““The reader, however, should remark, that this cause of the variation of commodities” (this should read variations of cost-prices or, as he calls them, relative values of commodities) “is comparatively slight in its effects. Not so with the other great cause of the variation in the value of commodities, namely, the increase or diminution in the quantity of labour necessary to produce them…An alteration in the permanent rate of profits, to any great amount, is the effect of causes which do not operate but in the course of years; whereas alterations in the quantity of labour necessary to produce commodities, are of daily occurrence. Every improvement in machinery, in tools, in buildings, in raising the raw material, saves labour, and enables us to produce the commodity to which the improvement is applied with more facility, and consequently its value alters. In estimating, then, the causes of the variations in the value of commodities, although it would be wrong wholly to omit the consideration of the effect produced by a rise or fall of labour, it would be equally incorrect to attach much importance to it…“ (l.c., pp. 32-33).” (p 194)
Although, therefore, Ricardo, says, in Section 10 of Chapter 1, that he intends to examine the effect of changes in wages on the prices of production, he rarely actually does that. In fact, what his examples show, whether wages rise or fall, is that it is the postulation of a general rate of profit which means that prices of production must differ from exchange-values. Moreover, that variation is not, as Ricardo believes, a consequence of different ratios of fixed and circulating capital, but of varying ratios of constant and variable capital.
What Ricardo shows, by his illustration, is not what he set out to show, or thinks he has shown.
“In fact, he shows by his illustrations, in the first place, that it is only the general rate of profit which enables the different combinations of types of capital (namely, variable and constant etc.) to differentiate the prices of commodities from their values, that therefore the cause of those variations is the general rate of profit and not the value of labour, which is assumed to be constant. Then—only in the second place—he assumes cost-prices already differentiated from values as a result of the general rate of profit and he examines how variations in the value of labour affect these.” (p 195)
In Section V, Ricardo demonstrated that the price of production of commodities can be affected by changes in wages, but not as a consequence of differences in fixed capital, in capitals of equal size, employed in different spheres, but when that capital turns over at different speeds. But, as Marx says, by reducing the difference between fixed and circulating capital essentially to a question of durability, Ricardo misses the main differences.
“Fixed capital enters wholly into the labour-process and only in successive stages and by instalments into the process of creating value. This is another major distinction in their form of circulation. Furthermore: fixed capital enters—necessarily enters—only as exchange-value into the process of circulation, while its use-value is consumed in the labour-process and never goes outside it. This is another important distinction in the form of circulation. Both distinctions in the form of circulation also concern the period of circulation; but they are not identical with the degrees [of durability of fixed capital] and the differences [in the period of circulation].” (p 196)
Ricardo says that a capital that uses fixed capital that is less durable will employ more labour. In other words, it will continually require additional maintenance. The additional cost of this labour then raises the value of the output. But, as Marx points out, and Ricardo fails to recognise, this additional labour not only adds value to the output, it also creates additional surplus value.
If 50 men are required to be employed to maintain machinery, and each works 10 hours per day, this adds 500 hours of value to the output. But, if those workers are only paid wages equal to 250 hours, then that means that 250 hours of surplus value is produced, and appropriated by the capital.
““in the other very little would be so transferred” [l.c., p. 37].” (p 197)
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