Theories of Surplus Value, Part I, Chapter 3 - Part 5

Smith, who, like Marx, begins his analysis with the commodity, having correctly determined its value by the labour-time required for its production, then finds that this does not seem to apply when it comes to exchange of commodities in the form of capital and wage labour. Individual commodity producers are able to exchange their commodities at their values, he says, and under these conditions, the value of a commodity is also equal to the value of labour it commands, but this no longer applies when wage labour confronts landed property and capital.

“Hence he concludes that labour-time is no longer the immanent measure which regulates the exchange-value of commodities, from the moment when the conditions of labour confront the wage-labourer in the form of landed property and capital. He should on the contrary, as Ricardo rightly points out, have drawn the opposite conclusion, that the expressions “quantity of labour” and “value of labour” are now no longer identical, and that therefore the relative value of commodities, although determined by the labour-time contained in them, is not determined by the value of labour, since that was only correct so long as the latter expression remained identical with the former.” (p 73)

In fact, even where the labourer did appropriate their own product, it would be wrong to determine the value of commodities by the value of labour-power, rather than the labour-time required for their production, for the reasons I have set out earlier. The value of labour-power, in every society, must be less than the value of the product of labour, or else there can be no production of a surplus product, or surplus value, and consequently no accumulation and development.

“In any case Adam Smith feels the difficulty of deducing the exchange between capital and labour from the law that determines the exchange of commodities, since the former apparently rests on quite opposite and contradictory principles.” (p 73)

And, that had to be the case, so long as Smith did not distinguish between labour, as the essence of value, and labour-power, as a commodity. But, Smith did recognise that the value of labour-power was different from the value that same labour created, as Marx sets out.

Richard Cantillon

Smith himself quotes Cantillon to this effect.

““The labour of an able-bodied slave, the same author adds, is computed to be worth double his maintenance; and that of the meanest labourer, he thinks, cannot be worth less than that of an able-bodied slave” ([Wealth of Nations, O.U.P. edition, Vol. I, p. 75], [Garnier] t. I, l. I, ch. VIII, p. 137).” (p 73)

For the reasons I have described elsewhere I think it is necessary to distinguish here that what the slave produces is not new value, but new use values, and that what they produce is a surplus product, rather than surplus value. As Marx sets out, in The Grundrisse, the slave stands in relation to production in the same way that a pack animal or machine does. They only, thereby, transfer their own value to production piecemeal. They do not create new value, and nor, therefore, do they create surplus value.

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