“Thus, if it is true that the firm “primary production” supplies the firm “manufacturing industry” with the “value of the material” which enters as an item into the capital of the industrialist, then it is no less true that the firm “manufacturing industry” supplies the firm “primary production” with the value of the machinery which enters wholly (including that part which consists of raw material) into the farmer’s capital without this “component part of value” yielding him any surplus-value. This circumstance is a reason why the rate of profit appears to be smaller in “high agriculture”, as the English call it, than in primitive agriculture, although the rate of surplus-value is greater.” (p 82)
If the farmer gave to the machine maker all of the raw materials required to produce the machine for free, and so only paid for the manufacturing labour, (wages and profit) used in converting them into a machine, it would cost the farmer just as much for the machine. The only difference would be that in one case, they sold the raw materials for £x, and paid £y + x for the machine, whereas in the other, they obtained £0 for the raw materials, and paid £y + 0 for the machine.
It is just the same in relation to the seed. Either the farmer sells all of their grain for £x + y, and then pays the seed merchant £y for seed, or else the farmer retains £y of grain to use as seed, and sells the remaining £x of grain.
Rodbertus is also wrong in referring to the agricultural and manufacturing product as revenue. Again, as Marx sets out elsewhere, in his critique of Smith, revenue – wages, profit, rent and interest – and its equivalent in the consumption fund of commodities, which that revenue buys is quite different to the value of production – here the combined value of the agricultural and manufacturing product. That is because, in addition to those commodities that comprise the consumption fund, and whose revenue equivalent is the National Income, there are all those commodities that are not consumed, but which are required simply to replace, on a like for like basis, the constant capital, and which, therefore, exchange not with revenue, but with capital.
“The mass of products which make up revenue, as I have demonstrated earlier, does not contain any products that enter into production as instruments of labour (machinery), auxiliary material, semi-finished goods and the raw material of semi-finished goods, which form a part of the annual product of labour. Not only the constant capital of primary production is excluded but also the constant capital of the machine makers and the entire constant capital of the farmer and the capitalist which does not enter into the process of the creation of value though it enters into the labour-process. Furthermore, it excludes not only constant capital, but also the part of the unconsumable products that represents the revenue of their producers and enters into the capital of the producers of products consumable as revenue, for the replacement of their used up constant capital.” (p 83-4)
The consumption fund, the use values that comprise those commodities consumed by individuals out of revenue, represents only that portion of production equal to the new value created by labour during the year, v + s. That new value is the basis of those revenues, be they wages, (v), or the profit rent and interest, (s).
“Hence it can be resolved only into revenue, i.e., wages and profit (which again splits up into profit, rent, taxes, etc.), since not a single particle of it contains any of the value of the raw material which goes into production or of the wear and tear of the machinery which goes into production, in a word, it contains none of the value of the means of production.” (p 84)
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