Saturday, 5 May 2018

Theories of Surplus Value, Part II, Chapter 15 - Part 38

Smith starts from the observation that a certain quantity of labour(power) exchanges for a certain quantity of use value (corn, gold or whatever represents the subsistence requirement of the worker). And this is correct, because the subsistence requirement of the worker is always determined in these physical terms, of a certain quantity of use values, not a certain quantity of value. But, Smith errs when, from this, he concludes, 

“...that this definite quantity of labour is the measure of value and that it always has the same value, whereas the same quantity of use-value can represent very different exchange-values.” (p 403) 

In other words, a worker must buy a quarter of corn with 1 month of their labour, but this one month of their labour is not the measure of the value of the corn, or of any other commodity that exchanges for 1 quarter of corn.  It may only have required 2 weeks of their labour to produce the corn, and it is only this 2 weeks that is its value.

But, Marx says, Ricardo errs twice over, because not only does he fail to understand the problem that Smith encountered, but, by abandoning the determination of the value of labour(power) by the labour-time required for its reproduction, and seeking refuge in the law of supply and demand, he ends up repeating the same error as Smith. The only difference is that where Smith defines the value of labour in terms of corn, Ricardo defines it in terms of gold paid to workers as wages

“Thus in fact he says: The value of labour is determined by the value of the money which is paid for it! And what determines this? What determines the amount of money ‘that is paid for it? The quantity of use-value that a given amount of labour commands or the quantity of labour that a definite quantity of use-value commands. And thereby he falls literally into the very inconsistency which he himself condemned in Smith.” (p 403) 

And, as a result, he fails to make the distinction between commodity and capital. If a kilo of corn has a value of 10 hours labour, as a commodity, it exchanges for 10 hours of labour, whether this 10 hours of labour is in the form of some other commodity, such as a metre of linen, or is in the performance of 10 hours of labour, for example, of a peasant working on a blacksmith's fields, or actors giving a performance in a play. 

This is an exchange of commodity for commodity, or, in reality labour for labour. But, it is precisely the lack of such equivalence that distinguishes the exchange of capital for commodities, i.e. capital for wage-labour. If the commodities that the capitalist possesses as means of consumption, for the worker, or their money equivalent, have a value of 10 hours, and the capitalist only obtains 10 hours of labour, from the worker, in return, they can make no profit, and so these commodities, or money, does not act as capital, whose essence is of being self-expanding value. Capital is only capital when it produces profit. Indeed, under capitalist production, it is not only the means of consumption, variable-capital, that act as self-expanding value in this way. The same is true of the means of production, constant capital. It is only variable-capital that produces surplus value, but all capital, constant and variable, produces profit, because under capitalism commodities exchange not at exchange values, but at prices of production, the cost of production plus the average profit calculated on the total advanced capital

“The above example was this: 1 quarter of corn equals 1 month’s labour, say 30 working-days. (A working-day of 12 hours.) In this case the value of 1 quarter corn is less than 30 working-days. If 1 quarter corn were the product of 30 working-days, the value of the labour would be equal to its product. There would be no surplus-value, and therefore no profit. No capital. In actual fact, therefore, if 1 quarter corn represents the wages for 30 working-days, the value of 1 quarter corn is always less than 30 working-days. The surplus-value depends on how much less it is. For example, 1 quarter corn may be equal to 25 working-days. Then the surplus-value equals 5 working-days, which is 1/6 of the total labour-time. If 1 quarter (8 bushels) equals 25 working-days, then 30 working-days are equal to 1 quarter 1 3/5 bushels. The value of the 30 working-days (i.e., the wage) is therefore always smaller than the value of the product which contains the labour of 30 days. The value of the corn is thus determined not by the labour which it commands, for which it exchanges, but by the labour which is contained in it. On the other hand, the value of the 30 days’ labour is always determined by 1 quarter corn, whatever this may be.” (p 403-4) 

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