Monday, 8 May 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 63

““Only the net product,” says Ganilh, “and those who consume it form its” (the State’s) “wealth and its power, and contribute to its prosperity, its glory and its grandeur” (l.c., p. 218).” (p 222)

The net product is the surplus product. That is what is left after the commodities required to reproduce the constant capital and variable capital have been deducted from the Gross Product.

“Ganilh further cites Say’s notes to Constancio’s translation of Ricardo [Principles,] Chapter XXVI, where Ricardo says that if a country has 12 million [inhabitants], it would be more advantageous for it if 5 million productive labourers labour for the 12 million, than if 7 million productive labourers labour for the 12 million. In the first case the net product consists of the surplus-produce on which the 7 million who are not productive live; in the other, of a surplus-produce for 5 million.” (p 222)

In other words, the society with 5 million productive workers must be at a higher level of development, because its productivity is such as to be able to produce a larger surplus product with 5 million workers than the other can produce with 7 million workers.

Marx quotes Say,

““This is quite like the doctrine of the Economists of the eighteenth century, who maintained that manufactures in no way helped towards the wealth of the State, because the wage-earning class, consuming a value equal to that which they produce, contribute nothing to their famous net product.”” (p 222)

By "Economists" here, Say means the Physiocrats. The Physiocrats, as we have seen, believed that it was only agricultural labour that was productive. They believed that the manufacturers (within which they did not distinguish between workers and capitalists) only took the product of agriculture as means of production, and as food, and changed its form, thereby creating no new value.

Ganilh wrote,

“It is not easy to see any connection between the Economists’ assertion that the industrial class consumes a value equal to that which it produces and the doctrine of Mr. Ricardo, that the wages of labourers cannot be counted in the revenue of a State.” (p 222)

But, Marx points out that again Ganilh misses the point. Unlike the Physiocrats, Ricardo understood that the manufacturers comprised wage-workers and capitalists, and the former produced surplus value for the latter, just as much as the agricultural labourers produced a surplus value that took the form of a profit for the farmer and rent for the landlord – even though the distinction between the two was blurred where the farmer was the landlord.

The Physiocrats are wrong in believing that the wage workers only produce what they consume. They believe this because their conception of value is based on use value rather than labour. In other words, their conception of surplus value is the production of a surplus product, whereby more use values exist at the end of the process than went into it. They see the difference as being due solely to a free gift from nature, in the fertility of the land.

But, in reality, the surplus value arises not from this free gift from nature, but from the fact that the wage worker produces more than they consume. The agricultural worker produces more use values – food in the form of different crops – than they consume. For, so long as production and consumption is more or less limited within these bounds, the definition of value, in terms of use value, is practically the same as its definition in terms of labour.

The proportion of the use values produced, which must be consumed is here, effectively the same as the proportion of the day/year required to produce these wage goods, relative to the working day/year. But, when we consider production on a wider scale then it is the value created by labour, in excess of the value of that labour-power, which reveals the true nature of surplus value. The wage worker whether an agricultural worker or an industrial worker receives a wage equal to the value of their labour-power, i.e. equal to the value of the commodities required for their reproduction.

Those commodities do not just comprise agricultural products, but equally comprise the products of industry, as well as various forms of services, such as education etc. The value of these commodities is equal to the labour-time required for their production. But, the surplus value arises precisely because the workers who produce all of these various commodities only receive a portion of them back as wages. The value they create by their labour exceeds the value of their labour-power, paid to them as wages.

“But when Ricardo says that profits and rents form this surplus and are consequently the only wealth, in spite of his difference from the Physiocrats, he agrees with them in thinking that only the net product, the product in which the surplus-value exists, forms the national wealth; although he has a better understanding of the nature of this surplus. For him, too, it is only the part of the revenue which is in excess of wages. What distinguishes him from the Economists is not his explanation of the net product, but his explanation of wages, under which category the Economists wrongly also include profits.” (p 223)

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