Marx quotes Ricardo's comment, directed at Say.
““Though Adam Smith, who defined riches to consist in the abundance of necessaries, convenience and enjoyments of human life, would have allowed that machines and natural agents might very greatly add to the riches of a country, he would not have allowed that they add any thing to the value of those riches” [l.c., p. 335, note].” (p 554)
Marx says,
“Natural agents, indeed, add nothing to value, so long as there are no circumstances in which they give occasion for the creation of rent.” (p 554)
This seems a curious comment. Even where such natural agents do give rise to rent, surely they add nothing to value. The only thing that occurs, in that case, is that the surplus profit that arises, which is the basis of the rent, is not competed away by additional capital entering the sphere. It's not that additional value is created, but that the output is sold at its market value, rather than its price of production. By contrast, because capital does not flow into this area, from elsewhere, the price of production, in other spheres, is lower than it otherwise would have been.
If we take land that is naturally more fertile this has no value, because it is not the product of labour. It cannot, by its use, therefore, add any value to production, even though it facilitates the production of a greater quantity of use values, for any given amount of capital and labour. But, that is not the case with a machine. A machine has the same consequence as a natural agent, in that it enhances labour productivity, and so brings about the production of a larger quantity of use values for any given quantity of labour. However, unlike a natural agent, a machine does have a value, because it is the product of labour. Unlike a natural agent, therefore, a machine does contribute to the value of output, because the value of the machine is transferred to output, piecemeal, as a result of its wear and tear. But, it does this in another way too. Because machines increase productivity, they thereby bring about an increase in the amount of material processed. Although machines, on the one hand, act to reduce the value of output, by reducing the amount of labour required for production, on the other hand, they act to increase the value of output, because they bring about an increase in the volume of output.
Suppose £1,000 employs 10 workers who process 100 kilos of cotton, with a value of £1,000, into 100 kilos of yarn, with a value of £2,000. A machine that lasts for a year is introduced, with a value of £200, and now the cotton is transformed into yarn by only 2 workers, on wages of £200. The total value of output is then £1,400. But, the machine leads to increased production, and increased production is required, because as the price per kilo has fallen from £20 to £14, the demand for yarn will have risen accordingly. If a double shift is introduced, 200 kilos of cotton, with a value of £2,000 is processed, and £400 is paid out in wages. Even if we assume the machine is made to last the year, so that it only represents the original £200, the total value of output will have risen to £2,600. And, this is the process that Marx describes that underlies the rise in the organic composition of capital, as productivity rises, so that a continually increasing quantity of material is processed by a given quantity of labour.
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