Saturday, 15 June 2019

Theories of Surplus Value, Part III, Chapter 21 - Part 23

[c) The Merits of the Author of the pamphlet and the Theoretical Confusion of His Views. The Importance of the Questions He Raises about the Role of Foreign Trade in Capitalist society and of “Free Time” as Real Wealth] 

Marx begins with a long quote from the pamphlet, which sets out the argument previously advanced. That is, it assumes that the labour of a country can produce enough, in a year, to sustain its population for two years. The surplus product is in the hands of the capitalists, and exists for them as capital. But, the pamphlet argues, there is no reason for them to hand the surplus over to the workers unless the workers were to perform labour in exchange for it. Yet, there is no purpose in performing additional labour, which would then result in 2 year's surplus product sitting unsold in the market. It would be possible to employ the workers producing fixed capital, rather than any additional consumption goods, so that, over the year, the surplus product was consumed. However, in the following year, the workers would again produce enough consumption goods to sustain the population for two years, but now with the assistance of all the machines and other fixed capital produced the previous year, they would produce even more than that, so that now the surplus product would be even larger. 

They might again refrain from producing consumption goods, and engage in producing even more fixed capital, but each time this process is undertaken, the surplus product gets even larger, “... till men must cease from productive labour for a time, or the produce of their labour must perish, This is the palpable consequence in the simplest state of society” (op. cit., pp. 4-5). 

“The demand of other countries is limited, not only by our power to produce, but by their power to produce…” 

In other words, it is the reply to Say's claim that there cannot be overproduction of commodities, only under-consumption, resulting from underproduction elsewhere. 

As Marx described in Theories of Surplus Value, Part I, the reason the Physiocrats were able to uncover the source of surplus value in production, whereas, in Britain, the search for an explanation for it was undertaken by the Mercantilists, in the realm of exchange, is the different economies of the two countries. The Physiocrats were studying a French economy in transition from feudal agriculture to capitalist agriculture. It was this agricultural production that was the main feature of the country's economy, and source of its wealth. The physical characteristics of this production – a certain quantity of inputs at one end, a greater quantity of outputs at the other – made it fairly obvious where the source of the surplus derived from, i.e. production, even if it also encouraged false conclusions about the nature of value as being use value, rather than labour, and about the surplus itself being a product of the land, a free gift of nature, rather than being the product of surplus labour. 

When Britain replaced Holland as the premier mercantile power, it was equally understandable that the large amounts of money coming into the economy, in payment for the exports going out, would lead to theories that this surplus value was a consequence of exchange, or to be more precise unequal exchange, of the ability to sell at prices higher than the costs of production, and that the country was able to import the commodities it required, as means of production, and means of consumption, and then to export commodities at a higher price. 

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