Monday, 27 March 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 21

William Petty also has this conception of foreign trade, which brings in money, being the basis of what is productive wealth, but Petty includes in his definition of who is involved in this productive activity soldiers. This presumably reflects their role, for example, within the East India Company, of securing these colonial markets from which treasure was returned from such trade.

““Husbandmen, Seamen, Soldiers, Artizans and Merchants, are the very Pillars of any Common-Wealth: all the other great Professions, do rise out of the infirmities and miscarriages of these; now the Seaman is three of these four” (navigator, merchant, soldier) ([William Petty,] Political Arithmetick, etc. [in Several Essays in Political Arithmetick], London, 1699, p. 177). “… the Labour of Seamen, and Freight of Ships, is always of the nature of an Exported Commodity, the overplus whereof, above what is Imported, brings home Money, etc.” (p. 179).” (p 180)

Petty also indicates that with a certain level of trade, a nation can also benefit from the division of labour, so that it can build different types of ships to carry different types of cargo, and to operate in different types of sea conditions, and thereby reduce the cost of construction and the cost of freight.

Petty also adopts a position similar to Smith in respect of a definition of productive being determined by whether what is produced is a material commodity.

“If taxes are taken from industrialists, etc., in order to give [money] to those who in general are occupied in ways “which produce no material thing, or things of real use and value in the Commonwealth: In this case, the Wealth of the Publick will be diminished: Otherwise than as such Exercises, are Recreations and Refreshments of the mind; and which being moderately used, do qualify and dispose Men to what in it self is more considerable” (l.c., p. 198).” (p 180)

Petty anticipates the analysis of surplus value, but only in the form of rent. He defines value in terms of labour-time – although, as with Benjamin Franklin, he doesn't distinguish between concrete and abstract labour. So, he says that if it takes the same time to bring an ounce of silver from the ground in Peru, to London, as it takes to produce a bushel of corn, then “one is the natural price of the other.”

On this basis, he argues that as other industries arise, labour will leave agriculture, and wages rise. But, as wages rise, the rent must fall. In other words, the surplus value is reduced. The value produced by the agricultural worker (husbandman) remains the same, and this is reflected in the price of a bushel of wheat remaining constant so that, if wages rise, they form a greater portion of this price, leaving a smaller portion for rent. The price of the wheat cannot rise, because of competition, as wheat would be imported.

Marx quotes a further passage from Petty's A Treatise of Taxes, and Contributions…, London, 1662, where he sets out this view of surplus value even clearer. In this passage, Petty says that after a husbandman planted, cultivated and harvested a certain area of land by hand, then after they had deducted from their output what was required to replace their seed, what was required to cover their own consumption, and what had been given to others in exchange for the clothes and other commodities they require, then “..the Remainder of Corn is the natural and true Rent of the Land for that year; and the medium of seven years, or rather of so many years as makes up the Cycle, within which Dearths and Plenties make their revolution, doth give the ordinary Rent of the Land in Corn.” (p 182)

He goes on to ask what the corn and the rent would be in money, and again repeats the argument made previously.

“Let another man go travel into a Countrey where is Silver, there Dig it, Refine it, bring it to the same place where the other man planted his Corn; Coyne it, etc. the same person, all the while of his working for Silver, gathering also food for his necessary livelihood, and procuring himself covering, etc. I say, the Silver of the one must he esteemed of equal value with the Corn of the other” (p 182)

(c) John Stuart Mill, an Adherent of Smith’s Second View of Productive Labour

J.S. Mill added nothing to Smith's second, incorrect, definition of productive labour, other than to suggest that labour used to produce labour-power was itself productive. In other words, the labour involved in educating and training labour-power is itself productive.

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