Saturday, 1 February 2020

Theories of Surplus Value, Part III, Addenda - Part 53

For the classical economists, value is labour, and so they are perturbed by the fact that not all of the new value created by labour goes to the labourer. For Adam Smith, the answer is found in the realm of distribution, in the fact that labour is plentiful and capital scarce. But, the fact that the owners of land - rent, of capital - interest or profits, obtain these revenues without undertaking labour, seems to them in contradiction to The Law of Value. They seek to explain this distribution of revenues, whilst still upholding the law of value, and the analysis of value as labour. But, for the vulgar economist, there is no such concern. 

“... the vulgar economists, on the other hand, feel completely at home precisely with the alienated form in which the different parts of value confront one another; just as a scholastic is familiar with God the Father, God the Son, and God the Holy Ghost, so are the vulgar economists with land—rent, capital—interest, and labour—wages. For this is the form in which these relationships appear to be directly connected with one another in the world of phenomena, and therefore they exist in this form in the thoughts and the consciousness of those representatives of capitalist production who remain captive to it. The more the vulgar economists in fact content themselves with translating common notions into doctrinaire language, the more they imagine that their writings are plain, in accordance with nature and the public interest, and free from all theoretical hair-splitting. Therefore, the more alienated the form in which they conceive the manifestations of capitalist production, the closer they approach the nature of common notions, and the more they are, as a consequence, in their natural element.” (p 503) 

To make a comparison with natural science it is as though theory simply looked at the world and saw that it was flat, and so constructed its analysis on that basis, enquiring no further beneath this outward appearance, and simply explaining away all contradictions, such as the existence of the horizon. It is this which separates vulgar economy from the science of political economy as represented by classical and critical economy. As Marx says elsewhere, if the reality could be understood simply on the basis of superficial appearances there would be no necessity for science. 

This vulgar approach facilitates apologism, because it proposes that all revenues are themselves independent of each other, and so antagonism between the owners of the different factors producing these revenues have no contradictory interests. That Adam Smith and Ricardo should not take such a standpoint is obvious, because they represented the views and interests of industrial capital, at a point where it was still confronted by the power of the landed aristocracy, which drained rent from its profit, and which still exercised considerable influence over the state, which in turn drained taxes from those profits. 

Vulgar economy presents a framework in which all factors of production contribute to the creation of value via their harmonious cooperation in the production process. As the industrial capitalists became victorious with the Repeal of the Corn Laws, in 1848, as they increasingly married into the landed aristocracy, and became owners of landed property themselves, and, as the working-class grew in size and significance, and began to push forward its own interests, so it became obvious why the industrial capitalists and their apologists should seek to deny such contradictions and present the production process as one of harmonious cooperation and mutual benefit. 

But, as the monopoly of private capital gave way to the dominance of socialised capital, towards the end of the 19th century, so the other contradiction, inherent in the relation between these different factors emerges. The large private capitalists remove themselves from their social function in production, in the same way that the landlords had done with the rise of the capitalist farmer. In the same way that the landlords became an excrescence, living purely from their rents, so the large private capitalists, who became mere money-lending capitalists, share and bondholders, living purely off their interest/dividends, become a similarly socially useless, parasitic excrescence. But, their interest, thereby, in maximising their revenues and capital gains (maximisation of shareholder value) stands in exactly the same contradictory antagonism to real capital and its need to maximise profit and accumulation as did the interests of landlords at the time of Smith and Ricardo. 

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