Capital II, Chapter 19, Section 2) Adam Smith Resolves Exchange Value into v + s
“Let us now see how Adam Smith tries to spirit the constant part of the capital-value away from the commodity-value.” (p 377)
Marx then quotes Smith's account of the value of corn. Smith again includes the element of rent, which Marx has shown is already covered within the surplus value, s. Smith sets out that a further part pays the wages of the labourers and “labouring cattle”, with a third part going as profit to the farmer. Marx quotes Smith.
“These three parts seem” [they seem indeed] “either immediately or ultimately to make up the whole price of corn.”
This entire price, i.e., the determination of its magnitude, is absolutely independent of its distribution among three kinds of people.
“A fourth part, it may perhaps be thought, is necessary for replacing the stock of the farmer, or for compensating the wear and tear of his labouring cattle, and other instruments of husbandry. But it must be considered that the price of any instrument of husbandry, such as a labouring horse, is itself made up of the same three parts: the rent of the land upon which he is reared, the labour of tending and rearing him, and the profits of the farmer who advances both the rent of this land, and the wages of this labour. Though the price of the corn, therefore, may pay the price as well as the maintenance of the horse, the whole price still resolves itself either immediately or ultimately into the same three parts of rent, labour” (he means wages), “and profit.” (Book I, Ch. 6, p. 42.)” (p 377-8)
But, as Marx points out this amounts merely to an assertion not proof or a rational argument. For any of the items of constant capital that Smith defines, its value does not resolve merely into these revenues, but also itself into an element for the constant capital consumed in its own production.
“This is verbatim all that Adam Smith has to say in support of his astonishing doctrine. His proof consists simply in the repetition of the same assertion. He admits, for instance, that the price of corn does not only consist of v + s, but also of the price of the means of production consumed in the production of corn, hence of a capital-value not invested in labour-power by the farmer. But, he says, the prices of all these means of production resolve themselves into v + s, the same as the price of corn. He forgets, however, to add: and, moreover, into the prices of the means of production consumed in their own creation. He refers us from one branch of production to another, and from that to a third.” (p 378)
Smith's assertion would not represent such a “hollow subterfuge” if he could show that any of the elements of constant capital he refers to could be traced back to something in which only labour was involved, but he can't even do that. Smith had put forward the Scottish pebble collectors as an example of production where only labour was involved, but Marx notes,
“Adam Smith himself did not believe that he had furnished such a proof by his example of the collectors of Scotch pebbles, who, according to him 1) do not generate surplus-value of any description, but produce only their own wages, and 2) do not employ any means of production (they do, however, employ them, such as baskets, sacks, and other containers for carrying the pebbles).” (p 378)
Moreover, its quite clear that the labour undertaken by the labourers only replaces the value of their labour-power, and the profit of the capitalist, and can replace nothing more, i.e. the value of the constant capital. This was the argument discussed in Capital Vol. I over Senior's Last Hour, in which the argument of Senior and those opposing the shortening of the working-day required workers not only to replace their wages, but also the value of the consumed constant capital, rather than that value merely being preserved by their labour, and transferred into the value of the final product.
“That is all they accomplish, and all they can accomplish. And what is true of the industrial labour of one day is true of the labour set in motion by the entire capitalist class during one year. Hence the aggregate mass of the annual value produced by society can resolve itself only into v + s, into an equivalent by which the labourers replace the capital-value expended for the purchase of their own labour-power, and into an additional value which they must deliver over and above this to their employers.” (p 378-9)
In other words, they produce revenues, and these revenues find their equivalent in consumption goods, not in the reproduction of the consumed constant capital.
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