Theories of Surplus Value, Part III, Chapter 21 - Part 35

3. Hodgskin 

Marx examines the work of Hodgskin, contained in four lectures at the London Mechanics Institute, along with an anonymous pamphlet that was also produced by Hodgskin - Labour Defended against the Claims of Capital; or, the Unproductiveness of Capital Proved, By a Labourer, London, 1825. (With reference to the Present Combinations amongst Journeymen.) 

“Thomas Hodgskin, Popular Political Economy. Four Lectures delivered at the London Mechanics’ Institution, London, 1827. 

The anonymous first work is also by Hodgskin. Whereas the pamphlets mentioned previously and a series of similar ones have disappeared without trace, these writings, especially the first one, made a considerable stir and are still regarded as belonging to the most important works of English political economy (see John Lalor, Money and Morals, London, 1852).” (p 263) 

[a) The Thesis of the Unproductiveness of Capital as a Necessary Conclusion from Ricardo’s Theory] 

It is necessary to distinguish between “capital” and the commodities that comprise the elements of capital. A building, a machine, a quantity of raw material are all commodities that can comprise elements of constant capital. But, in themselves, they are not capital. They are only commodities. When we speak of the value of constant capital, what we are actually referring to is not the value of this constant capital as capital – because capital itself is a social relation, not a thing, and has no value, because it is not the product of labour – but as commodities. The same applies to those commodities – wage goods – that comprise the variable-capital.  As Marx sets out, in Capital II, when we talk about "buying constant capital" this is just a shorthand for saying buying the commodities that comprise the elements of constant capital.  It does not mean buying them as capital.

Capital, as capital, as a social relation, has value only in the sense that, via this social relation with wage labour, it is able to produce profit. This ability to produce profit, i.e. to produce the average rate of profit, as commodities sell at prices of production, is the use value of capital. It is this use value of capital that is sold as a commodity, whose price is the rate of interest. The value of capital, as capital, i.e. the use value of it as capital, is not the value of the commodities that comprise it, but the average rate of profit. If the average rate of profit is 10%, then the value of a €100 machine, as capital, rather than as a commodity, is €10, i.e. the amount of profit that this machine, used as capital can produce. The use value of the machine, as capital, as opposed to its use value as a machine/commodity, is its capacity to produce €10 of profit, and it is this latter use value that is paid for, when capital is bought and sold as a commodity. 

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