The contribution of, say, machines, by their operation, is not to create additional value, but to create additional use values, and thereby to participate in the increase in social wealth. The increase in the total value of output, over the last 200 years is not a consequence of such machines creating additional value, but of the fact that the total mass of labour employed has itself increased. Moreover, because the machines raise productivity, they, thereby, increase the rate of surplus value. That, together with the increase in the mass of labour employed, results in an ever increasing mass of produced surplus value, available for accumulation. That accumulation, in conjunction with the rise in productivity, means that an increasing mass of material can be produced, and processed, which even as the unit value of this material falls, results in a proportionately greater value of material being transferred into total output. If the machines created additional value, rather than use value, then the unit value of commodities, during all that time, would have been rising, rather than falling. The total value of output has risen considerably, but by only a small fraction of the increase in the mass of output. The machines, by raising labour productivity, have massively increased the quantity of use values produced, but have only transferred their own value, in wear and tear, to the value of output. It is that fact (together with the fact that the rise in productivity means that less immediate labour is used in their production) that explains the continual fall in the unit value of commodities.
As Ricardo puts it, in arguing against Say,
““… the services which … natural agents and machinery perform for us … are serviceable to us … by adding to value in use; but as they perform their work gratuitously … the assistance which they afford us, adds nothing to value in exchange” (David Ricardo, [Principles of Political Economy, and Taxation, third ed., London, 1821,] pp. 336-37).” (p 183)
Using this same argument, McCulloch argues that land is also such a natural agent, which, by its operation, also, thereby, creates value. Rent, thereby, becomes this productive power of the land, as was the case with the Physiocrats.
“This is an outstanding example of Mac’s way of vulgarising Ricardo. On the one hand, he copies Ricardo’s arguments, which only make sense if they are based on the Ricardian assumptions, and on the other hand, he takes from others the direct negation of these assumptions (with the reservation that he uses his “nomenclature” or makes some small changes in the propositions).” (p 183)
McCulloch says,
““If a capitalist expends the same sum in paying the wages of labourers, and maintaining horses, or in hiring a machine, and if the men, the horses, and the machine can all perform the same piece of work, its value will obviously be the same by whichever of them it may have been performed” (op. cit., p. 77 [Note I]).” (p 183)
So, he should really describe rent as the wages of land, pocketed by the landowner. McCulloch is, of course, right that the price of the product is dependent upon the capital laid out, and, if each capital obtains the same rate of profit, then each capital should produce a commodity of the same price. The problem is that this is not possible on the basis of the law of value. McCulloch's answer is to abandon the law of value, and to turn each element of the capital into labour, so that each element, thereby, also creates value. If every element of the capital is labour, and equally produces value, it also thereby produces surplus value, and so the profit always rises in proportion to the total capital, according to the average rate of profit.
“But since the machine, for example, performs a greater piece of work than the men displaced by it, it is even more “obvious” that the product of the machine will not fall but rise in value compared with the value of the product of the men who “perform the same work”. Since the machine can produce 10,000 units of work where a man can only produce one, and every unit has the same value, the product of the machine should be 10,000 times as dear as that “of man”.” (p 183-4)
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