IX. A Retrospect to Adam Smith, Storch, and Ramsay
The aggregate value of the social product amounts to 9,000 = 6,000c + l,500v + l,300s; in other words: 6,000 reproduce the value of the means of production and 3,000 that of the articles of consumption. The value of the social revenue (v + s) amounts therefore to only lj[3] of the value of the aggregate product, and the totality of consumers, labourers as well as capitalists, can draw commodities, products out of the total social product and incorporate them in their consumption fund only to the amount of this lji . On the other hand 6,000, or [2]/[3] of the value of the product, are the value of the constant capital which must be replaced in natura. Means of production to this amount must therefore again be incorporated in the production fund. Storch recognised this as essential without being able to prove it:
"It is clear that the value of the annual product is divided partly into capital and partly into profits, and that each one of these portions of the value of the annual product is regularly employed in buying the products which the nation needs both for the maintenance of its capital and for replacing its consumption fund.... The products which constitute the capital of a nation are not to be consumed"* (Storch, Considerations sur la nature du revenu national, Paris, 1824, pp. 134-35, 150).
Adam Smith, however, has promulgated this astounding dogma, which is believed to this day, not only in the previously mentioned form, according to which the entire value of the social product resolves itself into revenue, into wages plus surplus value, or, as he expresses it, into wages plus profit (interest) plus ground rent, but also in the still more popular form, according to which the consumers must "ULTIMATELY"[15] pay to the producers the entire value of the product. This is to this day one of the best-established commonplaces, or rather eternal truths, of the so-called science of political economy. This is il-lustrated in the following plausible manner: Take any article, for instance a linen shirt. First, the spinner of linen yarn has to pay the flax-grower the entire value of the flax, i. e., the value of flax-seed, fer-tilisers, labouring cattle feed, etc., plus that part of the value which the fixed capital, such as buildings, agricultural implements, etc., of the flax-grower gives up to the product; the wages paid in the production of the flax; the surplus value (profit, ground rent) embodied in the flax; finally the carriage costs of the flax from its place of production to the spinnery. Next, the weaver has to reimburse the spinner of the linen yarn not only for the price of the flax, but also for that portion of the value of machinery, buildings, etc., in short of the fixed capital, which is transferred to the flax; furthermore, all the auxiliary materials consumed in the spinning process, the wages of the spinners, the surplus value, etc., and so the thing goes on with the bleacher, the transportation costs of the finished linen, and finally the shirt manufacturer, who has to pay the entire price of all preceding producers, who supplied him only with his raw material. In his hands a further addition of value takes place, partly through the value of constant capital consumed in the manufacture of shirts in the shape of instruments of labour, auxiliary materials, etc., and partly through the labour expended, which adds the value of the shirt makers' wages plus the surplus value of the shirt manufacturer. Now let this entire product in shirts cost ultimately £100 and let this be the aliquot part of the value of the total annual product expended by society on shirts. The consumers of the shirts pay these £100, i. e., the value of all the means of production contained in the shirts, and of the wages plus surplus value of the flax-grower, spinner, weaver, bleacher, shirt manufacturer, and all carriers. This is absolutely correct. Indeed, every child can see that. But then it says: That's how matters stand with regard to the value of all other commodities. It should say: That's how matters stand with regard to the value of all articles of consumption, with regard to the value ofthat portion of the social product which passes into the consumption fund, i. e., with regard to that portion of the value of the social product which can be expended as revenue. True enough, the sum of the values of all these commodities is equal to the value of all the means of production (constant portions of capital) used up in them plus the value created by the labour last added (wages plus surplus value). Hence the totality of the consumers can pay for this entire sum of values because, although the value of each individual commodity is made up of c -f- v + s, nevertheless the sum of the values of all commodities passing into the consumption fund, taken at its maximum, can be equal only to that portion of the value of the social product which resolves itself into v + s, in other words, equal to that value which the labour expended during the year has added to the existing means of production — to the value of the constant capital. As for the value of the constant capital, we have seen that it is replaced out of the mass of social products in a two-fold way. First, through an exchange by capitalists II, who produce articles of consumption, with capitalists I, who produce the means of production for them. And here is the source of the saying that what is capital for the one is revenue for the other.[55] But this is not the actual state of affairs. The 2,000 IIC existing in the shape of articles of consumption worth 2,000 constitute a constant capital value for the capitalist class of II. They therefore cannot consume this value themselves, although the product in accordance with its natural form is intended for consumption. On the other hand, the 2,000 I(v+s) are wages plus surplus value produced by capitalist and working class I. They exist in the natural form of means of production, of things in which their own value cannot be consumed. We have here, then, a sum of values to the amount of 4,000, one half of which, before and after the exchange, replaces only constant capital, while the other half forms only revenue.
In the second place, the constant capital of department I is replaced in natura, partly by exchange among capitalists I, partly by replacement in natura in each individual business.
The phrase that the value of the entire annual product must ultimately be paid by the consumer[56] would be correct only if consumer were taken to comprise two vastly different kinds: individual consumers and productive consumers. However that one portion of the product must be consumed productively means nothing but that it must function as capital and not be consumed as revenue.
If we divide the value of the aggregate product = 9,000 into 6,000c + l,500v + l,500s and look upon the 3,000(v+s) only in its quality of revenue, then, on the contrary, the variable capital seems to disappear and capital, socially speaking, to consist only of constant capital. For that which appeared originally as l,500v has resolved itself into a portion of the social revenue, into wages, the revenue of the working class, and its character of capital has thus vanished. This conclusion is actually drawn by Ramsay. According to him, capital, socially considered, consists only of fixed capital, but by fixed capital he means the constant capital, that quantity of values which consists of means of production, whether these means of production are instruments or materials of labour, such as raw materials, semi-finished products, auxiliary materials, etc. He calls the variable capital circulating capital:
Ramsay defines fixed capital, by which he means constant capital, more closely in the following words:
* "The length of time during which any portion of the product of that labour" * (namely LABOUR BESTOWED ON ANY COMMODITY) *"has existed as fixed capital; that is, in a form in which, though assisting to raise the future commodity, it does not maintain labourers"* (ibid., p. 59).
Here we see once more the calamity Adam Smith brings on by sub-merging the distinction between constant and variable capital in that between fixed capital and circulating capital. Ramsay's constant capital consists of instruments of labour, his circulating capital of means of subsistence. Both of them are commodities of a given value. The one can no more create surplus value than the other.
Endnotes
[2] Engels did not have time to publish Marx's Theories of Surplus Value as the fourth volume of Capital. It was first published in 1905-10 by Karl Kautsky. In 1954-61 and 1962-64, the Institute of Marxism-Leninism of the CC CPSU in Moscow published in Russian a new edition of Theories... which differed from that of Kautsky. In 1956-62 this Russian edition was used by the Institute of Marxism-Leninism of the CC SUPG as the basis for the publication of Theories... in German. In the present edition Theories of Surplus Value is published, according to MEGA 2, Abt. II, Bd. 3, Berlin, 1976-82, as part of the Economic Manuscript of 1861-63 (see present edition, vols 30-34).— 6
[15] A reference to the Peasant Reform of 1861, which abolished serfdom in Russia and brought "freedom" to about 22.5 million peasants. Even after the official abolition of serfdom, however, part of the peasantry remained dependent on its former land-lords. For the use of land these so-called temporarily obligated peasants had to perform corvée services and pay quit-rent. Under the law of December 28, 1881, peasants could redeem their allotments as of January 1, 1883, and corvée and quit-rent as they had previously existed were officially abolished. In actual fact, however, they continued to, the beginning of the 20th century.— 39
[55] Marx is referring to Smith's assertion that part of capital for an entrepreneur forms workers' revenue. For a detailed criticism of this proposition see this volume, pp. 378-79.-434
[56] Marx is referring to the following phrase from A. Smith's An Inquiry into the Mature and Causes of the Wealth of Nations: "the whole annual produce of the land and labour of every country is, no doubt, ultimately destined for supplying the consumption of its inhabitants" (Vol. II, Book II, Ch. III).—435 57 Marx copied out passages from this book by Senior in one of his Brussels notebooks
[3] From the numerous notebooks compiled by Marx in the period indicated by Engels, the Institute of Marxism-Leninism of the CC CPSU published nearly all the passages from Russian sources (see Marx-Engels Archives, vols XI-XII, XVI, Moscow, 1948, 1952, 1955, 1982) as well as Mathematical Manuscripts (Moscow, 1968). Marx's notebooks are published in full in Section IV of Marx-Engels Gesamtausgabe.— 7