Theories of Surplus Value - Part II, Chapter 10 - Part 24

Ricardo's Section VI of Chapter I, “On An Invariable Measure of Value”, contains nothing important, Marx says. Ricardo fails to understand the nature of money and prices, starting from the measure of value by labour-time, progressing to the expression of exchange-value, in the relation between commodities, and the ultimate form of that in the shape of a universal equivalent form of value. The only way it would be possible to measure the variations in the values of commodities, Ricardo says, is if there were some invariable standard of measure. Although Ricardo adopts a labour theory of value, he does not recognise that this invariable measure is, in fact, labour-time. That is because he slips into a definition of value as “relative” rather than “absolute” value. In other words, he conflates value and exchange-value.

Ricardo can only conceive value as this relative value, compared against something else, here the money-commodity. But, Ricardo says, even if this money commodity could act as some invariable measure, it would still not act as a perfect measure, because changes in wages, the different compositions of fixed and circulating capital, and different rates of turnover would all cause disturbances in its relation to other commodities.

““It would be a perfect measure of value for all things produced under the same circumstances precisely as itself, but for no others” (l.c., p. 43).” (p 202) 

In other words, if the prices of this latter type of commodities rose, that could only be because their own value had risen, and vice versa.

Again, Marx says there is nothing much of interest in Section VII of Chapter I, apart from Ricardo's recognition that where money prices change, because of a change in the value of money, this has no effect on the division into wages, profit, interest and rent. If the price of a commodity is £100, and comprises £50 materials, £25 wages, £10 profit, £3 rent, and £2 interest, then, if the value of money halves, the price of the commodity will become £200. Likewise, materials will become £100; wages £50; profit £20; rent £6; and interest £4. The proportional relations of all these remaining as they were before.

“The same applies when the profit is expressed by double the number of pounds, £100 is then however represented by £200 so that the relation between profit and capital, the rate of profit, remains unaltered. The changes in the monetary expression affect profit and capital simultaneously, ditto profit, wages and rent. This applies to rent as well in so far as it is not calculated on the acre but on the capital advanced in agriculture etc. In short, in this case the variation is not in the commodities etc.” (p 203)

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