Ramsay distinguishes between manufacturing and agriculture. In manufacture,
“though […] it may throw out of employment a considerable body of persons, “this” will yet probably be followed, after a longer or shorter period, by the re-engagement of the same, or even a much greater number of labourers” (loc. cit., pp. 92-93).” (p 336)
In agriculture, however, Ramsay says, not only does the demand for raw material not rise so rapidly, but the conversion of arable to pasture leads to large numbers of agricultural workers being displaced. The funds that previously went to wages then go to support sheep, cattle, and other livestock.
Previously, Marx has distinguished between the real cost of production, for society, of commodities, as opposed to the cost of production for the capitalist. As Ramsay has described, it, the real cost of production of a commodity is the labour embodied in the constant capital, consumed in production, plus the quantity of living labour expended in production. For the capitalist, the cost of production is only the cost of the constant capital plus what they pay for wages. The difference between the two is the surplus value appropriated by capital. Marx says that Ramsay is correct, then, when he says,
““Wages … as well as profits, are to be considered each of them as really a portion of the finished product, totally distinct in the national point of view from the cost of raising it” (op. cit., p. 142).
“Independent of its results, it” (fixed capital) “is a pure loss… But, besides this, labour … not what is paid for it, ought to be reckoned as another element of cost of production, Labour is […] a sacrifice […] The more of it is expended in one employment, the less … for another, and therefore if applied to unprofitable undertakings … the nation suffers from the waste of the principal source of wealth… the reward of labour ought not to be considered as an element of cost” … (loc. cit., pp. 142-43).” (p 336-7)
This formulation may seem odd, because we have come to think of cost of production as meaning in the sense used by business, as the cost of materials, equipment, wages etc., and of profit as something in addition to these costs. The definition as set out by Ramsay is, however, significant in analysing the process of reproduction.
“Ramsay describes the real reproduction process correctly:
“In what manner is a comparison to be instituted between the product and the stock expended upon it?… With regard to a whole nation… It is evident that all the various elements of the stock expended must be reproduced in some employment or another, otherwise the industry of the country could not go on as formerly. The raw material of manufactures, the implements used in them, as also in agriculture, the extensive machinery engaged in the former, the buildings necessary for fabricating or storing the produce, must all be parts of the total return of a country, as well as of the advances of all its master-capitalists. Therefore, the quantity of the former may be compared with that of the latter, each article being supposed placed as it were beside that of a similar kind” (loc. cit., pp. 137-39).” (p 337)
Marx notes that the distinction between the nation and the individual capitalist is a false abstraction. The nation exists only as the capitalist class, in this sense, “and the whole class operates in exactly the same way as the individual capitalist.” (p 337)
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