Sunday, 23 July 2017

Theories of Surplus Value, Part I, Chapter 6 - Part 14

Marx points out here that, on the basis of Quesnay's presentation, however, there seems to be a gap in relation to the allocation of the gross product. According to Quesnay, the value of the gross product is ₣5 billion. For the Physiocrats, it is only agriculture that produces new value, the manufacturers only transforming the value produced in agriculture into other products.

“That is to say: one-fifth goes into reproduction for the farmer, and does not come into circulation; the landlord consumes one-fifth (that makes two-fifths); S gets two-fifths; in all, four-fifths.” (p 331)

Marx's assumption here, and in his further analysis is based on the idea that, for Quesnay, it is only a fifth of the output, which does not enter into circulation. Marx returns to this later. But, also he refers to it in Chapter X of Engels' “Anti-Duhring”, which Marx wrote. There, Marx writes,

“The whole gross product, of a value of five milliards, is therefore in the hands of the productive class, that is, in the first place the farmers, who have produced it by advancing an annual working capital of two milliards, which corresponds to an invested capital of ten milliards. The agricultural products—foodstuffs, raw materials, etc.—which are required for the replacement of the working capital, including therefore the maintenance of all persons directly engaged in agriculture, are taken in natura from the total harvest and expended for the purpose of new agricultural production. Since, as we have seen, constant prices and simple reproduction on a given scale are assumed, the money value of the portion which is thus taken from the gross product is equal to two milliard livres. This portion, therefore, does not enter into general circulation. For, as we have noted, circulation which takes place only within a particular class, and not between one class and another, is excluded from the Tableau.”

(Anti-Duhring, Part II, Chapter X, p 315-6)

This is a similar situation to that discussed by Marx in criticism of Smith and the Trinity Formula, that, in fact, the gross output is greater than the value of the commodities that enter circulation, and form the consumption fund, because a portion of output is always simply consumed in kind, as an exchange of capital with capital. In fact, Marx points to a number of flaws in Quesnay's presentation.

The ₣5 billion represent only the gross annual product. However, Quesnay's presentation requires that the farmers had ₣2 billion also in money, at the start of the year, which they pay as rent to landlords. In addition, the manufacturers must also have in their possession ₣2 billion of manufactured goods, which are the product of last year's activity.

When the landlords buy ₣1 billion of food from farmers, this food is the product of last year's harvest, which must be replaced out of this year's production. Similarly, when the landlords buy ₣1 billion of manufactured goods these come out of the existing commodity-capital of the manufacturers, and this production must be replaced out of this year's output.

In the current year, therefore, the total value of output is ₣7 billion, ₣5 billion produced in agriculture, and ₣2 billion produced in manufacturing, but the ₣2 billion produced in manufacturing is actually comprised of ₣1 billion of raw materials produced in agriculture, and ₣1 billion of food used as means of subsistence by manufacturing workers, so that, consistent with the Physiocratic system, it only represents a transformation of this value into another form.

“We thus have: (1) 2 milliards in money in the farmer’s hands; (2) 5 milliards in gross product of the land; (3) 2 milliards in manufactured goods. That is, 2 milliards in money, and 7 milliards in product (agricultural and industrial).” (p 332)

The Tableau Economique is, therefore, important not just for its function in describing the basis of these social exchanges of production, but also the role of money in this process of the circulation of commodities and capital. Its possible to envisage the exchanges of physical products that result, but not on the basis of capitalist production and exchange.

Quesnay's presentation suffers because of the limitations of Physiocratic concepts of value. For example, in this schema it is only the farmers who are capitalists, the landlords are simply recipients of revenue, whereas the manufacturers are merely wage earners (even those who are capitalists) but, it is possible, as Marx does, to move beyond those limitations.

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