Capital III, Chapter 48 - Part 7

iii) “Vulgar economy actually does no more than interpret, systematise and defend in doctrinaire fashion the conceptions of the agents of bourgeois production who are entrapped in bourgeois production relations. It should not astonish us, then, that vulgar economy feels particularly at home in the estranged outward appearances of economic relations in which these prima facie absurd and perfect contradictions appear and that these relations seem the more self-evident the more their internal relationships are concealed from it, although they are understandable to the popular mind. But all science would be superfluous if the outward appearance and the essence of things directly coincided.” (p 817)

The fundamental contradiction, therefore, of trying to equate use value with value, and this is the basis of all theories of subjective value, such as theories of marginal utility, does not even occur to bourgeois economists as a problem. Indeed, the idea that all of these factors contribute their own share of value, by working harmoniously together, and each thereby receiving, out of the resultant social wealth, a revenue equal to what they have contributed, is a powerful ideological tool. It lies behind nonsensical concepts such as “A Fair Day's Work for A Fair Day's Wage.” 

The use value land, which has no value, is equated with the revenue, i.e. value, rent. Capital is considered as a sum of money, whether it is money-capital itself or the money equivalent of capital, in the form of means of production, or commodity-capital. But, this value is then equated with interest in other words, the original value plus an additional amount of value. Yet, it is clearly nonsense to say that a value is equal to a greater value, to say that 4 is equal to 5!

If I have £4 in money, then it clearly does not have a value of £5, which it would have to have, were it to spontaneously generate £1 of interest as an additional value from somewhere. All of the justifications for me obtaining this interest, such as abstinence, time preference and so on do not in any sense explain where the additional value comes from. If I bury £4 in the ground, and thereby abstain from its use, it will not magically have turned into £5 when I dig it up.

If I give you £10 today, because you have a time preference to have it now, which I am prepared to forego, then, in a month's time, all you can return to me is that same £10, unless other things have happened, e.g. you have used the £10 productively to create a profit. But, then your ability to give me back £12 rather than £10 is a consequence of you making a profit, not a consequence of your time preference to have the money now, or my time preference to forego its possession for a month.

“The vulgar economist prefers the formula capital — interest, with its occult quality of making a value unequal to itself, to the formula capital — profit, precisely for the reason that this already more nearly approaches actual capitalist relations. Then again, driven by the disturbing thought that 4 is not 5 and that 100 taler cannot possibly be 110 taler, he flees from capital as value to the material substance of capital; to its use-value as a condition of production of labour, to machinery, raw materials, etc. Thus, he is able once more to substitute in place of the first incomprehensible relation, whereby 4 = 5, a wholly incommensurable one between a use-value, a thing on one side, and a definite social production relation, surplus-value, on the other, as in the case of landed property.” (p 817-8)

The means of production, at least has the advantage over land that as products themselves of labour, they do also have value, but then, as set out above, it is nonsensical to claim that this value can be greater than itself, and therefore, a source of revenue. Incidentally, this is also what the TSSI does by using historic prices for means of production, which thereby appear to promote a revenue if their value increases.

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