3) Application of the Law of the Proportionality of Value, B. Surplus Left By Labour - Part 1 of 8

B. Surplus Left By Labour

Marx quotes Proudhon's comment,

“In works on political economy we read this absurd hypothesis: If the price of everything were doubled.... As if the price of everything were not the proportion of things – and one could double a proportion, a relation, a law!” (p 84)

But, price is not the proportion of all things, i.e. their exchange values, only their proportion/exchange-value as measured by one thing, i.e. money. So, the proportions of all commodities might remain constant, and yet the prices double, simply because the value of the one commodity, the money commodity, halves, or because the value of the standard of prices, such as £, $, € etc., is halved, due to the currency supply being doubled. Marx notes that, in works on political economy, this explanation is always given.

“When one speaks of the price of all commodities going up or down, one always excludes some one commodity going up or down. The excluded commodity is, in general, money or labour.” (p 84)

Proudhon also makes the same mistake as the Keynesians, in claiming that a rise in wages leads to a rise in prices. He says,

“if wages rose generally, the price of every thing else would rise.” (p 84)

Marx demonstrated, in Value, Price and Profit, that this is false, and its root is the equation of labour with labour-power, and consequently the value created by labour with the value of labour-power/wages. A rise or fall in wages is not at all the same as a rise or fall in the amount of new value created by labour. The worker may receive the same £10 in wages, but, by working 10 hours £10 of new value, 12 hours £12 of new value, or 15 hours £15 of new value. Similarly, they may work the same 15 hours, producing £15 of new value, whilst their wages rise from £10 to £11, to £12, or conversely move in the opposite direction.

The rise or fall in wages is a function of the value of labour-power. i.e. its cost of reproduction, not of the new value created by labour, or, thereby, the value or price of what that labour produces. It only changes the proportions in which that new value is divided between wages and profits. And, its to this question of the surplus value, and Proudhon's treatment of it that Marx now turns.

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