Theories of Surplus Value, Part I, Chapter 4 - Part 19

6. Advocates of Smith’s Views on Productive Labour. On the History of the Subject

(a) Advocates of the First View: Ricardo, Sismondi

Both Sismondi and Ricardo accepted Smith's first correct definition of productive labour as that which exchanges with capital. Sismondi writes,

““The one always exchanges its labour against the capital of a nation; the other always exchanges it against a part of the national revenue.”” (p 177)

Ricardo also argues that it is better for workers if capitalists and landlords spend their revenue on hiring “unproductive labourers” than that they spend it on the purchase of luxury commodities. If they buy the latter then, once these commodities have been consumed “and there would be an end of them”, no more labour would be employed. However, Ricardo continues, if the revenue were spent on hiring menial servants, this would increase the demand for labour. 

“As the labourers, then, are interested in the demand for labour, they must naturally desire that as much of the revenue as possible should be diverted from expenditure on luxuries, to be expended in the support of menial servants” ([David ] Ricardo, [On the] Principles [of Political Economy, and Taxation,] third edition, [London,] 1821, pp. 475-76).” (p 177)

Marx does not challenge this view here, but its not at all clear that Ricardo is correct in this argument, for the reasons Marx has set out previously. If revenue is spent simply on hiring a cook, to prepare a meal for me then once I have spent that money it is gone. It is not reproduced. Unless I have some more revenue I have no means of employing the cook to produce further meals. The commodity they supply, the service of cooking a meal, has gone just as much as is any other commodity I buy, such as some luxury clothes. Ricardo does not seem to take into consideration that in buying say an expensive suit, this too created a demand for labour as with hiring a cook.

The tailor is added labour here, as is the labour of the weaver, who produces the cloth, the spinner who produces the yarn, the farmer who produces the cotton or wool, the machine maker who produces the loom, and the spinning machines and so on.

All of this additional labour is demanded because the revenue is expended upon buying a suit, which increases the demand for all these other commodities, and the labour required for their production. In hiring the menial servant, the revenue merely enables that worker to reproduce their labour-power, but adds nothing to capital accumulation. However, in buying a luxury suit, the revenue enables the surplus value of the tailor to be realised, so that his capital can be expanded. This expansion of capital thereby creates the condition not only for the existing labour to be reproduced, but for a demand for additional labour to be created.

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