[5. Elements of Physiocratic Theory in Adam Smith]
Marx then moves on to the elements of Physiocratic theory that reappear in Adam Smith. Smith was writing at a time still prior to large scale industry, and so his views continue to reflect these conditions, as opposed to Ricardo, who saw the beginnings of such large-scale production. This is important, as Marx sets out, in relation to this question about the extent to which the surplus product is a consequence of the free gifts of nature.
In agriculture, those free gifts, provided by natural fertility of the land, are obvious. But, small scale industry seems to rely only on the materials produced by agriculture, and the labour of the industrial workers – and capitalists, who in this early period themselves often still worked – whose labour is again only reproduced as a consequence of the produce provided by agriculture.
It is only with large scale industry that it becomes apparent that nature provides these free gifts just as much to industrial production as it does to agriculture.
Marx quotes Smith from “The Wealth of Nations”.
““It is the work of nature which remains after deducting or compensating every thing which can be regarded as the work of man.”” (p 61)
And the response of Ricardo from “On the Principles of Political Economy, and Taxation”
““Does nature nothing for man in manufactures? Are the powers of wind and water, which move our machinery, and assist navigation, nothing? The pressure of the atmosphere and the elasticity of steam, which enable us to work the most stupendous engines — are they not the gifts of nature? to say nothing of the effects of the matter of heat in softening and melting metals, of the decomposition of the atmosphere in the process of dyeing and fermentation. There is not a manufacture which can he mentioned, in which nature does not give her assistance to man, and give it too, generously and gratuitously.””(p 61)
As discussed earlier, the Physiocrats saw profit as merely a deduction from rent, which for them was the only form of surplus value. This applied whether it was the profit of an industrial capitalist or a capitalist farmer. Profit here is just a form of wages paid to the capitalist. The same applies to interest as a deduction from rent, at least in respect of Turgot, for the reasons described earlier.
Consequently, for the Physiocrats, accumulation of capital can only arise out of rent. If the capitalist accumulates out of profits, this can only be then because the capitalist has stinted on their own consumption – because profits here are only wages required as revenue to fund the consumption of the capitalist. This provides the basis for the idea, found in Adam smith, that capital accumulation arises because of the abstention from consumption of the capitalists.
This is summarised in the work of Adolphe Blanqui, quoted by Marx, who writes of the Physiocrats that they were of the opinion that,
““Labour applied to the cultivation of the soil produced not only the wherewithal to maintain the labourer throughout the entire duration of the task, but also an excess of value” (surplus-value) “which could he added to the mass of already existing wealth. They called this excess the net product”. (Thus they conceive surplus-value in the form of the use-values in which it appears.) “The net product had necessarily to belong to the owner of the land and constituted in his hands a revenue fully at his disposal. What then was the net product of the other industries? … Manufacturers, merchants, workmen, all were the employees, the stipendiaries of agriculture, sovereign creator and dispenser of all wealth. The products of the labour of these latter represented in the system of the Economists only the equivalent of what they had consumed during the task, so that after their work was completed, the sum total of wealth was absolutely the same as before, unless the workmen or the masters had placed in reserve, that is to say saved, what they had the right to consume. Thus, then, labour applied to the soil was the only labour productive of wealth, and labour in other industries was regarded as sterile, because no increase in the general capital resulted from it.”” (p 62)
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