Jones, however, does recognise that, even if agricultural productivity declines, relative to industrial productivity, that is still consistent with an absolute rise in agricultural productivity.
““In the progress of nations, an increase of manufacturing power and skill usually occurs, greater than that which can be expected in the agriculture of an increasing people. This is an unquestionable […] truth. A rise in the relative value of raw produce may, therefore, be expected in the advance of nations, and this from a cause quite distinct from any positive decrease in the efficiency of agriculture” (p. 265).” (p 409)
Where Smith failed to take into account the ability of capital to create a relative surplus population, by the introduction of labour-saving technologies, Ricardo, like Malthus fails to take into account the ability of capital to reduce the value both of labour-power, and of primary products (constant capital) also by the use of such technology, and thereby to remove the squeeze on profits from those causes. That is because Ricardo, like Malthus, bases himself on the concept of diminishing returns, and the idea that production moves from more fertile to less fertile land etc. Marx has demonstrated that that is not the case.
However, Jones argument, here, does not explain the rise in the money price of agricultural products required for the Ricardian explanation of the rise in wages, and reduction in the rate of surplus value. If exchange-values/prices are measured in gold, then an absolute rise in agricultural productivity results in a fall in the value of agricultural products. If the value of gold remains constant, then the gold price, i.e. the exchange-value as against gold, of agricultural products must fall. It may not fall as much as the gold price of manufactured commodities, where productivity rises faster, but it must fall, nevertheless. The only way the gold/money price of agricultural commodities could rise, where the productivity of agriculture rises, and the value of agricultural products falls, is if productivity in gold production rose faster, so that the value of gold fell, and so the exchange value of all other commodities against gold rose.
“This may happen, even if no general fall in the value of gold (money) takes place, but when a particular nation, for instance, buys more money with a day’s work than the competing nations do.” (p 410)
In other words, where productivity, in country A, is higher, on average, than in country B, country A's labour will have the character of complex labour, relative to country B's labour. The currency of country A will, therefore, rise relative to that of country B. A simple way of understanding this is to consider two countries producing corn, and a third country producing gold. Country A produces 100 kilos of corn with 10 hours of labour, and country B with 20 hours of labour. The global market price of corn is determined by B. Country C produces 1 kilo of gold in 20 hours, and exchanges it with B for 100 kilos of corn. But, country A also sells 100 kilos of corn to country C, and likewise obtains 1 kilo of gold. A, therefore, exchanges 10 hours of its labour for 20 hours of country C's labour.
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