Marx quotes James Mill, setting out his Law of Markets, which, today, is known as Say's Law, after J.B. Say, who plagiarised and popularised it.
“"Whatever... be the amount of the annual produce, it never can exceed the amount of the annual demand.... Of two men who perform an exchange, the one does not come with only a supply, the other with only a demand; each of them comes with both a demand and a supply.... The supply which he brings is the instrument of his demand and his demand and supply are of course exactly equal to one another. It is, therefore, impossible that there should ever be in any country a commodity or commodities in quantity greater than the demand, without there being, to an equal amount, some other commodity or commodities in quantity less than the demand.”” (p 96-7)
As I have described elsewhere, the basis of Mill's law is Adam Smith's “absurd dogma”, that the value of commodities resolves entirely into revenues. But, as Marx sets out, both Smith's absurd dogma and Say's Law are false. The value of commodities does not resolve entirely into revenues (v + s), but into revenues and constant capital (c + v + s). Say's Law is false because money, as general commodity, is not demanded to be consumed, as with other commodities, and need not be exchanged for other commodities either, but may, instead, simply be hoarded for longer or shorter periods of time, so that, as Marx puts it, the demand for this general commodity exceeds that for all other commodities, leaving them overproduced.
“Mill establishes equilibrium by reducing the process of circulation to direct barter, but on the other hand he insinuates buyer and seller, figures derived from the process of circulation, – into direct barter. Using Mill's confusing language one may say that there are times when it is impossible to sell all commodities, for instance in London and Hamburg during certain stages of the commercial crisis of 1857/58 there were indeed more buyers than sellers of one commodity, i.e., money, and more sellers than buyers as regards all other forms of money, i.e. commodities. The metaphysical equilibrium of purchases and sales is confined to the fact that every purchase is a sale and every sale a purchase, but this gives poor comfort to the possessors of commodities who unable to make a sale cannot accordingly make a purchase either.” (p 97)
Mill wrote his “Defence of Commerce” in response to a pamphlet by William Spence entitled “Britain Independent of Commerce”, published in 1807, and a more militant version of it published by Cobbett, in his Political Register, entitled “Perish Commerce”. The ideas are essentially reactionary, reflecting the interests of the independent small producers/petty-bourgeois, who saw themselves being overwhelmed by capitalist production. The same reactionary, petty-bourgeois ideas are promoted today by “anti-capitalists” and “anti-imperialists”, as I have described in my series, “Lenin on Economic Romanticism”, describing Lenin's response to the same ideas put forward by the Narodniks.
As Marx points out in Theories of Surplus Value, Chapter 9, Sismondi was right in pointing out the possibility of generalised overproduction, arising from commodity production and exchange, his ideas being plagiarised by Malthus, in the interests of the old landlord class. In this, Sismondi was correct, and Say, Ricardo and Mill were wrong, a point that Lenin fails to acknowledge. Its not Sismondi's insight into the possibility of overproduction that Marx takes issue with, but his attempt to avoid it by seeking to hold back capitalist development itself.
“The separation of sale and purchase makes possible not only commerce proper, but also numerous pro forma transactions, before the final exchange of commodities between producer and consumer takes place. It thus enables large numbers of parasites to invade the process of production and to take advantage of this separation. But this again means only that money, the universal form of labour in bourgeois society, makes the development of the inherent contradictions possible.” (p 98)
No comments:
Post a Comment