Wednesday 2 October 2019

Theories of Surplus Value, Part III, Chapter 23 - Part 16

What Cherbuliez says about the process of a formation of the average rate of profit, however, is very good, Marx notes. He quotes Cherbuliez' statement. 

““After the deduction of rent, what remains of the amount of profit, that is, of the excess of products over the capital consumed, is divided between the capitalist producers in proportion to the capital each has invested, whereas the portion of the product which corresponds to the capital used up and is intended to replace it, is divided in proportion with the capital actually used up. This dual law of division comes about as a result of competition, which tends to equalise the advantages of the different investments of capital. Finally, this dual law of division determines the respective values and prices of the different kinds of products” (loc. cit., pp. 71-72).” (p 376) 

In other words, Cherbuliez correctly identifies that the average profit that each capital obtains is proportionate to the capital it advances. But, this average profit is then spread across the total value of its output, i.e. is added to its cost of production, equal to the capital laid-out. It thereby constitutes its rate of profit or profit margin. The latter thereby differs from the former, i.e. its annual rate of profit, as the advanced capital differs from the laid-out capital. As Marx points out, his last sentence should read that the average rate of profit determines the price of production, rather than values and prices. 

“On the contrary, the determination of the value is the primary factor, antecedent to the rate of profit and to the establishment of production prices. How can any kind of division of the “amount of profit”, i.e., of the surplus-value —which is itself only a part of the total value of commodities—determine the “amount of profit”, that is, the surplus-value, that is, the value of the commodities? This is only correct if, by relative values of commodities, one means their production prices, The whole lopsidedness of Cherbuliez’s presentation arises from the fact that he does not examine the origin and the laws of value and surplus-value independently.” (p 377) 

Despite the fact that Cherbuliez, like Smith and Ricardo, fails to distinguish between labour and labour-power, he essentially describes the relation between capital and wage labour correctly. Marx paraphrases his comment. 

“People who neither receive anything by devolution (legal transfer, inheritance, etc.), nor have any possessions they can exchange, can “obtain what they need only by offering their labour to the capitalist. They only acquire the right to the things which are allocated to them as the price of labour, but they have no right to the product of their labour, nor to the value which they have added” (op. cit., pp. 55-56). “By exchanging his labour for a certain volume of means of subsistence, […] the worker completely renounces all right to the other portions of capital […] The distribution of these products remains the same as it was previously; it is not modified in any way by the above-mentioned convention. The products continue to belong exclusively to the capitalist who has provided the raw materials and the means of subsistence. This is an inescapable sequence of the law of appropriation, the fundamental principle of which was, conversely, the exclusive right of every worker to the product of his labour” (p. 58).” (p 377) 

Its clear, here, that the fundamental principle, set out by Cherbuliez, that “the worker has an exclusive right to the value resulting from his labour” (p. 48).” does not exist, here, because the capitalist appropriates that product and returns to the worker only the necessary means of their subsistence. But, as stated earlier, nowhere does Cherbuliez set out an analysis based upon the exchange of commodities at their values. 

“Cherbuliez does not understand nor does he explain how the law of commodities, according to which commodities are equivalents and exchange with one another in proportion to their value, i.e., to the labour-time embodied in them, unexpectedly leads to the result that on the contrary capitalist production—and only on the basis of capitalist production is it essential for the product to be produced as a commodity—depends on the fact that one portion of labour is appropriated without exchange. He only senses that a transformation has suddenly taken place.” (p 377-8) 

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