Quesnay used actual prices for this production from the time.
“It comes to five milliard livres, a sum which roughly expresses the money value of the gross agricultural production of France based on such statistical estimates as were then possible. This and nothing else is the reason why Quesnay in his Tableau “operates with several milliards”, to be precise, with five milliards, and not with five livres tournois.” (p 315)
The significance of the assumption of constant prices is seen, here. Contrary to Duhring, the use of money prices is simply a mean of expressing the physical quantities more conveniently. The same is true in Marx's schemas of reproduction, where these same assumptions are made, and the money values represent only the money equivalent of the physical commodities being reproduced.
“The whole gross product, five milliards in value, is therefore in the hands of the productive class, that is, in the first place of the farmers, who have produced it by advancing an annual working capital of two milliards, which corresponds to an invested capital of ten milliards.” (p 315-6)
The ten milliards comprises, in addition to the 2 milliards of working-capital, the fixed capital. As Marx sets out, in Capital II, III, and Theories of Surplus Value, in calculating rates of turnover of capital, it is the circulating capital that is used, but, to calculate the annual rate of profit, it is the total advanced capital, including the fixed capital, that is used.
“The agricultural products—foodstuffs, raw materials, etc.—which are required for the replacement of the working capital, including therefore the maintenance of all persons directly engaged in agriculture, are taken in natura from the total harvest and expended for the purpose of new agricultural production.” (p 316)
Again, Marx uses this same methodology in his schemas of reproduction, and to illustrate Adam Smith's “absurd dogma”, that the value of commodities resolves entirely into revenues, and its concomitant that the total national output resolves entirely into National Income. The difference in Marx's analysis, given that he was discussing a developed industrial capitalism, in which the cottage industry of the agricultural labourer was not simply “auxiliary to agriculture”, i.e. there is no direct production and consumption, is that it is only the reproduction of the consumed constant capital that, in aggregate, is taken “in natura”, from the total output, and so has no revenue equivalent.
Given that it is this constant capital component that grows relative total output, at least quantitatively if not, necessarily, in value terms, the significance of that can be seen in considering the extent to which GDP is a misrepresentation of total output, as a result of Smith's “absurd dogma” being accepted by economists down to today. For example, Michael Roberts states,
“The demand for goods and services in a capitalist economy depends on the new value created by labour and appropriated by capital. Capital appropriates surplus value by exploiting labour-power and buys capital goods with that surplus value. Labour gets wages and buys necessities with those wages. Thus it is wages plus profits that determine demand (investment and consumption).”
It is quite clear that, as soon as we have an accumulation of constant capital (or, in pre-capitalist production, means of production), not provided gratis by Nature, as in hunter-gatherer societies, but as a result of labour expended on it, this constant capital has value, as seen in the earlier example. Wild corn may be a free gift of nature. Its only value is the labour that must be expended to gather it, for consumption, just as the value of the meat a tribe consumes is the labour it expends in hunting. But, as soon as wild corn is collected, but not all of it is consumed, and, instead, a portion is accumulated to be used as seed (means of production – constant capital) this seed, and its value is, then, consumed productively as raw material/means of production/constant capital, in the following year. It can have no revenue equivalent in the year in which its use-value/value is productively consumed, because its revenue equivalent existed in the previous year. Means of production/capital is always accumulated out of revenue, though, as Marx sets out, in Capital III, not necessarily from profit, as bourgeois ideology would have it.
The seed/means of production/constant capital set aside in Year 1, out of revenue, i.e. out of that year's labour, has a value determined by the labour expended on its production, i.e. collection of wild seed provided gratis by Nature. That value is preserved and reproduced in the corn produced in the following year, now the product of settled agriculture. That value can have no revenue equivalent in the year it is then consumed as seed. Its value, and its use-value, is reproduced, in natura, in the output of corn. As Marx puts it in Capital III, and Theories of Surplus Value, it is reproduced, “on a like for like basis”, out of capital, not out of revenue.
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