Tuesday, 9 May 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 64

Say failed to understand the point made earlier, in relation to the fact that it is not the gross product of a society that is a measure of its wealth, but the net product. It is the latter which is the indicator of its level of development, precisely because it reflects the development of social productivity. A smaller number of producers produces a larger volume of output. As Marx says, in Capital III, this relative surplus value is also the basis of all surplus value, that productivity must reach a certain minimum before what is produced is greater than what is consumed.

So, when Say says,

““From seven million fully employed labourers there would be more savings than from five million.”” (p 223)

Ganilh is quite right in refuting this saying,

““With every step made by civilisation, labour becomes less burdensome and more productive; the classes condemned to produce and to consume diminish; and the classes which direct labour, which relieve (!), console (!) and enlighten the whole population, multiply, become more numerous and appropriate to themselves all the benefits which result from the diminution of the costs of labour, from the abundance of products and the cheapness of consumer goods. In this way, the human race lifts itself up.” (p 223)

Marx quotes Ricardo, who points out that Adam Smith made this same error in overstating the importance of the size of the gross product as opposed to the net product.

““ Whether a nation employs five or seven million productive labourers to produce the net revenue on which five million others live, “the food and clothing of five millions would be still the net revenue.”” (p 223)

Employing more workers who added nothing to the surplus product would “... enable us neither to add a man to our army and navy, nor to contribute one guinea more in taxes” (l.c., p. 215).” (p 224)

In fact, as Marx shows in Capital III, Chapter 15, such a situation is what lies behind crises of overproduction. Capital is only capital in so far as it is able to realise profits. The limits of producing surplus value are set by the level of productivity existing at any moment, and the size of the available workforce.

“Given the necessary means of production, i.e. , a sufficient accumulation of capital, the creation of surplus-value is only limited by the labouring population if the rate of surplus-value, i.e. , the intensity of exploitation, is given; and no other limit but the intensity of exploitation if the labouring population is given. And the capitalist process of production consists essentially of the production of surplus-value, represented in the surplus-product or that aliquot portion of the produced commodities materialising unpaid labour.”

(Capital III, Chapter 15)

But, if more workers have been employed, as capital expanded, then, as set out above, this will expand the gross output, whilst the net output may expand by a much smaller amount or not expand at all. The workers, as the supply of labour-power gets used up, are able to increase wages so that the net product increases by a diminishing amount. At a certain point, prices fail to surpass costs of production, and a crisis erupts.

Back To Part 63

Forward To Part 65

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