Capital II, Chapter 11 - Part 3

Marx reiterates a point made in Volume I that although its stated that the capitalist advances capital for wages, the reverse is true. Wages are always paid in arrears. The worker advances his labour-power to the capitalist, by working for a day, week, month or whatever, before being paid. On some occasions the worker might be given an advance on their wages in the form of a loan, but this is then deducted from the wages when they are paid at the end of the period.

The fact that the capitalist, in turn, might not get back the capital they have advanced, as variable and other productive capital, for some time, does not affect this. The seller of a commodity, here the worker selling labour-power, doesn't care what the buyer does with it after. The capitalist can't buy a machine cheaper just because it will take them a longer rather than a shorter time to get its value back.

Variable capital, paid as wages, buys Labour-power, a commodity whose value is constant and equal to the value of the means of subsistence required for its reproduction. But, this labour-power has the unique ability not only to reproduce this value of its own reproduction, but to produce a surplus value over and above it. But, this unique characteristic is hidden when labour is viewed instead simply from the perspective of circulation, and only distinguished from other types of capital as being circulating rather than fixed capital. As circulating capital, it is no more capable of producing surplus value than its other components such as raw and auxiliary materials.

As a consequence, Ricardo cannot provide any analysis of the source of surplus value, and so ignores it.

“Similarly the fact is ignored that the part of the value added to the product by the capital laid out in wages is newly produced (and therefore really reproduced), while the part of the value which the raw material adds to the product is not newly produced, not really reproduced, but only preserved in the value of the product, conserved, and hence merely reappears as a component part of the value of the product.” (p 222)

But, then, looked at from this perspective, both of these types of capital, fixed and circulating, can only transfer their value to the end product. The only distinction is that the latter transfers it piecemeal. But, in either case it is impossible, on this basis, for a surplus value to arise. The source of the surplus value is obliterated.

“It is therefore understandable why bourgeois Political Economy instinctively clung to Adam Smith’s confusion of the categories “constant and variable capital” with the categories “fixed and circulating,” and repeated it parrotlike, without criticism, from generation to generation for a century.” (p 223)

The Physiocrats avoided this confusion because, for them, surplus value was not a product of capital but of the special role that nature plays in assisting agricultural labour. So, this is completely separate from their views on the different types of capital, which they can then differentiate in accordance with the period for which it is advanced.

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