Wednesday, 22 March 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 16

For Smith, the commodity appears either as past objectivised labour embodied in a physical commodity, or else it appears as labour-power itself. But, the commodity is never living labour, i.e. the actual performance of labour.

Productive labour would therefore be such labour as produces commodities or directly produces, trains, develops, maintains or reproduces labour-power itself. Adam Smith excludes the latter from his category of productive labour; arbitrarily, but with a certain correct instinct—that if he included it, this would open the flood-gates for false pretensions to the title of productive labour.” (p 172)

For Smith, a commodity is a material product, which has required the expenditure of labour-time. It would include a machine produced by a manufacturer not for sale, but for their own use, in the production of other commodities for sale. In this case, the machine is sold bit by bit, as its wear and tear is transferred to the end product. But, likewise for Smith, the actor does not produce commodities but only immediate use values, even though they sell a commodity, their labour-power to the theatre owner.

“... the fact that their purchaser cannot sell them to the public in the form of commodities but only in the form of the action itself would show that they are unproductive labours.” (p 172)

As Marx points out, the commodity is the most elementary form of bourgeois wealth, and so Smith's second definition of productive labour as that which produces these material commodities is itself a more elementary definition than his first, as that labour which produces capital.

Smith's opponents disregarded his first definition and concentrated on his second, with all of the contradictions in it highlighted by Marx above.

“And their attacks were made all the easier for them by their insistence on the material content of the labour, and particularly the specific requirement that the labour must fix itself in a more or less permanent product. We shall see in a moment what it was that particularly gave rise to the polemics.” (p 173)

Marx quotes Smith's comment that the great merit of the Physiocratic system was that it represented the wealth of nations as consisting “... “not in the unconsumable riches of money, but in the consumable goods annually produced by the labour of the society”( [Wealth of Nations, O.U.P. edition, p. 299], [Garnier] t. III, l. IV, ch. IX, p. 538).” (p 173)

Here, Smith's second definition is clearly in view, as wealth is defined only in terms of these physical commodities – consumable goods.

“The definition of surplus-value naturally depended on the form in which value itself was conceived. In the Monetary and Mercantile systems it is therefore presented as money; by the Physiocrats, as the produce of the land, as agricultural product; finally in Adam Smith’s writings as commodity in general.” (p 173)

For the Physiocrats, value is merely use value, whereas for the Monetary and Mercantile schools it is pure exchange value – money. Smith combines both use value and exchange value as contained in the commodity, “... so all labour is productive which manifests itself in any use-value, any useful product.” (p 174)

Smith thereby goes beyond the Physiocrats and restores value – labour-time – as central to bourgeois wealth, but without its fantastic form, as it appears for the Mercantilists, as gold and silver. By re-establishing value as labour, Smith demonstrates that,

“Every commodity is in itself money.” (p 174)

Every commodity is money, because it is a representative of a certain quantity of social labour-time. Like the money-commodity, it is a claim to a quantity of social labour-time, in exchange for it. But, in re-establishing this centrality of value, Smith himself falls back into a Mercantilist concept of permanence, of a concept of the embodiment of labour within the commodity, which thereby establishes exchange value as a relation between things – embodiment of labour – rather than as a relation between between people - commodity fetishism. Consequently, the concept of the commodity itself becomes restricted to only physical products.

Marx refers back to “A Contribution To The Critique of Political Economy”, in which he criticised Petty's view “... where I quote from Petty’s Political Arithmetick) where wealth is valued according to the degrees in which it is imperishable, more or less permanent, and finally gold and silver are set above all other things as wealth that is “not perishable”.” (p 174)

Marx concludes this section with a quote from Adolphe Blanqui's Histoire de l’économie politique, commenting on Smith.

““In restricting the sphere of wealth exclusively to those values which are embodied in material substances, he erased from the book of production the whole boundless mass of immaterial values, daughters of the moral capital of civilised nations,” etc.” (p 174)


Unknown said...

Hey Boffy, what do you think of Heinrich's interpretation of Marx. Specifically his views on ToSV being outdated and something Marx moved past.

Boffy said...

Hi Harrison,

I think you are referring to Henrich's comments about the Law of The Tendency for the Rate of Profit To Fall, not Theories of Surplus Value, which Marx developed originally as a major historical excursus to sit alongside the corresponding elements of the three volumes of Capital.

As Engels himself says, had Marx written and published Volumes II and III, they would have been different books. But, he didn't. He only left manuscripts, and notes in various conditions, which he told Engels to "make something of", and which Engels then saw as placing a responsibility on hims to put in an unadulterated, but readable form.

As Engels says, had Marx published Volume II, then he would undoubtedly have written far more about the process of development of the average rate of profit, and the transformation of exchange values into prices of production, within which the role of the law of the tendency for the rate of profit to fall, by determining the allocation of capital, so as to form an average rate of profit plays a decisive role, i.e. competition to secure the highest annual rate of profit drives capital into those areas of production where the organic composition of capital is lowest, and where the rate of turnover of capital is highest.

But, as I've written at length - The Law of the Tendency for the Rate of Profit to Fall I think that much of the understanding of that Law if wrong. It confuses the Rate of Profit/Profit Margin with the Annual Rate of Profit, and consequently General Annual Rate of Profit, for example.

Consequently, I think the question of whether Marx was moving away from the Law or not is at best moot, and more importantly wrong headed. Moot because Marx never gave it the role in being a cause of crisis that some have claimed for it - rather Marx sees the mechanism behind it (rising social productive reflected in rising organic composition of capital) as the means by which capital resolves crises of overproduction, which come down to capital expanding faster than the supply of labour-power, causing wages to rise, and rate of surplus value to fall, as described in Chapter 15 - and wrong headed, because the Law sits behind the process of formation of the average rate of profit, and allocation of capital, and marx certainly did not think that process was outdated, though in the closing chapters of Volume III, he does describe how this is manifest via competition and monopoly in practice, and particularly in relation to socialised forms of capital.