Theories of Surplus Value, Part I, Chapter 4 - Part 65

Marx compares the situation with that of the ancient Germany which took it in turns for one part of the population to cultivate the fields while another portion went to war. It would be of no benefit, he says, if the population rose from 1,000 to 1,500 if, in the process, it required 1,000 people to cultivate the land rather than 500, because it would still have left only 500 to go to war. (Its not strictly true to say there would be no benefit, as the time spent fighting by any particular group of 500 would be reduced accordingly, but that doesn't change the actual point, Marx is making.)

The point is more correctly made by Marx's argument that if agricultural productivity rose, only 250 out of the 1,000 may be required, leaving 750 available to fight, whereas if productivity fell, more would be required for cultivation, leaving fewer to fight.

However, Ricardo shared the false view of Smith that the value of the gross product resolved itself into the total revenue. As Marx points out, therefore, when Ricardo talks of the net product or net revenue, he does not mean the excess of the gross product over the part which must be returned to replace the means of production. He means the surplus product or surplus value, i.e. the revenue over that which covers wages.

The wages are equal to the variable capital – this applies whether the wages are paid as money wages, or paid in kind. They form part of the circulating capital that must be continually reproduced. For example, the agricultural workers, paid in kind, obtained some of their food from the previous year's harvest, which could be stored and drawn from over the following year, but also other elements of current production – milk, eggs, butter, cheese, for example – were in constant supply, and a part of them withdrawn as wages. But, money wages must also be paid at such periods as similarly allow workers to buy the wage goods required to reproduce their labour-power.

At the time Ricardo was writing, many industrial capitalists were themselves actively involved in production, and so some of their revenue was properly attributable to wages rather than surplus value.

“If Ricardo treats the capitalists as not entirely useless, that is to say, as themselves agents of production, and therefore resolves a part of their profit into wages, he has to deduct a part of their revenue from the net revenue and to declare that all these persons only contribute to wealth in so far as their wages form the smallest possible part of their profit. However that may be, at least a part of their time as agents of production belongs, like a fixture, to production itself. And to this extent they cannot be used for other purposes of society or of the State. The more free time their duties as managers of production leave them, the more is their profit independent of their wage. In contrast to these, the capitalists who live only on their interest, and also the landlords who live on rent, are in person entirely at the disposal [of society and the State], and no part of their income enters into the costs of production—except for that part which is used for the reproduction of their own worthy person.” (p 224-5)

Its not actually clear to me why Marx believes that even the costs of reproduction of the rentiers form a part of the costs of production. Marx's main point here, however, is to expose the ideological aspect of Ricardo's argument. If the concern is to maximise the time available for the benefit of society and the state, then surely it is an expansion of the revenue of these latter classes – the landlords and rentiers – that Ricardo should have favoured, i.e. an increase in rents and interest, because it is they who have the greatest free time.

But, Ricardo, of course, does not argue for that.

“And why not? Because it hinders the accumulation of capitals [or]—what is in part the same thing—because it increases the number of unproductive labourers at the cost of the productive.” (p 225)

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