Thursday, 23 April 2015

Capital III, Chapter 1 - Part 5

Marx then turns to the reproduction of this argument by Torrens. His version of it went like this. The profit cannot be part of the cost of production, or 'natural price' because if it was that would mean it would also have to have formed part of the expenditure of the capitalist. If a farmer uses 100 quarters of corn to obtain 120 quarters, the 20 quarters form his profit, but they have not been a part of his expenditure.

Marx deals with this argument from Torrens also in Theories of Surplus Value, as we will see then. There he shows that there are several things wrong with it. Torrens assumes that the use value of 100 quarters magically becomes a use value of 120 quarters. But, Marx says this additional use value, of 20 quarters, was there all the time. It existed in other forms – in the nutrients in the soil, in the water provided by the rain, the energy provided by the sun, and, of course, the labour provided by the worker. 

But, Torrens argument from a value rather than use value perspective is wrong too. The former may not have expended any value equal to these additional 20 quarters, but that does not at all mean that this value was NOT expended in their production. On the contrary, it was expended in the labour provided by the worker, but for which the worker was not paid!

If the worker were a peasant, this would have been apparent. If the value produced by a day's labour was £1, and the peasant worked for 100 days, having previously spent 20 days to acquire the 100 quarters of seed, then, at the end, he would have his 120 quarters of wheat to sell worth £120. But, it would not appear to him that he had made any surplus value, or obtained something for nothing. The value of his product would be exactly the same as the value required to produce it, equal to the labour he had expended to acquire the seed and cultivate its crop.

By focussing only on the capital-value laid out, Torrens misses this additional value contributed for free by the worker, and so he can only conceive that the profit is derived because consumers, “... either by immediate or circuitous barter give some greater portion of all the ingredients of capital than their production costs.” (p 38)

This illusion of something arising out of nothing, as Marx describes Torrens argument, is itself generated by the reality of capitalist production, where it is exactly how it appears to be, and thereby becomes established within the ideology of the social relations that develop upon it. Once those capitalist relations become dominant, this mode of thinking is absorbed by the other classes too, for whom this now appears as reality. For the peasant too, his surplus product produced over and above what is required for his reproduction appears as a 'profit' when sold in the market, even though it has not come to him free, but only at the expense of his own labour.

We see the same thing today, in the plethora of get rich quick property programmes, on TV. It is clear in most cases, that those involved have usually grossly deluded themselves about how much a renovation project has actually cost them, because they either do not include the value of their own labour-time expended, or else hugely understate it.

In that regard, Marx quotes Balzac's “Les Paysans”,

“ a petty peasant performs many small tasks gratuitously for his usurer, whose goodwill he is eager to retain, and how he fancies that he does not give the latter something for nothing because his own labour does not cost him any cash outlay. As for the usurer, he thus fells two dogs with one stone. He saves the cash outlay for wages and enmeshes the peasant, who is gradually ruined by depriving his own field of labour, deeper and deeper in the spider-web of usury.” (p 39)

This view that the cost price was the actual value of the commodity was also adopted by Proudhon, and made the basis of his People's Bank.

If a commodity is sold at its cost price, it does not at all change the fact that the workers have still performed unpaid labour. It only means they have now done so for the purchaser of the commodity rather than the capitalist. If we have 20 kilos of yarn whose value is made up of £20 means of production, £5 labour-power, and £5 surplus value, where £1 = the value produced by 1 hour's labour, the worker will still have worked 10 hours to produce the yarn.  If 20 kilos has a value of £30, which equals £1.50 per kilo, then the means of production, £20, are equal to 13.33 kilos, whilst the new value added by labour is equal to 6.66 kilos, divided 3.33 for labour-power and 3.33 kilos for surplus value. 

If the 20 kilos are sold not at £30, but at £25, the consumer gets a sixth of the product (surplus value = 1/6 of the value) for free, or 20/6 = 3.33 kilos.

“It would be altogether wrong to assume that if all commodities were sold at their cost-price, the result would really be the same as if they had all been sold above their cost-price, but at their value. For even if the value of the labour-power, the length of the working-day, and the degree of exploitation of labour were the same everywhere, the quantities of surplus-value contained in the values of the various kinds of commodities would be unequal, depending on the different organic composition of the capitals advanced for their production.” (p 40)

Which again is the conundrum that has to be solved of how these unequal masses of surplus value can result in an equal rate of profit.

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