankind to conceal the hand that shears them" * (Labour Defended..., [p.] 17).
In accordance with the tradition he found prevailing among the economists, he distinguishes between circulating and fixed capital; circulating capital moreover is described as mainly that part which consists of, or is used as, means of subsistence for the workers.
It is maintained that "division of labour is impossible without previous accumulation of capital" [p. 8].(6) But * "the effects attributed to a stock of commodities, under the name of circulating capital, are caused by co-existing labour"* ([p.] 9).
Faced with the crude conception of the economists, it is quite correct to say that "CIRCULATING CAPITAL" is only THE "NAME" for a "STOCK OF" PECULIAR "COMMODITIES". Since the economists have not analysed the specific social relationship which is represented in the metamorphosis of commodities, they can understand only the material aspect of "CIRCULATING" capital. All the differentiations in capital arising from the circulation process [XV-868]—in fact the circulation process itself — are actually nothing but the metamorphosis of commodities" (determined by their relationship to wage labour as capital) as an aspect of the reproduction process.
DIVISION OF LABOUR is, in one sense, nothing but CO-EXISTINC LABOUR, that is, the CO-EXISTENCE of different kinds of labour which are represented in DIFFERENT KINDS OF PRODUCE OR RATHER COMMODITIES. The DIVISION OF LABOUR in the capitalist sense, as the breaking down of the particular labour which produces a definite commodity into a series of simple and co-ordinated operations divided up amongst different workers, presupposes the division of labour within society outside the workshop, as SEPARATION OF OCCUPATIONS. On the other hand, it [division of labour] increases it [separation of occupations]. The product is increasingly produced as a commodity in the strict sense of the word, its exchange value becomes the more independent of its immediate existence as use value, and its production becomes more and more independent of its consumption by the producers and of its existence as use value for the producers, the more one-sided it itself becomes, and the greater the variety of commodities for which it is exchanged, the greater the kinds of use values in which its exchange value is expressed, and the larger the market for it becomes. The more this happens, the more the product can be produced as a commodity; therefore also on an increasingly large scale. The producer's indifference to the use value of his product is expressed quantitatively in the amounts in which he produces it, which bear no relation to his own consumption needs, even when he is at the same time a consumer of his own product. The division of labour within the workshop is one of the methods used in this production en masse and consequently in the production of the product. Thus the division of labour within the workshop is based on the division of OCCUPATIONS in society.
The size of the market has two aspects. First, the mass of consumers, their numbers. But secondly, also, the number of OCCUPATIONS which are independent of one another. The latter is possible without the former. For example, when spinning and weaving become divorced from domestic industry and agriculture, all those engaged in agriculture become a market for spinners and weavers. They likewise [form markets] for one another as a consequence of the separation of their occupations. What the division of labour in society presupposes above all, is that the different kinds of labour have become independent of one another in such a way that their products confront one another as commodities and must be EXCHANGED, that is, undergo the metamorphosis of commodities and stand in relation to one another as commodities. (This is why in the Middle Ages, the towns prohibited the spread of as many professions as possible to the countryside, not merely for the purpose of preventing competition — the only aspect seen by Adam Smith"—but in order to create markets for themselves.) On the other hand, the proper development of the division of labour presupposes a certain density of population. The development of the DIVISION OF LABOUR in the workshop depends even more on this density of population. This latter DIVISION is, to a certain extent, a precondition for the former and in turn intensifies it still further. It does this by splitting formerly correlated occupations into separate and independent ones, also by increasing and differentiating the indirect preliminary work they require; and as a result of the increase in both production and the population and the freeing of capital and labour it creates NEW WANTS and NEW MODES OF THEIR SATISFACTION.
Therefore when Hodgskin says "DIVISION OF LABOUR" is the effect
n o t OF A STOCK OF COMMODITIES CALLED CIRCULATING CAPITAL b u t OF " CO-EXISTING LABOUR", it would be tautologous if in this context he understood by DIVISION OF LABOUR the SEPARATION OF TRADES. It would only mean that DIVISION OF LABOUR is the cause or the EFFECT of the DIVISION OF LABOUR. He can therefore only mean that DIVISION OF LABOUR within the workshop depends on the SEPARATION OF OCCUPATIONS, the SOCIAL DIVISION
OF LABOUR, and is, IN A CERTAIN SENSE, ITS EFFECT.
It is not A "STOCK OF COMMODITIES" which gives rise to this SEPARATION OF OCCUPATIONS and with it the DIVISION OF LABOUR in the workshop, but it is the SEPARATION OF OCCUPATIONS (and DIVISION OF LABOUR) that is manifested in the STOCK OF COMMODITIES, or rather in the fact that A STOCK OF PRODUCTS becomes a STOCK OF COMMODITIES. // The PROPERTY, the characteristic feature of the capitalist mode of production and therefore of capital itself in so far as it expresses a definite relation of the producers to one another and to their product, is inevitably always described by the economists as the PROPERTY of the THING. //
[XV-869] If, however, "PREVIOUS ACCUMULATION OF CAPITAL" is being discussed from an economic standpoint (see Turgot, Smith,b etc.)
a A.Smith, An Inquiry into the Nature and Causes of the Wealth of Nations..., Book I, Ch. X, Part 2.— Ed.
b A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations..., Vol. II, London, 1843, pp. 250-51; see also present edition, Vol. 30, pp. 366-67.— Ed.
as a condition for the then what is understood by this is the previous CONCENTRATION OF A STOCK OF COMMODITIES as capital in the possession of the buyer of labour, since the kind of cooperation characteristic of the division of labour presupposes a CONGLOMERATION of workers—consequently, accumulation of the means of subsistence necessary for them while they are working— increased productivity of labour — consequendy, increase in the amount of raw materials, instruments and matières instrumentales which must be available in order that labour proceeds continuously, since it constantly requires large amounts of these things— in short, the objective conditions of production on a large scale.
Here, accumulation of capital cannot mean increase in the amount of means of subsistence, raw materials and instruments of labour as a condition for the division of labour, for in so far as the accumulation of capital is taken to mean this, it is a consequence of the division of labour, not its precondition.
Similarly, accumulation of capital cannot here mean that means of subsistence for the workers must be available in general before new necessaries are reproduced, or that products of their labour must constitute the raw material and means of labour for the new production which they carry out. For this is the condition of labour in general and was just as true before the development of the division of labour as it is after it.
On the one hand: if we consider the material element of accumulation, it means nothing more than that the division of labour requires the concentration of means of subsistence and means of labour at particular points, whereas formerly these were scattered and dispersed as long as the workers in individual TRADES — which could not have been very numerous under these conditions — themselves carried out all the manifold and consecu-tive operations required for the production of one or more products. Not an increase in absolute terms is presupposed, but CONCENTRATION, the gathering together of more at a given point, and of relatively more [means of labour] compared with the numbers of workers brought together there. More flax, for example, [is used] by the workers in manufacture (in proportion to their numbers) than the relative amount of flax required in proportion to all the peasants — both men and women — who used to spin flax as a sideline. Hence, CONGLOMERATION of workers, CONCENTRATION of raw materials, instruments, and means of subsistence.
On the other hand: if we consider the historical foundation on which this process develops, from which manufacture arises, the industrial mode of production whose characteristic feature is the division of labour, then this CONCENTRATION can only take place in the form that these workers are assembled together as wage workers, that is, as workers who must sell their labour capacity because their conditions of labour confront them as alien property, as an independent, alien force. This implies that these conditions of labour confront them as capital; in other words, these means of subsistence and means of labour (or, what amounts to the same thing, the disposal of them through the intermediary of money) are in the hands of individual owners of money or of commodities, who, as a result, become capitalists. The loss of the conditions of labour by the workers is expressed in the fact that these conditions become independent as capital or as things at the disposal of the capitalists.
Thus primitive accumulation, as I have already shown,(7) means nothing but the separation of labour and the worker from the conditions of labour, which confront him as independent forces. The course of history shows that this separation is a factor in social development. Once capital exists, the capitalist mode of production itself evolves in such a way that it maintains and reproduces this separation on a constantly increasing scale until the historical reversal takes place.
It is not the ownership of money which makes the capitalist a capitalist. For money to be transformed into capital, the prerequisites for capitalist production must exist, whose first historical presupposition is that separation. The separation, and therefore the existence of the conditions of labour as capital, is given in capitalist production; this separation which constantly reproduces itself and expands, is the foundation of production.
Accumulation by means of the reconversion of profit, or SURPLUS PRODUCE, into capital now becomes a continuous process as a result of which the increased products of labour which are at the same time its objective conditions, conditions of reproduction, continuously confront labour as capital, i.e. as forces — personified in the capitalist — which are alienated from labour and dominate it. Consequently, it becomes a specific function of the capitalist to accumulate, that is, to reconvert a part of the SURPLUS PRODUCE into conditions of labour. And the stupid economist concludes from this that if this operation did not proceed in this contradictory, specific way, it could not take place at all. Reproduction on an extended scale is inseparably connected in his mind with accumulation, the capitalist form of this reproduction.
[XV-870] Accumulation merely presents as a continuous process what in primitive accumulation appears as a distinct historical process, as the process of the emergence of capital and as a transition from one mode of production to another.
The economists, caught as they are in the toils of the notions proper to the agents of the capitalist mode of production, advance a double quid pro quo, each side of which depends on the other.
On the one hand, they transform capital from a relationship into a thing, A STOCK OF COMMODITIES (already forgetting that commodities themselves are not things) which, in so far as they serve as conditions of production for new labour, are called capital and, with regard to their mode of reproduction, are called circulating capital.
On the other hand, they transform things into capital, that is, they consider the social relationship which is represented in them and through them as an attribute which belongs to the thing as such as soon as it enters as an element into the labour process or the technological process.
The concentration in the hands of non-workers of raw materials and of the disposition over the means of subsistence as powers dominating labour, the preliminary condition for the division of labour (later on, the division of labour increases not only concentration, but also the amount [available for] concentration by increasing the productive power of labour), in other words the preliminary accumulation of capital as the condition for the division of labour therefore means for them the augmentation or concentration (they do not differentiate between the two) of means of subsistence and means of labour.
On the other hand, these necessaries and means of labour would not operate as objective conditions of production if these things did not possess the attribute of being capital, if the product of labour, the condition of labour, did not absorb labour itself, if past labour did not absorb living labour, and if these things did not belong to themselves or per procurationem'(8) to the capitalist instead of to the worker.
As if the division of labour was not just as possible if its conditions belonged to the associated workers (although historically it could not AT FIRST appear in this form, but can only achieve it as a result of capitalist production) and were regarded by the latter as their own products and the material elements of their own activity, which they are by their very nature.
Furthermore, because in capitalist production capital appropriates the SURPLUS PRODUCE of the worker, consequently, because it has appropriated the products of labour and these now confront the worker in the form of capital, it is clear that the conversion of the SURPLUS PRODUCE into conditions of labour can only be initiated by the capitalist and only in the form that he turns the product of labour — which he has appropriated without any equivalent — into a means of production of new labour performed without receiving an equivalent. Consequently, the extension of reproduction appears as the transformation of profit into capital and as a saving by the capitalist who, instead of consuming the SURPLUS PRODUCE which he has acquired gratis, converts it anew into a means of exploitation of labour but is able to do this only in so far as he converts it again into productive capital; this entails the conversion of SURPLUS PRODUCE into means of labour. As a result, the economists conclude that the SURPLUS PRODUCE cannot serve as an element of new production if it has not been transformed previously from the product of the worker into the property of his EMPLOYER in order to serve as capital once again and to repeat the old process of exploitation. The more inferior economists add to this the idea of HOARDING and the accumulation of treasure. Even the better ones — Ricardo, for example — transfer the notion of renunciation from the hoarder to the capitalist.
The economists do not conceive capital as a relation. They cannot do so without at the same time conceiving it as a historically transitory, i.e. a relative — not an absolute — form of production. Hodgskin himself does not share this concept. In so far as it justifies capital it does not justify its justification by the economists, but on the contrary refutes it. Thus Hodgskin is not concerned in all this.
As far as matters stood between him and the economists, the kind of polemic he had to wage seemed to be mapped out beforehand and quite simple. To put it simply, he had to vindicate the one aspect which the economists elaborate "scientifically" against the fetishistic conception they accept sans raison,* naively and unconsciously from the capitalist way of looking at things. The utilisation of the products of previous labour, of labour in general, as materials, tools and means of subsistence, is necessary if the worker wants to use his products for new production. This particular mode of consumption of his product is productive. But what on earth has this kind of utilisation, this mode of consumption of his product, to do with the domination of this product over him, with its existence as capital, with the concentration [XV-870a] in the hands of individual capitalists of the right to dispose of raw materials and means of subsistence and the exclusion of the workers from ownership of their product? What has it to do with the fact that first of all they have to hand over their product gratis to a third party in order to buy it back again with their own labour and, what is more, they have to give him more labour in exchange than is contained in the product and thus have to create more SURPLUS PRODUCE for him?
Past labour exists here in two forms. As product, use value. The process of production requires that the workers consume one portion of this product [and use] another portion as raw materials and instruments of labour. This applies to the technological process and merely demonstrates the relations that have to exist in industrial production between the workers and the products of their own labour, their own products, in order to turn them into means of production.
Or, [as] value. This only shows that the value of their new product represents not only their present, but also their past labour, and that by increasing it they retain the old value, because they increase it.
The claim put forward by the capitalist has nothing to do with this process as such. It is true that he has appropriated the products of labour, of past labour, and that he therefore possesses a means for appropriating new products and living labour. This, however, is precisely the kind of procedure against which protests are made. The preliminary concentration and accumulation necessary for the "division of labour" must not take the form of accumulation of capital. It does not follow that because they are necessary, the capitalist must inevitably have the disposal of the conditions of labour of today created by the labour of yesterday. If accumulation of capital is supposed to be nothing but ACCUMULATED LABOUR, it by no means implies that accumulation OF OTHER PEOPLE'S LABOUR has to take place.
Hodgskin however does not follow this simple path, and at first this seems strange. In his polemic against the productivity of capital, to begin with, against circulating and then even more, against fixed capital, he seems to oppose or to reject the importance of past labour, or of its product for reproduction as a condition of new labour. From this follows the importance of past labour embodied in products for labour as present kvépyeia.(9) Why this change?
Since the economists identify past labour with capital—past labour being understood in this case not only in the sense of concrete labour embodied in the product, but also in the sense of social labour, materialised labour time — it is understandable that they, the Pindars of capital, emphasise the objective elements of production and overestimate their importance as against the subjective element, living, immediate labour. For them, labour only becomes efficacious when it becomes capital and confronts itself, the passive element confronting its active counterpart. The producer is therefore controlled by the product, the subject by the object, labour which is being embodied by labour embodied in an object, etc. In all these conceptions, past labour appears not merely as an objective factor of living labour, subsumed by it, but vice versa; not as an element of the power of living labour, but as a power over this labour. The economists ascribe a false importance to the objective factor of labour compared with labour itself in order to have also a technological justification for the specific social form, i.e. the capitalist form, in which the relationship of labour to the conditions of labour is turned upside-down, so that it is not the worker who makes use of the conditions of labour, but the conditions of labour which make use of the worker. It is for this reason that Hodgskin asserts on the contrary that this objective factor, that is, the entire material wealth, is quite unimportant compared with the living process of production and that, in fact, this wealth has no value in itself, but only in so far as it is a factor in the living production process. In doing so, he underestimates somewhat the value which the labour of the past has for the labour of the present, but in opposing economic fetishism this is quite all right. If in capitalist production — HENCE in political economy, ITS THEORETICAL EXPRESSION — past labour were met with only as a pedestal, etc., created for labour by labour itself, then such a controversial issue would not have arisen. It only exists because in the real life of capitalist production, as well as in its theory, materialised labour appears as a contradiction to itself, to living labour. In exactly the same way in religiously constrained reasoning, the product of thought not only claims but exercises domination over thought itself.
[XV-865][114] The proposition
* "The effects attributed to a stock of commodities, under the name of circulating capital, are caused by co-existing labour"* ([p.] 9),(10)
means first of all: -The simultaneous co-existence of living labour brings about a large part of the effects which are attributed to the product of previous labour UNDER THE NAME OF CIRCULATING CAPITAL.
For example, a part of CIRCULATING CAPITAL consists of the stock of means of subsistence WHICH THE CAPITALIST IS SAID TO HAVE STORED UP TO
SUPPORT THE LABOURER WHILE WORKING.
The formation of a reserve stock is by no means a feature peculiar to capitalist production although, since under it production and consumption are greater than ever before, the amount of commodities on the market — the amount of commodities in the sphere of circulation — is likewise greater than ever before. Here memories of HOARDING, of accumulation of treasure by hoarders are still discernible.
The consumption fund must be disregarded first of all because we are speaking here of capital and of industrial production. What has reached the sphere of individual consumption, whether it is consumed more quickly or more slowly, has ceased to be capital. //Although it can be partly reconverted into capital, for instance, houses, parks, crockery, etc.//
* "Do all the capitalists of Europe possess at this moment one week's food and clothing for all the labourers they employ? Let us first examine the question as to food. One portion of the food of the people is Bread, which is never prepared till within a few hours of the time when it is eaten... The produce of the baker cannot be stored up. In no case can the material of bread, whether it exist as corn or flour, be preserved without continual labour.* The CONVICTION of the worker employed by the * cotton spinner, that he will obtain bread when he requires it, and his master's conviction that the money he pays him will enable him to obtain it, arise simply from the fact that the bread has always been obtained when required" (I.e., [p.] 10).
"Another article of the labourer's food is milk, and milk is manufactured ... twice a day. If it be said that the cattle to supply it are already there, why, the answer is, they require constant attention and constant labour, and their food, through the greater part of the year, is of daily growth. The fields in which they pasture, require the hand of man.* The same applies to * meat; it cannot be stored up, for it begins instantly to deteriorate after it is brought to market"* ([p.] 10).
Because of moths, even of clothing * "only a very small stock is ever prepared, compared to the general consumption"* ([p.] 11).
"Mill says, and says justly, * what is annually produced is annually consumed,(11) so that, in fact, to enable men to carry on all those operations which extend beyond a year, there cannot be any stock of commodities stored up Those who undertake them must rely, therefore, not on any commodities already created, but that other men will labour and produce what they are to subsist on till their own products are completed. Thus, should the labourer admit that some accumulation of circulating capital is necessary for operations terminated within the year ... it is plain, that in all operations which extend beyond a year, the labourer does not, and cannot, rely on accumulated capital" ([p.] 12).
"If we duly consider the number and importance of those wealth producing operations which are not completed within the year, and the numberless products of daily labour, necessary to subsistence, which are consumed as soon as produced, we shall be sensible that the success and productive power of every different species of labour is at all times m o r e dependent on the co-existing productive labour of other men than on any accumulation of circulating capital" ([p.] 13).
"It is by the command the capitalist possesses over the labour of some men, not by his possessing a stock of commodities, that he is enabled to support and consequently employ other labourers" ([p.] 14).
"The only thing which can be said to be stored up or previously prepared, is the skill of the labourer" ([p.] 12).
"All the effects usually attributed to accumulation of circulating capital are derived from the accumulation and storing up of skilled labour, and this most important operation is performed, as far as the great mass of the labourers is concerned, without any circulating capital whatever" ([p.] 13).
"The number of labourers must at all times depend on the quantity of circulating capital, or, as I should say, on the quantity of the products of co-existing labour, which labourers are allowed to consume" ([p.] 20).
[XV-866] "Circulating capital ... is created only for consumption; while fixed capital ... is made, not to be consumed, but to aid the labourer in producing those things which are to be consumed" * ([p.] 19).
T h u s first of all:
"The success and productive power of every different species of labour is at all times more dependent on the co-existing productive labour of other men than on any accumulation of circulating capital",[3] that is, of "COMMODITIES ALREADY CREATED". T h e s e "ALREADY CREATED COMMODITIES" c o n f r o n t "THE PRODUCTS OF
CO-EXISTING LABOUR".
// T h e part of capital which consists of instruments and materials of labour is as "COMMODITIES ALREADY CREATED" always a precondition in each particular TRADE. It is impossible to spin cotton which has not yet been "CREATED", to operate spindles which have yet to be manufactured, or to burn coal which has not yet been brought u p from the mine. These always enter the process as forms of existence of PREVIOUS LABOUR. EXISTING LABOUR thus DEPENDS ON ANTECEDENT LABOUR and not ONLY ON CO-EXISTING LABOUR, although this ANTECEDENT LABOUR, whether in the form of means of labour or materials of labour, can only be OF ANY USE (PRODUCTIVE USE) when it is in contact with living labour as a material element of it. Only as an element of industrial consumption, i.e. consumption by labour.
But when considering circulation and the reproduction process, we have seen that it is only possible to reproduce the commodity after it is finished and converted into money, because simultaneously all its elements have been produced and reproduced by means
Of CO-EXISTING LABOUR.3
A twofold progression takes place in production. Cotton, for example, advances from one phase of production to another. It is produced first of all as raw material, then it is subjected to a number of operations until it is fit to be exported or, if it is further worked up in the same country, it is handed over to a spinner. It then goes on from the spinner to the weaver and from the weaver to the bleacher, dyer, FINISHER, and thence to various workshops where it is worked up for definite USES, i.e. articles of clothing, bed-linen, etc. Finally it leaves the last producer for the consumer and enters into individual consumption if it does not enter into industrial consumption as means (not material) of labour. But whether it is to be consumed industrially or individually, it has acquired its final form as use value. What emerges from one sphere of production as a product enters another as a condition of production, and in this way, goes through many SUCCESSIVE phases until it receives its last FINISH as use value. Here PREVIOUS LABOUR appears continually as the condition for
CO-EXISTING LABOUR.
Simultaneously, however, while the product is advancing in this way from one phase to another, while it is undergoing this real metamorphosis, production is being carried on in every phase. While the weaver spins the yarn, the spinner is simultaneously spinning cotton, and fresh quantities of [raw] cotton are in the process of production.
Since the continuous, constandy repeated process of production is, at the same time, a process of reproduction, it is therefore equally dependent on the CO-EXISTING LABOUR which produces the various phases of the product simultaneously, while the product is passing through metamorphoses from one phase to another. Cotton, yarn, fabric, are not only produced one after the other and from one another, but they are produced and reproduced simultaneously, alongside one another. What appears as the EFFECT of ANTECEDENT LABOUR, if one considers the production process of the individual commodity, presents itself at the same time as the effect of CO-EXISTING LABOUR, if one considers the reproduction process of the commodity, that is, if one considers this production process in its continuous motion and in the entirety of its conditions, and not merely an isolated action or limited in its scope. There exists not only a cycle comprising various phases, but all the phases of the commodity are simultaneously produced in the various spheres and branches of production. If the same peasant first plants flax, then spins it, then weaves it, these operations are performed in SUCCESSION, but not simultaneously as the mode of production based on the division of labour within society presupposes.
No matter what phase of the production process of an individual commodity is considered, the ANTECEDENT LABOUR only acquires significance as a result of the LIVING LABOUR which it provides with the necessary conditions of production. On the other hand, however, these conditions of production without which LIVING LABOUR cannot realise itself always appear in the process as the result of ANTECEDENT LABOUR. Thus the COOPERATING LABOUR of the contributing branches of labour always appears as a passive factor and, as such a passive factor, it is a precondition. The economists emphasise this aspect. In reproduction and circulation, on the other hand, the mediating social labour on which the [production] process of the commodity in each particular phase depends and by which it is determined, appears as present, CO-EXISTING, CONTEMPORANEOUS LABOUR. The INCIPIENT FORMS of the commodity and its SUCCESSIVE or completed forms are produced simultaneously. Unless this happened it would not be possible, after it has undergone its real metamorphosis, to reconvert it from money into its conditions of existence. [XV-870b] A commodity is thus the product of ANTECEDENT LABOUR only in so far as it is the product of CONTEMPORANEOUS LIVING LABOUR. From the capitalist point of view, therefore, all material wealth appears only as a fleeting aspect of the flow of production as a whole, which includes the process of circulation. //
Hodgskin examines only one of the constituent parts of circulating capital. One part of circulating capital is however continuously converted into fixed capital and matière instrumentale and only the other part is converted into articles of consumption. Moreover, even that part of circulating capital which is ultimately transformed into commodities intended for individual consumption always exists, alongside the final form in which it emerges from the FINISHING PHASE as end product, simultaneously in the earlier phases in its INCIPIENT FORMS—[as] raw material or semi-manufactured goods, removed in various degrees from the final form of the product — in which it cannot as yet enter into consumption.(12)
The problem Hodgskin is concerned with is: what is the relation of the present labour performed by the worker for the capitalist to the labour contained in those articles on which his WAGES are spent, which, in actual fact, are the use values of which variable capital consists? It is admitted that the worker cannot work without finding these articles ready for consumption. And that is why the economists say that circulating capital — the PREVIOUS LABOUR, COMMODITIES ALREADY CREATED which the capitalist has stored up — is the condition for labour and, amongst other things, also the condition for the division of labour.
When the conditions of production, and especially circulating capital are being discussed in the sense Hodgskin views them, it is usual to declare that the capitalist must have accumulated the means of subsistence which the worker has to consume before HIS NEW COMMODITY is FINISHED, that is, while he works, while the commodity he produces is only in statu nascendi.(13) This is shot through with the notion that the capitalist either gathers things like a hoarder or that he stores up a supply of means of subsistence like the bees their honey.
This however is merely a modus loquendi.(14)
First of all, we are not speaking here of the SHOPKEEPERS who sell means of subsistence. These must naturally always have a full STOCK IN TRADE. Their stores, SHOPS, etc., are simply reservoirs in which the various commodities are stored once they are ready for circulation. This kind of storing is merely an interim period in which the commodity remains until it leaves the sphere of circulation and enters that of consumption. It is its mode of existence as a commodity on the market. Stricdy speaking, as a commodity it exists only in this form. It does not affect the matter whether, instead of being in the possession of the first seller (the producer), the commodity is in the possession of the 3rd or 4th and finally passes into the possession of the seller who sells it to the real consumer. (It merely means that, in the intermediate stages, exchange of capital (really of capital+profit, for the producer sells not only the capital in the commodity but also the profit made on the capital), for capital is taking place, and in the last stage exchange of capital for REVENUE (provided the commodity is intended not for industrial but for individual consumption, as is assumed here). The commodity which is a finished use value and marketable, enters the market as a commodity, in the phase of circulation; all commodities enter this phase when they undergo their first metamorphosis, the transformation into money. If this is called "storing up" then it means nothing more than "circulation" or the existence of commodities as commodities.) This kind of "storing" is exactly the opposite of treasure-hoarding, the aim of which is to retain commodities permanendy in the form in which they are capable of entering into circulation, and it achieves this only by withdrawing commodities in the form of money from circulation. If production, and therefore also consumption, is varied and on a mass scale, then a great quantity of the most diverse commodities will be found continually at this stopping place, at this intermediate station, in a word, in circulation or on the market. Regarded from the standpoint of quantity, storing on a large scale in this context means nothing more than production and consumption on a large scale.
The STOP made by the commodities, their sojourn at this stage of the process, their presence on the market instead of in the MILL or in a private house (as articles of consumption) or in the SHOP or the store of the SHOPKEEPER, is only a [XV-871] tiny fraction of time in their, life-process. The immobile, independent existence of this "world of commodities", "of things", is only illusory. The station is always full, but always full of different travellers. The same commodities (commodities of the same kind) are constantly produced anew in the sphere of production, available on the market and absorbed in consumption. Not the identical commodities, but commodities of the same type, can always be found in these 3 stages simultaneously. If the INTERVAL is prolonged so that the commodities which emerge anew from the sphere of production find the market still occupied by the old ones, then it becomes overcrowded, a STOPPAGE occurs, the market is SURCHARGED, the commodities decline in value, there is overproduction. Where, therefore, the intermediate stage of circulation acquires independent existence so that the flow of the stream is not merely held up, where the existence of the commodities in the circulation phase appears as storing up, then this is not brought about by a free act on the part of the producer, it is not an aim or an immanent aspect of production, any more than the flow of blood to the head leading to apoplexy is an immanent aspect of the circulation of the blood. Capital as commodity capital (and this is the form in which it appears in the circulation phase, on the market) must not become stationary, it must only constitute a pause in the movement. Otherwise the reproduction process is interrupted and the whole mechanism is thrown into confusion. This objectified wealth which is concentrated at a few points is — and can only be — very small in comparison to the continuous stream of production and consumption. Wealth, therefore, according to Smith, is "the annual" reproduction.(15) It is not, that is to say, something out of the dim past. It is always something which emerges from yesterday. If, on the other hand, reproduction were to stagnate due to some disturbances or others, then the stores, etc., would soon empty, there would be shortages and it would soon be evident that the permanency which the existing wealth appears to possess, is only the permanency of its being replaced, of its reproduction, that it is a continuous objectification of social labour.
The movement C—M—C also takes place in the transactions of the SHOPKEEPER. In so far as he makes a "profit", it is a matter which does not concern us here. He sells a commodity and buys the same commodity (the same type of commodities) over again. He sells them to the consumer and buys them again from the producer. Here the same (type of) commodity is converted perpetually into money and money back again continuously into the same commodity. This movement, however, simply represents continuous reproduction, continuous production and consumption, for reproduction includes consumption. (The commodity must be sold, must reach the sphere of consumption in order that it can be reproduced.) It must be accepted as a use value. (For C—M for the seller is M—C for the buyer, that is, the conversion of money into a commodity as a use value.) The reproduction process, since it is a unity of circulation and production, includes consumption, which is itself an aspect of circulation. Consumption is itself both an aspect and a condition of the reproduction process. If one considers the process in its entirety, the SHOPKEEPER, in fact, pays the producer of the commodities with the same sum of money as the consumer pays him when he buys from him. He represents the consumer in his dealings with the producer and the producer in his dealings with the consumer. He is both seller and buyer of the same commodity. The money with which he buys is, in fact, considered from a purely formal standpoint, the final metamorphosis of the consumer's commodity. The latter transforms his money into the commodity as a use value. The passing of the money into the SHOPKEEPER'S hands thus signifies the consumption of the commodity or, considered formally, the transition of the commodity from circulation into consumption. In so far as he buys again from the producer with the money, this constitutes the first metamorphosis of the producer's commodity and signifies the transition of the commodity into the INTERVAL, where it remains as a commodity in the sphere of circulation. C—M—C, in so far as it represents the transformation of the commodity into the consumer's money and the transformation back again of the money, whose owner is now the SHOPKEEPER, into the same commodity (a commodity of the same kind), expresses merely the constant passing over of commodities into consumption, for the vacuum left by the commodity reaching the sphere of consumption must be filled by the commodity emerging from the production process and now entering this stage.
[XV-872] The period during which the commodity stays in circulation and is replaced by a new commodity naturally depends also on the length of time in which the commodities remain in the production sphere, that is, on the duration of their reproduction time, and varies in accordance with their different length. For example, the reproduction of corn requires a year. The corn harvested in the autumn, for example, of 1862 (in so far as it is not used again for seed) must suffice for the whole coming year — until autumn 1863. It is thrown all at once into circulation (it is already in circulation when it is placed in the farmers' granaries) and absorbed in the various reservoirs of circulation— storehouses, corn merchants, millers, etc. These reservoirs serve as channels both for the commodities issuing from production and those going to the consumer. As long as the commodities remain in them, they are commodities and are therefore on the market, in circulation. They are withdrawn only piecemeal, in small quantities, by the annual consumption. The replacement, the stream of new commodities which are to displace them, arrives only in the following year. Thus these reservoirs are only depleted gradually, in the measure that their replacements move forward. If there is a surplus and if the new harvest is above the AVERAGE, then a STOPPAGE takes place. The space which these particular commodities were to have occupied in the market is overstocked. In order to permit the whole quantity to find a place on the market, the price of the commodities is reduced, and this causes them to move again. If the total quantity of use values is too large, they accommodate themselves to the space they occupy by a CONTRACTION of their prices. If the quantity is too small, it is expanded by an increase of their prices.
On the other hand, commodities which quickly deteriorate as use values remain only for a very short time in the reservoirs of circulation. The period of time during which they have to be converted into money and reproduced, is prescribed by the nature of their use value which, if it is not consumed daily or almost daily, is spoilt and consequently ceases to be a commodity. For exchange value along with its basis, use value, disappears provided the disappearance of use value is not itself an act of production.
In general, it is clear that although in absolute terms the quantity of the commodities which have been stored up in the reservoirs of circulation increases as a result of the development of industry, because production and consumption increase, this same quantity represents a decrease in comparison with the total annual production and consumption. The transition of commodities from circulation to consumption takes place more rapidly. And for the following reasons. The speed of reproduction increases:
1) When the commodity passes rapidly through its various production phases, that is, when each production phase of the production process is reduced in length; this is due to the fact that the labour time necessary to produce the commodity in each one of its forms is reduced; this is a result, therefore, of the development of the division of labour, use of machinery, application of chemical processes, etc. (The development of chemistry makes it possible to artificially speed up the transition of commodities from one state of aggregation to another, their combination with other material which, for instance, occurs in dyeing, their separation from [other] substances as in bleaching; in short, both [modifications in] the form of the same substance (its state of aggregation) as well as changes to be brought about in the substance, are artificially accelerated quite apart from the fact, that for vegetative and organic reproduction, plants, animals, etc., are supplied with cheaper substances, that is, substances which cost less labour time.)
2) Partly as a result of the combination of various branches of industry, that is, the establishment of centres of production for particular industrial branches, [partly] through the development of means of communication, the commodity proceeds rapidly from one phase to another; in other words, the interim period, the interval during which the commodity remains in the intermediate station between one production phase and another is reduced, that is, the transition from one phase of production to another is shortened.
3) This whole development — the shortening both of production phases and of the transition from one phase to another— presupposes production on a large scale, mass production and, at the same time, production based on a large amount of constant capital, especially fi,xed capital; [it requires] therefore a continuous flow of production. But not in the sense in which we have earlier considered the flow, that is, not as the closing and overlapping of the separate production phases, but in the sense that there are no deliberate breaks in production. These occur as long as work is done to order, as in [XV-873] the handicrafts, and continue even in manufacture properly so called (in so far as this has not been reshaped by large-scale industry). But now, however, work is carried out on the scale allowed by the capital. This process does not wait on demand, but is a function of capital. Capital works on the same scale continuously (if one disregards accumulation or expansion) and constantly develops and extends the productive forces. Production is therefore not only rapid, so that the commodity quickly acquires the form in which it is suitable for circulation, but it is continuous. Production here appears only as constant reproduction and at the same time it takes place on a mass scale.
Thus if the commodities remain in the circulation reservoirs for a long time — if they accumulate there — then they will soon glut them as a result of the speed with which the waves of production follow one another and the huge amount of goods which they deposit continuously in the reservoirs. It is in this sense that Corbet, for example, says THE MARKET IS ALWAYS overstocked.(16) But the same circumstances which produce this speed and mass scale of reproduction likewise reduce the necessity for the accumulation of commodities in these reservoirs. In part — in so far as it is concerned with industrial consumption—this is already implied by the close succession of the production phases which the commodity itself or its ingredients have to undergo. If coal is produced daily on a mass scale and brought to the manufacturer's door by railways, steamships,, etc., he does not need to keep a STOCK of coal, or at most only a very small one; or, what amounts to the same thing, if a SHOPKEEPER acts as an intermediary, he only needs to keep a small amount of stock over and above the amount he sells daily and which is daily delivered to him. The same applies to yarn, iron, etc. But apart from industrial consumption, in which the stock of commodities (that is, the stock of the ingredients of commodities) must decline in this way, the SHOPKEEPER likewise enjoys the benefits of the speed of communications first of all, and secondly, the certainty of a continuous and rapid renewal and delivery. Although his STOCK of commodities may grow in size, each element of it will remain in his reservoir, in a state of transition, for a shorter period of time. In relation to the total amount of commodities which he sells, that is, in relation to the scale of both production and consumption, the STOCK of commodities which he accumulates and keeps in store, will be small. It is different in the less developed stages of production where reproduction proceeds slowly — where therefore more commodities must remain in the circulation reservoirs—, the means of transport are slow, the communications difficult and, as a consequence, the renewal of STOCK can be interrupted and a great deal of time elapses as a result between the emptying and the refilling of the reservoir— that is, the renewal of the STOCK IN hand. The position is then similar to that of products whose reproduction takes place yearly or half-yearly, that is, in more or less prolonged periods of time, owing to the nature of their use values.
(For example, cotton is an illustration of how transport and communications affect the emptying of the reservoirs. Since ships continually ply between Liverpool and the UNITED STATES — speed of communications is one factor, continuity another — all the cotton supply is not shipped at once. It comes on to the market gradually (the producer likewise does not want to flood the market all AT ONCE). It lies at the docks in Liverpool, that is, already in a kind of circulation reservoir, but not in such quantities — in relation to the total consumption of the article — as would be required if the ship from America arrived only once or twice [a year,] after a journey of six months. The cotton manufacturer in Manchester and other places stocks his warehouse roughly in accordance with his immediate consumption needs, since the electric telegraph and the railway make the TRANSFER from Liverpool to Manchester possible at a moment's notice.)
Special filling of the reservoirs — in so far as this is not due to the overstocking OF THE MARKET, which can happen much more easily in these circumstances than under archaically slow conditions— occurs only for speculative reasons and merely in exceptional cases because of A REAL or SUSPECTED FALL OR RISE OF PRICES. Regarding this relative decline in stock, that is, the commodities which are in circulation, compared with the amount of production and consumption, see Lalor? [The] Economist, Corbet" (give the corresponding quotations [XV-874] after Hodgskin). Sismondi wrongly saw something lamentable in all this (his writings to be looked up as well).0
(On the other hand, there is indeed a continuous extension of the market and in the degree that the interval of time decreases in which the commodity remains on the market, its flow in space increases, that is, the market expands spatially, and the periphery in relation to the centre, the production sphere of the commodity, is circumscribed by a constantly extending radius.)
The fact that consumption lives from hand to mouth, changes its linen and its coat as rapidly as it does its opinions, and does not wear the same coat ten years running, etc., is connected with the speed of reproduction, or is another expression of it. To an increasing extent consumption — even of articles where this is not demanded by the nature of their use value — takes place almost simultaneously with production and becomes therefore more and more dependent on the PRESENT, CO-EXISTING LABOUR (since it is, IN FACT, exchange of COEXISTING LABOUR). This takes place in the same degree in which past labour becomes an ever more important factor of production, even though this past itself is after all a very recent and only relative one.
(The following example demonstrates how closely the keeping of a stock is linked with deficiencies of production. As long as it is difficult to keep catde throughout the winter, there is no fresh meat in winter. As soon as stock-farming is able to overcome this difficulty, the stock previously made up of substitutes for fresh meat — pickled or smoked varieties — ceases of itself.)
(The product only becomes a commodity where it enters into circulation. The production of goods as commodities, hence circulation, expands enormously as a result of capitalist production for the following reasons:
1. Production takes place on a large scale; the quantity, the huge amounts produced, therefore, do not stand in any kind of quantitative relationship to the producer's needs; IN FACT it is pure chance whether he consumes any, even a small part of his own product. He only consumes his own product on a mass scale where he produces PART OF THE INGREDIENTS OF HIS OWN CAPITAL. On the other hand, in the earlier stages only those products which exceed the amount required by the producer himself become commodities or, at any rate, this is mainly the case.
2. The narrow range of goods produced [stands] in inverse ratio to the increased variety of needs. This leads to previously combined branches of production becoming increasingly separated and independent — in short, to increasing division of labour within society — a contributing factor is the establishment of new branches of production and the multiplication of KINDS OF COMMODITIES produced. ([To be inserted] at the end, after Hodgskin, also Wakefield about this.) This VARIEGATION and DIFFERENTIATION OF COMMODITIES arises in two ways. The different phases of one and the same product, as well as the auxiliary operations (that is, the labour connected with various constituent parts, etc.) are separated and become different branches of labour, independent of one another; or various phases of one product become DIFFERENT KINDS OF COMMODITIES. But secondly, owing to labour and capital (or labour and SURPLUS PRODUCT) becoming free; on the other hand, to the discovery of new practical applications of the same use value, either because new needs arise as a result of the modification of No. 1 (for example, the need for more rapid and universal means of transport and communication arising with the application of steam in industry) and therefore new means of satisfying them, or new possibilities of utilising the same use value are discovered, or new substances or new methods (plastic-galvanisation, for instance) for treating well-known substance in different ways, etc. All this amounts to the following: *One produce in its successive phases or conditions converted into different commodities. Creation of new products or new values in use as commodities.*
3. Transformation of the majority of the population who formerly consumed a mass of products in naturalibus* into wage workers.
4. Transformation of the tenant farmer into an industrial capitalist (and with it the conversion of rent into money rent) and generally of all payments in kind (taxes, etc., rent) into money payments). In general — industrial exploitation of the land with the result that it is no longer confined to its own muck-heap as previously, but that both its chemical and mechanical conditions of production — even seeds, fertilisers, cattle, etc.—are subjected to the process of exchange of matter.
5. Mobilisation of a mass of previously "inalienable" possessions [by conversion] into commodities and the creation of forms of property which only exist in negotiable papers. On the one hand, alienation of landed property. //The lack of property of the masses causes them, for example, to regard the dwelling in which they live as a commodity.// [On the other hand,] railway shares, in short, all kinds of shares.
[XV-875] Back again to Hodgskin now. It is obvious that by "storing up" [means of subsistence] for the workers by the capitalists one cannot understand that commodities which are passing from production into consumption are in the circulation reservoirs, in the circulation system, on the market. This would mean that the products circulate for the benefit of the worker and become commodities for his sake; and that in general, the production of products as commodities is undertaken for his sake. The worker shares with every other [commodity owner] the need to transform the commodity he sells — which in actual fact, though not in form, is his labour — at first into money in order to convert the money back again into commodities which he can consume. It is perfectly obvious that [no] division of labour (in so far as it is based on commodity production), [no] wage labour and, in general, no capitalist production can take place without commodities—whether they be means of consumption or means of production — being available on the market; that this kind of production is impossible without commodity circulation, [without] the commodities spending a period of time in the circulation reservoirs. For the product is a commodity xorr' k^,ox'f\vB only within the framework of circulation. It is as true for the worker as for anybody else that he must find his means of subsistence in the form of commodities.
The worker, moreover, does not confront the SHOPKEEPER as a worker confronts a capitalist, but as money confronts the commodity, as a buyer faces the seller. There is no relationship of wage labour to capital here, except, of course, where the SHOPKEEPER is dealing with his own workers. But even they, in so far as they buy things from him, do not confront him as workers. They confront him as workers only in so far as he buys from them. Let us therefore leave this circulation agent
But as far as the industrial capitalist is concerned, his stock, his accumulation, consists of:
[First,] his fixed capital, i.e. buildings, machinery, etc., which the worker does not consume or, in so far as he does consume them, does so through labour, and thus consumes them industrially for the capitalist, and although they are means of labour they are not means of subsistence for him.
Secondly, his raw materials and matières instrumentales,(17)' the STOCK of which, in so far as it does not enter direcdy into production, declines, as we have seen. This likewise does not consist of means of subsistence for the workers. This "accumulation" by the capitalist for the worker means nothing more than that he does the worker the favour of depriving the latter of his conditions of labour as property and converting the means of his labour (which are themselves merely the transformed product of his labour) into means for the exploitation of labour. In any case, the worker, while he uses the machines and the raw materials as means of labour, does not live on them.
Thirdly, the commodities, which he keeps in the storehouse or warehouse before they enter into circulation. These are products of labour, not means of subsistence stored in order to maintain it, labour, during the course of production.
Thus the "accumulation" of means of subsistence by the capitalist for the worker means merely that he must possess enough money in order to pay wages with which the worker withdraws the articles of consumption he needs from the circulation reservoirs (and, if we consider the class as a whole, with which he buys back part of his own product). This money, however, is simply the transformed form of the commodity which the worker has sold and handed over. In this sense, the means of subsistence are "stored up" for him in the same way as they are stored up for his capitalist, who likewise buys consumption goods, etc., with money (the transformed form of the same commodity). This money may be a mere token of value, it therefore does not have to be a representation "OF PREVIOUS LABOUR" but, in the hands of whoever possesses it, simply expresses the realised price not of past labour (or previously [sold] commodities) but of the CONTEMPORANEOUS LABOUR or commodities which he sells. [Money has] merely a formal existence.(18) Or — since in previous modes of production the worker also had to eat and consume during the course of production irrespective of the period of time required for the production of his product—"storing up" may mean that the worker must first of all transform the product of his labour into the product of the capitalist, into capital, [XV-876] in order to receive back a portion of it in the form of money, in lieu of payment.
What interests Hodgskin about this whole process (with regard to the process as such it is indeed a matter of indifference whether the worker receives the product of CONTEMPORANEOUS OR PREVIOUS LABOUR, just as it does not matter whether he receives the product of his own previous labour or the product of labour performed simultaneously in a different branch) is this:
A great part, [or] the greatest part of the products consumed daily by the worker — which he must consume whether his own product is finished or not — represents by no means STORED UP LABOUR OF BYGONE TIMES. On the contrary they are TO A GREAT DEGREE products of labour performed the same day or during the same week in which the worker produces his own commodity. For example, bread, meat, beer, milk, newspapers, etc. Hodgskin could also have added that they are partly the products of future labour, for the worker who buys an overcoat with what he has saved out of 6 months' WAGES buys one which has only been made at the end of the 6 months, etc. (We have seen that the whole of production presupposes simultaneous reproduction of the required constituent parts and products in their different forms as raw materials, semi-manufactured goods, etc. But all fixed capital presupposes future labour for its reproduction and for the reproduction of its equivalent, without which it cannot be reproduced.) Hodgskin says that during the course of the year the worker must RELY TO SOME DEGREE ON PREVIOUS LABOUR (because of the nature of the production of corn, vegetable raw materials, etc.). (This does not apply to a house, for example. As regards use values which, by their nature, only wear out slowly, are not consumed at once, but gradually used up, it is not due to any action specially devised for the benefit of the workers that these products of previous labour are available on the "market". The worker also used to have a "dwelling" before the capitalist "piled up" deadly stinkholes for him. (See Laing on this.")) (Apart from the enormous mass of day-to-day needs which are of decisive importance especially to the worker, who, at best, can only satisfy his everyday needs, we have seen that, in general, consumption becomes more and more CONTEMPORANEOUS with production, and therefore, if one considers society as a whole, consumption depends more and more on simultaneous production, or rather on the products of simultaneous production.) But when operations extend over several years, the worker must " depend " on his own production, on the simultaneous and future producers of other commodities.
The worker always has to find his means of subsistence in the form of commodities on the market (the "SERVICES" he buys are eo ipso[1]' only brought into being at the moment they are bought); they are relative, the PRODUCE OF ANTECEDENT LABOUR, that is of LABOUR which is ANTECEDENT to their existence as produce but which is by no means ANTECEDENT TO HIS OWN LABOUR WITH WHOSE PRICE HE BUYS THIS PRODUCE. They can be CONTEMPORANEOUS PRODUCTS, and are so most of all for those who live from hand to mouth.
TAKING IT ALL IN ALL the "storing u p " of means of subsistence for the worker by the capitalist comes to this:
1) Commodity production presupposes that articles of consumption which one does not produce oneself are available on the market as commodities, or that in general, commodities are produced as commodities.
2) T h e majority of the commodities consumed by the worker in the final form in which they confront him as commodities, are IN FACT products of simultaneous labour (they are therefore by no means stored u p by the capitalist).
3) In capitalist production, the means of labour and the means of subsistence produced by the worker himself confront him as capital, the one as constant, the other as variable capital; these, the worker's conditions of production, appear as the property of the capitalist; their transfer from the worker to the capitalist and the partial return of the worker's product to the worker, or of the value of his product to the worker, is called the "storing u p " of circulating capital for the worker. These means of subsistence which the worker must always consume before his product is finished, become "circulating capital" because he, instead of buying them direct or paying for them with the value either of his past or of his future [XV-877] product, must first of all receive a draft (money) on it; a draft moreover which the capitalist is entitled to issue only thanks to the worker's past, present or future product.
Hodgskin is concerned here with demonstrating the dependence of the worker on the CO-EXISTING LABOUR of other workers as against his dependence on PREVIOUS LABOUR,
a By that fact.— Ed.
1) in order to do away with the phrase about "storing up"; 2) because "PRESENT LABOUR" confronts capital, whereas the economists always consider "PREVIOUS LABOUR" to be capital eo ipso, that is, an alienated and independent form of labour which is hostile to labour itself.
To grasp the all-round significance of CONTEMPORANEOUS LABOUR as against PREVIOUS labour is however in itself a very important achievement.
Hodgskin thus arrives at the following: Capital is either a mere name and pretext or it does not express a thing; the social relation of the labour of one person to the CO-EXISTING LABOUR of another, and the consequences, the EFFECTS of this relationship, are ascribed to the things which make up so-called circulating capital. Despite the fact that the commodity exists as money, its realisation in use values depends on CONTEMPORANEOUS LABOUR. ([The labour performed in] the course of a year is itself CONTEMPORANEOUS.) Only a small portion of the commodities entering into direct consumption are the product of more than one year's labour and when they are — such as cattle, etc., they require renewed labour every year. All operations requiring more than a year depend on continuous annual production.
* "It is by the command the capitalist possesses over the labour of some men, not by his possessing a stock of commodities, that he is enabled to support and consequently employ other labourers" * ([p.] 14).
Money however gives everyone "COMMAND" over "THE LABOUR OF SOME MEN", over the labour embodied in their commodities as well as over the reproduction of this labour, and to that extent therefore over labour itself.
What is really "stored up", not however as a dead mass but as something living, is the skill of the worker, the level of development of labour. (It is true, however, that the stage of the development of the productive power of labour which exists at any particular time and serves as the starting-point, comprises not only the skill and capacity of the worker, but likewise the material means which this labour has created for itself and which it daily renews. (Hodgskin does not emphasise this because, in opposing the crude views of the economists, it is important for him to lay the stress on the subject—so to speak, on the subjective in the subject — in contrast to the object.)) This is really the primary factor, the point of departure and it is the result of a process of development. Accumulation in this context means assimilation, continual preservation and at the same time transformation of what has already been handed over and realised. In this way Darwin makes "accumulation" through inheritance the driving principle in the formation of all organic things, of plants and animals; thus the various organisms themselves are formed as a result of "accumulation" and are only "inventions", gradually accumulated inventions of living beings." But this is not the only prerequisite of production. Such a prerequisite in the case of animals and plants is external nature, that is both inorganic nature and their relationship with other animals and plants. Man, who produces in society, likewise faces an already modified nature (and in particular natural factors which have been transformed into means of his own activity) and definite relations existing between the producers. This accumulation is in part the result of the historical process, in part, as far as the individual worker is concerned, TRANSMISSION OF SKILL. Hodgskin says that as far as the majority of the workers are concerned, circulating capital plays no part in this accumulation.
He has demonstrated that "THE STOCK OF COMMODITIES" (means of subsistence) "PREPARED" is always small in comparison with the total amount of consumption and production. On the other hand, the DEGREE OF SKILL of the existing population is always the precondition of production as a whole; it is therefore the principal accumulation of wealth and the most important result of ANTECEDENT LABOUR; its form of existence, however, is living labour itself.
[XV-878] * "All the effects usually attributed to accumulation of circulating capital are derived from the accumulation and storing up of skilled labour, and this most important operation is performed, as far as the great mass of the labourers is concerned, without any circulating capital whatever" * ([p.] 13).
With regard to the assertion of the economists that the number of workers (and therefore the well-being or poverty of the existing working population) depends on the amount of circulating capital available, Hodgskin comments correctly, as follows:
*"The number of labourers must at all times depend on the quantity of circulating capital, or, as I should say, on the quantity of the products of co-existing labour, which labourers are allowed to consume" * ([p.] 20).
What is attributed to CIRCULATING CAPITAL, to a STOCK OF COMMODITIES, is the effect of "CO-EXISTING LABOUR". In other words, Hodgskin says that the effects of a certain social form of labour are ascribed to objects, to the products of this labour; the relationship itself is imagined to exist in material form. We have already seen that this is a characteristic of labour based on commodity production, on exchange value, and this quid pro quo is revealed in the commodity, in money (Hodgskin does not see this), and to a still higher degree in capital.3 The effects of things as materialised aspects of the labour process are attributed to them in capital, in their personification, their independence in respect of labour. They would cease to have these effects if they were to cease to confront labour in this alienated form. The capitalist, as capitalist, is simply the personification of capital, that creation of labour endowed with its own will and personality which stands in opposition to labour. Hodgskin regards this as a pure subjective illusion which conceals the deceit and the interests of the exploiting classes. He does not see that the way of looking at things arises out of the actual relationship itself; the latter is not an expression of the former, but vice versa. In the same way, English socialists say: "We need capital, but not the capitalist."b
But if one eliminates the capitalist, the means of production cease to be capital
//The "VERBAL OBSERVER", Bailey, and others remark0 that "VALUE", "valeur" express a property of things. In fact the terms originally express nothing but the use value of things for people, those qualities which make them useful or agreeable, etc., to people. It is in the nature of things that "VALUE", "valeur", "Werth" can have no other etymological origin. Use value expresses the natural relationship between things and men, in fact the existence of things for men. Exchange value, as the result of the social development which created it, was later superimposed on the word value=use value. It [exchange-value] is the social existence of things.
Sanskrit Wer [means] cover, protect, consequently respect, honour and love, cherish. From these the adjective Wertas (EXCELLENT, RESPECTABLE) is derived; Gothic, wairths; Teutonic, wert; ANGLO-SAXON, weorth, vordh, wurth; English, WORTH, WORTHY; Dutch, waard, waardig; Alemannic, werth; Lithuanian, werthas (respectable, precious, dear, estimable). Sanskrit, Wertis; Latin, virtus; Gothic, wairthi; Teutonic, Werth.d
T h e v a l u e of a t h i n g is, in fact, its own virtus," while its exchange value is q u i t e i n d e p e n d e n t of its m a t e r i a l QUALITIES.
Sanskrit Wal [means] cover, fortify; [Latin] vallo? valeo,h vallusc: valor is the power itself. HENCE valeur, VALVE. Compare Wal with the Teutonic walle, walted
and English WALL, WIELD.'115/I Hodgskin now turns to fixed capital. It is productive power which has been produced and, in its development in large-scale industry, it is an instrument which social labour has created for itself.
As far as fixed capital is concerned:
*"... all instruments and machines are the produce of labour" ([p.] 14).f "As long as they are merely the result of previous labour, and are not applied to their respective uses by labourers, they do not repay the expense of making them. ... most of them diminish in value from being kept... Fixed capital does not derive its utility from previous, but present labour; and does not bring its owner a profit because it has been stored up, but because it is a means of obtaining command over labour" * «pp. 14-]15). Here at last, the nature of capital is understood correctly.
[XV-879] * "After any instruments have been made, what do they effect? Nothing. On the contrary they begin to rust or decay unless used or applied by labour" ([p.] 15). "Whether an instrument shall be regarded as productive capital or not, depends entirely on its being used, or not, by some productive labourer" ([pp.] 15-16).
"One easily comprehends why ... the road-maker should receive some of the benefits, accruing only to the road-user; but I do not comprehend why all these benefits should go to the road itself, and be appropriated by a set of persons who neither make nor use it, under the name of profit for their capital" ([p.] 16).
"The vast utility of the steam-engine does not depend on stored up iron and wood, but on that practical and living knowledge of the powers of nature which enables some men to construct it, and others to guide it" ([p.] 17).
"Without knowledge they" (the machines) "could not be invented; without manual skill and dexterity they could not be made, and without skill and labour they could not be productively used. But there is nothing more than the knowledge, skill, and labour required, on which the capitalist can found a claim to any share of the produce" ([p.] 18).
"After he" (man) "has inherited the knowledge of several generations, and when he lives congregated into great masses, he is enabled by his mental faculties to complete the work of nature" (I.e.).
"It is not the quantity but the quality of the fixed capital on which the productive industry of a country depends. ... fixed capital as a means of nourishing and supporting men, depends for its efficiency, altogether on the skill of the labourer, and consequently the productive industry of a country, as far as fixed capital is concerned, is in proportion to the knowledge and skill of the people" ([pp.] 19-20).
Compound interest.
"A mere glance must satisfy every mind that simple profit does not decrease but increase in the progress of society, i.e. the same quantity of labour which at any former period produced 100 qrs of wheat, and 100 steam-engines, will now produce somewhat more.... In fact, also, we find that a much greater number of persons now live in opulence on profit in this country than formerly. It is clear, however, that no labour, no productive power, no ingenuity, and no art, can answer the overwhelming demands of compound interest. But all saving is made from the revenue of the capitalist"* (that is from * simple profit), so that actually these demands are constantly made, and as constantly the productive power of labour refuses to satisfy them. A sort of balance is, therefore, constantly struck"*[116] ([p.] 23).
For example, if the profit were always accumulated, a capital of 100 at 10% would amount to something like 673, or — since a little plus ou moins[3] makes no difference here — say 700, in 20 years. Thus the capital will have multiplied itself sevenfold over a period of 20 years. According to this yardstick, if only simple interest were paid, it would have to be 30% per annum instead of 10, that is, three times as much profit, and the more we increase the number of years that elapse, the more the rate of interest or the rate of profit calculated at simple interest per annum will increase, and this increase is the more rapid, the larger the capital becomes.
In fact, however, capitalist accumulation is nothing but the reconversion of interest into capital (since interest and profit for our purpose, i.e. for the purpose of our calculation, are identical). Thus it is compound interest. First there is a capital of 100; it yields 10[%] profit (or interest). This is added to the capital which is now 110. This now becomes the capital. The interest on this amount is therefore not simply interest on a capital of 100 but interest on 100C+10I. That is compound interest. Thus, at the end of the 2nd year, we have (100C+10I)+10I+1I = (100+10I)+11I=121. This is the capital at the beginning of the 3rd year. In the 3rd year we get (100C+10I)+llI+12VioI, so that at the end of it the capital is lSSVio-
[XV-880] We have:
Capital First year 100 Second year (100+10) Third year (100+20I+1I') = 121 Fourth year (100+301+11' + + [2]I' + [1]/[10].)=133[1]/(19)
Interest Total
10 HO 10+1'* 121 10+2' + [1]/[10]. 133[1]/,,, (10+3' + [1]/[10]"+[2]/io"+
+ [1]/loo'")= 146«/,oo [Capital]
Fifth year (100+40I+1I'+2I' + +V [1 0]r+3i'+V,pi"+ [2]/]oi"+ + [1]/,ool™) = 146«/[1]oo etc.
In the 2nd year the capital In the 3rd year the capital In the 4th year the capital In the 5th year the capital In the 6th year the capital
In the 7th year the capital
In the 8th year [the capital]
[In the 9th year the capital
prises li'f-u'""'/[1],ooo,000
* The sign ' indicates interest on interest.
In other words, more than half the capital is made up of interest in the 9th year and the portion of capital consisting of interest thus increases in geometrical progression.
We have seen that over 20 years, capital increased sevenfold, whereas, even according to the "most extreme" assumption of Malthus, the population can only double itself every 25 years. But let us assume that it doubles itself in 20 years, and therefore the working population as well. Taking one year with another, the interest would have to be 30%—three times greater than it is. If one assumes, however, that the rate of exploitation remained unchanged, in 20 years the doubled population (and it would be unfit for work during a considerable part of these 20 years, scarcely during half this period would it be able to work, in spite of the employment of children) would only be able to produce twice as much labour as it did previously, and therefore only twice as much surplus labour, but not three times as much.
The rate of profit (and consequently the rate of interest) is determined:
1) If the rate of exploitation is assumed to be constant — by the number of workers in employment, by the absolute mass of workers employed, that is, by the growth of the population. Although this number increases, its ratio to the total amount of capital employed declines with the accumulation of capital and with industrial development (consequently the rate of profit [declines] if the rate of exploitation remains the same). Likewise
[Interest] [Total]
[10+4«"/ l i 0 0 0.-i618,/i.oool
comprises 10 interest (simple) comprises 21 interest comprises 33'/io interest comprises 46[41]/ioo interest
= 161[51]/i,ooo> consequently 61[51]/ii0oo [interest] l77i.56i/,o,ooo [77^[61]/[10],ooo in-tcrcstl
194W."i/100000 [9487.i7i/l00000 i„. tcrcstl 214358,881/ ^ w h i c h c o m . i i j-i&Q e o n • .-, the population does not by any means [increase] in the same geometrical progression as the computed compound interest. The growth of the population at a given stage of industrial development is the explanation for the increase in the amount of surplus value and of profit, but also for the fall in the rate of profit.
2) [By] the absolute length of the normal working day, that is, by increasing the rate of surplus value. Thus the rate of profit can increase as a result of the extension of labour time beyond the normal working day. However, this has its physical and — BY AND LARGE — its social LIMITS. That in the same measure as workers set more capital in motion, the same capital commands more absolute labour time [XV-881] is OUT OF THE QUESTION.
3) If the normal working day remains the same, SURPLUS LABOUR can be increased relatively by reducing the necessary labour time and reducing the prices of the necessaries which the worker consumes, in comparison with the development of the productive power of labour. But this very development of productive power reduces variable capital relative to constant. It is physically impossible that the surplus labour time of, say, 2 men who displace 20, can, by any conceivable increase of the absolute or relative labour time, equal that of the 20. If each of the 20 men only work 2 hours of surplus labour a day, the total will be 40 hours of surplus labour, whereas the total life span of the 2 men amounts only to 48 hours in one day.
The value of labour capacity does not fall in the same degree as the productive power of the workers or of capital increases. This increase in productive power likewise increases the ratio between constant and variable capital in all branches of industry which do not produce NECESSARIES (either directly or indirectly) without giving rise to any kind of alteration in the VALUE OF LABOUR. The development of productive power is not even. It is in the nature of capitalist production that it develops industry more rapidly than agriculture. This is not due to the nature of the land, but to the fact that, in order to be exploited really in accordance with its nature, land requires different social relations. Capitalist production turns towards the land only after its influence has exhausted it and after it has devastated its natural qualities. An additional factor is that, as a consequence of landownership, agricultural products are more expensive compared with other commodities, because they are sold at their value and are not reduced to their cost price. They form, however, the principal constituent of the NECESSARIES. Furthermore, if '/io of the land is dearer to exploit than the other [9]/[10], these latter are likewise hit "artificially" by this relative infertility, as a result of the law of competition."
T h e rate of profit would in fact have to grow if it is to remain constant while accumulation of capital is taking place. As long as capital yields 10% of surplus labour, the same worker must, as soon as interest accumulates on interest and thus increases the capital employed, produce threefold, fourfold, fivefold IN PROGRES-
SION OF COMPOUND INTEREST, WHICH IS NONSENSE.
T h e amount of capital which the worker sets in motion, and whose value is maintained and reproduced by his labour, is something quite different from the value which he adds, and therefore from the surplus value. If the amount of capital= 1,000 and the labour added = 1 0 0 , then the capital reproduced= 1,100. If the amount = 1 0 0 and the labour added = 20, then the capital reproduced= 120. T h e rate of profit in the first case=10% and in the second=20%. Nevertheless, more can be accumulated from 100 than from 20. T h u s the flow of capital or its "accumulation" continues //apart from depreciation as a result of the increase in productive power // in proportion to the force it already possesses, but not in proportion to the size of the rate of profit. This explains that accumulation — its amount — m a y increase in spite of a falling rate of profit, apart from the fact that, while productivity rises, a larger portion of the REVENUE can be accumulated, even when the rate of profit declines, than when there is a high rate of profit together with lower productivity. A high rate of profit — in so far as it is based on a high rate of surplus value — is possible if very long hours are worked, although the labour is unproductive. It is possible because the workers' needs, and therefore the minimum wage, are very small, although the labour is unproductive. T h e lack of energy with which the labour is performed will correspond to the low level of the minimum [wage]. Capital is accumulated slowly in both cases despite the high rate of profit. T h e population is STAGNANT and the labour time which the product costs is high, although the wages received by the workers are small.
[XV-882] I have explained the decline in the rate of profit in spite of the fact that the rate of surplus value remains the same or even rises, by the decrease of the variable capital in relation to the constant, that is, of the living PRESENT LABOUR in relation to the PAST LABOUR which is EMPLOYED AND REPRODUCED.b Hodgskin and the man who
a See present edition, Vol. 31, pp. 427-32, 484-37, 519-21.--- Ed. b See this volume, pp. 73-74, 543.— Ed.
wrote The Causes and Remedy of Distress* explain it by the fact that it is impossible for the worker to fulfil the demands of CAPITAL
w h i c h ACCUMULATES like COMPOUND INTEREST.
* "No labour, no productive power, no ingenuity, and no art, can answer the overwhelming demands of compound interest. But all saving is made from the revenue of the capitalist" * (that is from * simple profit) "so that actually these demands are constantly made, and as constantly the productive power of labour refuses to satisfy them. A sort of balance is, therefore, constantly struck"*[116] (I.e., [p.] 23)>
In its general sense, this amounts to the same thing. If I say that, as capital accumulates, the rate of profit declines because constant capital increases in relation to variable capital, it means that, disregarding the specific form of the different portions of capital, the capital employed increases in relation to the LABOUR EMPLOYED. The profit falls not because the worker is exploited less, but because altogether less labour is employed in relation to the capital employed. For example, let us assume that the ratio of variable to constant capital=l:l. Then, if the total capital= 1,000, c=500 and t>=500. If the rate of surplus value=50%, then 50% of 500=50x5 = 250. Thus the rate of profit on 1,000 yields a profit of 250,=250/[1],ooo=[25]/[10]o=[1]/4=25%.
If the total capital= 1,000 and if c = 750 and v = 250, then at 50% [the rate of surplus value] 250 will yield 125. But
/l,000= /200= AM)= / 8 = 1 2 /i%. But in comparison with the first case [less] living labour is employed in the second case. If we assume that the annual wage of the worker=.£25, then in the first case £500 employed=20 workers; in the second case wages=£250= 10 workers. The same capital employs 20 workers in one case and only 10 in the other. In the first case, the ratio of total capital to the number of working days= 1,000:20; in the second, 1,000:10. In the first case, for each of the 20 workers £50 capital (constant and variable) is used (for 20x50 = 500x2=1,000). In the second case, the capital employed per individual worker is £100 (for 100x10=1,000). Consequently, in both cases, the capital which is allocated to WAGES is, pro rata, the same.
The formula I have given provides a new ground for explaining why, with accumulation, less workers are employed by the same amount of capital or, what amounts to the same thing, why a greater amount of capital has to be used for the same amount of
a A reference to The Source and Remedy of the National Difficulties...—Ed. b [Th. Hodgskin,] Labour Defended..; cf. also this volume, p. 431.— Ed.
labour. It comes to the same thing if I say that 1 worker is employed for a capital ouday of 50 in one case, and 1 worker for a capital outlay of 100 in the other, that therefore only half a worker is employed by a capital of 50; in other words, if I say that in one case there is 1 worker for 50 capital and only half a worker for 50 capital in the other, or if I say that in one case 50 capital is used by 1 worker and in the other case 50x2 capital is used by 1 worker.
This latter formula is the one used by Hodgskin and others. According to them, accumulation means in general the demand for compound interest; in other words, that more capital is expended on one worker and that he has therefore to produce more surplus labour proportionally to the amount of capital expended on him. Since the capital expended on him increases at the same rate as COMPOUND INTEREST, but on the other hand, his labour time has very definite limits which even relatively "NO PRODUCTIVE POWERS" can reduce in accordance with the DEMANDS of this
COMPOUND INTEREST, " A SORT OF BALANCE IS CONSTANTLY S T R U C K " . 1 ' 6 " SlMPLE profit" remains the same, or rather it grows. (This is IN FACT the SURPLUS LABOUR or SURPLUS VALUE.) But as the result of the accumulation of capital it is COMPOUND INTEREST which is disguised in the form of
SIMPLE INTEREST.
[XV-883] It is clear furthermore that if COMPOUND INTEREST=accumulation, then, apart from the absolute limits of accumulation, the growth of this interest depends on the extent, the intensity, etc., of the accumulation process itself, that is, on the mode of production. OTHERWISE compound interest is nothing but appropriation of the capital (property) of others in the form of interest as was the case in Rome and in general with usurers.
Hodgskin's view is as follows: Originally £50 capital, for example, falls pro rata to one worker, on which he produces, let us say, a profit of [£]25.[117] Later, as a result of the conversion of a part of the interest into capital and of the fact that this process repeats itself again and again, a capital of £200 is allocated to the worker. If the entire interest of 50% received per annum were always capitalised, the process would be complete in less than 4 years. Just as the worker produced [a profit of] 25 on [a capital of] 50, he is now expected to produce 100 on a capital of 200, or 4 times as much. But that is impossible. To do that either the worker would have to work 4 times as long, that is, 48 hours a day if he worked 12 hours previously, or the VALUE OF LABOUR would have to fall by 75 per cent as a result of increased productive power of labour.
If the working day= 12 hours, £25 the [annual] wage, and the worker produces £25 profit [per annum], then he has to work as much for the capitalist as he does for himself. That is for 6 hours or half the working day. In order to produce 100, he would have to work 4 x 6 hours for the capitalist in a 12-hour working day — which is NONSENSE. Let us assume that the working day is lengthened to 15 hours, then the worker still cannot produce 24 hours work in 15 hours. And still less can he work for 30 hours, which is what would be necessary, since [he would have to work] 24 hours for the capitalist and 6 for himself. If he worked the whole of his labour time for the capitalist, he would be able to produce only 50; he would only double the amount of interest, that is, he would produce 50 [profit] on a capital of 200, whereas he produced 25 for 50 capital. The rate of profit=50% in the second case and 25% in the first. But even this is impossible, since the worker must live. No matter how much productive power increases, if, as in the above example, the value of 12 hours=75, then that of 24 hours=2x75 = 150. And since the worker must live, he can never produce 150 profit, still less 200. His surplus labour is always a part of his working day, from which it does not at all follow, as Mr. Rodbertus thinks,[3] that profit can never=100%. It can never=100% if it is calculated on the working day as a whole (for it is itself included in it). But it can most certainly be 100% in relation to that part of the working day which is paid for.
Let us take the above example of 50%.
Capital Surplus value Rate of Rate of surplus value profit
Constant Variable 25 25 25 100% 50%
Here the profit, half a working day=7s of the whole [product]. [XV-884] Then the surplus value=100%. If the worker worked [3]/(20) of the working day for the capitalist, then:
Capital Surplus value [Rate of] Rate of profit surplus value
Constant Variable 25 12V[2] 37i/[2] 300%
Total capital
Capital Surplus value Rate of surplus value
Constant Variable 662/[3] 33i/(21) xoo 300%
[Total capital]
100 Rate of profit
100%
Let us examine this a little more closely and see what is implied by the view that [the rate of] profit falls because, in consequence of progressive accumulation, it does not constitute SIMPLE profit (consequently the rate of exploitation of the worker does not decline but, as Hodgskin says, increases[3]) but COMPOUND profit and it is impossible for labour to keep pace with the demands of COMPOUND
INTEREST.
It has to be noted first of all that this has to be defined in more detail if it is to make any sense at all. Regarded as a product of accumulation (that is, of the appropriation of surplus labour) — and this approach is necessary if one considers reproduction as a whole — all capital is made up of profit (or of interest, if this word is considered to be synonymous with profit and not with INTEREST in the strict sense). If the rate of profit=10%, then this is "compound interest", compound profit. And it would be impossible to see how 10 to 100 could — in economic terms — differ from 11 to 110. So what emerges is that "SIMPLE PROFIT" too is impossible, or at least that SIMPLE PROFIT must also decline, because, in fact, SIMPLE PROFIT is made up in exactly the same way as compound profit. If one narrows the problem, that is, considers solely interest-bearing capital, then compound interest would swallow up profit and more than profit; and the fact that the producer (capitalist or not) has to pay the lender compound interest means that sooner or later, in addition to profit, he has to pay him part of his capital as well.
Thus it should be noted first of all that Hodgskin's view only has meaning if it is assumed that capital grows more rapidly than population, that is, than the working population. (Even this latter is a relative growth. It is in the nature of capital to overwork one section of the working population while it turns another into paupers.) If the population grows at the same rate as capital, then there is no reason whatsoever why I should [not] be able to extract from 8 x workers with £800 the same surplus labour that I can extract from x workers with £100. [XV-885] Eight times 100 capital makes no greater demand on 8 times x workers than 100 capital on x workers. Thus "Hodgskin's" argument becomes groundless. (In reality, things turn out differently. Even if the population grows at the same rate as capital, capitalist development nevertheless results in one part of the population being made REDUNDANT, because constant capital develops at the expense of variable capital.)
//*"It is very material, with reference to labour, whether you distribute them" (goods(22)) "so as to induce a greater supply of labour or a less: whether you distribute them where they will be conditions for labour, or where they will be opportunities for idleness" (An Inquiry into those Principles respecting the Nature of Demand etc., London, 1821, [p.] 57).
"That increased supply (of labour) is promoted by the increased numbers of mankind" (I.e., [p.] 58).
"The not being able to command so much labour as before, too, is only important where the labour would produce no more than before. If labour has been rendered more productive, production will not be checked, though the existing mass of commodities should command less labour than before" * (I.e., [p.] 60).
This is directed against Malthus. TRUE, PRODUCTION WOULD NOT BE CHECKED, BUT THE RATE OF PROFIT WOULD. These cynical propositions stating that A "MASS OF COMMODITIES COMMANDS LABOUR", reflect the same cynicism which finds expression in Malthus' explanation of value(23); command of the commodity over labour is very good and is absolutely characteristic of the nature of capital.
The same author makes the following correct observation directed against West:
* "The author of An Essay on the Application of Capital to Land says [p. 24] that more will be given for labour when there is most increase of stock, and that ... will be when the profits on stock are highest. 'The greater the profits of stock,' he adds, 'the higher will be the wages of labour.' The fault of this is, that a word or two is left out: 'The greater have been the profits of stock, ... The higher will be the wages of labour'... The high profits and the high wages are not simultaneous; they do not occur in the same bargain; the one counteracts the other, and reduces it to a level. It might as well be argued, 'the supply of a commodity is most rapid when the price is highest; therefore, large supply and high price go together.' It is a mixing up of cause and effect"* (I.e., [pp.] 100-01).//
Hodgskin's proposition, therefore, has meaning only if, as a result of the process of accumulation, more capital is set in motion by the same worker, or if the capital grows pro rata to labour. That is, if, for example, the capital was 100 and becomes 110 by accumulation, and if the same worker who produced a surplus value of 10, is to produce a surplus value of 11, corresponding to the growth of capital, i.e. compound interest. So that it is not simply the same capital he set in motion previously which, after its reproduction, is to yield the same profit (SIMPLE PROFIT) but this capital has been increased by his surplus labour [so that] he has to provide surplus labour for the original capital (or its value)+his own accumulated (i.e. capitalised) surplus labour. And since this capital increases every year, the same worker would constantly have to furnish more labour.
It is however only possible for more capital to be applied per worker:
First If the productive power of labour remains the same, then this is only possible if the worker prolongs his labour time absolutely, i.e., for example, if he works 15 hours instead of 12 hours, or if he works more intensively and performs 15 hours' labour in 12 hours, does 5 hours' labour in 4 hours or [5]/[5] hour's labour in [4]/[5] of an hour. Since he reproduces his means of subsistence in a definite number of hours, then, in this case, 3 hours of labour are won for the capitalist in the same way as if the productive power of labour had been increased, while, in fact, it is labour which has been increased, not its productive power. If the intensification of labour were to become general, then the value of commodities would fall in proportion to the reduced labour time which they cost. The degree of intensity would become the average intensity of labour, its natural quality. If, however [XV-886], this only occurs in particular spheres, then it amounts to more complex labour, simple labour raised to a higher power. [Less than] an hour of more intensive labour then counts as much — and creates as much value — as an hour of the more extensive labour. For example, in the above case, [4]/[5] of an hour [produces] as much as [5]/[5], or an hour.
Both the extension of labour time and the increase of labour through its greater intensification by means of the compression of the pores of labour as it were, have their limits (although the London bakers, for example, regularly work 17 hours [a day] if not more), very definite, physical, limitations, and it is when encountering these that compound interest — COMPOSITE profit— ceases.
Within these limitations the following applies: If the capitalist pays nothing for the extension or INTENSIFICATION of labour, then his SURPLUS VALUE (his profit as well, provided there is no CHANGE in the VALUE of the constant capital, for we assume that the mode of production remains the same)—and, in accordance with the proviso, his profit — increases more rapidly than his capital. He pays NO NECESSARY LABOUR for the capital which has been added.
If he pays for the surplus labour at the same rate as previously, then the growth of the SURPLUS VALUE is proportionate to the increase in capital. The profit grows more rapidly. For there is a more rapid turnover of fixed capital, while the more intensive use of the machinery does not cause the wear and tear to increase at the same rate. There is a reduction of expenditure on fixed capital, for less machinery, workshops, etc., are required for 100 workers who work longer hours than for 200 workers employed simultaneously. Likewise fewer OVERLOOKERS, etc. (This gives rise to a most satisfactory situation for the capitalist, who is able to expand or contract his production without hindrance, in accordance with the market conditions. In addition, his power grows, since that portion of labour which is over-employed, has its counterpart in an unemployed or semi-employed reserve army, so that competition amongst the workers increases.)
Although there is in this case no change in the purely numerical ratio between NECESSARY LABOUR and SURPLUS LABOUR — this is however the only case where both can simultaneously increase in the same proportion — the exploitation of labour has NEVERTHELESS grown, both by means of an extension of the working day and by its INTENSIFICATION (condensation) provided the working day is not
shortened at the same time (as with the Ten Hours Bill[118]). The period for which the worker is fit to work is reduced and his labour capacity is exhausted in a much greater measure than his wages increase and he becomes even more of a work machine. But disregarding the latter aspect, if he lives for 20 years working a normal working day and only 15 years when his working day is extended or intensified, then he sells the value of his labour capacity in 15 years in the latter case and in 20 years in the former. In one case it has to be replaced in 15 years, in the other, in 20 years. A value of 100 which lasts for 20 years is replaced if 5% is paid on it annually, for 5x20=100. A value of 100 which lasts 15 years is replaced if 6[10]/i[5] or 6[2]/3% is paid on it annually. But in the given case, the worker receives for 3 hours of additional labour only an amount equivalent to the daily value of his labour capacity calculated over 20 years. Assuming that he works 8 hours NECESSARY LABOUR and 4 hours SURPLUS LABOUR, then he
12x2 receives [2]/s of each hour, for —-— =8. And in the same way he
receives 2 out of the 3 hours OVERTIME that he works. Or [2]/[3] of each
29* hour. But this is only the value of his hourly labour capacity on the assumption that it will last for 20 years. If he uses it up in 15 years, its value [per hour] increases.
ANTICIPATION of the future — real ANTICIPATION — occurs in the production of wealth only in relation to the worker and to the land. The future can indeed be anticipated and ruined in both cases by premature over-exertion and exhaustion, and by the disturbance of the balance between expenditure and income. In capitalist production this happens to both the worker and the land. As far as so-called ANTICIPATION is concerned, in relation to the national debt, for example, Ravenstone remarks with justice:
[XV-887] * "In pretending to stave off the expenses of the present hour to a future day, in contending that you can burthen posterity to supply the wants of the existing generation,* they assert the absurd proposition * that you can consume what does not yet exist, that you can feed on provisions before their seeds have been sown in the earth" (Ravenstone, I.e., [Thoughts on the Funding System, and Its Effects, p.] 8).
"All the wisdom of our statesmen will have ended in a great transfer of property from one class of persons to another, in creating an enormous fund for the reward of jobs and peculation" * (I.e., [p.] 9).
It is different in the case of the worker and the land. What is EXPENDED here EXISTS as 8vva|Ji,L<;(24) and the life span of this 8-uvct(JW<; is shortened as a result of accelerated EXPENDITURE.
Finally, if the capitalist is forced to pay more for OVER-TIME than for normal labour time, then, according to the facts outlined above, this is by no means an increase in wages, but only compensation for the increased value of OVERTIME — and in reality overtime pay is rarely sufficient to cover this. In fact, in order to pay for the increased wear and tear of the labour capacity, when OVERTIME is worked, a higher rate ought to be paid for every working hour not merely for OVERTIME. Thus there is UNDER ALL CIRCUMSTANCES an increased exploitation of labour. At the same time, as a result of the accumulation of capital, a [relative] reduction in SURPLUS VALUE takes place at all events and also a decline in the rate of profit, in so far as this is not counteracted by saving on constant capital.[119]
This is therefore a situation where, in consequence of the accumulation of capital — of the appearance of COMPOSITE profit— the rate of profit must decline. If on a capital of 300 (the original amount) the rate of profit was 10[%] (that is [profit came to] 30), and if for an additional 100 it is 6[%], then profit is 36 for 400.
Thus on the whole it is 9 for 100. And the rate of profit has fallen from 10[%] to 9.
But, as has been stated, on this basis (if the productivity of labour remains the same) not only must the profit on ADDITIONAL CAPITAL fall, but at a certain point it must cease altogether, thus the whole accumulation based on this COMPOSITE PROFIT would BE STOPPED. In this case, the decline in profit is linked with increased exploitation of labour and the STOPPAGE of profit AT A CERTAIN POINT is not due to the worker or SOMEBODY ELSE receiving the whole product of his labour, but to the fact that it is physically impossible to work over and above a certain amount of labour time or to increase the intensity of labour beyond a certain degree.
Second. The only other case, where, with the number of workers remaining constant, more capital is applied per worker, and therefore the surplus capital can be laid out and used for the increased exploitation of the same number [XV-888] [of workers] occurs when the productivity of labour increases, i.e. the method of production is changed This presupposes a CHANGE in the organic ratio between constant and variable capital. In other words, the increase in the capital in relation to labour is here identical with the increase of constant capital as compared with variable capital and, in general, with the amount of living labour employed.
This is where Hodgskin's view merges with the general law which I have outlined. The SURPLUS VALUE, i.e. the exploitation of the worker, increases, but, at the same time, the rate of profit falls because the variable capital declines as against the constant capital, because in general, the amount of living labour falls relatively in comparison with the amount of capital which sets it in motion. A larger portion of the annual product of labour is appropriated by the capitalist under the signboard of capital, and a smaller portion under the signboard of profit.
(Hence the phantasy of the Rev. Thomas Chalmers to the effect that the smaller the amount of the annual product laid out by the capitalists as capital, the larger the profit they pocket.[3] The ESTABLISHED CHURCH[69] then comes to their assistance and sees to it that a large part of the SURPLUS PRODUCE is consumed instead of being capitalised. The miserable priest confuses cause with effect. Moreover, with a smaller rate the amount of profit increases as the size of the capital laid out grows. In addition, the quantity of use values which this smaller proportion represents, increases. At the same time, however, this leads to the centralisation of capital, since the conditions of production now demand the application of capital on a mass scale. It brings about the swallowing up of the smaller capitalists by the bigger ones and the "decapitalisation" of the former. This is once again, only in a different form, the separation of the conditions of labour from labour // for there is still a great deal of self-employment amongst the smaller capitalists; in general the labour done by the capitalist stands in inverse proportion to the size of his capital, that is, to the degree in which he is a capitalist. This process would soon bring capitalist production to a head if it were not for the fact that, alongside the centripetal forces, counteracting tendencies exist, which continuously exert a decentralising influence; this need not be described here, for it belongs to the chapter dealing with the competition of capitals //.[30] It is this separation which constitutes the concept of capital and of primitive accumulation, which then appears as a continual process in the accumulation of capital and here finally takes the form of the centralisation of already existing capitals in a few hands and of many being divested of capital.)
The fact that the (proportionally) declining quantity of labour is not fully offset by increased productivity, or that the ratio of surplus labour to the capital expended does not increase at the same rate as the amount of labour employed declines, is due partly to the fact that the development of the productivity of labour reduces the VALUE OF LABOUR, the NECESSARY LABOUR, only in certain capital investment spheres, and that, even in these spheres, it does not develop uniformly, and that factors exist which nullify this effect; for example, the workers themselves, although they cannot prevent reductions in (the value of).wages, will not permit them to be reduced to the absolute minimum; on the contrary, they can compel a certain quantitative participation in the general growth of wealth.
But this growth of surplus labour too is relative, [and is only possible] within certain limits. In order to make this growth correspond to the demands of COMPOSITE INTEREST, the necessary labour time in this case would have to be reduced to zero in the same way as [the surplus labour time] had to be extended endlessly in the case considered previously.
The rise and fall in the rate of profit — in so far as it is determined by the rise or fall of wages resulting from the conditions of demand and supply [in the labour market], or caused by the temporary rise or fall in the prices of NECESSARIES compared with those of LUXURIES, as a result of the changes in d e m a n d a n d supply and the rise or fall in wages to which this leads — has as little to do with the general law of [XV-889] the rise or fall in the profit rate as the rise or fall in the market prices of commodities has to do with the determination of value in general. This has to be analysed in the chapter on the real movement of wages.[120] If the balance of d e m a n d a n d supply is favourable to the workers, then wages rise, then it is possible (but by no means certain) that the prices of certain NECESSARIES, especially food, will rise correspondingly for a time. T h e author of the Inquiry into Those Principles etc. rightly remarks in this connection:
In this case * there will be "an increase of demand for necessaries, in proportion to that for superfluities, as compared with what would have been the proportion between those two sorts of demand, if he had exerted that command" * (i.e. the capitalist, his COMMAND over commodities) * "to procure things for his own consumption. Necessaries will thereby exchange for more of things in general... And, in part, at least, these necessaries will be food"(25) (I.e., [pp. 21-]22).
H e then correctly expresses the Ricardian view as follows:
* "At all events, then, the increased price of corn was not the original cause of that rise of wages which made profits fall, but, on the contrary, the rise of wages was the cause of the increased price of corn at first, and the nature of land, yielding less and less proportional returns to increased tillage, made part of that increase of price permanent, prevented a complete reaction from taking place through the principle of population" * (I.e., [p.] 23).
Hodgskin a n d the author of The Cause and Remedy? since they explain the fall OF PROFITS by the impossibility of LIVING LABOUR TO COME UP TO THE DEMANDS OF "COMPOUND INTEREST", and although they do not go into detail, are much nearer the truth than Smith and Ricardo, who explain the FALL OF PROFITS by the RISE in WAGES, one of them, in REAL a n d NOMINAL WAGES, the other, in NOMINAL WAGES, WITH RATHER A DECREASE OF REAL WAGES. Hodgskin and all the other proletarian opponents have enough common sense to emphasise the FACT that the proportional number of those who live on profit has increased with the development of capital.
Now a few concluding passages from Hodgskin's Labour Defended etc.
The treatment of the exchange value of the product, HENCE of the labour embodied in the commodity, as social labour * "So dependent is man on man, and so much does this dependence increase as society advances, that hardly any labour of any single individual ... is of the least value but as forming a part of the great social task."*
//This passage has to be quoted, and in doing so [it is necessary to emphasise] that it is only on the basis of capital that commodity production or the production of products as commodities becomes all-embracing and affects the nature of the products themselves. //
*"... Wherever the division of labour is introduced, the judgement of other men intervenes before the labourer can realise his earnings, and there is no longer any thing which we can call the material3 reward of individual labour. Each labourer produces only some part of a whole, and each part, having no value or utility of itself, there is nothing on which the labourer can seize and say: 'this is my product, this I will keep to myself. Between the commencement of any joint operation, such as that of making cloth, and the division of its product among the different persons whose combined exertions have produced it, the judgement of men must intervene several times, and the question is how much of this joint product should go to each of the individuals whose united labour produced it?" ([p.] 25).
"I know no way of deciding this [XV-890] but by leaving it to be settled by the unfettered judgements of the labourers themselves" (I.e.).
"I must add that it is doubtful whether one species of labour is more valuable than another; certainly it is not more necessary" * ([p.] 26).
Finally Hodgskin writes about the relation of capital [and labour]:
* "Masters are labourers as well as their journeymen. In this character their interest is precisely the same as that of their men. But they are also either capitalists or the agents of the capitalist, and in this respect their interest is decidedly opposed to the interest of the workmen" (I.e., [p.] 27).
"The wide spread of education among the journeyman mechanics of this country, diminishes daily the value of the labour and skill of almost all masters and employers, by increasing the numbers of persons who possess their peculiar knowledge" ([p.] 30).
"The capitalist is the oppressive middleman" between the different labourers.* If he is put out of view, * "it is plain that capital or the power to employ labour and co-existing labour are one; and productive capital and skilled labour are also one; consequently capital and a labouring population are precisely synonymous. In the system of nature, mouths are united with hands and with intelligence" * ([p.] 33).
The capitalist mode of production disappears with the form of alienation which the various aspects of social labour bear to one another and which is represented in capital This is the conclusion arrived at by Hodgskin.
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of the conditions of labour. It means that the conditions of labour acquire an independent existence in relation to the worker and to labour itself. This historical act is the historical genesis of capital, the historical process of separation which transforms the conditions of labour into capital and labour into wage labour. This provides the basis for capitalist production.
Accumulation of capital on the basis of capital itself, and therefore also on the basis of the relationship of capital and wage labour, reproduces the separation and the independent existence of material wealth as against labour on an ever increasing scale.
CONCENTRATION of capital Accumulation of large amounts of capital by the destruction of the smaller capitals. Attraction. Decapitalisation of the intermediate links between capital and labour. This is only the last degree and the final form of the process which transforms the conditions of labour into capital, then reproduces capital and the separate capitals on a larger scale and finally separates from their owners the various capitals which have come into existence at many points of society, and centralises them in the hands of big capitalists. It is in this extreme form of the contradiction and conflict that production — even though in alienated form — is transformed into social production. There is social labour, and in the real labour process the instruments of production are used in common. As functionaries of the process which at the same time accelerates this social production and thereby also the development of the productive forces, the capitalists become superfluous in the measure that they, on behalf of society, enjoy the usufruct and that they become overbearing as owners 'of this social wealth and commanders of social labour. Their position is similar to that of the feudal lords whose exactions in the measure that their services became superfluous with the rise of bourgeois society, became mere outdated and inappropriate privileges and who therefore rushed headlong to destruction.
Endnotes
[108] Among the opponents of the economists Marx also included J. F. Bray whose statements he examined in notebook X of his manuscript (see present edition, Vol. 31, pp. 245-50).—373
[44] Marx is referring to Say's argument stated in Lettres à M. Malthus..., Paris, Londres, 1820, p. 15, that the cause of the flooding of the Italian market with English goods was the underproduction of Italian goods which might be exchanged for English ones. This argument by Say is quoted in the anonymous discourse An Inquiry into Those Principles..., London, 1821, p. 15, from which Marx made excerpts. Cf. also present edition, Vol. 31, pp. 133, 166.—160, 311
[114] When writing notebook XV, Marx skipped over pages 865 and 866. Having filled in p. 870a, he continued writing on the empt) pages. Following p. 870a, the text continues on pp. 865 and 866, and then on p. 870b. The progression from one non-adjacent page to another was indicated by Marx himself.— 399, 410
[41] The manuscript continues with a brief insertion in brackets on Ricardo's views of money and exchange value. In line with its substance, this insertion has been placed on p. 135 of this volume as a note at the bottom of the page.—149
[61] Lord Dundrearyism (or Dundrearyism)—pompous foppishness. Lord Dundreary is a character from the comedy Our American Cousin by the English writer Tom Taylor which was first performed in 1858.—230, 240
[9] In the original: "More exacdy, £16 li1/^. disregarding a few fractions not even=2d." 211016 52754 The total profit equals £64 3 4 6 7 3 1, and the average profit on capital £16 346731 • or £16.1521. 16'/7=16.1429.—27
[25] The reference is to the world exhibition, opened in London on May 1, 1862, displaying the latest achievements of science, agricultural and industrial products and works of art. The source of this quotation is unknown.—94, 199
[117] The figures indicate that they refer to a period of one year.—436
[118] A reference to the Ten Hours Bill, passed by the British Parliament on June 8, 1847, which applied only to adolescents and women and was ignored by many manufacturers.—441
[119] The manuscript continues with a passage in square brackets which, in accordance with its content, has been placed on p. 330 of this volume as a note at the bottom of the page.—442
[69] The Established Church is the name given in England to the Anglican Church, or Church of England.—248, 443
[30] Working on his manuscript of 1861-63 devoted to the study of capital, Marx based himself on the plan he had drawn up when preparing to compile the manuscript of 1857-58. He had intended to include in the book on capital special sections devoted to competition and credit (see Marx's letter to Engels of April 2, 1858, present edition, Vol. 40, p. 298). When subsequendy preparing the manuscript of Volume Three of Capital, Marx considered it expedient to deal here with a number of questions related to competition and credit (see present edition, Vol. 37).—116, 162, 444, 460
[120] The chapter on the real movement of wages was not written by Marx. He deals with this question in Volume One of Capital (see present edition, Vol. 35).— 445
[109] " This cobbler" was the way the author of the pamphlet most incredible Some Illustrations of Mr. M'Culloch's Principles of Political Economy described MacCulloch. See p. 370 above.—374, 400
[1] The Theories of Surplus Value on which Marx began work in March 1862 constitutes the fifth and final section of the first chapter of his study of capital, "The Production Process of Capital". His original intention was to examine absolute and relative surplus value in their combination. The Theories of Surplus Value was to form an historical survey pursuant to the chapter on surplus value, similar to that introducing the chapters on commodity and on money in A Contribution to the Critique of Political Economy. However, substantial changes occurred in the character of the Theories of Surplus Value during the course of Marx's work on the manuscript. It considerably exceeded the scope of the tasks set by the author, both in terms of volume (approx. 100 printed sheets) and content. The manuscript not only examined the views of bourgeois economists but also elaborated a number of important theoretical propositions of Marx's economic doctrine. The Theories of Surplus Value were first published in English in 1951 in an abridged form as: K. Marx, Theories of Surplus Value. A selection from the volumes published between 1905 and 1910 as Theorien über den Mehrwert, edited by K. Kautsky, taken from 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 published in full in 1963-71 as: 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. The present volume contains the concluding part of Marx's Theories of Surplus Value. Volume 30 is given over to the first five notebooks of the Economic Manuscripts of 1861-63 and the beginning of the Theories of Surplus Value (notebook VI and part of notebook VII), whilst Volume 31 contains the continuation of the Theories of Surplus Value (the remainder of notebook VII, notebooks VIII to XI and part of notebook XII).—7
[2] At the side of this line in the manuscript there is written in pencil, without any indication as to where it should be inserted: "(circulating and fixed capital, p. 643) in Ricardo".—7 36-733
[11] Here Marx illustrates by way of an example one of the ways in which the organic composition of agricultural capital can come closer to that of industrial capital. As the starting point he takes 60c+40u — for agricultural capital, 80c + 20t>—for non-agricultural capital. Marx assumes that, with increased productivity of agricultural labour, the number of workers employed in this sector falls by a quarter. There is a corresponding change in the organic composition of agricultural capital: the same product as previously called for the expenditure of 100 units of capital (60c+40v) now only calls for 90 units of capital (60c+30v) which, in percentage terms, represents 662l3c+S$1/iv. The organic composition of capital in agriculture has thus drawn closer to the organic composition of capital in industry. Marx further assumes that the fall in the number of agricultural workers is accompanied by a fall in wages by one quarter as a result of the decline in the price of corn. In this case, it must be assumed that wages in industry will fall by the same proportion. However, since agricultural capital has a lower composition, a fall in wages will be reflected to a greater extent here than in the case of non-agricultural capital. This would lead to a further reduction of the difference in the composition of capital in agriculture and that in industry. Given a fall in wages of one quarter, agricultural capital of 662/$c + 33l/$v will 662/sc+25i/ be transformed into capital of or, in percentage terms, 72 8/nc+27 s/„v. Given a fall in wages of one quarter, non-agricultural capital composed of 80 c+20 v will be transformed into capital composed of 80 c +15 v or, in percentage terms, 844/19c + 1515/19t>. In the case of further reduction in the number of agricultural workers and further falls in wages, the organic composition of agricultural capital would grow increasingly close to the organic composition of non-agricultural capital. In examining this hypothetical case, and in order to illustrate the influence a rise in the productivity of agricultural labour has on the organic composition ?6* simultaneous, and frequently more rapid, increase in the productivity of industrial labour, which would be expressed in a further rise of the organic composition of industrial capital as compared with agricultural. On the correlation between the organic composition of capital in industry and in agriculture, see present edition, Vol. 31, pp. 254-56, 325-26, 334-35, 337, 341-43, 464-65.-29
[3] The two final points were subsequently crossed out in pencil and instead of them Marx inserted the point "Theory of Cost Price".—7
[116] The passage immediately following this in Hodgskin's pamphlet makes it clear that what the author means by "striking a sort of balance" is: "The capitalists permit the labourers to have the means of subsistence, because they cannot do without labour, contenting themselves very generously with taking every particle of produce not necessary to this purpose".—431, 435, 436
[10] Marx is referring to sections IV and V of the first chapter of Ricardo's book On the Principles of Political Economy, and Taxation in which the author analyses the impact of a rise or fall of wages on the "relative value" of commodities produced by capitals of different organic composition. In his manuscript Marx gave a detailed critique of these two sections (see present edition, Vol. 31, pp. 400-25).— 27
[51] In this section, Marx analyses works written by Malthus following the appearance of Ricardo's On the Principles of Political Economy, and Taxation (1817). In his works, Malthus attempted to oppose Ricardo's labour theory of value and his call for the all-out development of the productive forces to the detriment of individuals and even whole classes (see this volume, pp. 243-44) with a vulgar apologetic theory aimed at defending the interests of the most reactionary strata of the dominant classes. Malthus as an exponent of the "theory of population" is mentioned only in passing in this chapter. Marx provides a general description of Malthus' work An Essay on the Principle of Population in the section "Notes on the History of the Discovery of the So-Called Ricardian Law" (see present edition, Vol. 31, pp. 344-51).—209
[5] This excerpt enclosed in brackets is a supplement to the Marxian analysis of Ricardo's theory of cost price and, in terms of content, belongs to p. XI — 549 of the manuscript (see present edition, Vol. 31, p. 439).—9
[4] The actual location of the materials in notebooks XIV and XV does not always accord with that given by Marx in the table of contents. Notebook XIV, for example, contains only the beginning of the section on the adversaries of the economists. The continuation of this section is to be found in the first half of notebook XV. The section on Bray is located in notebook X of the manuscript (see present edition, Vol. 31, pp. 245-50). This section was not completed. The sections on Ramsay, Cherbuliez and Richard Jones are to be found on pp. XVIII —1086-1157 (present edition, Vol. 33). Marx did not follow up his original intention to complete the fifth section in notebook XIV. The survey of revenue and its sources is located in the second half of notebook XV (this volume, pp. 449-541). The section on Ravenstone begins on p. XIV — 861 (this volume, p. 392). This section is preceded by that numbered 1 ) and devoted to the anonymous pamphlet The Source and Remedy of the National Difficulties. The end of the section on Hodgskin is contained on pp. XVIII — 1084-1086 (see present edition, Vol. 33). Marx did not write any section specifically devoted to vulgar political economy. He dealt with this subject in the section entitled "Revenue and Its Sources".—8