Vorontsov himself puts forward an essentially Malthusian/Sismondist theory of overproduction as under-consumption. He says that capitalist production inevitably leads to a “surplus of goods” in the home market that then requires foreign markets to absorb it. Malthus' solution to the problem was that the landed aristocracy could simply consume the surplus, and Keynes puts forward essentially the same solution a century later. But, the idea of this surplus of goods is based on an error, that flows from Adam Smith's “absurd dogma” that the value of commodities resolves entirely into revenues, which is also the basis of Say's Law; it fails to distinguish between productive and personal consumption, and between the new value created by labour, and the value of congealed labour preserved in the value of the commodity.
Its true that the value of output is greater than the value of income/revenues, and, thereby, personal consumption. Total income/revenue is equal to the new value created by labour during the year. This equals National Income/GDP. The new value created by labour divides into v + s, i.e. one part reproduces the variable capital consumed during production, and the other constitutes surplus value, divided into profits, rent and interest. The variable-capital is the wages paid to workers out of the new value they have created, and enables them to reproduce their labour-power for the year ahead. The surplus value divides into profit of enterprise, interest, rent and taxes, each of which provides revenues so that landlords, money-lenders, capitalists and the state can consume during the year. However, the total value of output is not just v + s, but c + v + s. On this basis, it appears that consumption can never be equal to production, so that there must be a surplus of goods. But, this fails to notice that not all consumption is personal consumption. Industry itself, in the shape of Department I, must also productively consume output in the process of producing means of production, if reproduction is to occur on the same scale. The surplus of goods, therefore, does not exist.
This is clear in Marx's examples of simple reproduction, but, as Marx demonstrates it is also true in relation to expanded reproduction, where a portion of surplus value, instead of being used for personal consumption, is used to buy additional labour-power and means of production. Its in this latter regard that Vorontsov, and thereby Struve, falls into his Malthusian error. Struve writes,
““Each worker,” says Mr. V. V. in his article “The Excess in the Market Supply of Commodities,” “produces more than he consumes himself, and all these surpluses accumulate in few hands; the owners of these surpluses consume them themselves, for which purpose they exchange them within the country and abroad for the most varied objects of necessity and comforts; but however much they eat, drink or dance (sic!!)—they cannot dispose of the whole of the surplus-value” (Otechestvenniye Zapiski, 1883, No. 5, p. 14), and “to be more convincing” the author “examines the chief expenditures” of the capitalist, such as dinners, travelling, etc. We get it still more vividly in the article “Militarism and Capitalism”: “The Achilles’ heel of the capitalist organisation of industry is the impossibility of the employers consuming the whole of their income” (Russkaya Mysl, 1889, No.9, p.80). “Rothschild could not consume the entire increment to his income ... for the simple reason that this ... increment constitutes such a considerable mass of articles of consumption that Rothschild, whose every whim is satisfied as it is, would find himself in very great difficulties,” etc.” (p 498)
That particular variant of the Malthusian argument also found expression in the so called Permanent Arms Economy Thesis. The whole argument is nonsense, because it assumes that the whole of the capitalists' consumption is personal consumption, whereas an increasing proportion of surplus value goes instead to accumulation, whilst an increasing proportion of total output goes to productive consumption, i.e. to the replacement, on a like for like basis, of the means of production consumed in production. This productive consumption/accumulation is required not only because the population increases each year, which itself requires output to expand, but also because living standards themselves increase, which requires output to increase further. Moreover, this rise in living standards is manifest not simply in an increase in the quantity of commodities consumed, but by a continual expansion in the range of commodities produced, and range of new industries created for their production, each of which absorbs vast amounts of this surplus value – the civilising mission of capital.
“All these arguments, as you see, are based on the naïve view that the capitalist’s purpose is only personal consumption and not the accumulation of surplus-value, on the mistaken idea that the social product splits up into v+s (variable capital+surplus-value) as was taught by Adam Smith and all the political economists before Marx, and not into c+v+s (constant capital, means of production, and then into wages and surplus-value), as was shown by Marx. Once these errors are corrected and attention is paid to the circumstance that in capitalist society an enormous and ever-growing part is played by the means of production (the part of the social products that is used for productive and not personal consumption, not for consumption by people but by capital) the whole of the notorious “theory” collapses completely.” (p 498)
No comments:
Post a Comment