Thursday, 29 September 2016

Capital III, Chapter 48 - Part 2

But, a cost of production, or historic cost, theory of value starts from the other end. It takes the historic prices paid for the constant capital, and the wages, alongside the profits, and adds them together to obtain the value of the commodity, or the commodity-capital. On this basis, the Smithian notion, adopted by bourgeois economics, of factor incomes, derived from the contribution each makes to the value of the product, flows naturally.

Given that, for Smith, as Marx sets out in Capital II, Chapter 20, the entire value of the commodity, and of the society's commodity product, dissolves entirely into these factor incomes, and thereby into just v + s, rather than c + v + s, this notion is reinforced. Modern bourgeois economics, of whatever flavour, from the Austrian School through to the Neo-Keynesian, accepts this absurd notion that the value of national output can be entirely dissolved into the factor incomes of wages, rent, profit and interest (plus taxes), which comprise National Income, and so only the value of the consumption fund, completely omitting the value of the fund required to reproduce the means of production!

This is important for Marx, because it is upon these phenomenal forms, on these different forms of revenue that he wants to examine the consequence for the division of society into classes, whose economic interests thereby diverge, and come into contradiction with each other.

i)

“Capital — profit (profit of enterprise plus interest), land — ground-rent, labour — wages, this is the trinity formula which comprises all the secrets of the social production process. 

Furthermore, since as previously [Present edition: Ch. XXIII. —Ed.] demonstrated interest appears as the specific characteristic product of capital and profit of enterprise on the contrary appears as wages independent of capital, the above trinity formula reduces itself more specifically to the following:

Capital — interest, land — ground-rent, labour — wages, where profit, the specific characteristic form of surplus-value belonging to the capitalist mode of production, is fortunately eliminated.” (p 814)

Yet, all these supposed sources of wealth are different, and not analogous to each other. As described previously, neither land nor loanable money-capital possess value, and thereby are not additive of value to the production process. They obtain a revenue, a portion of the total value produced by society, without contributing anything to it. They share in the surplus produced by productive-capital, but the productive-capital itself divides into constant capital, whose value is only transferred to the value of the commodity, and variable capital, which alone creates new value, and the potential for surplus value arising from it.

“Capital, land, labour! However, capital is not a thing, but rather a definite social production relation, belonging to a definite historical formation of society, which is manifested in a thing and lends this thing a specific social character. Capital is not the sum of the material and produced means of production. Capital is rather the means of production transformed into capital, which in themselves are no more capital than gold or silver in itself is money. It is the means of production monopolised by a certain section of society, confronting living labour-power as products and working conditions rendered independent of this very labour-power, which are personified through this antithesis in capital. It is not merely the products of labourers turned into independent powers, products as rulers and buyers of their producers, but rather also the social forces and the future [? illegible] [A later collation with the manuscript showed that the text reads as follows: "die Gesellschaftlichen Kräfte und Zusammenhängende Form dieser Arbeit" (the social forces of their labour and socialised form of this labour). — Ed.] form of this labour, which confront the labourers as properties of their products.” (p 814-5)

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