Hodgskin is also constrained by the categories of the bourgeois economists., in relation to the division of capital into fixed and circulating capital rather than constant and variable-capital. Like Ricardo, he also defines the circulating capital as comprising mostly the stock of commodities required for the reproduction of labour-power.
“All the differentiations in capital arising from the circulation process — in fact the circulation process itself—are actually nothing but the metamorphosis of commodities (determined by their relationship to wage-labour as capital) as an aspect of the reproduction process.” (p 268)
Marx briefly describes the way the division of labour in the factory is a consequence of the division of labour in society. As individual products begin to be produced by dedicated producers, with the growth of towns, so these products increasingly assume the form of commodities. The producer no longer produces them as use values, even where they consume some of their own output. They are produced only for exchange or sale, and, therefore, the aspect of their exchange-value rather than their use value is all that the producer sees in them.
“The product is increasingly produced as a commodity in the strict sense of the word, its exchange-value becomes the more independent of its immediate existence as use-value—in other words its production becomes more and more independent of its consumption by the producers and of its existence as use-value for the producers—the more one-sided it itself becomes, and the greater the variety of commodities for which it is exchanged, the greater the kinds of use-values in which its exchange-value is expressed, and the larger the market for it becomes. The more this happens, the more the product can be produced as a commodity; therefore also on an increasingly large scale.” (p 268-9)
And, a consequence of this large-scale production is that, within the workshop itself, the same kind of process can be replicated. In society, the situation whereby a peasant family or village commune might produce its own food, and also produce its own wool, or flax, which could be spun, woven and turned into clothing, had given way to a condition whereby tailors worked only producing clothes, with cloth from weavers, who only wove yarn from spinners who only spun wool or flax, from farmers who now only engaged in agriculture. This expresses one way in which the market itself expands.
“The size of the market has two aspects. First, the mass of consumers, their numbers. But secondly, also, the number of occupations which are independent of one another. The latter is possible without the former. For example, when spinning and weaving become divorced from “domestic” industry and agriculture, all those engaged in agriculture become a market for spinners and weavers. They likewise [form markets] for one another as a consequence of the separation of their occupations.” (p 269)
This is a feature of towns going back into antiquity, where artisans specialise in particular types of production, such as the production of pottery, jewellery, glassware and so on, and who obtain the use values required for their own reproduction, by exchanging these products as commodities with other such producers, such as the tailor, the baker, the cobbler, as well as the peasant farmer. Even with the peasant farmer, it should not be thought that “direct production” means literally that they produce all of the use values themselves required for their own reproduction. It means only that they produce solely for the purpose of obtaining the use values required for their own consumption, not for accumulation. In large part, a peasant household may produce all the use values they required for their own reproduction, but equally, they may well concentrate on producing agricultural products for which their soil, or location is particularly well suited, and then exchange these for other agricultural products that their soil or location was not so well suited to producing. The point about direct production here, as Marx described earlier, in Chapter 17, is that the exchange relation is characterised by C-C, under barter, that becomes C – M – C in a money economy. The direct producer is concerned with the production and consumption of use values, whether those use values are ones they actually produce themselves, or ones they obtain for consumption from other producers, in exchange for the use values they have produced.
As Marx pointed out, in Chapter 17, in his critique of Say's Law, the significance of this is that the direct producer who produces, say wine, does so, because they want to exchange this wine for other products, say a bible, or vegetables, or cloth. They may often produce a quantity of wine to order, for known individuals with whom they can trade it, in exchange for these other products required for their own consumption. They only produce a quantity of the use value wine, in order to obtain a quantity of other use values required for their consumption. Even when money intervenes, this continues to be the case. They produce a quantity of the use value wine, to sell it to obtain a quantity of money, the only purpose of which is to be able to obtain a quantity of other use values required for their reproduction. It is this, which leads James Mill to conclude that there can be no overproduction, because supply creates its own demand. But, as soon as money does intervene in this process, it creates its own dynamic. It means that not every producer now produces solely to sell so as to consume. It means they can produce so as to sell, so as to accumulate money. And, the accumulated money, can then be used to buy not use values for consumption, but to buy use values for additional production. It means that the hoarded money can be turned into money-capital. But, for that to be possible, it requires that markets become large enough for capitalist production to be efficient, and that is a process which requires millennia to develop.
And, when, in any particular sphere, production is conducted on a large-scale, so, within the factory, it too can be broken down into numerous component tasks. If production expands enough, even each of these components – now no longer even a use value in its own right – can be produced separately, as a commodity. Today, that has resulted in production on such a large-scale that a myriad of such components are produced as commodities, in companies spread across the globe, with each moving many times across borders, from company to company, or within the various plants of the same company in different countries, their delivery being timed exactly as part of “Just In Time” production and stock control systems. The world has become not just one single economy, one single market place, but has also become one huge single workshop, based upon a global division of labour, whose operation long since burst the bounds placed upon it by the nation state. It is why those that propose Brexit, and other such reactionary attempts to turn the clock back to some earlier time, are simply acting like Canute trying to hold back the tide of history.
“This is why in the Middle Ages, the towns prohibited the spread of as many professions as possible to the countryside, not merely for the purpose of preventing competition—the only aspect seen by Adam Smith—but in order to create markets for themselves.” (p 269)
The consequence of the approach of the “anti-imperialists”, who seek to hold back the development of less developed economies, by resisting investment in them by large-scale capital, is similar.
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