Sunday, 13 August 2017

Theories of Surplus Value, Part I, Chapter 7 - Part 15

[8. Addendum to the Chapters on the Physiocrats]

Marx returns to the examination of the Tableau Economique, and the false assumptions made by Quesnay, as well as the fall back into Mercantilist conceptions which flowed from them. For the Physiocrats, it is only agriculture that is productive of new value, and so of surplus value. The landlords appropriate the surplus value, in the form of rent, as it is conceived as flowing from the free gifts of nature, i.e. the land. The landlords are then entitled to the rent because they are the owners of the land, which is the source of the surplus value.

The manufacturers are seen only as labourers. The value of their product is comprised only of the value of the products of agriculture. So, it comprises only the value of the means of subsistence, consumed by industrial workers, provided by agriculture, and also the value of the means of production, also provided by agriculture.

Marx points out that Quesnay's assumption that the value of annual output is only ₣5 billion is then false, because it comprises ₣5 billion produced in agriculture and ₣2 billion of industrial production. This ₣2 billion produced in manufacture, replaces ₣2 billion produced by industry in the previous year, and exchanged with agriculture for the ₣2 billion of agricultural products used in this year's production.

But, Marx also points to another false assumption that flows from this. If the value of industrial production is ₣2 billion and this is not only equal to the value of agricultural inputs, but is wholly exchanged for it, this means that there is no profit, interest etc. produced in the industrial sector, from which the industrial capitalists could draw revenue. Moreover, if all industrial production is exchanged with the agricultural sector, this leaves no manufactured goods left over to be consumed by industrial workers and capitalists.

This had been noticed by Baudeau, Marx says, and led to the explanation that the industrial sector must sell its output above its value. This would mean that the actual value of industrial commodities was say ₣1.8 billion, they sell these to the farmers for ₣2 billion, and the other ₣0.2 billion of commodities thereby both comprise the industrial profits and the value of industrial commodities consumed by workers and capitalists in that sector.

But, Marx points out that this means a return to the Mercantilist conception of profit on alienation as the explanation for the source of profit, as opposed to the Physiocratic discovery that profit is created in production, not exchange. This is then one reason for the Physiocrats support for free competition. Such competition, they argue, limits the ability of industrial capitalists to overcharge for their commodities. At the same time, given that France was an exporter of agricultural products, free competition was seen as a means of exporting agricultural products at prices that exceeded their value.

Marx quotes, by contrast, the original arguments, given by Quesnay, as to why profit is impossible in exchange.

““Every purchase is a sale, and every sale a purchase” (Quesnay, Dialogues sur le commerce et sur les travaux des artisans, etc., éd. Daire, p. 170). “To buy is to sell, and to sell is to buy” (Quesnay in Dupont de Nemours, Origine, etc., 1767, p. 392). 

“Price always precedes purchases and sales. If the competition of sellers and buyers brings about no change in it, it exists as it is through other causes independent of trade” (l.c., p. 148). 

“It is always to be presumed that it” (exchange) “is profitable to both” (contracting parties), “since they mutually procure for themselves the enjoyment of wealth which they could only obtain through exchange. But always there is only exchange of wealth of a certain value for other wealth of equal value, and consequently no real increase of wealth” (this should be: no real increase of value) (l.c., p. 197).” (p 380)

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