Torrens does refer to the fact that capitals of the same size employ different quantities of immediate labour, which, as set out above, is the basis of different values of output, and different rates of profit, but he goes nowhere with it. He says,
““Equal capitals, or, in other words, equal quantities of accumulated labour, will often put in motion different quantities of immediate labour; but neither does this furnish any exception to our general principle” (loc. cit., pp. 29-30)” (p 72)
Marx notes,
“The merit of this passage does not consist in the fact that Torrens here merely registers the phenomenon once again without explaining it, but in the fact that he defines the difference by stating that equal capitals set in motion unequal quantities of living labour, though he immediately spoils it by declaring it to be a “special” case. If the value is equal to the labour worked up, embodied in a commodity, then it is clear that—if the commodities are sold at their value—the surplus-value contained in them can only be equal to the unpaid, or surplus labour, which they contain. But this surplus labour—given the same rate of exploitation of the worker—cannot be equal in the case of capitals which put in motion different quantities of immediate labour, whether it is the immediate production process or the period of circulation which is the cause of this difference.” (p 72)
Its to Torrens credit that he expresses this, Marx says, but the conclusion he draws from it is that, under capitalism, the law of value changes, and is contradictory to capitalist phenomenon, in the shape of prices and profits.
So, Torrens writes,
““the total quantity of labour, accumulated and immediate, expended on production, is that […] which […] determines the quantity of one commodity which shall be received for a given quantity of another. When stock has accumulated, when capitalists became a class distinct from labourers, […] when the person who undertakes any branch of industry, does not perform his own work, but advances subsistence and materials to others, then it is the amount of capital, or the quantity of accumulated labour expended in production, […] which determines the exchangeable power of commodities” (op. cit., pp. 33-34).” (p 73)
In other words, the value of these commodities is the value of the capital plus the average profit, but Torrens has no means of determining how much this average profit is. Like Ricardo, he simply assumes its existence and explains it on the basis of competition. However, as with Ricardo, although competition explains why an average rate of profit exists, and how it is formed, as capital moves from low to high profit areas, it explains neither where the profit comes from, nor why this rate of profit is 20% rather than 200%.
Torrens continues,
““As long as [these] two capitals [are] equal [the law of competition, always tending to equalise the profits of stock, will keep] their products of equal […] value, however we may vary the quantity of immediate labour which they put in motion, or which their products may require […] if we render these capitals unequal in amount, [the same law must render] their products of unequal value, though the total quantity of labour expended upon each, should be precisely equal” (op. cit., p. 39).
“… after the separation of capitalists and labour[ers], it is […] the amount of capital, or quantity of accumulated labour, and not as before this separation, the sum of accumulated and immediate labour, expended on production, which determines the exchangeable value…” (loc. cit., pp. 39-40).” (p 73)
But, it is not the law of value that has changed. The value of commodities continues to be determined, as before, by the labour-time required for their reproduction, but what changes, under capitalism, is that they no longer exchange at these values, but at their price of production.
“Ricardo sought to prove that, apart from certain exceptions, the separation between capital and wage-labour does not change anything in the determination of the value of commodities. Basing himself on the exceptions noted by Ricardo, Torrens rejects the law. He reverts to Adam Smith (against whom the Ricardian demonstration is directed) according to whom the value of commodities was determined by the labour-time embodied in them “in that early period” when men confronted one another simply as owners and exchangers of goods, but not when capital and property in land have been evolved.” (p 74)
But, the contradiction in this position was described by Marx in “A Contribution to the Critique of Political Economy”, and in “The Grundrisse”. It is the fact that it requires that the Law of Value (in the sense of the exchange of commodities in proportion to their values) only applies to the conditions that exist prior to capitalism. But, “in that early period”, when products begin to be traded, they do not exchange in proportion to their value. It's only as trade expands, and in particular, when specialist merchants arise, who conduct such trade, that the value of products begins to be measured and compared by these merchants, and through which they obtain their profits via arbitrage that the value of products becomes “stamped on their face”, as an exchange-value, and subsequently price, and the product thereby becomes a commodity.
But, even where this commodity exchange becomes generalised, the majority of production continues to be for direct consumption by the producer. The producer only exchanges their surplus product, in order to obtain other use values, or to obtain money, to pay rents, and taxes, or to buy other commodities. As Marx sets out, particularly in the Grundrisse, it is then, only under capitalism, where this direct production of use values, more or less disappears, and all production is for sale, that exchange-value takes on its fully mature form.
“... the product as a commodity. The law itself, as well as the commodity as the general form of the product, is abstracted from capitalist production and yet it is precisely in respect of capitalist production that the law is held to be invalid.” (p 74)
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