Theories of Surplus Value, Part II, Chapter 15 - Part 32

The answer, of course, is, as Marx demonstrated in Capital I, that Ricardo like Smith, fails to distinguish between labour as the essence of value and whose measure is labour-time, and labour-power, which is a use value possessed by the labourer, i.e. the use value of being able to undertake labour, which, in the form of wage labour, becomes the commodity that workers sell. The commodity that workers sell is the ability to perform labour, the activity of creating new value. The value of this commodity is determined, as with all other commodities, by the quantity of labour-time required for its reproduction. But, labour, the value creating substance, the essence of value, has no value itself, any more than length has a length. Labour is value, and it makes no more sense to ask what is the value of value, i.e. what is the value of labour, than it does to ask how long is length? It was Marx’s great achievement to make this distinction, and the failure to make this distinction was the fatal flaw in the Ricardian School.

“This weakness in Ricardo’s discourse, as we shall see later, has contributed to the disintegration of his school, and led to the proposition of absurd hypotheses. 

Wakefield is right when he says: 

“Treating labour as a commodity, and capital, the produce of labour, as another, then, if the value of these two commodities were regulated by equal quantities of labour, a given amount of labour would, under all circumstances, exchange for that quantity of capital which had been produced by the same amount of labour, antecedent labour […] would always exchange for the same amount of present labour […] It follows, that the value of labour in relation to other commodities, in so far, at least, as wages depend upon share, is determined, not by equal quantities of labour, but by the proportion between supply and demand.” (E. G. Wakefield, Note on p. 230 of Vol. I of his edition of Adam Smith’s Wealth of Nations, London, 1835.)” (p 398-9)

In other words, if all we are dealing with is an exchange of commodities, it follows that a variable-capital of £100, representing 100 hours of labour, would purchase 100 hours of labour, or 100 hours of materialised labour, whether in the form of the general commodity, money, or in the form of actual wage goods, would purchase 100 hours of labour. This would be no different than where a blacksmith provides 100 hours of labour in shoeing a peasant's horse, and in return the peasant labours for 100 hours on the blacksmith's land. But, it is precisely because the social relation between capital and wage labour is not the same as that between two independent commodity owners and producers that this exchange relation does not exist. The capitalist owns the means of production that the labourer needs, in order to be able to produce at all, just as the landlord owns the land, which the labourer needs, in order to produce. In just the same way that landed property will not allow a labourer, or a capitalist farmer, to use the land, without paying them a rent, so capital will not allow wage labour to use the means of production without providing them with a quantity of unpaid labour.

The capitalist also owns the means of subsistence that the labourer needs in order to live, because, without being able to produce, the labourer cannot even provide for their own subsistence. So, capital does not buy the commodities that labour produces, in the same way that independent commodity producers exchange finished products, but instead buys labour-power itself from the labourer, and thereby obtains the ability to appropriate the product, not just of the labour they have paid for, in wages, equal to the value of that labour-power, but also the product of a period of unpaid labour, which thereby creates a surplus product and surplus value.

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