Of course, as Marx has explained, at length, earlier, the whole “absurd dogma” of Adam Smith that the value of commodities resolves into revenues is false. Revenues comprise only the new value created by labour, i.e. they comprise a division of v + s, but the value of commodities is comprised of c + v + s. Rather than revisit this argument, here, Marx is dealing with the question only of revenues, their source and their distribution. So, Marx notes that the way Ricardo should have framed his response to Smith is:-
“The price of every commodity is reducible to profit and wages, the prices of some commodities (and of very many, indirectly) are reducible to profit, rent and wages. But no commodity price is constituted by them for they are not independent factors acting of their own accord, having a definite magnitude, and making up the value of commodities; on the contrary, when the value is given, it can be divided into those parts in many different proportions. The magnitude of value is not determined by the addition or combination of given factors—i.e., profit, wages and rent—but one and the same magnitude of value, a given amount of value, is broken down into wages, profit and rent, and according to different circumstances it is distributed between these three categories in very different ways.” (p 517)
In other words, as Marx describes in Capital III, if I take a 3 metre length of string and cut it into three pieces, the length of the string is not determined by the sum of these three pieces. It is the other way round. I can cut it into, say, three equal length of 1 metre, but I cannot cut it into three two metre lengths, or two 1 metre lengths and one 2 metre length. Nor can I cut it into three 0,5 metre lengths. Whatever relative proportions the three pieces have, it must result in a total of three metres, because that is the length of the string, and it is that which determines the limits of its constituent parts, not the constituents parts that determines the length of the string.
If capitalism existed in a steady state, then production and reproduction would occur under the same conditions. If the population grew, and productivity is constant, it would mean that output grew in proportion with the amount of this new production going to wages and profits increasing by the same proportion. Similarly, the proportion going to interest and rent would remain the same so that interest and rent would rise proportionally. As Marx points out, when capitalist production was undertaken largely on the basis of handicraft or manufacturing, this condition largely applied. It is when industrial capitalism based upon machine production takes over that these conditions cease to operate.
Marx says, even if productivity did change so that commodity prices changed, this would still be true, so long as this change in prices did not change the relative income shares. This might not seem possible because of the inevitable change in relative surplus value. If currently 5 hours of a 10 hour working-day constitutes necessary labour, then 5 hours constitutes surplus labour. If productivity falls so that 6 hours of necessary labour is required, surplus value falls to 4 hours, resulting in a change in relative income shares. However, this does not take into consideration absolute surplus value. If the working day is extended to 12 hours, then labour and capital would again receive equal shares, now equal to 6 hours, although this 6 hours would now represent only the same quantity of use values as was previously represented by 5 hours, as a result of the fall in productivity.
“This uniformity or similarity of reproduction—the repetition of production under the same conditions—does not exist. Productivity itself changes and changes the conditions [of production]. The conditions, on their part, change productivity. But the divergences are reflected partly in superficial oscillations which even themselves out in a short time, partly in a gradual accumulation of divergences which either lead to a crisis, [to a] violent, seeming restoration of the old relationships, or very gradually assert themselves and are recognised as a change in the conditions.” (p 518)
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