Theories of Surplus Value, Part II, Chapter 10 - Part 4

As a consequence of such an honest scientific analysis, Ricardo exposes not only the contradictions within the economic system, but the contradictions in the interests of the different social classes that arise from the economic relations, created by the system. Unlike Smith, who analyses the system in its early period, and for whom the major conflict of interest arises between the landed aristocracy and the productive classes, for Ricardo, writing later, those conflicting interests are extended to include also the interests of the workers.

As a result, Carey described Ricardo as the father of communism.

““Mr. Ricardo’s system is one of discords …its whole tends to the production of hostility among classes and nations… His book is the true manual of the demagogue, who seeks power by means of agrarianism, war, and plunder.” (H. C. Carey, The Past, the Present, and the Future, Philadelphia, 1848, pp. 74-75.)” (p 166)

Marx summarises the contents and structure of Ricardo's “Principles of Taxation and Political Economy” and concludes that the Ricardian theory is contained in the first six chapters of the book, with all of the other chapters really being examples of an application of theory, or supplements to the contents of the first six chapters.

“It is in respect of this part of the work that I use the term faulty architectonics. The other part (with the exception of the section on money) consists of applications, elucidations and addenda which, by their very nature, are jumbled together and make no claim to being systematically arranged. But the faulty architectonics of the theoretical part (the first six chapters) is not accidental, rather it is the result of Ricardo’s method of investigation itself and of the definite task which he set himself in his work. It expresses the scientific deficiencies of this method of investigation itself.” (p 167)

Marx examines these first six chapters slightly more closely. The first chapter “On Value” is divided into seven sections. In line with the method described earlier, Ricardo considers, in the first section, whether wages contradict the determination of value by labour time. The same approach is taken in the third section, where Ricardo shows that the fact that part of the value of the commodity comprises the value of constant capital – though Ricardo like Smith does not use that term and confuses it with fixed capital – does not contradict the labour theory of value.

Similarly, in the fourth section, Ricardo considers how varying proportions of fixed capital, in different spheres, affects exchange value, and that extends into the fifth section, where he considers the effect of different rates of turnover of capital and changes in wages.

“Thus one can see that in this first chapter not only are commodities assumed to exist—and when considering value as such, nothing further is required—but also wages, capital, profit, the general rate of profit and even, as we shall see, the various forms of capital as they arise from the process of circulation, and also the difference between “natural and market-price”.” (p 168)

Chapters 2 and 3 are on rent. Chapter 3 on the rent of mines is really just a supplement. Both again ask the question of whether landed property and rent contradicts the labour theory of value.

“In order to carry out this investigation, he introduces not only, en passant, the relationship of “market-price” and “real price” ( monetary expression of value) but postulates the whole of capitalist production and his entire conception of the relationship between wages and profit. The fourth chapter “On Natural and Market-Price” and the fifth “On Wages” and the sixth “On Profits” are thus not only taken for granted, but fully developed in the first two chapters “On Value” and “On Rent” and in Chapter III as an appendix to II. The later three chapters, in so far as they bring any new theoretical points, fill in gaps here and there, and provide closer definitions, which for the most part should by rights have found their place in [chapters] I or II. 

Thus the entire Ricardian contribution is contained in the first two chapters of his work.” (p 168 – 9)

In other words, the underlying element of the theory is the determination of value by labour time. Ricardo has the benefit over Smith of seeing the major categories of the capitalist system of production, not in their formation, but in their more or less established and mature form. Smith had to describe these categories precisely because they were new. Ricardo can effectively take them for granted, and rather than providing a description of them concentrate instead on examining their anatomy and thereby verify the extent to which they confirm or contradict the theory of value.

“They contain the whole of his critique of hitherto existing political economy, the determined break with the contradiction that pervades Adam Smith’s work with its esoteric and exoteric method of approach, and, at the same time, because of this critique, they produce some quite new and startling results. (p 169)

The sharpness and originality of the first chapters is lost in the subsequent chapters, Marx argues, because they consist either of monotonous repetitions of the earlier contents, or simply formal applications of the principles to a range of extraneous matters.

“In the critique of Ricardo, we have to separate what he himself failed to separate. [Firstly] his theory of surplus-value, which of course exists in his work, although he does not define surplus-value as distinct from its particular forms, profit, rent, interest. Secondly, his theory of profit.” (p 169)

Back To Part 3

Forward To Part 5