Theories of Surplus Value Part I, Chapter 2 - Part 1

The Physiocrats

[1. Transfer of the Inquiry into the Origin of Surplus-Value from the Sphere of Circulation into the Sphere of Direct Production. Conception of Rent as the Sole Form of Surplus-Value]

“The analysis of capital, within the bourgeois horizon, is essentially the work of the Physiocrats. It is this service that makes them the true fathers of modern political economy.” (p 44)

One of the great elements of the Physiocratic theory was that, in transferring the inquiry of the nature of surplus value, and the basis of social reproduction, into the realm of production, rather than circulation, they laid bare the material foundations upon which that rested.

As Marx sets out, particularly in the concluding chapters of Capital, this process of social reproduction takes place under several material and physical constraints.

• The material elements of constant capital must be reproduced in kind
• the material elements of variable capital, i.e. the commodities required for the reproduction of labour-power must be reproduced in kind
• the total output of society depends upon the given level of productivity and technology, its accumulated capital, and the available social labour-time. 

If the level of productivity and technology is constant, the proportion of total output that must be allocated for the physical reproduction of the constant and variable capital is thereby fixed. On this basis, the amount of surplus product and surplus value is thereby objectively determinable. But, even the division of this surplus product and surplus value, into profit, interest and rent is calculable, on the basis of the laws of competition, and, however it is thereby divided, its total mass cannot exceed that determined by these physical constraints.

This material, physical foundation, for social reproduction, and the production of surplus value, was obvious to the Physiocrats, whereas it is lost sight of by later economists, Marx says, precisely because the Physiocrats were studying agriculture, where production “can be thought of in complete separation from and independently of circulation, of exchange; and which presupposes exchange not between man and man but only between man and nature.” (p 49)

The Physiocrats, in studying agriculture, witness this fundamental aspect of social reproduction that it is a reproduction of physical products. This is particularly apparent where the agricultural labourer is paid themselves in kind rather than money wages. The capitalist farmer then not only physically reproduces the material elements of their constant capital, in kind, from their output, but pays the workers in kind from that same output.

The surplus value is then most clearly viewed as the surplus of this output over and above what has had to be taken out of it to physically reproduce the constant and variable capital.

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