“Quite correctly they lay down the fundamental principle that only that labour is productive which creates a surplus-value, in whose product therefore a higher value is contained than the sum of the values consumed during the production of this product.” (p 46)
But, for the reasons set out earlier, the Physiocrats wrongly considered that only agricultural labour was productive, just as rent for them was the form of surplus value. In reality, as Marx describes in Capital III, under capitalism, it is the extraction of surplus value by capital from wage labour, which is the basis of profit, and rent and interest are merely portions of this surplus value, which the landowner and the owner of money-capital are able to extract from the industrial capitalist.
But, for the Physiocrats, it is rent which is the form that surplus value takes, and for them, industrial profit appears as nothing more than a special form of wages paid to the industrial capitalist.
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| Turgot |
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| Mirabeau The Elder |
Similarly, it is declared by one section of the Physiocrats, “such as Mirabeau the elder, to be usury and contrary to nature. Turgot on the other hand derives his justification of it from the fact that the money capitalist could buy land, that is, rent, and that therefore his money capital must bring him in as much surplus-value as he would receive if he converted it into landed property.” (p 47)
In this respect, the Physiocratic theory reflects later development as though in a mirror. With the later development of capitalism, the private capitalist becomes removed from their social function, in production, and becomes merely the provider of money-capital, in receipt of interest, whilst the role of “functioning capitalist” is taken over by professional managers who are paid a wage, “the profit of enterprise” then appearing clearly as a surplus extracted from the workers.
But, also, as land itself becomes a commodity that is bought and sold, increasingly also, by urban capitalists, its price is determined on the basis of capitalised rent. However, its not now that interest can be justified on the basis that the money lender could have bought land and earned rent, but that this money-capital could have been loaned to productive-capitalists, could have been used to buy bonds or shares etc., so that the purchase of land, and the obtaining of rent becomes just one in a range of alternative uses to which this money-capital could have been put.
In fact, its on this basis that the interaction of demand and supply for this money-capital brings about a risk adjusted equalisation of yields between different asset classes, via the rise and fall of the prices of these assets.
There were other good reasons why the Physiocrats saw rent as the form of surplus value, and only agricultural labour as productive. Rent only appears as transitory in industrial production. But, in agriculture, rent appears as a surplus when the cost of employing labour and capital have been met, because rent arises on the basis of surplus profit.
Moreover, as Marx set out in Capital III, it is undeniably true that a fundamental requirement for labour to be set free to engage in alternative activities is that agricultural labour must first be able to produce a surplus. Those employed on the land must be able to produce enough food not just to feed themselves, but also to feed all those not employed on the land.
The idea understandably arises, therefore, that the industrial workers are only able to exist, and produce, because their need for food is met by the surplus produced by the agricultural workers, and that the profits of the industrial capitalist and interest paid to the money-capitalist are only possible because they are able to extract a portion of the rent.
But, there was another feature of agriculture, which facilitates this view. Surplus value depends upon the ability of the labourer to create a greater quantity of value than is required for the reproduction of their labour-power. This has two consequences in agriculture. Firstly, as seen earlier, the manifestation of this in agriculture is that the labourer produces more food (use values) than are required for their own reproduction. The industrial labourer, however, produces commodities, which are use values, which may not be part of their own consumption at all. It is only when the analysis is conducted on the basis of value, rather than use values, that it becomes obvious that the industrial labourer as much as the agricultural labourer can produce a greater value than is required for the reproduction of their labour-power.
Secondly, it is apparent in agriculture that the ability to produce this surplus product in part arises from the gifts of nature. More food is produced on fertile land than on barren land. Even the production of absolute surplus value depends upon the minimum level of productivity, so that more can be produced in a day than the labourer needs to consume in a day.
In industry, however, it is only in its later development that the forces of nature can be seen to be harnessed as a free gift, so as to increase this level of productivity (the use of water wheels, windmills, steam-power) and thereby increase the size of the surplus product.
Once again, therefore, the nature of this surplus product appears to be inextricably linked to the nature of agricultural production and its direct relation to nature.
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