11. Over-Production, “Unproductive Consumers”, etc.
Malthus' theory of crisis, like that of Smith and Ricardo, is tied to their respective theories of the falling rate of profit. For Malthus, the problem resides in the question of realising the profit. It amounts essentially to this. Workers are paid wages that are equal to the value of the labour they provide. But, capitalists add a surcharge, equal to the average rate of profit on to the cost of the production of the commodities they sell. The value of commodities then, for Malthus, is determined not by what they cost to produce, but what they cost the consumer to buy.
Inevitably, if the commodities, which the workers produce, are sold at this higher price then workers cannot buy all they have produced. So, if workers have been paid wages of £100, and produce commodities, which the capitalist sells for £120, then workers can only buy 10/12 = 5/6 = 83.33% of what they have produced. This is how the capitalist ends up with a surplus product of 1/6 or 16.66% of the output. But, Malthus recognises that, if capitalists themselves exchange these commodities amongst themselves, then what they gain as a seller they lose as a buyer. They could avoid this problem by simply consuming the surplus product, but Malthus then notes that the point of capitalist production is to accumulate the surplus as capital, and not consume it as revenue. But, if its accumulated, it simply means a bigger surplus is produced that can't be realised. Moreover, the more is accumulated, the more this encourages a growth of population that the land cannot support, so that there is overpopulation, resulting in famines to reduce the overpopulation.
Malthus' answer, as the apologist for the old landed aristocracy, clergy and state bureaucracy, is to argue that the only way for the surplus production to be sold, in a way that realises the profit, is for it to be bought by consumers who themselves have nothing to sell. Enter all of the above unproductive sectors of society. By the landlords, state etc. acting as buyers but not sellers, the capitalists can sell their surplus product and realise their profit. They do not then have to throw all of this surplus product into accumulation, which would lead to overproduction and overpopulation.
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