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

The Physiocrats did not understand the concept of value, Marx says, but they did not need to, in order to understand the nature of surplus value on this basis. All that an understanding of value adds to this analysis is to put a quantified figure of value on to these respective physical quantities of use values, that appear alternately as constant capital, variable capital, and surplus value, and thereby facilitate their representation as amounts of exchange value and money.

For example, suppose we represent all agricultural production in terms of grain. We might then have, in physical quantities:

c 100 units + v 500 units + s 600 units.

The rate of surplus value here equals 120%, and the rate of profit 100%. Suppose we represent these quantities of use values instead as values, in terms of labour-time. We may then have either:

c 100 + v 500 + s 600, or

c 200 + v 1000 + s 1200, or

c 50 + v 250 + s 300.

In each case, nothing has fundamentally changed, because the value of the grain, whether it is used to reproduce the constant capital, the variable capital or is left over as surplus product, is the same in each case, and consequently, the proportional relations remain the same in each case.

“Therefore the foundation of modern political economy, whose business is the analysis of capitalist production, is the conception of the value of labour-power as something fixed, as a given magnitude — as indeed it is in practice in each particular case. The minimum of wages therefore correctly forms the pivotal point of Physiocratic theory. They were able to establish this although they had not yet recognised the nature of value itself, because this value of labour-power is manifested in the price of the necessary means of subsistence, hence in a sum of definite use-values. Consequently, without being in any way clear as to the nature of value, they could conceive the value of labour-power, so far as it was necessary to their inquiry, as a definite magnitude.” (p 45)

Of course, the constant and variable capital was not comprised only of grain, but the point remains. A quantity of agricultural produce, be it grain, vegetables or whatever is produced, and out of this product, a given proportion must be set aside to replace those same products that were consumed as constant and variable capital, in its own production.

“It was their great merit that they conceived these forms as physiological forms of society: as forms arising from the natural necessity of production itself, forms that are independent of anyone’s will or of politics, etc. They are material laws, the error is only that the material law of a definite historical social stage is conceived as an abstract law governing equally all forms of society.” (p 44)

In other words, this is essentially a restatement of The Law of Value, as Marx outlined it, in his letter to Kugelmann. The Law of Value determines that society has a given quantity of available social labour-time to be allocated to the production of new value. The value of existing means of production is automatically transferred to the value of current production, but must be physically replaced, like for like, out of that current production. Of the new value created, a portion must go to the reproduction of the labour-power used in its production, leaving the remainder as a surplus value.

This physical division of each society's physical production into a fund to replace the consumed means of production, a fund to reproduce labour-power, and a remainder that constitutes a surplus product and surplus value is a natural law that applies to all societies, and all that changes is the form in which it is materialised under different modes of production.

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