[8. Vulgarisation of the Physiocratic Doctrine by the Prussian Reactionary Schmalz]
Marx gives a short illustration of how the Physiocrats ideas were misused by the Prussian reactionary, Theodor Schmalz.
““If nature pays him” (the lessor of the land, the landowner) “even double the legal interests, on what plausible ground could anyone dare to deprive him of it?” (Économie politique, traduit par Henri Jouffroy, etc., t. I. Paris, 1826, p. 90.)” (p 67)
Schmalz made the following argument. Wages are equal to the average consumed during the time labour is being undertaken. Rent is the only form of national revenue, because it constitutes the net product, i.e. the product left over, after all those engaged in agricultural production have consumed to reproduce their labour-power. Consequently, all other wages, which includes industrial profits, as well as interest, only act to circulate this surplus product around the economy.
The value of any product, he argues, is only equal to the value created by nature. On the one hand, all products come from nature, and to the extent this value is enhanced by the application of labour, the value of this labour, as set out above, is only equal to the value of the products consumed by that labour, during the period it is working.
[9. An Early Critique of the Superstition of the Physiocrats in the Question of Agriculture (Verri)]
Marx then quotes from the work of Pietro Verri, who challenged the superstitious nature of the Physiocrats belief in the specific role of agriculture, as the sole form of productive activity.
Verri points out that,
““All the phenomena of the universe, whether produced by the hand of man or through the universal laws of physics, are not actual new creations, but merely a modification of matter. Joining together and separating are the only elements which the human mind always finds on analysing the concept of reproduction; and it is just the same with the reproduction of value and of wealth, when earth, air and water in the fields are transformed into corn, or when the hand of man transforms the secretions of an insect into silk, or some pieces of metal are arranged to make the mechanism of a watch” (pp. 21-22).” (p 67-8)
Verri also points out an obvious contradiction in the Physiocratic theory, because the condition of artisans was improving, whereas the mass of the agricultural population lived in constant poverty.
““This proves that the artisan, in the price which he receives, gets not only the replacement of his outlay on consumption, but a certain sum over and above that; and this sum is a new quantity of value created in the annual production” (l.c., p. 26). “The newly-created value is therefore that part of the price of the agricultural or industrial products which they yield over and above the original value of the materials and the necessary outlays on consumption while they are being worked up. In agriculture the seed and the consumption of the husbandman must be deducted, as in manufacture the raw material and the consumption of the industrial workman; and every year new value is created, to the amount of the balance that remains” (l.c., pp. 26-27).” (p 68)
This also highlights the essentially Mercantilist view of those who today argue that the higher living standards of workers in developed (imperialist) metropolitan centres, have arisen due to some form of unequal exchange, or "super-exploitation" of the less developed economies, as opposed to Marx's view, that builds upon Adam Smith, Ricardo and others, that the wealth of nations, and with it the living standards of their people is a function of the accumulation of capital, and the constant rise in the level of social productivity, it brings with it.
This also highlights the essentially Mercantilist view of those who today argue that the higher living standards of workers in developed (imperialist) metropolitan centres, have arisen due to some form of unequal exchange, or "super-exploitation" of the less developed economies, as opposed to Marx's view, that builds upon Adam Smith, Ricardo and others, that the wealth of nations, and with it the living standards of their people is a function of the accumulation of capital, and the constant rise in the level of social productivity, it brings with it.
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