Thursday, 12 February 2015

Capital II, Chapter 20 - Part 53

13) Destutt De Tracy’s Theory of Reproduction 

In examining the writing of Destutt, on social reproduction, Marx once again has to deal with many of the same false arguments he revealed in Volume I, in relation to the source of profit. Marx quotes Destutt,

“'I shall be asked how these industrial entrepreneurs can make such large profits and out of whom they can draw them. I reply that they do so by selling everything which they produce for more than it has cost to produce; and that they sell: 

1) to one another for the entire portion of their consumption intended for the satisfaction of their needs, which they pay with a portion of their profits;

2) to the wage-labourers, both those whom they pay and those whom the idle capitalists pay; from these wage-labourers they thus extract their entire wages except perhaps their small savings; 

3) to the idle capitalists who pay them with the portion of their revenue which they have not yet given to the wage-labourers employed by them directly; so that the entire rent which they pay them annually flows back to them in this way or the other.' (Destutt de Tracy, Traité de la volonté et de ses effets, Paris, 1826, p. 239.)” (p 484-5)

The basic argument here is that we have seen previously, and which Marx demolished in Volume I, i.e. that profit arises by selling commodities above their value. The only elaboration here by Destutt is that he separates those on whom this fraud is perpetrated into the different groups of the capitalists themselves, the workers and the 'idle capitalists', by whom he means the landlords and money capitalists, who share the surplus value of the productive-capitalists.

But, as Marx illustrates, rather than improving things, this elaboration only results in greater confusion and absurdity. To briefly restate the refutation of the basic argument, profit overall cannot result from selling commodities above their value, for the simple reason that, if everyone does this, every gain is cancelled by the loss on the other side of the trade. If A sells a commodity for £12 that has a value of £10, they make a gain of £2. But, when A appears as a buyer rather than a seller, and similarly buys a commodity from B for £12, that has a value of £10, he makes a loss of £2!

There is no difference whether A exchanges a commodity with B, and B exchanges a commodity with A with a price tag of £12 or £10. In the end, whatever price has been put on it, no profit can arise simply from the exchange. All that has arisen is an inflation of prices. This, in fact, is what has happened with the bubbles in the prices of things like shares, bonds, and property at the present time.

“...and this would seem to be rather a method of impoverishing than of enriching themselves since it compels them to keep a large portion of their total wealth unproductively in the useless form of circulation media. The whole thing boils down to this, that despite the all-round nominal rise in the price of their commodities the capitalist class has only £400 worth of commodities to divide among themselves for their individual consumption, but that they do one another the favour of circulating £400 worth of commodities by means of a quantity of money which is required to circulate £500 worth of commodities.” (p 485)

That is a perfect description of the current situation in respect of those bubbles, and the huge money printing conducted by central banks. It is not a method for increasing wealth, but of reducing it.

The argument is not improved by Destutt's application of it, in relation to the selling of commodities to workers rather than to other capitalists. If capitalists pay workers £100 in wages, and those workers buy back, the commodities they have produced, with that same £100, then its clear the capitalists have become not one jot richer by this process. They began with £100, they advanced the £100, and in its place obtained £100 of commodities. They sold the £100 of commodities and received in their place £100 in money, taking them back to where they started!

“The reflux of this money might therefore at best explain why the capitalists do not get poorer by this transaction, but by no means why they get richer by it.” (p 486)

More importantly,

“To be sure it is another question how the capitalists came into possession of the £100 and why the labourers, instead of producing commodities for their own account, are compelled to exchange their labour-power for these £100. But this, for a thinker of Destutt’s calibre, is self-explanatory.” (p 486)

But, Destutt's problem is not resolved by recourse to his claim that the profit arises from selling these commodities above their value. If the capitalists have paid the workers £100 in wages, they might then charge £120 for them. But, it is impossible for the workers to pay £120, because they have only £100 in wages to spend.

The alternative is that the workers hand over this £100, but receive back commodities worth only £80. In other words, the capitalist has cut wages by 20% in real terms. In that case, the same effect could have been achieved by paying workers only £80 in wages to begin with, and then selling them £80 worth of commodities. That is provided, of course, that the workers continued to provide to the capitalist the same quantity and value of commodities as before, i.e. with a value of £100.

“This seems to be the normal way, considering the class of capitalists as a whole, for according to Monsieur Destutt himself the labouring class must receive a “sufficient wage” (p. 219), since their wages must at least be adequate to maintain their existence and capacity to work,“"to procure the barest subsistence.” (p. 180). If the labourers do not receive such sufficient wages, that means, according to the same Destutt, “the death of industry” (p. 208), which does not seem therefore to be a way in which the capitalists can get richer.” (p 487)

That, of course, is the secret Marx elaborated in Volume I. Provided the £80 wages represents the value of the labour-power, i.e. is sufficient to buy the commodities to ensure its reproduction, then the workers CAN be sold back this £80 of commodities they have produced, and the capitalist CAN make a surplus value, provided the workers have produced a surplus of commodities over and above that, and those commodities represent a surplus value, that can be appropriated by the capitalist.

Once again, it is not the price tag on these commodities that is significant. The labour-power has a definite value determined by those commodities required for its production. Whatever nominal figure is placed upon it, as wages, be it £80, £100 or £120, the fact remains those wages must be sufficient to buy those commodities necessary for the worker to be reproduced.

“If the capitalist class pays the labourers £80, then it has to supply them with commodities worth £80 for these £80 and the reflux of the £80 does not enrich it. If it pays them £100 in money, and sells them £80 worth of commodities for £100 it pays them in money 25 per cent more than their normal wage and supplies them in return with 25 per cent less in commodities.” (p 487)

But, if as according to Destutt, the workers are paid a 'normal' wage, i.e. enough in money to cover the value of commodities required for their subsistence, but then charges those workers above that value, its clear that they cannot then buy all of the commodities they require! They may as well have paid wages below the subsistence level.

“Hence Destutt should have reduced the entire secret of how the capitalist class gets richer to the following: by a deduction from wages. In that case the other surplus-value funds, which he mentions under 1) and 3), would not exist.” (p 488)

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