Theories of Surplus Value, Part I, Chapter 3 - Part 10

Adam Smith, when he comes to look at the exchange between wage labour and capital, recognises that fundamental to this exchange is a condition where we no longer have individual commodity producers, exchanging their commodities, but one in which we have a group of people who only have their labour-power to sell, and who confront another group of people who own land and means of production. But, he does not ask how this situation comes about. Smith writes,

““As soon as stock has accumulated in the hands of particular persons, some of them will naturally employ it in setting to work industrious people, whom they will supply with materials and subsistence, in order to make a profit by the sale of their work, or by what their labour adds to the value of the materials” ([ibid., p. 53], [Garnier] l.c., p. 96).” (p 78)

Marx notes,

“If we strip Smith’s statement of its naïve phrasing, it means nothing more than: capitalist production begins from the moment when the conditions of labour belong to one class, and another class has at its disposal only labour-power. This separation of labour from the conditions of labour is the precondition of capitalist production.” (p 78)

But, also, this profit that Smith refers to here, can come from only one of two places. Either that profit comes from the sale of the commodity above its value, which is Steuart's “Profit On Alienation” which is only a relative profit, or else it has arisen in production.

However, if it arises in production, and yet sells at its value, on the basis of Smith's argument, this profit can only be the result of the labourer being cheated.

““The value,” Adam continues immediately, “which the workmen add to the materials, therefore, resolves itself in this case” (when capitalist production has begun) “into two parts, of which the one pays their wages, the other the profits of their employer upon the whole stock of materials and wages which he advanced” ([ibid., p. 53], [Garnier] l.c., pp. 96–97).” (p 79)

So its clear here that the worker produces value of one amount, but does not receive back an equivalent amount of value in exchange. A part of that value is appropriated by capital. Smith justified this appropriation by claiming that,

“...something must be given for the profits of the undertaker of the work, who hazards his stock in this adventure” ([ibid., p. 53], [Garnier], l.c.).” (p 79) 

But, however, this appropriation may be justified, it is clear that the worker has created one amount of value, and been paid a smaller amount of value in exchange for having done so. In other words, by the expenditure of their labour, the workers create a quantity of new value, and this divides into two parts. A quantity of this new value is returned to the worker as wages, to reproduce their labour-power. The second part constituting the surplus value is appropriated by capital.

“If therefore he sells the commodity at its value, that is, for the labour-time contained in it, in other words if he exchanges it for other commodities in accordance with the law of value, then his profit originates from the fact that he has not paid for a part of the labour contained in the commodity, but has nevertheless sold it. Adam Smith has thereby himself refuted the idea that the circumstance that the whole product of his labour no longer belongs to the labourer, that he is obliged to share it or its value with the owner of capital, invalidates the law that the proportion in which commodities exchange for each other, or their exchange-value, is determined by the quantity of labour-time materialised in them.” (p 79-80)

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