We come now to the last controversial point in Adam Smith’s writings which we have to consider: the distinction between productive and unproductive labour.
||300| In Adam Smith’s definition of what he calls productive labour as distinguished from unproductive labour, we find the same two-sided approach as we have found on every question up to now. Jumbled together in his presentation we find two definitions of what he calls productive labour, and to begin with we will examine the first, the correct definition.
Productive labour, in its meaning for capitalist production, is wage-labour which, exchanged against the variable part of capital (the part of the capital that is spent on wages), reproduces not only this part of the capital (or the value of its own labour-power), but in addition produces surplus-value for the capitalist, It is only thereby that commodity or money is transformed into capital, is produced as capital. Only that wage-labour is productive which produces capital. (This is the same as saying that it reproduces on an enlarged scale the sum of value expended on it, or that it gives in return more labour than it receives in the form of wages. Consequently, only that labour-power is productive which produces a value greater than its own.)
The mere existence of a class of capitalists, and therefore of capital, depends on the productivity of labour: not however on its absolute, but on its relative productivity. For example: if a day’s labour only sufficed to keep the worker alive, that is, to reproduce his labour-power, ||301| speaking in an absolute sense his labour would be productive because it would be reproductive; that is to say, because it constantly replaced the values ( equal to the value of its own labour-power) which it consumed. But in the capitalist sense it would not be productive because it produced no surplus-value. (It produced in fact no new value, but only replaced the old; it would have consumed it—the value—in one form, in order to reproduce it in the other. And in this sense it has been said that a worker is productive whose production is equal to his own consumption, and that a worker is unproductive who consumes more than he reproduces.)
Productivity in the capitalist sense is based on relative productivity—that the worker not only replaces an old value, but creats a new one; that he materialises more labour-time in his product than is materialised in the product that keeps him in existence as a worker. It is this kind of productive wage-labour that is the basis for the existence of capital.
<Assuming, however, that no capital exists, but that the worker appropriates his surplus-labour himself—the excess of values that he has created over the values that he consumes. Then one could say only of this labour that it is truly productive, that is, that it creates new values.>
This conception of productive labour follows naturally from Adam Smith’s view of the origin of surplus-value, that is, of the nature of capital. In so far as he holds to this conception he is following a course that was taken by the Physiocrats and even by the Mercantilists; he only frees it from misconceptions, and in this way brings out its inner kernel. Though wrong in thinking that only agricultural labour is productive, the Physiocrats put forward the correct view that from the capitalist standpoint only that labour is productive which creates a surplus—value; and in fact a surplus—value not for itself, but for the owner of the conditions of production; labour which produces a net product not for itself, but for the landowner, For the surplus-value or surplus labour-time is materialised in a surplus-produce or net product. (But here again they have a wrong conception of this; in as much as there is, for example, more wheat than labourers and farmers eat; but also in the case of cloth there is more than what the cloth manufacturers—workman and master—need for their own clothing.) Surplus-value itself is wrongly conceived, because they have a wrong idea of value and reduce it to the use-value of labour, not to labour-time, social, homogeneous labour. Nevertheless, there remains the correct definition that only the wage-labour which creates more value than it costs is productive. Adam Smith frees this definition from the wrong conception with which the Physiocrats linked it.
If we go back from the Physiocrats to the Mercantilists, there too we find one aspect of their theory which contains the same view of productive labour, even though they were not conscious of it, The basis of their theory was the idea that labour is only productive in those branches of production whose products, when sent abroad, bring back more money than they have cost (or than had to be exported in exchange for them); which therefore enabled a country to participate to a greater degree in the products of newly-opened gold and silver mines. They saw that in these countries there was a rapid growth of wealth and of the middle class. What in fact was the source of this influence exerted by gold? Wages did not rise in proportion to the prices of commodities; that is, wages fell, and because of this relative surplus-labour increased and the rate of profit rose—not because the labourer had become more productive, but because the absolute wage (that is to say, the quantity of means of existence which the labourer received) was forced down—in a word, because the position of the workers grew worse. In these countries, therefore, labour was in fact more productive for those who employed it. This fact was linked with the influx of the precious metals; and it was this, though they were only dimly aware of it, which led the Mercantilists to declare that labour employed in such branches of production was alone productive.
||302| “The remarkable increase [of population] which has taken place […] in almost every European State, during the last fifty or sixty years, has perhaps proceeded chiefly from the increased productiveness of the American mines. An increased abundance of the precious metals” (of course as a result of the fall in their real value) “raises the price of commodities in a greater proportion than the price of labour; it depresses the condition of the labourer, and at the same time increases the gains of his employer, who is thus induced to enlarge his circulating capital to the utmost of his ability, to hire as many hands as he has the means to pay;—and it has been seen that this is precisely the state of things most favourable to the increase of people… Mr. Malthus observes, that ‘the discovery of the mines of America, during the time that it raised the rice of corn between three and four times, did not nearly so much as double the price of labour’. — The price of commodities intended for home consumption (of corn for instance) does not immediately rise in consequence of an influx of money; but as the rate of profit in agricultural employments is thus depressed below the rate of profit in manufactures, capital will gradually be withdrawn from the former to the latter: thus all capital comes to yield higher profits than formerly, and a rise of profits is always equivalent to a fall of wages” (John Barton, Observations on the Circumstances which Influence the Condition of the Labouring Classes of Society, London, 1817, pp. 29 sqq.).*
So, firstly, according to Barton, in the second half of the eighteenth century there was a repetition of the same phenomenon as that which, from the last third of the sixteenth century and in the seventeenth, has given the impulse to the Mercantile system. Secondly as only exported goods were measured in gold and silver on the basis of its reduced value, while those for home consumption continued to be measured in gold and silver according to its former value (until competition among the capitalists put an end to this measuring by two different standards), labour in the former branches of production appeared to be directly productive, that is, creating surplus-value, through the depression of wages below their former level.
The second, wrong conception of productive labour which Smith develops is so interwoven with the correct one that the two follow each other in rapid succession in the same passage. To illustrate the first conception it is therefore necessary to tear the quotations into separate parts.
“There is one sort of labour which adds to the value of the subject upon which it is bestowed: there is another which has no such effect. The former, as it produces a value, may be called productive; the latter, unproductive labour. Thus the labour of a manufacturer adds, generally, to the value of the materials which he works upon, that of his own maintenance, and of his master’s profit. The labour of a menial servant, on the contrary, adds to the value of nothing. Though the manufacturer has his wages advanced to him by his master, he, in reality, costs him no expense, the value of those wages being generally restored, together with a profit, in the improved value of the subject upon which his labour is bestowed. But the maintenance of a menial servant never is restored. A man grows rich by employing a multitude of manufacturers: he grows poor, by maintaining a multitude of menial servants” ([Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations,] b. II, ch. III, Vol. II, ed. McCulloch, pp. 93 and 94).
In this passage—and in its continuation to be quoted later, the contradictory definitions jostle each other even more closely—what is in the main and pre-eminently understood by productive labour is labour which produces a surplus-value—“his master’s profit”—in addition to the reproduction of the value of “his” (the labourer’s) “own maintenance”. Also, the industrialist could not grow rich “by employing a multitude of manufacturers” (working men), unless the latter, in addition to the value which their own maintenance costs, added also a surplus-value.
Secondly, however, in this passage Adam Smith treats as productive labour, labour which in general “produces a value”. ||303| Leaving this latter statement out of account for the moment, however, we will first cite other passages in which the first conception is partly repeated, partly formulated more sharply, but particularly also further developed.
“If the quantity of food and clothing, which were — consumed by unproductive, had been distributed among productive hands, they would have reproduced, together with a profit, the full value of their consumption” (l.c., p. 109; b. II, ch. III).
Here the productive labourer is quite explicitly one who not only produces for the capitalist the full value of the means of subsistence contained in his wages, but reproduces it for him “with a profit”.
Only labour which produces capital is productive labour. Commodities or money become capital, however, through being exchanged directly for labour-power, and exchanged only in order to be replaced by more labour than they themselves contain. For the use-value of labour-power to the capitalist as a capitalist does not consist in its actual use-value, in the usefulness of this particular concrete labour—that it is spinning labour, weaving labour, and so on. He is as little concerned with this as with the use-value of the product of this labour as such, since for the capitalist the product is a commodity (even before its first metamorphosis), not an article of consumption. What interests him in the commodity is that it has more exchange-value than he paid for it; and therefore the use-value of the labour is, for him, that he gets back a greater quantity of labour-time than he has paid out in the form of wages. Included among these productive workers, of course, are all those who contribute in one way or another to the production of the commodity, from the actual operative to the manager or engineer (as distinct from the capitalist), And so even the latest English official report on the factories “explicitly” includes in the category of employed wage-labourers all persons employed in the factories and in the offices attached to them, with the exception of the manufacturers themselves (see the wording of the report before the concluding part of this rubbish).
Productive labour is here defined from the standpoint of capitalist production, and Adam Smith here got to the very heart of the matter, hit the nail on the head. This is one of his greatest scientific merits (as Malthus rightly observed, this critical differentiation between productive and unproductive labour remains the basis of all bourgeois political economy) that he defines productive labour as labour which is directly exchanged with capital; that is, he defines it by the exchange through which the conditions of production of labour, and value in general, whether money or commodity, are first transformed into capital (and labour into wage-labour in its scientific meaning).
This also establishes absolutely what unproductive labour is. It is labour which is not exchanged with capital, but directly with revenue, that is, with wages or profit (including of course the various categories of those who share as co-partners in the capitalist’s profit, such as interest and rent). Where all labour in part still pays itself (like for example the agricultural labour of the serfs) and in part is directly exchanged for revenue (like the manufacturing labour in the cities of Asia), no capital and no wage-labour exists in the sense of bourgeois political economy. These definitions are therefore not derived from the material characteristics of labour (neither from the nature of its product nor from the particular character of the labour as concrete labour), but from the definite social form, the social relations of production, within which the labour is realised. An actor, for example, or even a clown, according to this definition, is a productive labourer if he works in the service of a capitalist (an entrepreneur) to whom he returns more labour than he receives from him in the form of wages; while a jobbing tailor who comes to the capitalist’s house and patches his trousers for him, producing a mere use-value for him, is an unproductive labourer. The former’s labour is exchanged with capital, the latter’s with revenue. The former’s labour produces a surplus-value; in the latter’s, revenue is consumed.
Productive and unproductive labour is here throughout conceived from the standpoint of the possessor of money, from the standpoint of the capitalist, not from that of the workman; hence the nonsense written by Ganilh, etc., who have so little understanding of the matter that they raise the question whether the labour or service or function of the prostitute, flunkey, etc., brings in returns. |303||
||304| A writer is a productive labourer not in so far as he produces ideas, but in so far as he enriches the publisher who publishes his works, or if he is a wage-labourer for a capitalist.
The use-value of the commodity in which the labour of a productive worker is embodied may be of the most futile kind. The material characteristics are in no way linked with its nature which on the contrary is only the expression of a definite social relation of production. It is a definition of labour which is derived not from its content or its result, but from its particular social form.
On the other hand, on the assumption that capital has conquered the whole of production—and that therefore a commodity (as distinct from a mere use-value) is no longer produced by any labourer who is himself the owner of the conditions of production for producing this commodity—that therefore only the capitalist is the producer of commodities (the sole commodity excepted being labour-power)—then revenue must be exchanged either against commodities which capital alone produces and sells, or against labour, which just like those commodities is bought in order to be consumed; that is, only for the sake of its particular material characteristics, its use-value—for the sake of the services which, through its particular material characteristics, it renders to its buyer and consumer. For the producer of these services the services rendered are commodities. They have a definite use-value (imaginary or real) and a definite exchange-value. For the buyer, however, these services are mere use-values, objects in which ||305| he consumes his revenue. These unproductive labourers do not receive their share of revenue (of wages and profits), their co-partnership in the commodities produced by productive labour, gratis: they must buy their share in them; but they have nothing to do with their production.
It is, however, in any case clear: the greater the part of the revenue (wages and profit) that is spent on commodities produced by capital, the less the part that can be spent on the services of unproductive labourers, and vice versa.
The determinate material form of the labour, and therefore of its product, in itself has nothing to do with this distinction between productive and unproductive labour. For example, the cooks and waiters in a public hotel are productive labourers, in so far as their labour is transformed into capital for the proprietor of the hotel. These same persons are unproductive labourers as menial servants, inasmuch as I do not make capital out of their services, but spend revenue on them. In fact, however, these same persons are also for me, the consumer, unproductive labourers in the hotel.
“That part of the annual produce of the land and labour of any country which replaces a capital, never is immediately employed to maintain any but productive hands. It pays the wages of productive labour only. That which is immediately destined for constituting a revenue either as profit or as rent, may maintain indifferently either productive or unproductive hands. Whatever part of his stock a man employs as a capital, he always expects it to be replaced to him with a profit. He employs it, therefore, in maintaining productive hands only; and after having served in the function of a capital to him, it constitutes a revenue to them. Whenever he employs any part of it in maintaining unproductive hands of any kind, that part is, from that moment, withdrawn from his capital, and placed in his stock reserved for immediate consumption” (l.c., p. 98).
To the extent that capital conquers the whole of production, and therefore the home and petty form of industry—in short, industry intended for self-consumption, not producing commodities—disappears, it is clear that the unproductive labourers, those whose services are directly exchanged against revenue, will for the most part be performing only personal services, and only an inconsiderable part of them (like cooks, seamstresses, jobbing tailors and so on) will produce material use-values. That they produce no commodities follows from the nature of the case. For the commodity as such is never an immediate object of consumption, but a bearer of exchange-value. Consequently only a quite insignificant part of these unproductive labourers can play a direct part in material production once the capitalist mode of production has developed. They participate in it only through the exchange of their services against revenue. This does not prevent, as Adam Smith remarks, the value of the services of these unproductive labourers being determined and determinable in the same (or an analogous) way as that of the productive labourers: that is, by the production costs involved in maintaining or producing them. Other factors also come into play in this connection, but they are not relevant here.
||306| The labour-power of the productive labourer is a commodity for the labourer himself. So is that of the unproductive labourer. But the productive labourer produces commodities for the buyer of his labour-power. The unproductive labourer produces for him a mere use-value, not a commodity; an imaginary or a real use-value. It is characteristic of the unproductive labourer that he produces no commodities for his buyer, but indeed receives commodities from him.
“The labour of some of the most respectable orders in the society is, like that of menial servants, unproductive of any value… The sovereign, for example, with all the officers both of justice and war who serve under him, the whole army and navy, are unproductive labourers. They are the servants of the public, and are maintained by a part of the annual produce of the industry of other people… In the same class must be ranked.., churchmen, lawyers, physicians, men of letters of all kinds; players, buffoons, musicians, opera-singers, opera-dancers, etc.” (l.c., pp. 94-95).
It itself, as has been said, this distinction between productive and unproductive labour has nothing to do either with the particular speciality of the labour or with the particular use-value in which this special labour is incorporated. In the one case the labour is exchanged with capital, in the other with revenue. In the one case the labour is transformed into capital, and creates a profit for the capitalist; in the other case it is an expenditure, one of the articles in which revenue is consumed. For example, the workman employed by a piano maker is a productive labourer. His labour not only replaces the wages that he consumes, but in the product, the piano, the commodity which the piano maker sells, there is a surplus-value over and above the value of the wages. But assume on the contrary that I buy all the materials required for a piano (or for all it matters the labourer himself may possess them), and that instead of buying the piano in a shop I have it made for me in my house. The workman who makes the piano is now an unproductive labourer, because his labour is exchanged directly against my revenue.
It is however clear that in the same measure as capital subjugates to itself the whole of production—that is to say, that all commodities are produced for the market and not for immediate consumption, and the productivity of labour rises in this same measure—there will also develop more and more a material difference between productive and unproductive labourers, inasmuch as the former, apart from minor exceptions, will exclusively produce commodities, which the latter, with minor exceptions, will perform only personal services. Hence the former class will produce immediate, material wealth consisting of commodities, all commodities except those which consist of labour-power itself. This is one of the aspects which lead Adam Smith to put forward other points of difference, in addition to the first and in principle determining specific difference between productive and unproductive labour. Thus, following through various associations of ideas, he says:
“The labour of a menial servant” (as distinct from that of a manufacturer) “adds to the value of nothing … the maintenance of a menial servant never is restored. A man grows rich by employing a multitude of manufacturers; he grows poor, by maintaining a multitude of menial servants. The labour of the latter, however, has its value, and deserves its reward as well as that of the former. But the labour of the manufacturer fixes and realises itself in some particular subject or vendible commodity, which lasts for some time at least after that labour is past. It is, as it were, a certain quantity of labour stocked and stored up to be employed, if necessary, upon some other occasion. That subject, or what is the same thing, the price of that subject, can afterwards, if necessary, put into motion a quantity of labour equal to that which had originally produced it. The labour of the menial servant, ||307| on the contrary, does not fix or realise itself in any particular subject or vendible commodity. His services generally perish in the very instant of their performance, and seldom leave any trace or value behind them, for which an equal quantity of service could afterwards be procured. The labour of some of the most respectable orders in the society is, like that of menial servants, unproductive of […] value, and does not fix or realise itself in any permanent subject, or vendible commodity” (l.c., pp. 93-94 passim).
To define the unproductive labourer we here have the following determinants, which at the same time reveal the links in Adam Smith’s train of thought:
It (the labour of the unproductive labourer) is “unproductive of […] value”, “adds to the value of nothing”, “the maintenance” (of the unproductive labourer) “never is restored”, “[it] does not fix or realise itself in any particular subject or vendible commodity”. On the contrary, “his services generally perish in the very instant of their performance, and seldom leave any trace or value behind them for which an equal quantity of service could afterwards be procured”. Finally, his labour “does* not fix or realise itself in any permanent subject or vendible commodity”.
Here “productive of value” or “unproductive of value” is used in a different sense from that in which these terms were used originally. The reference is no longer to the production of a surplus-value, which in itself implies the reproduction of an equivalent for the value consumed. But according to this presentation the labour of a labourer is called productive in so far as he replaces the consumed value by an equivalent, by adding to any material, through his labour, a quantity of value equal to that which was contained in his wages. Here the definition by social form, the determination of productive and unproductive labourers by their relation to capitalist production, is abandoned. From Chapter IX of Book IV (where Adam Smith criticises the doctrine of the Physiocrats), it can be seen that he came to make this aberration as a result partly of his opposition to the Physiocrats and partly under their influence. If a labourer merely replaces each year the equivalent of his wages, then for the capitalist he is not a productive labourer. He does indeed replace his wages, the purchase price of his labour. But the transaction is absolutely the same as if this capitalist had bought the commodity which this labourer produces. He pays for the labour contained in the constant capital and in the wages. He possesses the same quantity of labour in the form of the commodity as he had before in the form of money. Its money is not thereby transformed into capital. In this case it is the same as if the labourer himself owned his conditions of production. He must each year deduct the value of the conditions of production from the value of his annual product, in order to replace them. What he consumed or could consume annually would be that portion of the value of his product equal to the new labour added to his constant capital during the year. In this case, therefore, it would not be capitalist production.
The first reason why Adam Smith calls this kind of labour “productive” is that the Physiocrats call it “stérile”* and “nonproductive”. **
Thus Adam Smith tells us in the chapter referred to:
“First, this class” (namely the industrial classes, who do not carry on agriculture), “it is acknowledged “ [by the Physiocrats], “reproduces annually the value of its own annual consumption, and continues, at least, the existence of the stock or capital which maintains and employs it… Farmers and country labourers, indeed, over and above the stock which maintains and employs them, reproduce annually a neat produce, a free rent to the landlord .., the labour of farmers and country labourers is certainly more productive than that of merchants, artificers, and manufacturers. The superior produce of the one class, however, does not render the other barren or unproductive” ([Wealth of Nations O.U.P. edition, Vol. II, pp. 294-95], [Garnier], l.c., t, III, p. 530).
Here, therefore, Adam Smith falls back into the Physiocratic ||308| standpoint. The real “productive labour”, which produces a surplus-value and therefore a “neat produce”, is agricultural labour. He abandons his own view of surplus-value and accepts that of the Physiocrats. At the same time he asserts, as against the Physiocrats, that manufacturing (and according to him, also commercial) labour is nevertheless also productive, even if not in this highest sense of the word. He therefore drops the definition by social form, the definition of what a “productive labourer” is from the standpoint of capitalist production; and asserts, in opposition to the Physiocrats, that the non-agricultural, industrial class reproduces its own wages, that is, it does after all produce a value equal to the value it consumes, and thereby “continues, at least, the existence of the stock or capital which employs it”. Hence arises, under the influence of and in contradiction to the Physiocrats, his second definition of what is “productive labour.
“Secondly,” says Adam Smith, “it seems, on this account, altogether improper to consider artificers, manufacturers, and merchants, in the same light as menial servants. The labour of menial servants does not continue the existence of the fund which maintains and employs them. Their maintenance and employment is altogether at the expense of their masters, and the work which they perform is not of a nature to repay expense. That work consists in services which perish generally in the very instant of their performance, and does not fix or realise itself in any vendible commodity, which can replace the value of their wages and maintenance. The labour, on the contrary, of artificers, manufacturers, and merchants, naturally does fix and realise itself in some such vendible commodity. It is up on this account that, in the chapter in which I treat of productive and unproductive labour, I have classed artificers, manufacturers, and merchants among the productive labourers, and menial servants among the barren or unproductive” ([ibid., p. 295], [Garnier], l.c., p. 531).
As soon as capital has mastered the whole of production, revenue, in so far as it is at all exchanged against labour, will not be exchanged directly against labour which produces commodities, but against mere services. It is exchanged partly against commodities which are to serve as use-values, and partly against services, which as such are consumed as use-values.
A commodity—as distinguished from labour-power itself—is a material thing confronting man, a thing of a certain utility for him, in which a definite quantity of labour is fixed or materialised.
So we come to the definition already in essence contained in point I: a productive labourer is one whose labour produces commodities; and indeed such a labourer does not consume more commodities than he produces, than his labour costs. His labour fixes and realises itself “in some such vendible commodity”, “in any vendible commodity which can replace the value of their wages and maintenance”—(that is, of the workers who produced these commodities). By producing commodities the productive worker constantly reproduces the variable capital which he constantly consumes in the form of wages. He constantly produces the fund which pays him, “which maintains and employs him”.
In the first place. Adam Smith naturally includes in the labour which fixes or realises itself in a vendible and exchangeable commodity all intellectual labours which are directly consumed in material production. Not only the labourer working directly with his hands or a machine, but overlooker, engineer, manager, clerk, etc.—in a word, the labour of the whole personnel required in a particular sphere of material production to produce a particular commodity, whose joint labour (co-operation) is required for commodity production. In fact they add their aggregate labour to the constant capital, and increase the value of the product by this amount. (How far is this true of bankers, etc.?)
||309| Secondly, Adam Smith says that on the whole, “generally”, this is not the case with the labour of unproductive labourers. Even though capital has conquered material production, and so by and large home industry has disappeared, and the industry of the small craftsman who makes use-values directly for the consumer at his home —even then, Adam Smith knows quite well, a seamstress whom I get to come to my house to sew shirts, or workmen who repair furniture, or the servant who scrubs and cleans the house, etc., or the cook who gives meat and other things their palatable form, fix their labour in a thing and in fact increase the value of these things in exactly the same way as the seamstress who sews in a factory, the engineer who repairs the machine, the labourers who clean the machine, or the cook who cooks in a hotel as the wage-labourer of a capitalist. These use-values are also, potentially, commodities; the shirts may be sent to the pawnshop, the house resold, the furniture put up to auction, and so on. Thus these persons have potentially also produced commodities and added value to the objects on which they have worked. But this is a very small category among unproductive workers, and does not apply either to the mass of menial servants or to parsons, government officials, soldiers, musicians and so on.
But however large or small the number of these “unproductive labourers” may be, this much at any rate is evident—and is admitted by the limitation expressed in the phrase “services which perish generally in the very instant of their performance”, etc.— that neither the special kind of labour nor the external form of its product necessarily make it “productive” or “unproductive”. The same labour can be productive when I buy it as a capitalist, as a producer, in order to create more value, and unproductive when I buy it as a consumer, a sender of revenue, in order to consume its use-value, no matter whether this use-value perishes with the activity of the labour-power itself or materialises and fixes itself in an object.
The cook in the hotel produces a commodity for the person who as a capitalist has bought her labour—the hotel proprietor; the consumer of the mutton chops has to pay for her labour, and this labour replaces for the hotel proprietor (apart from profit) the fund out of which he continues to pay the cook. On the other hand if I buy the labour of a cook for her to cook meat, etc., for me, not to make use of it as labour in general but to enjoy it, to use it as that particular concrete kind of labour, then her labour is unproductive, in spite of the fact that this labour fixes itself in a material product and could just as well (in its result) be a vendible commodity, as it in fact is for the hotel proprietor. The great difference (the conceptual difference) however remains: the cook does not replace for me (the private person) the fund from which I pay her, because I buy her labour not as a value-creating element but purely for the sake of its use-value. Her labour as little replaces for me the fund with which I pay for it, that is, her wages, as, for example, the dinner I eat in the hotel in itself enables me to buy and eat the same dinner again a second time. This distinction however is also to be found between commodities. The commodity which the capitalist buys to replace his constant capital (for example, cotton material, if he is a cotton printer) replaces its value in the printed cotton. But if on the other hand he buys it in order to consume the cotton itself, then the commodity does not replace his outlay.
The largest part of society, that is to say the working class, must incidentally perform this kind of labour for itself; but it is only able to perform it when it has laboured “productively”. It can only cook meat for itself when it has produced a wage with which to pay for the meat; and it can only keep its furniture and dwellings clean, it can only polish its boots, when it has produced the value of furniture, house rent and boots. To this class of productive labourers itself, therefore, the labour which they perform for themselves appears as “unproductive labour”. This unproductive labour never enables them ||310| to repeat the same unproductive labour a second time unless they have previously laboured productively.
Thirdly. On the other hand: an entrepreneur of theatres, concerts, brothels, etc., buys the temporary disposal over the labour-power of the actors, musicians, prostitutes, etc.—in fact in a roundabout way that is only of formal economic interest; in its result the process is the same—he buys this so-called “unproductive labour”, whose “services perish in the very instant of their performance and do not fix or realise themselves “any permanent” (“particular” is also used) “subject or vendible commodity” (apart from themselves). The sale of these to the public provides him with wages and profit. And these services which he has thus bought enable him to buy them again; that is to say, they themselves renew the fund from which they are paid for. The same is true for example of the labour of clerks employed by a lawyer in his office—except for the fact that these services as a rule also embody themselves in very bulky “particular subjects” in the form of immense bundles of documents.
It is true that these services are paid for to the entrepreneur out of the revenue of the public. But it is no less true that this holds good of all products in so far as they enter into individual consumption. It is true that the country cannot export these services as such; but it can export those who perform the services. Thus France exports dancing masters, cooks, etc., and Germany schoolmasters. With the export of the dancing master, or the schoolmaster, however, his revenue is also exported, while the export of dancing shoes and books brings a return to the country.
If therefore on the one hand a part of the so-called unproductive labour embodies itself in material use-values which might just as well be commodities (vendible commodities), so on the other hand a part of the services in the strict sense which assume no objective form—which do not receive an existence as things separate from those performing the services, and do not enter into a commodity as a component part of its value—may be bought with capital (by the immediate purchaser of the labour), may replace their own wages and yield a profit for him. In short, the production of these services can be in part subsumed under capital, just as a part of the labour which embodies itself in useful things is bought directly by revenue and is not subsumed under capitalist production.
Fourthly. The whole world of “commodities” can be divided into two great parts. First, labour-power; second, commodities as distinct from labour-power itself. As to the purchase of such services as those which train labour-power, maintain or modify it, etc., in a word, give it a specialised form or even only maintain it—thus for example the schoolmaster’s service, in so far as it is “industrially necessary” or useful; the doctor’s service in so far as he maintains health and so conserves the source of all values, labour-power itself—these are services which yield in return “a vendible commodity, etc.”, namely labour-power itself, into whose costs of production or reproduction these services enter. Adam Smith knew however how little “education’ enters into the costs of production of the mass of working men. And in any case the doctor’s services belong to the faux frais* of production. They can be counted as the cost of repairs for labour-power. Let us assume that wages and profit fell simultaneously in total value, from whatever cause (for example, because the nation had grown lazier), and at the same time in use value (because labour had become less productive owing to bad harvests, etc.), in a word, that the part of the product whose value is equal to the revenue declines, because less new labour has been added in the past year and because the labour added has been less productive. If in such conditions capitalist and workman wanted to consume the same amount of value in material things as they did before, they would have to buy less of the services of the doctor, schoolmaster, etc. And if they were compelled to continue the same outlay for both these services, then they would have to restrict their consumption of other things It is therefore clear that the labour of the doctor and the schoolmaster does not directly create the fund out of which they are paid, although their labours enter into the production costs of the fund which creates all values whatsoever—namely, the production costs of labour-power.
||311| Adam Smith continues:
“Thirdly, it seems, upon every supposition, improper to say, that the labour of artificers, manufacturers, and merchants, does not increase the real revenue of the society. Though we should suppose, for example, as it seems to be supposed in this system, that the value of the daily, monthly, and yearly consumption of this class was exactly equal to that of its daily, monthly, and yearly production; yet it would not from thence follow, that its labour added nothing to the real revenue, to the real value of the annual produce of the land and labour of the society. An artificer, for example, who, in the first six months after harvest, executes ten pounds worth of work, though he should, in the same time, consume ten pounds worth of corn, and other necessaries, yet really adds the value of ten pounds to the annual produce of the land and labour of the society. While he has been consuming a half-yearly revenue of ten pounds worth of corn and other necessaries, he has produced an equal value of work, capable of purchasing, either to himself, or to some other person, an equal half-yearly revenue. The value, therefore, of what has been consumed and produced during these six months, is equal, not to ten, but to twenty pounds. It is possible, indeed, that no more than ten pounds worth of this value may ever have existed at any one moment of time. But if the ten pounds worth of corn and other necessaries which were consumed by the artificer, had been consumed by a soldier, or by a menial servant, the value of that part of the annual produce which existed at the and of the six months, would have been ten pounds less than it actually is in consequence of the labour of the artificer. Though the value of what the artificer produces, therefore, should not, at any one moment of time, be supposed greater than the value he consumes, yet, at every moment of time, the actually existing value of goods in the market is, in consequence of what he produces, greater than it otherwise would be” ([Wealth of Nations, O.U.P. edition, Vol. II, pp. 295-96], [Garnier], l.c., t. III, pp. 531-33).
Is not the [total] value of the commodities at any time in the market greater as a result of the “unproductive labour” than it would no without this labour? Are there not at every moment of time in the market, alongside wheat and meat, etc., also prostitutes, lawyers, sermons, concerts, theatres, soldiers, politicians, etc.? These lads or wenches do not get the corn and other necessaries or pleasures for nothing. In return they give or pester us with their services, which as such services have a use-value and because of their production costs also an exchange-value. Reckoned as consumable articles, there is at every moment of time, alongside the consumable articles existing in the form of goods, a quantity of consumable articles in the form of services. The total quantity of consumable articles is therefore at every moment of time greater than it would be without the consumable services. Secondly, however, the value too is greater; for it is equal to the value of the commodities which are given for these services, and is equal to the value of the services themselves. Since here, as in every exchange of commodity for commodity, equal value is given for equal value, the same value is therefore present twice over, once on the buyer’s side and once on the seller’s.
<Adam Smith goes on to say in reference to the Physiocrats:
“When the patrons of this system assert, that the consumption of artificers, manufacturers, and merchants, is equal to the value of what they produce, they probably mean no more than that their revenue, or the fund destined for their consumption, is equal to it” (that is, to the value of what they produce) ([ibid., p. 296], [Garnier] l.c., p. 533).
In this the Physiocrats were right in relation to workmen and employers taken together, rent forming only a special category of the latter’s profit.>
||312| <Adam Smith notes on the same occasion—that is, in his criticism of the Physiocrats—Book IV, Chapter IX (edit. Garnier, t. III):
“The annual produce of the land and labour of any society can he augmented only in two ways; either, first, by some improvement in the productive powers of the useful labour actually maintained within it; or, secondly, by some increase in the quantity of that labour. The improvement in the productive powers of useful labour depends, first, upon the improvement in the ability of the workman; and, secondly, upon that of tire machinery with which he works… The increase in the quantity of useful labour actually employed within any society must depend altogether upon the increase of tire capital which employs it; and the increase of that capitol, a must be exactly equal to the amount of the savings from the revenue, either of the particular persons who manage and direct the employment of that capital, or of some other persons, who lend it to them” ([ibid., p. 297], [Garnier], pp. 534-35).
Here we have a double vicious circle. First: the annual product is augmented by greater productivity of labour. All means to augment this productivity (in so far as this is not due to accidents of nature such as a specially favourable season, etc.) require an increase of capital. But in order to increase the capital, the annual product of labour must be increased. First circle. Secondly: the annual product can be augmented by an increase in the quantity of labour employed. The quantity of labour employed, however, can only be increased if the capital which employs it is first increased. Second circle. Adam Smith helps himself out of both vicious circles with “savings”, by which he means in fact the transformation of revenue into capital.
To think of the whole profit as “revenue” for the capitalist is already in itself wrong. The law of capitalist production requires on the contrary that a part of the surplus-labour, of the unpaid labour, performed by the workman should be transformed into capital. When the individual capitalist functions as a capitalist—that is, as a functionary of capital—he himself may think of this as saving; but it also appears to him as a necessary reserve fund. The increase of the quantity of labour does not however depend only on the number of workmen, but also on the length of the working-day. The quantity of labour can therefore be increased without increasing the part of the capital that is converted into wages. Similarly, on this assumption there would be no need to increase the machinery, etc. (although it would wear out more quickly; but this makes no difference). The only thing that would have to be increased is the part of the raw material that resolves itself into seed, etc. And it remains true that, taking a single country (excluding foreign trade), surplus-labour must first be applied to agriculture before it becomes possible in the industries which get their raw materials from agriculture. A part of these raw materials, such as coal, iron, wood, fish, etc. (the last-named for example as manure), in a word, all fertilisers other than animal manures, can be got by merely increasing the labour (the number of labourers remaining the same). There can therefore be no lack of these. On the other hand it has been shown above that the increase of productivity in its origin always presupposes merely the concentration of capital, not the accumulation of capital. Later however each process supplements the other.>
<The reason why the Physiocrats preached laissez faire, laissez passer, in short, free competition, is correctly stated in the following passages from Adam Smith:
“The trade which is carried on between these two different sets of people” (country and town) “consists ultimately in a certain quantity of rude produce exchanged for a certain quantity of manufactured produce. The dearer the latter, therefore, the cheaper the former; and whatever tends in any country to raise the price of manufactured produce, tends to lower that of the rude produce of the land, and thereby to discourage agriculture.”
But all fetters and restrictions placed on manufactures and foreign trade make manufactured commodities, etc., dearer. Therefore, etc. (Smith, [ibid., p.308] [Garnier trans], l.c., pp. 554-56).
||313| Smith’s second view of “productive” and “unproductive labour”—or rather the view that is interwoven with his other view—therefore amounts to this: that the former is labour which produces commodities, and the latter is labour which does not produce “any commodity”. He does not deny that the one kind of labour, equally with the other, is a commodity. See above: “The labour of the latter …has its value, and deserves its reward as well as that of the former” (that is, from the economic standpoint; there is no question of moral or other standpoints in the case of either the one or the other kind of labour). The concept commodity however implies that labour embodies, materialises, realises itself in its product. Labour itself, in its immediate being, in its living existence, cannot be directly conceived as a commodity, but only labour-power, of which labour itself is the temporary manifestation. Just as it is only in this way that wage-labour in the true sense can be explained, so it is with “unproductive labour”, which Adam Smith throughout defines by the costs of production required to produce the “unproductive labourer”. A commodity must therefore be conceived as something different from labour itself. Then, however, the world of commodities is divided into two great categories:
On one side, labour-power.
On the other side, commodities themselves.
The materialisation, etc., of labour is however not to be taken in such a Scottish sense as Adam Smith conceives it. When we speak of the commodity as a materialisation of labour—in the sense of its exchange-value—this itself is only an imaginary, that is to say, a purely social mode of existence of the commodity which has nothing to do with its corporeal reality; it is conceived as a definite quantity of social labour or of money. It may be that the concrete labour whose result it is leaves no trace in it. In manufactured commodities this trace remains in the outward form given to the raw material. In agriculture, etc., although the form given to the commodity, for example wheat or oxen and so on, is also the product of human labour, and indeed of labour transmitted and added to from generation to generation, yet this is not evident in the product. In other forms of industrial labour the purpose of the labour is not at all to alter the form of the thing, but only its position. For example, when a commodity is brought from China to England, etc., no trace of the labour involved can be seen in the thing itself (except for those who call to mind that it is not an English product). Therefore the materialisation of labour in the commodity must not be understood in that way. (The mystification here arises from the fact that a social relation appears in the form of a thing).
It remains true, however, that the commodity appears as past, objectivised labour, and that therefore, if it does not appear in the form of a thing, it can only appear in the form of labour-power itself; but never directly as living labour itself (except only in a roundabout way which in practice seems the same, but whose significance lies in the determination of different rates of wages). Productive labour would therefore be such labour as produces commodities or directly produces, trains, develops, maintains or reproduces labour-power itself. Adam Smith excludes the latter from his category of productive labour; arbitrarily, but with a certain correct instinct—that if he included it, this would open the flood-gates for false pretensions to the title of productive labour.
In so far therefore as we leave labour-power itself out of account, productive labour is labour which produces commodities, material products, whose production has cost a definite quantity of labour or labour-time. These material products include all products of art and science, books, paintings, statues, etc., in so far as they take the form of things. In addition, however, the product of labour must be a commodity in the sense of being “some vendible commodity”, that is to say, a commodity in its first form, which has still to pass through its metamorphosis. (A manufacturer may himself construct a machine if he cannot get one built anywhere else, not to sell it but to make use of it as a use-value. However, he then wears it out as a part of his constant capital and so sells it piecemeal in the form of the product which it has helped to make.)
||314| Certain labours of menial servants may therefore equally well take the form of (potential) commodities and even of the same use-values considered as material objects. But they are not productive labour, because in fact they produce not “commodities” but immediate “use-values”. As for labours which are productive for their purchaser or employer himself—as for example the actor’s labour for the theatrical entrepreneur—the fact that their purchaser cannot sell them to the public in the form of commodities but only in the form of the action itself would show that they are unproductive labours.
Apart from such cases, productive labour is such as produces commodities, and unproductive labour is such as produces personal services. The former labour is represented in a vendible thing; the latter must be consumed while it is being performed. The former includes (except for that labour which creates labour-power itself) all material and intellectual wealth—meat as well as books—that exists in the form of things; the latter covers all labours which satisfy any imaginary or real need of the individual—or even those which are forced upon the individual against his will.
The commodity is the most elementary form of bourgeois wealth. The explanation of “productive labour” as labour which produces “commodities” also corresponds, therefore, to a much more elementary point of view than that which defines productive labour as labour which produces capital.
Adam Smith’s opponents have disregarded his first, pertinent definition, and instead have concentrated on the second, pointing out the unavoidable contradictions and inconsistencies to which it gives rise. And their attacks were made all the easier for them by their insistence on the material content of the labour, and particularly the specific requirement that the labour must fix itself in a more or less permanent product. We shall see in a moment what it was that particularly gave rise to the polemics.
But first this further point. Adam Smith says of the Physiocratic system that its great merit is that it represented the wealth of nations as consisting
“not in the unconsumable riches of money, but in the consumable goods annually produced by the labour of the society”( [Wealth of Nations, O.U.P. edition, p. 299], [Garnier] t. III, l. IV, ch. IX, p. 538).
Here we have a deduction of his second definition of productive labour. The definition of surplus-value naturally depended on the form in which value itself was conceived. In the Monetary and Mercantile systems it is therefore presented as money; by the Physiocrats, as the produce of the land, as agricultural product; finally in Adam Smith’s writings as commodity in general. In so far as the Physiocrats touch on the substance of value, they resolve it entirely into pure use-value (matter, corporeal object), just as the Mercantilists resolve it into the pure form of value, the form in which the product makes itself manifest as general social labour: money. With Adam Smith, both conditions of the commodity—use-value and exchange-value—are combined; and so all labour is productive which manifests itself in any use-value, any useful product. That it is labour that manifests itself in the product already implies that the product is equal to a definite quantity of general social labour. As against the Physiocrats, Adam Smith re-establishes the value of the product as the essential basis of bourgeois wealth; but on the other hand he divests value of the purely fantastic form—that of gold and silver—in which it appeared to the Mercantilists. Every commodity is in itself money. It must be recognised that at the same time Adam Smith also falls back more or less into the Mercantilist conception of “permanency”—in fact, inconsumability. We can recall the passage in Petty (see my first volume, p. 109, where I quote from Petty’s Political Arithmetick) where wealth is valued according to the degrees in which it is imperishable, more or less permanent, and finally gold and silver are set above all other things as wealth that is “not perishable”.
Adolphe Blanqui (Histoire de l’économie politique, Bruxelles, 1839, p.152) says [of Adam Smith]:
“In restricting the sphere of wealth exclusively to those values which are embodied in material substances, he erased from the book of production the whole boundless mass of immaterial values, daughters of the moral capital of civilised nations,” etc.
The polemics against Adam Smith’s distinction between productive and unproductive labour were for the most part confined to the dii minorum gentium* (among whom moreover Storch was the most important); they are not to be found in the work of any economist ||315| of significance—of anyone of whom it can be said that he made some discovery in political economy. They are, however, the hobby-horse of the second-rate fellows and especially of the schoolmasterish compilers and writers of compendia, as well as of dilettanti with facile pens and vulgarisers in this field. What particularly aroused these polemics against Adam Smith was the following circumstance.
The great mass of so-called “higher grade” workers—such as state officials, military people, artists, doctors, priests, judges, lawyers, etc.—some of whom are not only not productive but in essence destructive, but who know how to appropriate to themselves a very great part of the “material” wealth partly through the sale of their “immaterial” commodities and partly by forcibly imposing the latter on other people—found it not at all pleasant to be relegated economically to the same class as clowns and menial servants and to appear merely as people partaking in the consumption, parasites on the actual producers (or rather agents of production). This was a peculiar profanation precisely of those functions which had hitherto been surrounded with a halo and had enjoyed superstitious veneration. Political economy in its classical period, like the bourgeoisie itself in its parvenu period, adopted a severely critical attitude to the machinery of the State, etc. At a later stage it realised and—as was shown too in practice—learnt from experience that the necessity for the inherited social combination of all these classes, which in part were totally unproductive, arose from its own organisation.
In so far as those “unproductive labourers” do not produce entertainment, so that their purchase entirely depends on how the agent of production cares to spend his wages or his profit—in so far on the contrary as they are necessary or make themselves necessary because of physical infirmities (like doctors), or spiritual weakness (like parsons), or because of the conflict between private interests and national interests (like statesmen, all lawyers, police and soldiers)—they are regarded by Adam Smith, as by the industrial capitalists themselves and the working class, as incidental expenses of production, which are therefore to be cut down to the most indispensable minimum and provided as cheaply as possible. Bourgeois society reproduces in its own form everything against which it had fought in feudal or absolutist form. In the first place therefore it becomes a principal task for the sycophants of this society, and especially of the upper classes, to restore in theoretical terms even the purely parasitic section of these “unproductive labourers”, or to justify the exaggerated claims of the section which is indispensable. The dependence of the ideological, etc., classes on the capitalists was in fact proclaimed.
Secondly, however, a section of the agents of production (of material production itself) were declared by one group of economists or another to be “unproductive”. For example, the landowner, by those among the economists who represented industrial capital (Ricardo). Others (for example Carey) declared that the merchant in the true sense of the word was an “unproductive” labourer. Then even a third group came along who declared that the “capitalists” themselves were unproductive, or who at least sought to reduce their claims to material wealth to “wages”, that is, to the wages of a “productive labourer”. Many intellectual workers seemed inclined to share the scepticism in regard to the capitalist. It was therefore time to make a compromise and to recognise the “productivity” of all classes not directly included among the agents of material production. One good turn deserves another; and, as in the Fable of the Bees, it had to be established that even from the “productive”, economic standpoint, the bourgeois world with all its “unproductive labourers” is the best of all worlds. This was all the more necessary because the “unproductive labourers” on their part were advancing critical observations in regard to the productivity of the classes who in general were “fruges consumere nati”*; or in regard to those agents of production, like landowners, who do nothing at all, etc. Both the do-nothings and their parasites had to be found a place in this best possible order of things.
Thirdly: As the dominion of capital extended, and in fact those spheres of production not directly related to the production of material, wealth became also more and more dependent on it— especially when the positive science (natural sciences) were subordinated to it as serving material production— ||316| the sycophantic underlings of political economy felt it their duty to glorify and justify every sphere of activity by demonstrating that it was “linked” with the production of material wealth, that it was a means towards it; and they honoured everyone by making him a “productive labourer” in the “primary” sense, namely, a labourer who labours in the service of capital, is useful in one way or another to the enrichment of the capitalist, etc.
In this matter even such people as Malthus are to be preferred, who directly defend the necessity and usefulness of “unproductive labourers” and pure parasites.
It is not worth the trouble to examine in detail the inanities of Germain Garnier (Smith’s translator), the Earl of Lauderdale, Brougham, Say, Storch, and later Senior, Rossi, and so on, in regard to this question. We shall cite only a few characteristic passages.
But first a passage from Ricardo, in which he shows that it is much more advantageous for the “productive labourers” when the owners of surplus-value (profit, rent) consume it in “unproductive labourers” (as menial servants, for instance) than in luxury products produced by the “productive labourers.
<Sismondi, Nouveaux principes, t. I, p. 148, accepts the correct statement of Smith’s distinction (as also of course does Ricardo): the real distinction between productive and unproductive classes is:
“The one always exchanges its labour against the capital of a nation; the other always exchanges it against a part of the national revenue.”
Sismondi—likewise following Adam Smith—on surplus-value:
“Although the labourer, by his daily labour, may have produced much more than his daily outlay, after sharing with the landowner and the capitalist what remains for him is seldom much beyond what is strictly necessary for his existence” (Sismondi, Nouveaux principes, etc., t. I, p. 87).
Ricardo says:
“If a landlord, or a capitalist, expends his revenue in the manner of an ancient baron, in the support of a great number of retainers, or menial servants, he will give employment to much more labour, than if he expended it on fine clothes, or costly furniture; on carriages, on horses, or in the purchase of any other luxuries. In both cases the net revenue would be the same, and so would he the gross revenue, but the former would be realised in different commodities. If my revenue were 10,000 l., the same quantity nearly of productive labour would be employed, whether I realised it in fine clothes and costly furniture, etc.,etc,, or in a quantity of food and clothing of the same value. If, however, I realised my revenue in the first set of commodities no more labour would be consequently employed:— I should enjoy my furniture and my clothes, and there would be an end of them; but if I realised my revenue in food and clothing, and my desire was to employ menial servants, all those whom I could so employ with my revenue of 10,000 l., or with the food and clothing which it would purchase, would be to be added to the former demand for labourers, and this addition would take place only because I chose this mode of expending my revenue. As the labourers, then, are interested in the demand for labour, they must naturally desire that as much of the revenue as possible should be diverted from expenditure on luxuries, to be expended in the support of menial servants” ([David ] Ricardo, [On the] Principles [of Political Economy, and Taxation,] third edition, [London,] 1821, pp. 475-76).
D’Avenant quotes from an old statistician, Gregory King, a list entitled Scheme of the Income and Expense of the Several Families of England, calculated for the year 1688. In this, the erudite King divides the whole nation into two main classes: “Increasing the Wealth of the Kingdom—2,675,520 heads”, and “Decreasing the Wealth of the Kingdom—2,825,000 heads”; thus the former is the “productive” class, the latter the “unproductive”. The “productive” class consists of Lords, Baronets, Knights, Esquires, Gentlemen, Persons in Office and Places, merchants in oversea trade, Persons in the Law, Clergymen, freeholders, farmers, persons in liberal arts and sciences, shopkeepers and tradesmen, artisans and handicrafts, Naval Officers, Military Officers. As against these, the “unproductive” class consists of: common seamen, labouring people and out servants (these are agricultural labourers and day wage-labourers in manufacture), cottagers (who in D’Avenant’s time were still a fifth of the total English population), ||317| common soldiers, paupers, gipsies, thieves, beggars and vagrants generally. D’Avenant explains this list of ranks prepared by the learned King as follows:
“By which he means, That the First Class of the People, from Land, Arts and Industry, maintain themselves, and add every Year something to the Nation’s General Stock; and besides this, out of their Superfluity, contribute every Year so much to the maintenance of Others. That of the Second Class, some partly maintain themselves by Labour […] but that the rest, as most of the Wives and Children of these, […] are nourish’d at the Cost of Others; and are a Yearly Burthen to the Publick, consuming Annuallv so much as would be otherwise added to the Nation’s General Stock” (D’Avenant, An Essay upon the Probable Methods of Making a People Gainers in the Ballance of Trade, London, 1699, p. 50).
In addition to this, the following passage from D’Avenant is rather characteristic of the views of the Mercantilists on surplus-value:
It is “… the Exportation of our own Product that must make England rich; to he Gainers in the Ballance of Trade, we must carry out of our own Product, what will purchase the Things of Foreign Growth that are needful for our own Consumption, with some Overplus either in Bullion or Goods to he sold in other Countries; which Overplus is the Profit a Nation makes by Trade, and it is more or less according to the natural Frugality of the People that Export,” (a frugality which the Dutch have, but not the English—l.c., pp. 46-47) “or as from the low Price of Labour and Manufacture they can afford the Commodity cheap, and at a rate not to be under-sold in Foreign Markets” (D’Avenant, l.c., pp. 45-46).
<“… by what is Consum’d at Home, one loseth only what another gets, and the Nation in General is not at all the Richer; but all Foreign Consumption is a clear and certain Profit” (An Essay on the East-India Trade, etc., London, 1697). [In D’Avenant, Discourses on the Publick Revenues, and on the Trade of England… Part II, London, 1698, p. 31.]>
<This work printed in the form of an appendix to another work of D’Avenant’s, which he tries to defend, is not the same as the Considerations on the East-India Trade, 1701, quoted by McCulloch.>
Incidentally, it must not be thought that these Mercantilists were as stupid as they were made out to be by the later Vulgar-Freetraders. In Volume II of his Discourses on the Publick Revenues, and on the Trade of England, etc., London, 1698, D’Avenant says among other things:
“Gold and Silver are indeed the Measure of Trade, but the Spring and Original of it, in all Nations, is the Natural, or Artificial Product of the Country, that is to say, what their Land, or what their labour and Industry produces. And this is so true, that a Nation may be suppos’d, by some Accident, quite without the Species of Money, and yet, if the People are numerous, industrious, vers’d in Traffick, skill’d in Sea-Affairs, and if they have good Ports, and a Soil fertile in variety* of Commodities, such a people will have Trade, […] and, they shall quickly get among ‘em, a plenty of Gold and Silver**: So that the real and effective Riches of a Country, is its Native Product” (p.45). “Gold and Silver are so far from being […] the only Things that deserve the name of Treasure, or the Riches of a Nation that in truth, Money is at Bottom no more than the Countries with which Men in their dealings have been accustom’d to reckon (p. 46). “We understand that to be Wealth which maintains the Prince, and the general Body of his People, in Plenty, Ease and Safety. We esteem that to be Treasure which for the use of Man has been converted from Gold and Silver, into Buildings and Improvements of the Country. As also other Things convertible into those Metals, as the Fruits of the Earth, Manufactures or Foreign Commodities and stock of Shipping … even perishable Goods, may be he1d the Riches of a Nation, if they are convertible, tho’not converted into Gold and Silver; and this we believe does not only hold between Man and Man, […] but between one Country and another” (pp. 60-64). “The Common People being the Stomach of the Body Politick, […] that Stomach” in Spain did not take the money as it should have done, ||318| and failed to digest it. … “Trade and Manufactures are the only Mediums by which such a digestion and distribution of Gold and Silver can be made, as will be Nutritive to the Body Politick” (pp. 62-63).
Moreover, Petty too had the conception of productive labourers (though he also includes soldiers):
“Husbandmen, Seamen, Soldiers, Artizans and Merchants, are the very Pillars of any Common-Wealth: all the other great Professions, do rise out of the infirmities and miscarriages of these; now the Seaman is three of these four” (navigator, merchant, soldier) ([William Petty,] Political Arithmetick, etc. [in Several Essays in Political Arithmetick], London, 1699, p. 177). “… the Labour of Seamen, and Freight of Ships, is always of the nature of an Exported Commodity, the overplus whereof, above what is Imported, brings home Money, etc.” (p. 179).
In this connection Petty also explains the advantages of the division of labour:
“Those who have the command of the Sea-Trade, may Work at easier Freight with more profit, than others at greater:” (higher freight charges) “for a Cloth must be cheaper made, when one” etc., “another” etc. “so those who command the Trade of Shipping, can build “ different sorts of vessels for different purposes, “one sort of vessels for the turbulent Sea, another for Inland Waters and Rivers … one sort for War … another for Burthen”, etc. … And this “is” the chief of several Reasons, why the Hollanders can go at less Freight than their Neighbours, viz., because they can afford a particular sort of Vessels for each particular Trade”* (l.c., pp. 179-80).
Here too Petty strikes quite a Smithian note when he continues:
If taxes are taken from industrialists, etc., in order to give [money] to those who in general are occupied in ways “which produce no material thing, or things of real use and value in the Commonwealth: In this case, the Wealth of the Publick will be diminished: Otherwise than as such Exercises, are Recreations and Refreshments of the mind; and which being moderately used, do qualify and dispose Men to what in it self is more considerable” (l.c., p. 198). After computing how many people are needed for industrial work “…The Remainder […] may safely and without possible prejudice to the Commonwealth, be employed in the Arts and Exercises of Pleasure and Ornament: the greatest whereof is the improvement of natural Knowledge” (l.c., p. 199). “There is much more to be gained by Manufacture than Husbandry; and by Merchandize than Manufacture…” (l.c., p. 172). “… a Seaman is in effect three Husbandmen…“ (p. 178). |VII-318||
||VIII-346| Petty, Surplus-Value. In one passage of Petty’s there can be seen an anticipation of the nature of surplus-value, although he treats it only in the form of rent. Especially when it is put alongside the following passage, in which he determines the relative value of silver and corn by the relative quantities of each that can be produced in the same labour-time.
“If a man can bring to London an ounce of Silver out of the Earth in Peru, in the same time that he can produce a Bushel of Corn, then one is the natural price of the other; now if by reason of new and more easier Mines a man can get two ounces of Silver as easily as formerly he did one, then Corn will be as cheap at ten shillings the Bushel, as it was before five shillings, caeteris paribus*.”
“…let a hundred men work ten years upon Corn, and the same number of men the same time, upon Silver; I say, that the neat proceed of the Silver is the price of the whole neat proceed of the Corn, and like parts of the one, the price of like parts of the other.”
“Corn will be twice as dear where** are two hundred Husbandmen to do the same work which an hundred could perform…” ( [William Petty], On Taxes and Contributions, 1662) (in the edit. of 1679, pp. 32, 24, 67).
The passages to which I alluded above are the following:
“… as Trades and curious Arts increase; so the Trade of Husbandry will decrease, or else the Wages of Husbandmen must rise, and consequently the Rents of Lands must fall” (p. 193).
“… if Trade and Manufacture have increased in England … if a greater part of the People, apply themselves to those Faculties, than there did heretofore, and if the price of Corn he no greater now, than when Husbandmen were more numerous, and the Tradesmen fewer: it follows from that single reason .., that the Rents of Land must fall: As for Example, suppose the price of Wheat be 5s. or 60d. the Bushel; now if the Rent of the Land whereon it grows be the third Sheaf”; (i.e., part, share) “then of the 60d. 20d. is for the Land, and 40d, for the Husbandman; but if the Husbandman’s wages should rise one-eighth part, or from 8d. to 9d. per Diem,*** then the Husbandman’s share in the Bushel of Wheat rises from 40d. to 45d. and consequently the Rent of the Land must fall from 20d. to 45d. for we suppose the price of the Wheat still remains the same; especially since we cannot raise it, for if we did attempt it, Corn would be brought in to us, ||347| (as into Holland) from Foreign Parts, where the State of Husbandry was not changed.” ([William Petty], Political Arithmetick [in Several Essays in Political Arithmetick], London, 1699, pp. 493-94.) |VIII—347||
||VIII-364| <Petty. The following passage, where rent in general is treated as a surplus-value, a net product, should be compared with the one quoted above from Petty:
“Suppose a man could with his own hands plant a certain scope of land with Corn, that is, could Dig, or Plough: Harrow, Weed, Reap, Carry home, Thresh, and Winnow so much as the Husbandry of this Land required […]. I say, that when this man hath subducted his seed out of the proceed of his Harvest, and also what himself hath both eaten and given to others in exchange for Clothes, and other Natural necessaries; that the Remainder of Corn is the natural and true Rent of the Land for that year; and the medium of seven years, or rather of so many years as makes up the Cycle, within which Dearths and Plenties make their revolution, doth give the ordinary Rent of the Land in Corn. But a further, though collateral question may he, how much English money this Corn or Rent is worth; I answer so much as the money, which another single man can save, within the same time, over and above his expense, if he imployed himself wholly to produce and make it; viz. Let another man go travel into a Countrey where is Silver, there Dig it, Refine it, bring it to the same place where the other man planted his Corn; Coyne it, etc. the same person, all the while of his working for Silver, gathering also food for his necessary livelihood, and procuring himself covering, etc. I say, the Silver of the one must he esteemed of equal value with the Corn of the other” (Traité des taxes, pp. 23-24). [William Petty, A Treatise of Taxes, and Contributions…, London, 1662, pp. 23-24. Marx quotes the passage from Charles Ganilh, Des Systeme d’économie politique…, t. II, Paris, 1821, pp. 36-37.]> |VIII-364||
||VII-318| Mr. John Stuart Mill, in Essays on Some Unsettled Questions of Political Economy, London, 1844, also struggled with the problem of productive and unproductive labour; but in so doing he in fact added nothing to Smith’s (second) definition except that labours which produce labour-power itself are also productive.
“Sources of enjoyment may he accumulated and stored up; enjoyment itself cannot. The wealth of a country consists of the sum total of the permanent sources of enjoyment, whether material or immaterial, contained in it; and labour or expenditure which tends to augment or keep up these permanent sources, should, we conceive, be termed productive” (l.c., p. 82). “If the mechanic who made the spinning-jenny laboured productively, the spinner also laboured productively when he was learning his trade: and what they both consumed productively, that is to say, its consumption did not tend to diminish, but to increase the sum of the permanent sources of enjoyment in the country, by effecting a new creation of those sources, more than equal to the amount of the consumption” (l.c., p. 83).
We will now briefly run over the twaddle written against Adam Smith in connection with productive and unproductive labour.
||319| The fifth volume [contains Garnier’s] Notes to his translation of Smith’s Wealth of Nations (Paris, 1802).
On “productive labour” in the highest sense Garnier shares the view of the Physiocrats; he only makes it somewhat weaker. He opposes Smith’s view that “productive labour .., is that which realises itself in some particular subject or vendible commodity, which lasts for some time at least after that labour is past” ([Garnier] 1.c., t. V, p. 169). |VII-319||
||VIII-347| (Germain Garnier). He brings forward various arguments against Adam Smith (which are in part repeated by later authors).
First.
“This distinction is false, inasmuch as it is based on a difference which does not exist. All labour is productive in the sense in which the author uses this word productive, The labour of the one as of the other of these two classes is equally productive of some enjoyment, commodity or utility for the person who pays for it, otherwise this labour would not find wages.”
<It is therefore productive because it produces some use-value and is sold, has an exchange-value, and is thus itself a commodity.>
In developing this point, however, Garnier cites examples by way of illustration, in which the “unproductive labourers” do the same thing, produce the same use-value or the same kind of use-value as the “productive”. For example:
“The servant who is in my service, who lights my fire, who dresses my hair, who cleans and keeps in order my clothes and my furniture, who prepares my food, etc., performs services absolutely of the same kind as the laundress or the seamstress who cleans and keeps in order her customers’ Linen: as the eating-house keeper, cook-shop proprietor or publican who carries on his trade of preparing food for persons whom it suits better to come and dine with him; as the barber, the hairdresser” (for Adam Smith, however, most of these fellows are as little reckoned among productive workers as the servants) “who perform immediate services; finally as the mason, the tiler, joiner, the glazier, the stove setter […], etc., and the multitude of building labourers who come when they are called to carry out restorations and repairs, and whose annual income depends as much on simple repair and maintenance work as on new construction.”
(Adam Smith nowhere says that the labour which fixes itself in a more or less permanent object cannot be equally well repairs as the making of new things.)
“This kind of labour consists less in producing than in maintaining; its aim is less to add to the value of the subjects to which it is applied than to prevent their decay. All these labourers, including the servants, so ye the person who pays them the labour of maintaining his own things… “
(They can therefore be regarded as machines for maintaining value, or rather use-values. Destutt de Tracy also asserts this view of the “saving” of labour. See further on. The unproductive labour of one does not become productive by saving the other unproductive labour. One of the two performs it. A part of Adam Smith’s unproductive labour—but only the part which is absolutely necessary in order to consume things, which so to speak belongs to the costs of consumption (and then, too, only when it saves this time for a productive worker)—becomes necessary as a result of the division of labour. But Adam Smith does not deny this “division of labour”. If everyone had to perform productive and unproductive labour, and through the dividing up of these kinds of labour between two persons both were better performed, according to Adam Smith this would in no way alter the circumstance that one of these labours is productive and the other unproductive.)
“It is for that and for that alone that they most often labour” (for one person to save the labour of looking after himself, ten have to look after him—a curious way of “saving” labour; besides “unproductive labour” of this kind is most often made use of by those who do nothing); “thus, either they are all productive, or none of them is productive” (l.c., p.172).
||348| Secondly. A Frenchman cannot forget the ponts et chaussées.* Why, he says, call productive
“the labour of an inspector or director of a private enterprise in trade or manufacture, and non-productive, the labour of the government official who, watching over the upkeep of public highways, of navigable canals and ports, of monies and other important instruments destined to enliven commercial activity, watching over the security of transport and communications, the carrying out of conventions, etc., can with justice be regarded as the inspector of the great social manufacture? It is labour of absolutely the same nature, though on a vaster scale” (pp. 172-73).
In so far as such a lad takes part in the production (or conservation and reproduction) of material things which could be sold were they not in the hands of the State, Smith might call his labour “productive”. “Inspectors of the great social manufacture” are purely French creations.
Thirdly. Here Garnier falls into “moralising”. Why should the “manufacturer of perfumery, who flatters my sense of smell”, be productive and not the musician, who “enchants my ear”? (p. 173). Smith would reply: because the former supplies a material product and the latter does not. Morals and the “merits” of the two lads have nothing to do with the distinction.
Fourthly. Is it not a contradiction that the “violin maker, the organ builder, the music dealer, the mechanic, etc.”, are productive, and the professions for which these labours are only “preparations” are unproductive?
“All of them have, as the final aim of their labour, a consumption of the same kind. If the result which some of them have in view does not deserve to be counted among the products of the labour of society, why should one treat more favourably what is nothing but a means for attaining this result?”(l.c., p. 173).
On this reasoning, a man who eats corn is just as productive as the man who produces it. For with what aim is corn produced? In order to eat it. So if the labour of eating is not productive, why should the labour of cultivating corn be productive, since it is only a means for attaining this aim? Besides, the man who eats produces brain, muscles, etc., and are these not just as worthy products as barley or wheat?—an indignant friend of humanity might ask Adam Smith.
In the first place, Adam Smith does not deny that the unproductive labourer produces a product of some sort. Otherwise he would not be a labourer at all. Secondly, it may seem strange that the doctor who prescribes pills is not a productive labourer, but the apothecary who makes them up is. Similarly the instrument maker who makes the fiddle, but not the musician who plays it. But that would only show that “productive labourers” produce products which have no purpose except to serve as means of production for unproductive labourers. Which however is no more surprising than that all productive labourers, when all is said and done, produce firstly the means for the payment of unproductive labourers, and secondly, products which are consumed by those who do not perform any labour.
Of all these comments, No. II is that of a Frenchman who can’t forget his ponts et chaussées; No. III amounts only to morals; No. IV either contains the stupidity that consumption is just as productive as production <which is not true in bourgeois society, where one produces and another consumes> or that some productive labour merely produces the material for unproductive labour, which Adam Smith nowhere denies. Only No. I contains the correct point that Adam Smith, by his second definition, calls the same kinds of labour ||349| productive and unproductive—or rather that according to his own definition he would have to call a relatively small part of his “unproductive” labour productive; a point therefore that does not tell against the distinction, but against the subsumption of certain activities under the distinction or the way it is applied. After making all these comments, the learned Garnier finally comes to the point.
“The only general difference that can, it seems, be observed between […] the two classes assumed by Smith, is that in the class which he calls productive, there is or may always be some intermediary person between the maker of the object and the person who consumes it; whereas in the labour that he calls non-productive, there cannot be any intermediary, and the relation between the labourer and the consumer is necessarily direct and immediate. It is evident that there is necessarily a direct and immediate relation between the person who uses the experience of the physician, the skill of the surgeon, the knowledge of the lawyer, the talent of the musician or actor, or finally the services of the domestic servant, and each of these different hired workers at the moment of their labour; while in the professions constituting the other class, the thing to be consumed being material and palpable, it can be the subject of many intermediary exchanges after leaving the person who makes it before it reaches the one who consumes it” (p. 174).
In these last words Garnier shows, in spite of himself, the concealed association of ideas that exists between Smith’s first distinction (labour which is exchanged against capital, and labour which is exchanged against revenue) and his second (labour which fixes itself in a material, vendible commodity and labour which does not so fix itself). The latter by its nature cannot for the most part be subordinated to the capitalist mode of production; the former can. To say nothing of the fact that on the basis of capitalist production, where the great majority of material commodities—material and palpable things—is produced by wage-labourers under the domination of capital, [unproductive] labours (or services, whether those of a prostitute or of the Pope) can only be paid for either out of the wages of the productive labourers, or out of the profits of their employers (and the partners in those profits), quite apart from the circumstances that those productive labourers produce the material basis of the subsistence, and consequently, the existence, of the unproductive labourers. It is however characteristic of this shallow French cur that he, who wants to be an expert in political economy and so an explorer of capitalist production, considers inessential the feature which makes this production capitalist—the exchange of capital for wage-labour instead of the direct exchange of revenue for wage-labour or the revenue which the labourer directly pays to himself. By so doing Garnier makes capitalist production itself an inessential form instead of a necessary—though only historically, that is, transiently necessary —form for the development of the social productive powers of labour and the transformation of labour into social labour.
“… it would also always be necessary to deduct from his productive class all labourers whose labour consists purely of cleaning, conserving or repairing finished articles, and consequently does not put any new product into circulation” (p. 175).
(Smith nowhere says that the labour or its product must enter into the circulating capital. It can enter directly into fixed capital, like the mechanic’s labour repairing a machine in a factory. But in this case its value enters into the circulation of the product, the commodity. And the repairers, etc., who do this labour as servants, do not exchange ||350| their labour against capital but against revenue.)
“It is in consequence of this difference that the non-productive class, as Smith has observed, subsists only on revenues. In fact, since this class allows of no intermediary between itself and the consumer of its products, that is to say, the person who enjoys its labour, it is paid immediately by the consumer; and he pays only from revenues. As against these, the labourers of the productive class, being as a rule paid by an intermediary who intends to make a profit from their labour, are most often paid by capital. But this capital is always in the end replaced by the revenue of a consumer, otherwise it would not circulate and therefore would not yield any profit to its possessor.“
This last “but” is quite childish. In the first place, a part of the capital is replaced by capital and not by revenue, whether this part of the capital circulates or does not circulate (as in the case of seed).
When a coal-mine supplies coal to an ironworks and gets from the latter iron which enters into the operations of the coal-mine as means of production, the coal is in this way exchanged for capital to the amount of the value of this iron, and reciprocally the iron, to the amount of its own value, is exchanged as capital for coal. Both (considered as use-values) are products of new labour, although this labour was produced with means of labour that were already in existence. But the value of the product of the year s labour is not the product of the labour [newly added] in the year. It also replaces the value of the past labour which was materialised in the means of production. Therefore the part of the total product which is equal to this value is not a part of the product of the year’s labour, but the reproduction of past labour.
Let us take for example the product of the daily labour of a coal-mine, an ironworks, a timber producer and a machine-building factory. Let the constant capital in all these industries be equal to one-third of all the component parts of value in the product: that is, let the proportion of pre-existing labour to living labour be 1 : 2. Then all these industries produce each a daily product of x, x', x'', x'''. These products are certain quantities of coal, iron, timber and machinery. As such products, they are products of the day’s labour (but also of the daily consumed raw materials, fuel, machinery, etc., which have all contributed to the day’s production). Let the values of these be equal to z, z', z'', z'''. These values are not the product of the day’s labour, since z/3, z'/3, z''/3, z'''/3 are only equal to the value which the constant elements of z, z', z'', z''' had before they entered into the day’s labour. Therefore also x/3, x'/3, x''/3, x'''/3, or a third part of the use values produced, represent only the value of the pre-existing labour and continually replace it. <The exchange which here takes place between pre-existing labour and the product of living labour is of quite a different nature from the exchange between labour-power and the conditions of labour existing as capital.>
x=z; yet z is the value of the total x, but one-third of z is equal to the value of the raw material, etc., contained in the total x, Thus is a part of the day’s product of the labour <but not at all the product of the day’s labour, but on the contrary of the previous pre-existing labour combined with it> in which the preexisting labour combined with the day’s labour reappears and is replaced. Now it is true that each aliquot part of x, which is simply the quantity of actual products (iron, coal, etc.), represents in its value one-third pre-existing labour and two-thirds labour performed or added the same day. Pre-existing labour and the day’s labour enter into the total product in the same proportion as they enter into each separate product of which the total product is made up. But if I divide the total product into two parts, putting one-third on one side and two-thirds on the other, it is the same as if the one-third represents only pre-existing labour and the other two-thirds only the labour of the day. In fact the first one-third represents all past labour which entered into the total product, the full value of the means of production consumed. After deducting this one-third, therefore, the other two-thirds can represent only the product of the day’s labour. The two-thirds in fact represent the total amount of the day’s labour that was added to the means of production.
The last two-thirds are therefore equal to the producer’s revenue (profit and wages). He can consume them, that is, spend them on articles which enter into his individual consumption. Suppose that these two-thirds of the coal produced daily were bought by the consumers or purchasers not with money, but with the commodities which they have previously transformed into money in order to buy coal with it. A part of these two-thirds of the coal will enter into the individual consumption of the coal producers themselves, for heating, etc. This part therefore does not enter into circulation, or if it does first enter into circulation it will be withdrawn again from it ||351| by its own producers. Minus this part of the two-thirds which the producers of coal themselves consume, they must exchange all the rest of it (if they want to consume it) for articles which enter into individual consumption.
In this exchange it is a matter of complete indifference to them whether the sellers of the consumable articles exchange capital or revenue for the coal; that is to say, whether for example the cloth manufacturer exchanges his cloth for coal in order to heat his private dwelling (in this case the coal itself in turn is an article of consumption for him, and he pays for it with revenue, with a quantity of cloth that represents profit); or whether James, the cloth manufacturer’s footman, exchanges the cloth he has received as wages for the coal (in this case the latter is once more an article of consumption and exchanged for the revenue of the cloth manufacturer, who in turn however has exchanged his revenue for the unproductive labour of the footman); or whether the cloth manufacturer exchanges cloth for coal in order to replace the coal required in his factory that has been used up. (In the latter case the cloth that the cloth manufacturer exchanges represents for him constant capital, the value of one of his means of production; and the coal represents for him not only the value but his means of production in kind, But for the coal producer the cloth is an article of consumption, and both cloth and coal represent for him revenue; the coal, revenue in its non-realised form; the cloth, revenue in its realised form.)
But as for the last one-third of the coal, the coal producer cannot spend it on articles which enter into his individual consumption; he cannot spend it as revenue. It belongs to the process of production (or reproduction) and must be transformed into iron, timber, machinery—into articles which form the component parts of his constant capital and without which the production of coal cannot be renewed or continued. He could, it is true, exchange also this one-third for articles of consumption (or, what is the same thing, for the money of the producers of these articles), but in fact only on the condition that he exchanges these consumption articles in turn for iron, timber, machinery—that they enter neither into his own consumption nor into the outlay of his revenue, but into the consumption and revenue outlays of the producers of timber, iron and machinery; all of whom, however, in turn find themselves in the position of not being able to expend one-third of their product on articles for individual consumption.
Now let us assume that coal enters into the constant capital of the producers of iron and timber, and of the machine builder. On the other hand iron, timber, and machinery enter into the constant capital of the producer of coal. In so far as these products of theirs enter [into their] mutual [constant capital] to the same amount of value, they replace themselves in kind, and one has to pay the other only the balance for the surplus that he has bought from him in excess of what he has sold to him. In fact, in such a transaction money appears in practice (through the medium of bills of exchange, etc.) only as means of payment, not as coin, means of circulation; and only the balance is paid in money. The producer of coal will need a part of this one-third of his coal for his own reproduction, just as he deducted from the product a part of the two-thirds for his own consumption.
The whole quantity of coal, iron, timber and machinery which are reciprocally replaced in this way by the exchange of constant capital for constant capital, of constant capital in one natural form for constant capital in another natural form, has absolutely nothing to do either with the exchange of revenue for constant capital or with the exchange of revenue for revenue. It plays exactly the same role as seed in agriculture or the capital stock of cattle in cattle-rearing. It is a part of the yearly product of labour, but it is not a part of the product of the year’s [newly- added] labour (on the contrary it is a part of the product of the year’s labour plus the pre-existing labour), which (conditions of production remaining the same) replaces itself annually as means of production, as constant capital, without entering into any circulation other than that between dealers and dealers and without affecting the value of the part of the product which enters into the circulation between dealers and consumers.
Let us assume that the whole one-third of the coal is thus exchanged in kind for its own elements of production, iron, timber, machinery. <It might be possible for example to exchange the entire amount direct for machinery; but the machine builder in turn would exchange it as constant capital, not only for his own but for that of the producers of iron and timber.> In fact, each hundredweight of the two-thirds of his product in coal ||352| which he exchanged for articles of consumption, exchanged as revenue, would, from the standpoint of value, consist of two parts, as the total product does. One-third of a hundredweight would be equal to the value of the means of production used up in the hundredweight, and two-thirds of the hundredweight would be equal to the labour newly added to this third by the producers of the coal. But if the total product is for example equal to 30,000 hundredweight he exchanges only 20,000 hundredweight as revenue. On the assumption made, the other 10,000 hundredweight would be replaced by iron, timber, machinery, etc., etc.; in a word, the whole value of the means of production used up in the 30,000 hundredweight would be replaced in kind by means of production of the same sort and of equal value.
The buyers of the 20,000 hundredweight thus do not pay a single farthing for the value of the pre-existing labour contained in the 20,000 hundredweight; for the 20,000 represent only two-thirds of the value of the total product in which the newly-added labour is realised. It comes to the same thing, therefore, as if the 20,000 hundredweight represented only labour newly added (during the year, for example) and no pre-existing labour. The buyer therefore pays the whole value of each hundredweight, pre-existing labour plus newly-added labour, and yet he pays only for the newly-added labour; and that is because the quantity he buys is only 20,000 hundredweight, only that quantity of the total product which is equal to the value of all the newly-added labour. Just as little does he pay for the farmer’s seed in paying for the wheat which he eats. The producers have mutually replaced this part for each other; therefore they do not need to have it replaced a second time. They have replaced it with the part of their own product which it is true is the year’s product of their labour, but is not at all the product of their year’s labour, but on the contrary is the part of their annual product that represents the pre-existing labour. Without the new labour the product would not be there; but in the same way it would not be there without the labour materialised in the means of production. If it were merely the product of the new labour, then its value would be less than it now is, and there would be no part of the product to be returned to production. But if the other method of labour [using means of production] were not more productive and did not yield more product in spite of a part of the product having to be returned to production, it would not be used.
Although no part of the value of the one-third of the coal enters into the 20,000 hundredweight of coal sold as revenue, any change in the value of the constant capital which the one-third or 10,000 hundredweight represented would nevertheless bring about a change of value in the other two-thirds which are sold as revenue. Let production in iron, timber, machinery and so on, in a word, in the elements of production of which the one-third of the product is composed, become more costly. Let the productivity of mining labour remain the same. The 30,000 hundredweight are produced with the same quantity of iron, timber, coal, machinery and labour as before. But since iron, timber and machinery have got dearer, cost more labour-time than before, more coal than before must be given for them.
||353| As previously, the product would be equal to 30,000 hundredweight. The coal-mining labour has remained as productive as it was before. With the same quantity of living labour and the same amount of timber, iron, machinery, etc., it produces 30,000 hundredweight as before. The living labour, as before, is represented by the same value, say £20,000 (reckoned in money). On the other hand timber, iron, etc., in a word, the constant capital, now cost £16,000 instead of £10,000; that is to say, the labour-time contained in them has increased by six-tenths, or 60 per cent.
The value of the total product is now equal to £36,000; it was £30,000 before; it has therefore risen by one-fifth, or 20 per cent. So also every aliquot part of the product costs one-fifth, or 20 per cent, more than before. If a hundredweight cost £1 previously, then now it costs £1 plus one-fifth of £1=£1. 4s. Previously, 1/3 or 3/9 of the total product was equal to constant capital, 2/3 equal to labour added. Now the proportion of the constant capital to the value of the total product is as 16,000 : 36,000 = 16/36 = 4/9. It amounts therefore to one-ninth [of the value of the total product] more than before. The part of the product which is equal to the value of the labour added was formerly 2/3 or 6/9 of the product, now it is 5/9.
So we get:
| Constant capital | Labour added | |
| Value = £36,000 | £16,000 (4/9 of the product) | £20,000(the same value as before = 5/9 of the product |
| Product = 30,000 cwt. | 13,333 1/3 cwt. | 16,666 2/3 cwt. |
The coal miners’ labour would not have become less productive; but the product of their labour plus the pre-existing labour would have become less productive; that is, 1/9 more of the total product would be required to replace the component part of the value ||354 | formed by the constant capital. 1/9 less of the product would be equal to the value of the labour added. Now as before the producers of iron, timber, etc., would only pay for 10,000 cwt. of coal. Previously these cost them £10,000. They will now cost them £12,000. A part of the costs of the constant capital would therefore be made good, since they would have to pay the increased price for the part of the coal which they get in replacement of iron, etc. But the producer of coal has to buy raw material, etc., from them to the amount of £16,000. There remains therefore a debit balance of £4,000, that is, 3,333 1/3 cwt. of coal. He must therefore, as before, supply 16,666 2/3 + 3,333 1/3 cwt. = 20,000 cwt. of coal = two-thirds of the product to the consumers, who would now have to pay £24,000 for it instead of £20,000. In so doing they would have to replace for him not only labour, but also a part of the constant capital.
As regards the consumers, the matter would be very simple. If they wished to consume the same quantity of coal as before, they must pay one-fifth more for it and so must spend one-fifth of their revenue less on other products, if the production costs have remained the same in every branch of production. The difficulty lies only in this: how does the producer of coal pay for the £4,000 of iron, timber, etc., for which their producers do not want coal in exchange? He has sold the 3,333 1/3 cwt., equal to this £4,000, to the consumers of coal, and has received in exchange commodities of all kinds. But these cannot enter into his consumption or that of his labourers, but must pass into the consumption of the producers of iron, timber, etc., for he must replace in these articles the value of his 3,333 1/3 cwt. It will be said: it’s quite a simple matter. All consumers of coal have to consume 1/5 less of all other commodities, or each of them has to give 1/5 more of his commodities for coal. The producers of timber, iron, etc., consume exactly this 1/5 more. However, it is not prima facie evident how the lowered productivity in the ironworks, machine building, timber-felling, etc., is to enable their producers to consume a larger revenue than before, since the price of their articles is supposed to be equal to their values, and, consequently, to have risen only in proportion to the diminished productivity of their labour.
Now it is assumed that iron, timber, machinery have risen in value by three-fifths, by 60 per cent. There are only two causes which can give rise to this. Either the iron, timber, etc., production has become less productive, because the living labour used in it has become less productive, that is, a greater quantity of labour must be used to produce the same product. In this case the producers must use three-fifths more labour than before. The rate of wages has remained the same, because the lowered productivity of labour has only a passing effect on individual products. Therefore the rate of surplus-value also has remained the same. The producer needs 24 days’ labour where he needed 15 before; but he pays the labourers, as before, only 10 hours’ labour on each of the 24 [working-days], and makes them work 2 [hours] for nothing on each of these days, as previously. If the 15 [labourers] have therefore done 150 hours’ labour for themselves and 30 for him; so the 24 work 240 hours for themselves and 48 for him. (Here we don’t worry about the rate of profit.) Wages have only fallen in so far as they are spent in iron, timber and machinery, etc., which is not the case. The 24 labourers now consume 3/5 more than the 15 did before. So the coal producers can set aside correspondingly more for them from the value of the 3,333 1/3 cwt, (i.e., for their master, who pays out the wages).
Or the reduced productivity in the production of iron, timber, etc., arises from the fact that parts of their constant capital, of their means of production, have become dearer. Then the same alternative applies, and finally the reduced productivity must result in the use of a greater quantity of living labour; therefore also in increased wages, which the coal producer has partly received from the consumers in the £4,000.
In the branches of production where more labour is employed, the amount of the surplus-value will have risen because the number of workers employed is greater. On the other hand, the rate of profit will have fallen in so far as all component parts of their constant capital into which their own product enters [have risen]; whether they themselves use a part of their own product as means of production, or, as in the case of coal, their product enters as a means of production into their own means of production. However, if their circulating capital laid out in wages has increased more than the part of the constant capital that they have to replace, their rate of profit will also have risen, and they ||355| will participate in the consumption of a part of the £4,000.
An increase in the value of the constant capital (arising from lowered productivity in the branches of labour which supply it) raises the value of the product into which it enters as constant capital, and reduces the part of the product (in kind) which replaces the newly-added labour, thus making it less productive in so far as this is reckoned in its own product. For the part of the constant capital which is exchanged in kind, the position is the same as it was. The same quantity of iron, timber and coal as before will be exchanged in kind in order to replace the iron, timber and coal that has been used up, and in this transaction the higher prices will balance each other. But the surplus of coal which now forms a part of the constant capital of the coal producer and does not enter into this exchange in kind is, as before, exchanged for revenue (in the case given above, in part not only for wages but also for profit); this revenue, however, instead of going to the former consumers, accrues to the producers in whose spheres of production a greater quantity of labour is used, that is, the number of labourers has increased.
If a branch of industry produces products which enter only into individual consumption, and neither into other industries as means of production (by means of production constant capital is always meant here) nor into their own reproduction (as for example in agriculture, cattle-raising, or the coal industry, into which coal itself enters as auxiliary material), then the annual product of this branch<any possible surplus over the annual product making no difference in this connection> must always be paid for out of revenue, wages or profit.
Let us take the case of the linen given earlier. Three yards of linen consist of: two-thirds constant capital and one-third labour added. One yard of linen therefore represents labour added. If the surplus-value is 25 per cent, then one-fifth of the 1 yard represents the profit, the other four-fifths represent the reproduction of the wages. The manufacturer himself consumes the one-fifth, or what is the same thing, others consume it and pay him the value, which he consumes in their own or in other commodities. <To simplify matters, here the whole profit is—wrongly—considered as revenue.> But he expends the four-fifths of a yard again in wages; his labourers consume them as their revenue either directly or in exchange for other consumable products, whose owners consume the linen.
This is the total part of the 3 yards of linen—the 1 yard—which the linen producers can themselves consume as revenue. The other 2 yards represent the manufacturer’s constant capital; they must be reconverted into the conditions of production for linen—yarn, machinery, etc. From the standpoint of the manufacturer, the exchange ‘of the 2 yards of linen is an exchange of constant capital; but he can only exchange it against the revenue of other people. So he pays for the yarn, say, with 4/5 of the 2 yards or 8/5 yards, and for the machinery with 2/5 of a yard. The spinner and machine builder in turn can each consume 1/3 of what they get, that is, the former, out of 8/5 yards, 8/15 of a yard; the latter 2/15 out of the 2/5 of a [yard]. Added together, 10/15 or 2/3 of a yard. But 20/15 or 4/3 yards must replace for them the raw material, flax, iron, coal, etc., and each of these articles in turn consists of one part which represents revenue (labour newly added), and another part which represents constant capital (raw materials and fixed capital, etc.).
The last 4/3 yards, however, can only be consumed as revenue. What therefore ultimately appears as constant capital in yarn and machinery and is used by the spinner and machine builder to replace the flax, iron and coal (except for the part of the iron, coal, etc., which the machine builder replaces with machines) can only represent the part of the flax, iron and coal which forms the revenue of the flax, iron and coal producers, so that there is no constant capital to be replaced in this; that is to say, it must belong to the part of the product into which, as shown above, no part of the constant capital enters. But these producers consume what is their revenue in iron, coal, flax, etc., in linen or in other consumable products, because their own products do not enter in that form, or only to a small extent, into their individual consumption. Thus a part of the iron, flax, etc., can be exchanged for a product which only enters into individual consumption, that is linen, and in exchange for it replace for the spinner all, and for the machine builder part, of his constant capital; while in turn the spinner and machine builder, with the part of their yarn and machinery that represents revenue, consume linen and thereby replace the weaver’s constant capital.
Thus in fact the whole of the linen is resolved into the profits and wages of the weaver, spinner, machine builder, flax-grower and producers of coal and of iron, while at the same time they replace the whole of the constant capital for the linen manufacturer and the spinner. The account would not balance if the final producers of raw materials had to replace their own constant capital by exchange with the linen, since this is an article for individual consumption, which does not enter into any sphere of production as means of production, ||356| as part of the constant capital. The account balances, because the linen bought by the flax-grower, producers of coal and of iron, machine builder, etc., with their own product, replaces for them only the part of their product which consists in revenue for them, but in constant capital for those who buy their products. That is only possible because they replace the part of their product which does not consist of revenue and which therefore cannot be exchanged for consumable products, in kind or by the exchange of constant capital for constant capital.
In the example given above it may seem strange that it is assumed that the productivity of labour in a given branch of industry has remained the same, and yet that it has fallen, if the productivity of the living labour employed in this branch of industry is reckoned in its own product. But this is very simply explained.
Suppose the product of a spinner’s labour is equal to 5 lbs. of yarn. Assume that he needs for this only 5 lbs. of cotton (that is, there is no waste); and that an lb. of yarn costs 1 shilling (we leave the machinery out of account; that is, we suppose that its value has neither fallen nor risen; for the case we are considering, therefore, its value is equal to nil). [Let] cotton [cost] 8d. an lb. Of the 5s, which the 5 lbs. of yarn costs, 40d. (5x8d.)=3s. 4d. is for the cotton, and 5x4d.=20d.=1s. 8d, is the newly-added labour. Of the total product, therefore, constant capital amounts to 3s. 4d., [that is,] 3 1/3 lbs, of yarn, and labour to 1 2/3 lbs. of yarn, Hence two-thirds of the 5 lbs. of yarn replace constant capital and one-third of the 5 lbs, of yarn, or 1 2/3 lbs., is the part of the product which pays for the labour. Assume that the price of an lb. of cotton now rises by 50 per cent, from 8d. to 12d., or 1s. Then we have for 5 lbs, of yarn, first, 5s. for 5 lbs. of cotton, and 1s. 8d. for labour added, whose quantity, and therefore whose value expressed in money, remains the same. Thus the 5 lbs. of yarn now costs 5s, plus 1s. 8d.=6s, 8d. Of this 6s. 8d., however, raw material is now 5s, and labour 1s. 8d.
6s. 8d.=80 d., of which 60d, is for raw material and 20d. for labour. Labour now only forms 20d, of the value of the 5 lbs., 80d., or 1/4=25 per cent; previously, 33 1/3 per cent. On the other hand the raw material is 60d = 3/4 = 75 per cent; previously it was only 66 2/3 per cent. As the 5 lbs. of yarn now costs 80d., 1 lb. costs 80/5d.=16d. For his 20d.—the value of the [newly-added] labour—[the spinner] will therefore get 1 1/4 lbs, of the 5 lbs, of yarn, and [the other] 3 3/4 lbs. [go for] raw material. Previously, 1 2/3 lbs. were for labour (profit and wages) and 3 1/3 lbs, for constant capital. Reckoned in its own product, therefore, the labour has become less productive, although its productivity has remained the same and only the raw material has got dearer. But it has remained equally productive, because the same labour has transformed 5 lbs. of cotton into 5 lbs. of yarn in the same time, and the actual product of this labour (considered as use-value) is only the form of yarn which has been given to the cotton. The 5 lbs. of cotton have been given the form of yarn as before, with the same labour. The actual product, however, consists not only of this form of yarn but also of the raw cotton, the material which has been put into this form, and the value of this material now forms a greater part of the total product than it did before, in proportion to the labour which gives it the form. Consequently the same quantity of spinning labour is paid for in less yarn, or the part of the product which replaces it has become smaller.
So much for that.
So in the first place Garnier is wrong when he says that the whole capital is in the end always replaced by consumer’s revenue, since a part of the capital can be replaced by capital and not by revenue. Secondly, it is in itself a silly statement, since revenue itself, in so far as it is not wages (or wages paid by wages, revenue derived from wages), is profit on capital (or revenue derived from profit on capital). Finally, it is silly to say that the part of capital which does not circulate (in the sense that it is not replaced by consumer’s revenue) “yields no profit to its possessor”. In fact— conditions of production remaining the same—this part yields no profit (or rather, no surplus-value). But without it capital could in no case produce its profit.
||357| “All that can be deduced from this difference is that, in order to employ productive people, what is required is not only the revenue of the person who enjoys their labour, but also a capitol which yields profit to intermediaries, while to employ non-productive people the revenue which pays them is most often sufficient” (l.c., p. 175).
This one sentence is such a bundle of nonsense that it makes it clear that Garnier, the translator of Adam Smith, in fact understood nothing of what Adam Smith wrote, and in particular had no conception whatever of the essence of the Wealth of Nations—namely, the view that the capitalist mode of production is the most productive mode (which it absolutely is, in comparison with previous forms).
First, it is an extremely silly objection to raise against Smith, who declared that unproductive labour was labour paid directly from revenue, that “to employ non-productive people the revenue which pays them is most often sufficient”. Now however the antithesis:
“in order to employ productive people, what is required is not only the revenue of the person who enjoys their labour, but also a capital which yields profit to intermediaries. “
(How productive then must agricultural labour be for Monsieur Garnier, which in addition to the revenue which enjoys the product of the land, requires a capital which not only yields profit to intermediaries, but in addition a rent to the landowner!)
In order “to employ these productive people”, what is necessary is not first capital that employs them, and secondly revenue that enjoys their labour, but nothing other than capital, which produces the revenue, which enjoys the fruit of their labour. If as a capitalist tailor I lay out £100 in wages, this £100 produces for me say £120. It produces for me a revenue of £20, with which I can then, if I want to, also enjoy tailoring labour in the form of a “frockcoat”. If on the other hand I buy clothes for £20 in order to wear them, it is obvious that these clothes have not created the £20 with which I buy them. And the case would be the same if I got a jobbing tailor to come to my house and made him sew coats for me for £20. In the first case I received £20 more than I had before, and in the second case, after the transaction, I have £20 less than I had before. Moreover, I would soon realise that the tailor whom I pay directly from revenue does not make the coat as cheaply as if I bought it from the intermediary.
Garnier imagines that the profit is paid by the consumer. The consumer pays the “value” of the commodity; and although it contains a profit for the capitalist, the commodity is cheaper for him, the consumer, than if he had spent his revenue directly on labour causing it to produce on a small scale for his personal requirements. It is obvious here that Garnier has not the slightest idea of what capital is.
He continues:
“Do not many unproductive workers, such as actors, musicians, etc., as a rule only receive their wages through the channel of a manager w ho draws profits from the capital placed in this kind of enterprise?” (l.c., pp.175-76).
This observation is correct, but it only shows that a part of the labourers whom Adam Smith in his second definition calls unproductive are productive according to his first definition.
“It follows therefore that in a society in which the productive class is very numerous, it must be supposed that a large accumulation of capitals exists in the hands of the intermediaries or entrepreneurs of labour” (l.c., p. 176).
In fact, wage-labour on a mass scale is only another expression for capital on a mass scale.
“It is therefore not, as Smith maintains, the proportion existing between the mass of capitals and that of revenues which will determine the proportion between the productive class and the non-productive class. This latter proportion seems to depend much more on the customs and habits of the people; on the more or less advanced degree of its industry” (l.c., p. 177).
If productive labourers are such as are paid from capital, and unproductive such as are paid from revenue, the proportion of the productive class to the unproductive is obviously that of capital to revenue. The proportional growth of the two classes, however, will not depend only on the existing proportion of the mass of capitals to the mass of revenues. It will depend on the proportion in which the increasing revenue (profit) is transformed into capital or expended as revenue. Although the bourgeoisie was originally very thrifty, with the growing productivity of capital, i.e., of the labourers, ||358| it imitates the retainer system of the feudal lords. According to the latest report (1861 or 1862)* on the factories, the total number of persons (managers included) employed in the factories properly so called of the United Kingdom was only 775,534,* while the number of female servants in England alone amounted to 1 million. What a convenient arrangement it is that makes a factory girl to sweat twelve hours in a factory, so that the factory proprietor, with a part of her unpaid labour, can take into his personal service her sister as maid, her brother as groom and her cousin as soldier or policeman!
Garnier’s last sentence is trite tautology. He makes the proportion between the productive and the unproductive classes depend, not on the proportion of capital and revenue—or rather on the mass of existing commodities which are expended in the form of capital or of revenue—but (?) on the customs and habits of the people, on the degree of development of its industry. In fact, capitalist production first appears at a certain stage of development of industry.
As a Bonapartist senator, Garnier naturally waxes enthusiastic over lackeys and servitors in general: “No class with an equal number of individuals contributes more than domestic servants to the conversion into capital of sums originating from revenue “(p. 181).
In fact, no class provides a more worthless section of recruits for the petty bourgeoisie. Garnier does not understand how Smith, “a man who has observed things with such sagacity”, does not value more highly “this intermediary, placed close to the rich, in order to gather up the scraps of revenue which the latter so thoughtlessly dissipates” (l.c., pp. 82, 183). He himself says in this sentence that he merely “gathers up” the scraps of “revenue”. But of what does this revenue consist? Of the unpaid labour of the productive labourer.
After all these extremely worthless polemics against Smith, Garnier, relapsing into Physiocracy, declares agricultural labour the only productive labour! And why? Because it “creates another new value, a value which did not exist in society, even as an equivalent, at the moment when this labour began to be performed; and it is this value which provides a rent to the owner of the land” (l.c., p. 184).
So what is productive labour? Labour which produces a surplus-value, a new value over and above the equivalent which it receives as wages. Smith is not to blame for Garnier’s failing to understand that the exchange of capital for labour means nothing but the exchange of a commodity of a given value—equal to a given quantity of labour—for a greater quantity of labour than it itself contains, and thus creates “a new value, a value which did not exist in society, even as an equivalent, at the moment when this labour began to be performed”. |VIII-358||
||IX-400| Monsieur Germain Garnier had published in Paris in 1796 Abrégé élémmentaire des principes de l’économie politique. Along with the Physiocratic view that agriculture alone is productive another is to be found (which to a great extent explains his polemic against Adam Smith), namely, that consumption (strongly represented by the “unproductive labourers”) is the source of production, and that the volume of the latter is to be measured by the volume of the former. The unproductive labourers satisfy artificial needs and consume material products, and are thus in every way useful, He also polemises, therefore, against economy (thrift). On p. xiii of his preface we find:
“The fortune of an individual is enlarged by saving; the public fortune, on the contrary, derives its increase from the increase of consumption.”
And on p. 240, in the chapter on public debts:
“The improvement and extension of agriculture and consequently the progress of industry and commerce have no other cause than the extension of artificial needs.”
From this he concludes that public debts are a good thing, in that they increase these needs. |IX-400||
||XI-421| Schmalz. In his criticism of Smith’s distinction between productive labour and unproductive labour this German afterbirth of the Physiocrats says (German edition [it was published in] 1818):
“I observe only … that Smith’s distinction between productive and unproductive labour should not be considered as essential or very precise, if one has regard to the fact that in general the labour of others never produces anything for us but a saving of time, and that this saving of time is all that forms its value and its price.”*
<There is a confusion here: the value and the price of a thing is not determined by the economy of time effected through the division of labour; but I get more use-value for the same value, labour is more productive, because a greater quantity of products is produced in the same time; however as the echo of the Physiocrats he naturally could not discover value in labour-time itself.>
“The joiner for example who makes a table for me, and the servant who takes my letters to the post, who cleans my clothes or gets for mc the things I need, both perform a service of absolutely like nature, Both the one and the other save mc the time which I myself would have to use up in doing these things, as also the time I would have to devote to acquire the skill and facility needed for them” (Schmalz, Économie politique, traduit par Henri Jouffroy, etc., t. I, 1826, p. 304).
The following remark of this same scribbler Schmalz**** is also important for the link with Garnier, for instance his consumption system (and the economic utility of vast expenditure) with the Physiocratic system:
“This system” (Quesnay’s) “regards the consumption of artisans, and even of those who merely consume, as meritorious, because this consumption, even though in an indirect and mediated way, contributes to the growth of the nation’s revenue; since but for this consumption the consumed products would not have been produced from the land and could not have been added to the revenue of the landowner” (p. 321). |IX-421||
||VIII-358| A very inferior and superficial compilation is Charles Ganilh’s Des systémes d’économie politique, First edition Paris 1809, second 1821. (Quotations from the latter.) His twaddle is directly linked with Garnier, against whom he polemises.
<Canard in Principes d’économie politique defines “wealth” [as] “an accumulation of supeflruous labour”. Had he said that it is the labour which is superfluous for keeping the labourer alive as a labourer, the definition would be correct.>
Monsieur Ganilh’s starting-point is the elementary fact that the commodity is the element of bourgeois wealth, and therefore labour, in order to produce wealth, must produce commodities, must sell itself or its product.
“In the present state of civilisation, labour is only known to us through exchange” (l.c., t. I, p. 79). “Labour without exchange can produce no wealth” (l.c., p. 81).
From this Ganilh jumps straight into the Mercantile system.
Because labour without exchange creates no bourgeois wealth. “wealth comes exclusively from trade” (l.c., p. 84). Or, as he says later: “Exchange or trade alone gives value to things” (l.c., p. 98). On this “principle of the identity of values and wealth … rests the doctrine of the fruitfulness of general labour” (l.c., p. 93).
Ganilh himself declares ||359| that the “commercial system” which he calls a mere “modification” of the monetary system
“derives private and public wealth from the exchangeable values of labour, whether these values are or are not fixed in material, durable, and permanent objects” (l.c., p. 95).
He thus falls into the Mercantile system, as Garnier fell into the Physiocratic. His trash, if good for nothing else, is consequently not had as a characterisation of this system and of its views on “surplus-value”, especially as he puts forward these views in opposition to Smith, Ricardo, etc.
Wealth is exchangeable value; all labour which produces an exchangeable value or itself has an exchangeable value consequently produces wealth. The only word in which Ganilh shows himself a more profound Mercantilist, is the word general labour. The labour of individuals, or rather its product, must take the form of general labour. Only so is it exchange-value, money. In fact, Ganilh comes back to the view that wealth is equivalent to money; though no longer only gold and silver, but the commodity itself, in so far as it is money. He says: “Commercial system, or the exchange of values of general labour” (l.c., p. 98). This is nonsense. The product is value as the form of existence, as the incarnation of general labour, but not as “the value of general labour”, which would be equivalent to the value of value. But let us assume that the commodity is constituted as value, and has even taken on the form of money, is metamorphosed. It is now exchangeable value. But how great is its value? All commodities are exchangeable value. They are not different from each other in this. But what makes the exchangeable value of a definite commodity? Here Ganilh does not get beyond the crudest superficiality. A is of greater exchange-value when it exchanges for more B, C, D, etc.
Ganilh is quite right when he says of Ricardo and most economists that they consider labour without exchange, although their system, like the whole bourgeois system, rests on exchange-value. This however is only due to the fact that to them the form of product as commodity seems self-evident, and consequently they examine only the magnitude of value. In exchange the products of individuals only manifest themselves as products of general labour by taking the form of money. This relativity, however, originates from the fact that they must present themselves as the form of existence of general labour, and can be reduced to it only as relative, merely quantitatively different expressions of social labour. But the exchange itself does not give them their magnitude of value. In exchange they appear as general social labour; and the extent to which they can appear as general social labour depends on the extent to which they can present themselves as social labour, that is, on the extent of the commodities for which they can be exchanged, and therefore on the expansion of the market, of trade; on the range of commodities in which they can be expressed as exchange-value. For example, were there only four different branches of production in existence, each of the four producers would produce a great part of his product for himself. If there are thousands, then he can produce his total product as commodities. It can enter entirely into exchange. But Ganilh imagines, with the Mercantilists, that the magnitude of value is itself the product of exchange, whereas in fact it is only the form of value or the form of commodity which the product receives through exchange.
“Exchange gives things a value which they would not have had without it” (p. 102).
If this means that things, use-values, only become value, receive this form as relative expressions of social labour, it is a tautology. But if it is intended to mean that through exchange they get a greater value than they would have had without it, it is clearly nonsense, for exchange can only increase A’s magnitude of value by reducing that of B. So far as it gives A a greater value than it has before the exchange, it gives B a smaller value. A+B, therefore, has the same value after the exchange as it had before it.
“The most useful products may have no value if exchange does not give any to them” (p. 104).
(First, if these things are “products”, they are from the start products of labour, not general elemental things provided by nature like air, etc.; if they are “the most useful”, they are use-values in the highest sense, use-values that everyone needs; if exchange gives them no value, this is only possible if everyone produces them for himself; this however contradicts ||360| the assumption that they are produced for exchange; therefore the whole proposition is nonsense.)
“And the most useless products may have very great value, if exchange is favourable for them” (p. 104).
For Monsieur Ganilh, “exchange” is a mystical being. If the “most useless” products are no use for anything, have no use-value, who will buy them? They must therefore have at least an imaginary “utility” for the buyer. And if he is not a fool, why should he pay more for them? Their dearness must therefore originate in some circumstance which in any case does not arise from their “uselessness”. Their “scarcity”, rarity? But Ganilh calls them “the most useless products”. As therefore they are products, why are they not produced in greater quantities, in spite of their great “exchange-value”? If before it was the buyer who was a fool, giving a lot of money for something that had neither a real nor an imaginary use-value for him, now it is the seller, who does not produce these trifles of great exchange-value instead of utilities of small value. That their exchange-value is great in spite of their small use-value (use-value determined by the natural needs of man), must therefore be due to some circumstance that originates not from Lord Exchange, but from the product itself. Its high exchange-value is therefore not the product of exchange, but only appears in exchange.
“The exchanged value of things and not their exchangeable value establishes the real value, the value which is identical with wealth” (l.c., p. 104).
But exchangeable value is a relation of the thing to other things with which it can be exchanged. <The correct point underlying this statement is: what compels the transformation of the commodity into money is that it has to enter into exchange as an exchangeable value, but only becomes that as the result of exchange.> On the other hand, the exchanged value of A is a definite quantity of products B, C, D, etc. Therefore (according to Monsieur Ganilh) it is no longer a value, but a thing, without exchange. B, C, D, etc., were not “values”. A has become a value through these non-values stepping into its place (as exchanged value). By the mere change of place—after they have come out of exchange and find themselves in the same position as before—these things have become values.
“It is therefore neither the real utility of things, nor their intrinsic value, which makes them wealth; it is exchange which fixes and determines their value, and it is this value which identifies them with wealth” (l.c., p. 105).
Lord Exchange fixes and determines something which was there or was not there. If only exchange creates the value of things, then this value, this product of exchange, ceases to exist as soon as exchange itself ceases. Thus what it makes, it equally unmakes. I exchange A for B+C+D, In the act of this exchange A gets value. As soon as the act is past, B+C+D stands on the side where A was, and A on the side where B+C+D was. And in fact each stands on its own, outside Lord Exchange, who only consisted of this change of place. B+C+D is now things, not values. So is A. Or exchange “fixes and determines” in the literal meaning of the word. A dynamometer determines and fixes the degree of strength of my muscles, but it does not make it. In this case value is not produced by exchange.
“There is in truth no wealth for individuals and for peoples, except when each labours for all” (that is to say, when his labour takes the form of general social labour, for in any other meaning this would be nonsense; since, except in the form of general social labour, an iron manufacturer does not work for all, but only for consumers of iron); “and all for each” (which again is nonsense, if we are dealing with use-value, for the products of all are without exception special products, and each person needs only special products; what this means is therefore only that each special product takes on a form in which it exists for everyone; and it only exists in this form, not because as a special product it is distinct from the product of each other person, but because it is identical with it; that is, once more the form of social labour as it exists on the basis of commodity production) (l.c., p. 408).
||361| From this definition—exchange-value is the expression of the labour of the isolated individual as general social labour—Ganilh falls once more into the crudest conception: that exchange-value is the proportion in which commodity A exchanges against commodity B, C, D, etc. A has great exchange-value if much B, C, D is given for it; but then little A is given for B, C, D. Wealth consists of exchange-value. Exchange-value consists of the relative proportion in which products exchange for each other. The total quantity of products has therefore no exchange-value, since it is not exchanged for anything. Hence, society, whose wealth consists of exchange-values, has no wealth. Consequently it follows not only, as Ganilh himself concludes, that the “national wealth, which is composed of the exchange-values of labour” (p.108), can never rise and can never fall in exchange-value ( therefore there is no surplus-value), but that it has no exchange-value whatever, and so is not wealth, since wealth consists only of exchangeable values.
“If the abundance of wheat makes its value fall, the farmers will he less rich, because they have less exchange-values to obtain for themselves things that are necessary, useful or pleasant for life; but the consumers of wheat will profit from all that the farmers have lost: the loss of some will be compensated by the gain of others, and the general wealth will undergo no change” (pp. 108-09).
Excuse me. The consumers of wheat eat the wheat and not the exchangeable value of the wheat. They are richer in means of subsistence, but not in exchangeable value. They have exchanged a small amount of their products—which have a high exchange-value because of their relative paucity as compared with the quantity of wheat for which they are exchanged—for the wheat. The farmers have now received the high exchange-value and the consumers a good deal of wheat of small exchange-value, so that now the latter are the poor ones and the farmers the rich.
Moreover, the total (the social total of exchange-values) loses its nature of being exchange-value in the same degree as it becomes the total of exchange-values. A, B, C, D, E, F have exchange-value in so far as they are exchanged for each other. When they have been exchanged, they are then all products for their consumers, their purchasers. By exchanging hands they have ceased to be exchange-value. And thereby the wealth of society, which is composed of exchangeable values, has disappeared. The value of A is relative; it is its exchange relation to B, C, etc. A+B has less exchange-value, because its exchange-value now exists only in relation to C, D, E, F. But the total of A, B, C, D, E, F has no exchange-value at all, because it expresses no relation. The total of commodities is not exchanged for other commodities. Therefore the wealth of society, which consists of exchange-values, has no exchange-value and is consequently not wealth.
“Hence it is that it is difficult, and perhaps impossible, for a country to enrich itself by internal commerce. It is not at all the same for peoples who engage in foreign trade” (l.c., p. 109).
This is the old Mercantile system. Value consists in my getting not an equivalent, but more than the equivalent. At the same time, however, for Ganilh there is no equivalent, for this would imply that the value of A and the value of B are determined not by the proportion of A in B or of B in A, but by a third thing in which A and B are identical. But if there is no equivalent, there can also be no excess over the equivalent. I get less gold for iron than iron for gold. Now I have more iron, for which I get less gold. If therefore I gain on the original transaction because less gold is equal to more iron, I now lose just as much because more iron is equal to less gold.
“All labour, whatever be its nature, is productive of wealth provided that it has an exchange-value” (l.c., p. 119). “Exchange pays no regard either to the quantity or to the material nature or to the durability of the products” (l.c., p. 121). “All” (kinds of labour) “are equally productive of the sum for which they have been exchanged” (pp. 121-22).
First they are equally productive of the sum, that is, the price, which they have been paid (the value of their wages). But Ganilh at once goes another step further. Immaterial labour, he says, produces the material product for which it is exchanged, so that it seems that material labour produces the product of immaterial labour.
||362| “There is no difference between the labour of the workman who makes a chest of drawers for which he gets two bushels of wheat in exchange and the labour of a village fiddler for which he gets two bushels of wheat. In both cases two bushels of wheat are produced: two bushels to pay for the chest of drawers, and two bushels to pay for the pleasure given by the village fiddler. It is true that after the joiner has consumed the two bushels of wheat, a chest of drawers remains, and after the fiddler has consumed the two bushels of wheat, nothing remains; bet how many labours reputed productive are in the same case!… it is net by what remains after consumption that one can judge whether a labour is productive or sterile, it is by the exchange or by the production to which it has given rise. But since the joiner’s labour, as well as the fiddler’s labour, is the cause of the production of two bushels of wheat, both are equally productive of two bushels of wheat, although the one, after it is finished, does not fix and realise itself in any durable object, and the other fixes and realises itself in a durable object” (l.c., pp. 122-23).
“Adam Smith would like to reduce the number of labourers who are not usefully occupied, in order to multiply that of the labourers who are usefully occupied; but no consideration has been given to the fact that if this desire could be realised all wealth would be impossible, because consumers would be lacking for the producers, and the excess that was not consumed would not be reproduced. The productive classes do not give the products of their labours gratuitously to the classes whose labours do not yield any material products” (here he nevertheless himself distinguishes between labours which yield material products and labours which do not); “they give them to them in exchange for the convenience, the pleasures and the enjoyments that they receive from them, and, in order to give them to them, they are obliged to produce them. If the material products of labour were not employed to pay for the labours which do not yield material products, they would not have consumers and their reproduction would cease, The labours productive of enjoyment thus contribute to production as efficaciously as the labour which is considered to be the most productive” (l.c., pp. 123-24).
“Almost always the convenience, the pleasures or the enjoyments which they” (the peoples) “seek follow and do not precede the products which are to pay for them” (l.c., p. 125). (They seem therefore to be much more effect than cause of the products which are to pay for them). “The position is different when the pro ours devoted to pleasure, luxury and ostentation are not wanted by the productive classes, “ (thus he himself makes the distinction here) “and they are nevertheless forced to pay for them and to cut down their own requirements by this amount. Then it may come about that this forced payment does not bring about an increase in production” (l.c., p. 125). “Apart from this case all labour is necessarily productive, and contributes more or less efficaciously to the formation and growth of the public wealth, because it necessarily calls forth the products which pay for it” (l.c. p. 126).
<So according to this the “unproductive labours” are productive neither because of their cost, that is, their exchange-value, nor because of the special enjoyment that they produce, that is, their use-value, but because they produce productive labour.>
<If, according to Adam Smith, that labour is productive which is directly exchanged for capital, then we have to consider, apart from the form, also the material components of the capital which is exchanged for labour. It resolves itself into the necessary means of subsistence; that is for the most part into commodities, material things. What the labourer has to pay from these wages to State and Church is a deduction for services which are forced upon him; what he pays out for education is devilishly little, but when he does, his payments are productive, for education produces labour-power; what he pays out for the services of physicians, lawyers, priests, is his misfortune; there are very few unproductive labours or services left on which the labourer’s wages are spent, especially as he himself provides his costs of consumption (cooking, keeping his house clean, generally even repairs).>
The following statement of Ganilh’s is extremely characteristic:
“If exchange gives to the servant’s labour a value of 1,000 francs, while it gives to that of the husbandman or factory worker only a value of 500 francs, one must conclude from this that the servant’s labour contributes to the production of wealth twice as much as that of the husbandman and the factory worker; and it cannot be otherwise, as long as the labour of servants receives in payment twice as much in material products as the labour of husbandmen and factory workers. How can it be imagined that wealth results from labour which has less exchange-value and which is consequently paid less!” (l.c., pp. 293-94).
||363| If the wages of the factory or agricultural labourer are 500 francs, and the surplus-value (profit and rent) created by him is equal to 40 per cent, his net product would be 200 francs, and five such labourers would be required to produce the wages of 1,000 francs for the servant. If instead of the servant Lord Exchange cared to buy a mistress for 10,000 francs annually, the net product of 50 such productive labourers would be required. And because her unproductive labour brings in for the mistress twenty times as much exchange-value, wages, as the wages of the productive labourer, this person adds twenty times as much to “the production of wealth”, and a country produces the more wealth the higher it pays its servants and mistresses. Monsieur Ganilh forgets that only the productivity of manufacturing and agricultural labour, only the surplus created by the productive workers but not paid to them, provides any fund at all for which the unproductive labourers are paid. But he reckons like this: 1,000 francs wage, and the labour of servant or mistress as equivalent for the wage, make together 2,000 francs. The value of servants and mistresses, that is, their production costs, depend entirely on the net product of the productive labourers. Indeed, their existence as a special breed of people depends on it. Their price and their value have little in common with each other.
But even assuming that the value (the costs of production) of a servant is twice as great as that of a productive labourer, it must be observed that the productivity of a labourer (like that of a machine) and his value are entirely different things, which are even in inverse proportion to each other. The value that a machine costs is always a minus in relation to its productivity.
“In vain is the objection raised that if the labour of servants is as productive as that of husbandmen and factory workers, there is no reason why the public economy of a country should not be used to maintain them, not only without being squandered but with a constant increase of value. This objection is only specious because it assumes that the fruitfulness of each labour results from its co-operation in the production of material objects, that material production is constitutive of wealth and that production and wealth are completely identical. It is forgotten that all production only becomes wealth concurrently with its consumption,* and that exchange determines up to what point it contributes to the formation of wealth. If it is remembered that all labours contribute directly or indirectly to the total production of each country, that exchange, in fixing the value of each labour, determines the part that it has had in this production, that consumption of the production realises the value that exchange has given it, and that the surplus or deficit of production over consumption determines the state of wealth or poverty of peoples, it will be realised how inconsistent it is to isolate each labour, to fix its fertility and its fruitfulness by its contribution to material production and without any regard to its ||364| consumption, which alone gives it a value, a value without which wealth cannot exist” (l.c., pp. 294-95).
On the one hand the fellow makes wealth depend on the excess of production over consumption, on the other hand he says that only consumption gives value. And a servant who consumes 1,000 francs consequently contributes twice as much to the giving of value as a peasant who consumes 500 francs.
In the first place he admits that these unproductive labours do not ‘directly participate in the formation of material wealth. Smith does not claim more than this. On the other hand he tries to prove that on the contrary they create material wealth in the same measure as, according to his own admission, they do not.
All those who polemise against Adam Smith on the one hand assume a superior attitude to material production, and on the other hand they attempt to justify immaterial production—or even no production, like that of lackeys—as material production. It makes absolutely no difference whether the owner of the net revenue consumes this revenue in lackeys, mistresses or pasties. But it is ludicrous to imagine that the surplus must be consumed by servants and cannot be consumed by productive labourers themselves without the value of the product going to the devil. With Malthus too we find the same view of the necessity of unproductive consumers—which necessity in fact exists when the surplus comes into the hands of idlers. |364||
||364| Ganilh claims to have put forward a theory in his Théorie de l’économie politique (a book I don’t know) which Ricardo later copied from him. This theory is that wealth depends on net product and not on gross product, and thus on the level of profit and rent. (This is certainly not a discovery of Ganilh’s, who distinguishes himself, however, by the way he puts it.)
Surplus-value presents itself (has its real existence) in a surplus-produce in excess of the quantity of products which only replace its original elements, that is, which enter into its production costs and—taking constant and variable capital together—are equal to the total capital advanced to production. The aim of capitalist production is the surplus, not the product. The labourer’s necessary labour-time, and therefore also its equivalent in the product with which it is paid for, is only necessary as long as it produces surplus-labour. Otherwise it is unproductive for the capitalist.
The surplus-value is equal to the rate of surplus-value s/v multiplied by the number of simultaneous days’ labour or the number of employed labourers, that is, by n. So S= s/v × n. This surplus-value can therefore be increased or reduced in two ways. For example, (s/v)/2×n is equal to 2s/v × n=2S. Here S ||365| has doubled, because the rate has doubled, since (s/v)/2 is 2s/v, that is, is twice as much as s/v. On the other hand, however s/v × 2n would also be equal to 2sn/v, that is, also equal to 2S. V, the variable capital, is equal to the p rice of the single day’s labour multiplied by the number of labourers employed. If 800 labourers are employed, each costing £1, then V=£800, that is, £1 × 800, where n=800. Then if the surplus-value is 160, its rate would be 160/(£1×800) = 160/800 = 16/80 = 1/5 = 20 per cent. But the surplus-value itself is 160/(£1×800) × 800, that is, £S/£1×n× n.
With a given length of labour-time, this surplus-value can only be increased by an increase of productivity, or at a given level of productivity, by a lengthening of the labour-time.
But what concerns us here is: 2S=[(s/v)/2] × n; and 2S=s/v × 2n.
The surplus-value (gross amount of surplus-value) remains the same, if the number of labourers is reduced by half—is only n instead of 2n, but the surplus-labour performed by them each day is twice as much as it was before. On this assumption, therefore, two things would remain the same: first, the total quantity of products produced; secondly, the total quantity of surplus-produce or net product. But the following would have changed: first, the variable capital, or the part of the circulating capital expended in wages, would have fallen by half. The part of the constant capital which consists of raw materials would also remain unchanged, as the same quantity of raw material as before would be worked up, although this would be done by half the labourers employed before. As against this, the part which consists of fixed capital has increased.
If the capital expended in wages was £300 (£1 per labourer), it would now be £150. If that expended in raw materials was £310, it would now be £310. If the value of the machinery was four times as much as the rest of the capital, it would now be £1,600. Therefore if the machinery is worn out in ten years, the machinery entering annually into the product would be £160. We will assume that the capital previously expended annually on instruments was £40, thus only 1/4, Then the account would stand:
| Machinery | Raw Material | Wages | Total | Surplus-value | Rate of Profit | Total Product | |
| Old capital | 40 | 310 | 300 | 650 | 150 or 50% | 23 1/13% | 800 |
| New Capital | 160 | 310 | 150 | 620 | 150 or 100% | 246/31% | 770 |
In this case the rate of profit has risen, because the total capital has decreased—the capital expended in wages has fallen by £150, the total value of the fixed capital has only risen by £120, and so in all £30 less than before is expended.
But if the £30 left over is again employed in the same way, 31/62 (or 1/2) in raw material, 16/62 in machinery and 15/62 in wages, the result would be:
| Machinery | Raw material | Wages | Surplus-value |
| £7.14.6 | £15 | £7.5.6 | £7.5.6 |
And taking both together:
| Machinery | Raw material | Wages | Surplus-value | Rate of profit | |
| New capital | £167.14.6 | £325 | £157.5.6 | £157.5.6 | 24 6/31% |
Total amount of capital expended: £650 as before. Total product £807.5.6.
The total value of the product has risen; the total value of the capital expended has remained the same; and not only the value, but the amount of the total product has risen, since an additional £15 in raw materials has been transformed into the product.
||366| [We find in Ganilh:]
“When a country is deprived of the aid of machines, and its labour is carried out by hand, the labouring classes consume almost the whole of their production. To the degree that industry makes progress, is improved by the division of labour, the skill of the workmen, and the invention of machines, the costs of production diminish, or in other words, a smaller number of labourers is required to obtain a greater production” (l.c., t. 1, pp. 211-12).
That is to say, therefore, in the same degree as industry becomes more productive, the production costs of wages are reduced. Fewer labourers are employed in relation to the product, and these therefore also consume a smaller part of the product.
If a labourer without machinery needs 10 hours to produce his own means of subsistence, and if with machinery he only needs 6, then (with 12 hours’ labour) in the first case he works 10 for himself and 2 for the capitalist, and the capitalist gets one-sixth of the total product of the 12 hours. In the first case 10 labourers will produce a product for 10 labourers (equal to 100 hours) and 20 [hours] for the capitalist. Of the value of 120, the capitalist gets one-sixth, or 20. In the second case, 5 labourers will produce a product for 5 Labourers (equal to 30 hours), and for the capitalist 30 hours. Of the 60 hours the capitalist now gets 30, that is, one half—3 times as much as before, The total surplus-value too would have risen, namely from 20 to 30, by 1/3. When I appropriate one-half of 60 days, this is one-third more than when I appropriate one-sixth of 120 days.
Moreover, the one-half of the total product that the capitalist gets is also greater in quantity than before. For 6 hours now produce as much product as 10 did before; 1 [hour] as much as ten-sixths of an hour [before], or 1 as much as 1 4/6=1 2/3, So the 30 surplus hours contain as much product as did previously 30 (1+2/3) = 30 + 60/3 = 50. 6 hours produce as much product as 10 did previously, that is, 30—or 5×6—produce as much as 5×10 did before.
The capitalist’s surplus-value would therefore have risen and also his surplus-product (if he consumes it himself, or as much of it as he consumes in kind). The surplus-value can even rise without the quantity of the total product being increased. For the increase of surplus-value means that the labourer is able to produce his means of subsistence in less time than before, that therefore the value of the commodities he consumes falls, represents less labour-time, and that therefore a certain value, equal to 6 hours for example, represents a greater quantity of the use-values than before. The labourer receives the same quantity of product as before, but this quantity forms a smaller part of the total product, as its value expresses a smaller part of the fruits of the day’s labour. Although an increase in productive power in the branches of industry whose product neither directly nor indirectly enters into the formation of the labourer’s means of consumption could not have this result—since increased or reduced productivity in these branches does not affect the relation between the necessary and the surplus-labour—the result for these industries would nevertheless be the same, although it did not originate from a change in their own productivity. The relative value of their products would rise in exactly the same proportion as that of the other commodities had fallen (if their own productivity had remained the same); consequently, a proportionately smaller aliquot part of these products, or a smaller part of the labour-time of the labourer which is materialised in them, would procure for him the same quantity of means of subsistence as before. The surplus-value would therefore rise in these branches of labour just as in the others.
But what will then become of the five displaced labourers?
It will be said that capital has also been released, namely, that which paid the five dismissed workers, who each received 10 hours (f or which they worked 12), that is, 50 hours in all, which could previously have paid the wages of five labourers and which [now] that wages have fallen to 6 hours can pay for 50/6 = 8 1/2 days’ labour. Therefore now the capital of 50 [hours’] labour that has been released can employ more labourers than have been dismissed.
But a capital equivalent to the whole 50 hours’ labour has not been released. For even assuming that the raw material has become cheaper in the same proportion as the increase in the quantity of it that is worked up in the same labour-time—that is, assuming that the same increase of productivity has taken place in that branch of production —the outlay for the new machinery nevertheless remains. Assuming that this costs exactly 50 hours’ labour, it has certainly in no case employed as many labourers as were put off. For this 50 hours’ labour was laid out entirely in wages, for 5 labourers. But in the value of the machine, equivalent to 50 hours’ labour, both profit and wages are contained, both paid and unpaid labour-time. In addition, constant capital enters into the value of the machine. The number of machine-building labourers [who built the machine is] smaller than the number of labourers discharged; nor are they the same individuals ||367| as those discharged. The greater demand for labourers in machine building can at most affect the future distribution of the number of labourers, so that a larger part of the generation entering the labour-market—a larger part than before—turns to that branch of industry. It does not affect those who have been discharged. Moreover the increase in the annual demand for these is not equal to the new capital expended on machinery. The machine lasts for example for ten years. The constant demand which it creates is therefore equal annually to 1/10 of the wages contained in it. To this 1/10 must be added labour for repairs during the 10 years, and the daily consumption of coal, oil and other auxiliary materials; which in all amounts perhaps to another 2/10.
<If the capital released were equal to 60 hours, these would now represent 10 hours’ surplus-labour and only 50 necessary labour. Thus if previously the 60 hours had been expended in wages and 6 labourers had been employed, now it would be only 5.>
<The shifting of labour and capital which increased productivity in a particular branch of industry brings about by means of machinery, etc., is always only prospective. That is to say, the increase, the new number of labourers entering industry, is distributed in a different way; perhaps the children of those who have been thrown out, but not these themselves. They themselves vegetate for a long time in their old trade, which they carry on under the most unfavourable conditions, inasmuch as their necessary labour-time is greater than the socially necessary labour-time; they become paupers, or find employment in branches of industry where a lower grade of labour is employed.>
<A pauper, like a capitalist (rentier), lives on the revenue of the country. He does not enter into the production costs of the product, and consequently Monsieur Ganilh would call him a representative of exchangeable value. Ditto, for a criminal who is fed in prison. A large part of the “unproductive labourers”, holders of State sinecures, etc., are simply respectable paupers.>
<Assume that the productivity of industry is so advanced that whereas earlier two-thirds of the population were directly engaged in material production, now it is only one-third. Previously 2/3 produced means of subsistence for 3/3; now 1/3 produce for 3/3. Previously 1/3 was net revenue (as distinct from the revenue of the labourers), now 2/3. Leaving [class] contradictions out of account, the nation would now use 1/3 of its time for direct production, where previously it needed 2/3. Equally distributed, all [that is, the whole population] would have 2/3 more time for unproductive labour and leisure. But in capitalist production everything seems and in fact is contradictory. The assumption does not imply that the population is stagnant. For if the 3/3 grow, so also do the 1/3; thus, measured in quantity, a larger number of people could he employed in productive labour. But relatively, in proportion to the total population, it would always be 50 per cent less than before. Those two-thirds of the population consist partly of the owners of profit and rent, partly of unproductive labourers (who also, owing to competition, are badly paid). The latter help the former to consume the revenue and give them in return an equivalent in services—or impose their services on them, like the political unproductive labourers. It can be supposed that—with the exception of the horde of flunkeys, the soldiers, sailors, police, lower officials and so on, mistresses, grooms, clowns and jugglers—these unproductive labourers will on the whole have a higher level of culture than the unproductive workers had previously, and in particular that ill-paid artists, musicians, lawyers, physicians, scholars, schoolmasters, inventors, etc., will also have increased in number.
Within the productive class itself commercial middlemen will have multiplied, but in particular those engaged in machine construction, railway construction, mining and excavation; moreover, in agriculture labourers engaged in stock-raising will have increased in number, and also those employed in producing chemical and mineral materials for fertilisers, etc. Further, the farmers who grow raw materials for industry will have risen in number, in proportion to those producing means of subsistence; and those who provide fodder for cattle, in proportion to those who produce means of subsistence for people. As the constant capital grows, so also does the proportionate quantity of the total labour which is engaged in its reproduction. Nevertheless, the part [of the population] directly producing means of subsistence, although its number declines, ||368| produces more products than before. Its labour is more productive. While for the individual capital the fall in the variable part of the capital as compared with the constant part takes the direct form of a reduction in the part of the capital expended in wages, for the total capital—in its reproduction—this necessarily takes the form that a relatively greater part of the total labour employed is engaged in the reproduction of means of production than is engaged in the production of products themselves—that is, in the reproduction of machinery (including means of communication and transport and buildings), of auxiliary materials (coal, gas, oil, tallow, leather belting, etc.) and of plants which form the raw material for industrial products. Relatively to the manufacturing labourers, agricultural labourers will decline in number. Finally the luxury, labourers will increase in number, since the higher revenue will consume more luxury products.>
<The variable capital is resolved into revenue, firstly wages, secondly profit. If therefore capital is conceived as something contrasted with revenue, the constant capital appears to be capital in the strict sense: the part of the total product that belongs to production and enters into the costs of production without being individually consumed by anyone (with the exception of draught cattle). This part may originate entirely from profit and wages. In the last analysis, it can never originate from these alone; it is the product of labour, but of labour which regarded the instrument of production itself as revenue, as the savage did the bow. But once transformed into constant capital, this part of the product is no longer resolvable into wages and profit, although its reproduction yields wages and profit. A part of the product belongs to this part. Each subsequent product is the product of this past labour and of present labour. The latter can only be continued in so far as it returns a part of the total product to production. It must replace the constant capital in kind. If it grows more productive, it replaces the product, but not its value, reducing this value as a result. If it grows less productive, it raises its value. In the first case the aliquot part drawn by past labour from the total product falls; in the second case it rises. In the first case the living labour becomes more productive, in the second, less productive.>
<The factors which reduce the costs of the constant capital, also include improved raw materials. For example, it is not possible to make the same quantity of twist in the same time both from good and from had raw cotton, leaving entirely out of account the relative quantity of waste, etc. Hence the importance of the quality of seed, etc.>
<As an example combination where a manufacturer himself makes a part of his former constant capital, or where previously the raw material passed as constant capital out of his sphere of production into a second sphere, and he now himself gives it the second form—this always only amounts to a concentration of profits, as was shown earlier. An example of the first: the linking together of spinning and weaving. An example of the second: the mine owners of Birmingham, who took over the complete process of making iron, which had formerly been divided between a number of entrepreneurs and owners.>
Ganilh continues:
“So long as the division of labour is not established in all branches, so long as all classes of the labouring and industrious population have not attained their full development, the invention of machines, and their employment in certain industries, only cause the capitals and labourers displaced by the machines to flow into other employments which can usefully employ them. But it is evident that when all branches of employment have the capital and the labourers they require, every further improvement and every new machine that cuts down labour, necessarily reduces the labouring population: and as this reduction does not diminish production, the part which it leaves available accrues either to the profit of capitals or to the rent of land; and in consequence the natural and necessary effect of machines is to diminish the population of the wage-earning classes who live on the gross product, and to increase the population of the classes which live on the net product” (l.c., p. 212).
||369| “The displacement of the population of a country, a necessary consequence of the progress of industry, is the true cause of the prosperity, the power and the civilisation of modern peoples. The more the lower classes of society decrease in number, the less need it be troubled by the dangers to which the distress, the ignorance, the credulity and the superstition of these unfortunate classes ceaselessly expose it; the more the upper classes multiply, the more subjects the State has at its disposal, the stronger and more powerful it is, the more knowledge, intelligence and civilisation there is in the whole population” (l.c., p. 213).
<Say makes the total value of the product resolvable into revenue in the following way: in the Constancio translation of Ricardo’s [book Principles], Chapter 26, he says in a note:
“The net revenue of an individual consists of the value of the product to which he has contributed … less his disbursements; but as the disbursements that he has made are portions of revenue which he has paid to others, the totality of the value of the product has served to pay revenues. The total revenue of a nation is composed of its gross product, that is to say, of the gross value of all its products which are distributed among the producers.”
The last sentence would be correct if expressed in this way:
The total revenue of a nation is composed of that part of its gross product, that is to say, of the gross value of all the products which are distributed as revenues among the producers, that is to say, less that portion of all the products which in each branch of industry had replaced the means of production. But so expressed, the sentence would negate itself.
Say continues:
“This value, after many exchanges, would he entirely consumed in the year which saw its birth, but it would nonetheless he still the revenue of the nation; just as an individual who has 20,000 francs annual revenue has nonetheless 20,000 francs annual revenue, although he consumes it entirely each year. His revenue does not consist only of his savings.”
His revenue never consists of his savings, although his savings always consist of his revenues. To prove that a nation can annually consume both its capital and its revenue, Say compares it to an individual who leaves his capital intact and only consumes his revenue each year. If this individual consumed in a single year both his capital of 200,000 francs and the revenue of 20,000, he would have nothing to eat the year after. If the entire capital of a nation, and consequently the entire gross value of its products, consisted of revenues, Say would be right. The individual consumes his 20,000 francs revenue. His 200,000 francs capital, which he does not consume, would be composed of the revenues of other individuals, each of whom consumes his share, and thus, at the end of the year, the whole capital would be consumed. But perhaps it would be reproduced while it is consumed, and thus replaced? But the individual in question reproduces annually his revenue of 20,000 francs, because he has not consumed his capital of 200,000 francs. The others have consumed this capital. Then they have no capital with which to reproduce revenue.>
“Only the net product,” says Ganilh, “and those who consume it form its” (the State’s) “wealth and its power, and contribute to its prosperity, its glory and its grandeur” (l.c., p. 218).
Ganilh further cites Say’s notes to Constancio’s translation of Ricardo [Principles,] Chapter XXVI, where Ricardo says that if a country has 12 million [inhabitants], it would be more advantageous for it if 5 million productive labourers labour for the 12 million, than if 7 million productive labourers labour for the 12 million. In the first case the net product consists of the surplus-produce on which the 7 million who are not productive live; in the other, of a surplus-produce for 5 million. Say remarks on this:
“This is quite like the doctrine of the Economists of the eighteenth century, who maintained that manufactures in no way helped towards the wealth of the State, because the wage-earning class, consuming a value equal to ||370| that which they produce, contribute nothing to their famous net product.” “
On this, Ganilh observes (pp. 219-20):
“It is not easy to see any connection between the Economists’ assertion that the industrial class consumes a value equal to that which it produces and the doctrine of Mr. Ricardo, that the wages of labourers cannot be counted in the revenue of a State.”
Here too Ganilh misses the point. The Economists go wrong in regarding the manufacturers as only wage-earning classes. This distinguishes them from Ricardo. They are further wrong in thinking that the wage-earners produce what they consume. The correct view, as Ricardo in contrast to them knew very well, is that it is they who produce the net product, but produce it precisely because their consumption, that is to say their wage, is equal not to the time they labour, but to the labour-time that they have put in to produce this wage; that is, that they receive a share of the product only equal to their necessary consumption, or that they receive only as much of their own product as is equivalent to their own necessary consumption. The Economists assumed that the whole industrial class (masters and workmen) was in this position. They considered that only rent bore the character of an excess of production over wages, and consequently that it was the only wealth. But when Ricardo says that profits and rents form this surplus and are consequently the only wealth, in spite of his difference from the Physiocrats, he agrees with them in thinking that only the net product, the product in which the surplus-value exists, forms the national wealth; although he has a better understanding of the nature of this surplus. For him, too, it is only the part of the revenue which is in excess of wages. What distinguishes him from the Economists is not his explanation of the net product, but his explanation of wages, under which category the Economists wrongly also include profits.
Say also remarks in opposition to Ricardo:
“From seven million fully employed labourers there would be more savings than from five million.”
Ganilh rightly observes, refuting this:
“That is to suppose that economies from wages are preferable to the economy which results from the reduction of wages… It would be too absurd to pay four hundred millions in wages to labourers who give no net product, in order to provide them with the opportunity and the means for making economies on their wages” (l.c., p. 221).
“With every step made by civilisation, labour becomes less burdensome and more productive; the classes condemned to produce and to consume diminish; and the classes which direct labour, which relieve (!), console (!) and enlighten the whole population, multiply, become more numerous and appropriate to themselves all the benefits which result from the diminution of the costs of labour, from the abundance of products and the cheapness of consumer goods. In this way, the human race lifts itself up… Because of this progressive tendency to the diminution of the lower classes of society and the increase of the upper classes … civil society becomes more prosperous, more powerful,” etc, (l.c., p. 224). “If … the number of labourers employed is seven millions, the wages will be fourteen hundred millions; but if the fourteen hundred millions do not yield a larger net product than the thousand millions paid to the five million labourers, the real economy would be in abolishing the four hundred millions in wages paid to two million labourers who yield no net product, and not in the savings that these two million labourers could make from the four hundred millions of wages” (l.c., p. 221).
In Chapter XXVI [of his Principles] Ricardo observes:
“Adam Smith constantly magnifies the advantages which a country derives from a large gross, rather than a large net income… What would be the advantage resulting to a country from the employment of a great quantity of productive labour, if, whether it employed that quantity or a smaller, its net rent and profits together would be the same? “ Whether a nation employs five or seven million productive labourers to produce the net revenue ||371| on which five million others live, “the food and clothing of five millions would be still the net revenue. The employing of a greater number of men would enable us neither to add a man to our army and navy, nor to contribute one guinea more in taxes” (l.c., p. 215).
This reminds us of the ancient Germans, of whom one part in turn took the field and the other cultivated the field. The smaller the number that was indispensable for cultivating the field, the greater the number who were able to war. It would not have helped them if the number of people had increased by one-third, so that instead of 1,000 they had 1,500, if 1,000 were then required to cultivate the field while previously it was 500. Their disposable forces would have consisted of only 500 men both before and after. If on the other hand the productivity of their labour had increased, so that 250 sufficed to cultivate the field, 750 of the 1,000 could have taken the field, whereas in the opposite case, if the productivity of their labour had fallen, it would be only 500 out of the 1,500.
First it should be noted here that Ricardo means by net revenue or net product not the excess of the total product over the part of it that must be returned to production as means of production, raw materials or instruments. On the contrary, he shares the false view that the gross product consists of gross revenue. By net product or net revenue he means the surplus-value, the excess of the total revenue over the part of it that consists of wages, of the revenue of the labourers. This revenue of the labourer, however, is equal to the variable capital, the part of the circulating capital which he is constantly consuming and constantly reproducing as the part of his production which he himself consumes.
If Ricardo treats the capitalists as not entirely useless, that is to say, as themselves agents of production, and therefore resolves a part of their profit into wages, he has to deduct a part of their revenue from the net revenue and to declare that all these persons only contribute to wealth in so far as their wages form the smallest possible part of their profit. However that may be, at least a part of their time as agents of production belongs, like a fixture, to production itself. And to this extent they cannot be used for other purposes of society or of the State. The more free time their duties as managers of production leave them, the more is their profit independent of their wage. In contrast to these, the capitalists who live only on their interest, and also the landlords who live on rent, are in person entirely at the disposal [of society and the State], and no part of their income enters into the costs of production—except for that part which is used for the reproduction of their own worthy person. Ricardo should therefore have also desired, in the interests of the State, a growth of rent (the pure net revenue) at the cost of profits; but this is not at all his viewpoint. And why not? Because it hinders the accumulation of capitals [or]—what is in part the same thing—because it increases the number of unproductive labourers at the cost of the productive.
Ricardo fully shares Adam Smith’s view of the distinction between productive and unproductive labour, that the former exchanges its labour directly for capital, [the latter I directly for revenue. But he no longer shares Smith’s tenderness for and illusion about the productive labourer. It is a misfortune to be a productive labourer. A productive labourer is a labourer who produces wealth for another. His existence only has meaning as such an instrument of production for the wealth of others. If therefore the same quantity of wealth for others can be created with a smaller number of productive labourers, then the suppression of these productive labourers is in order. Vos, non vobis.* Ricardo, incidentally, does not think of this suppression as Ganilh does—that through mere suppression the revenue increases and that what was formerly consumed as variable capital (that is, in the form of wages) would then be consumed as revenue. With the diminution in the number of productive workers also disappears the amount of product which those who have been discharged themselves consumed and themselves produced—their equivalent. Ricardo does not assume, as Ganilh does, that the same quantity of products as before is produced; but the same quantity of net product. If the labourers consumed 200 and their surplus was 100, the total product was 300, and the surplus was one third=100. If the labourers consume 100 and their surplus is 100 as before, the total product is 200 and the surplus is one half=100. The total product would have fallen by one-third— by the quantity of products consumed by the 100 dismissed workers, and the net product ||372| [would have] remained the same, because 200/2 = 300/3. For Ricardo, therefore, the amount of the gross product does not matter, provided that that portion of the gross product which constitutes the net product remains the same or grows, but in any case does not diminish.
So he says:
“To an individual with a capital of 20,000 l., whose profits were 2,000 1. per annum, it would be a matter quite indifferent whether his capital would employ a hundred or a thousand men, whether the commodity produced sold for 10,000 l., or for 20,000 l., provided, in all cases, his profits were not diminished below 2,000 l. Is not the real interest of the nation similar? |VIII-372||
||IX - 377 | The passage in Ricardo (Chapter XXVI) runs:
“Adam Smith constantly magnifies the advantages which a country derives from a large gross, rather than a large net income” (because, says Adam, “the greater will he the quantity of productive labour which it puts into motion”) “What would be the advantage resulting to a country from the employment of a great quantity of productive labour, if, whether it employed that quantity or a smaller, its net rent and profits together would be the same.“
<This therefore means nothing but: if the surplus-value produced by a greater quantity of labour would be the same as that produced by a smaller quantity. That however in turn means nothing but that it is the same thing for a country whether it employs a large number of labourers at a lower rate of surplus or a smaller number at a higher rate. n × 1/2 is just as much as 2n × 1/4, where n represents the number [of labourers] and 1/2 and 1/4 the surplus-labour, The “productive labourer “ as such is a mere instrument of production for the production of surplus, and if the result is the same a larger number of these “productive labourers” would be a nuisance.>
“To an individual with a capital of 20,000 l., whose profits were 2,000 l. per annum, it would be a matter quite indifferent whether his capital would employ a hundred or a thousand men, whether the commodity produced sold for 10,000 l or for 20,000 l. provided, in all cases, his profits were not diminished below 2,000 1.”
<The meaning of this, as is evident from a later passage, is perfectly banal. For example, a wine-merchant, who makes use of £20,000 and has £12,000 lying in his cellar each year, but sells £8,000 for £10,000, employs few people and makes 10 per cent profit, etc. And then take bankers!>
“Is not the real interest of the nation similar? Provided its net real income, its rent and profits be the same, it is of no importance whether the nation consists of ten or of twelve millions of inhabitants. Its power of sup-porting fleets and armies, and all species of unproductive labour” (this passage shows among other things that Ricardo shared Adam Smith’s view of productive and unproductive labour, although he did no longer share Smith’s tenderness, based on illusions, for the productive labourer) “must be in proportion to its net, and not in proportion to its gross, income. If five millions of men could produce as much food and clothing as was necessary for ten millions, food and clothing for five millions would be the net revenue. Would it be of any advantage to the country, that to produce this same net revenue, seven millions of men should be required, that is to say, that seven millions should be employed to produce food and clothing sufficient for twelve millions? The food and clothing of five millions would be still the net revenue. The employing a greater number of men would enable us neither to add a man to our army and navy, nor to contribute one guinea more in taxes” (Ricardo, On the Principles of Political Economy and Taxation, 3rd edition, London, 1821, pp. 415-17).
A country is the richer the smaller its productive population is relatively to the total product; just as for the individual capitalist: the fewer labourers he needs to produce the same surplus, so much the better for him. The country is the richer the smaller the productive population in relation to the unproductive, the quantity of products remaining the same. For the relative smallness of the productive population would be only another way of expressing the relative degree of the productivity of labour.
On the one hand it is the tendency of capital to reduce to a dwindling minimum the labour-time necessary for the production of commodities, and therefore also the number of the productive population in relation to the amount of the product. On the other hand, however, it* has the opposite tendency to accumulate, to transform profit into capital, to appropriate the greatest possible quantity of the labour of others. It* strives to reduce the norm of necessary labour, but to employ the greatest possible quantity of productive labour at the given norm. The proportion of the products to the population makes no difference in this. Corn and cotton can be changed into wine, diamonds, etc., ||378| or labourers can be employed in productive labour which does not directly add anything to the (consumable) products (such as railway construction, etc.).
If as the result of an invention a capitalist can now only use in his business £10,000 instead of the £20,000 he used previously, because £10,000 is sufficient, and if this sum yields 20 per cent for him instead of 10, that is, as much as the £20,000 brought in before, this would be no reason for him to spend £10,000 as revenue instead of as capital as before. (Actually it is only in the case of State loans that we can speak of a direct transformation of capital into revenue.) He would place it elsewhere—and in addition would capitalise a part of his profit.
Among the economists (including Ricardo in part) we find the same antimony as there is in reality. Machinery displaces labour and increases the net revenue (particularly always what Ricardo here calls net revenue—the quantity of products in which revenue is consumed); it reduces the number of labourers and increases the products (which then are partly consumed by unproductive labourers, partly exchanged abroad, etc.). So this would be desirable. But no. In that case it must be shown that machinery does not deprive the labourers of bread. And how is this to be shown? By the fact that after a shock (to which perhaps the section of the population which is directly affected cannot offer any resistance) machinery once again employs more people than were employed before it was introduced—and therefore once again increases the number of “productive labourers” and restores the former disproportion.
That is in fact what happens. And so in spite of the growing productivity of labour the labouring population could constantly grow not in proportion to the product, which grows with it and faster than it, but proportionately [to the total population], if, for example, capital simultaneously becomes concentrated, and therefore former component parts of the productive classes fall into the ranks of the proletariat. A small part of the latter rises into the middle class. The unproductive classes, however, see to it that there is not too much food available. The constant retransformation of profit into capital always restores the same cycle on a wider basis.
And Ricardo’s care for accumulation is even greater than his care for net profit, which he regards with fervent admiration as a means to accumulation. Hence too his contradictory admonitions and consoling remarks to the labourers. They are the people most interested in the accumulation of capital, because it is on this that the demand for them depends. If this demand rises, then the price of labour rises. They must therefore themselves desire the lowering of wages, so that the surplus taken from them, once more filtered through capital, is returned to them for new labour and their wages rise. This rise in wages however is bad, because it restricts accumulation. On the one hand they must not produce children. This brings a fall in the supply of labour, and so its price rises. But this rise diminishes the rate of accumulation, and so diminishes the demand for them and brings down the price of labour. Even quicker than the supply of them falls, capital falls along with it. If they produce children, then they increase their own supply and reduce the price of labour; thus the rate of profit rises, and with it the accumulation of capital. But the labouring population must rise in the same degree as the accumulation of capital; that is to say, the labouring population must be there exactly in the numbers that the capitalist needs—which it does anyway.
Monsieur Ganilh is not altogether consistent in his admiration for the net product. He quotes from Say:
“I do not doubt at all (…) that in slave labour the excess of the products over consumption is larger than in the labour of a free man… The worker of the slave has no limit hut his capacity. … The slave” (and the free work too) “labours for an unlimited need: his master’s cupidity” (Say, 1re éd., pp. 215, 216).
||379 | On this Ganilh observes:
“The free labourer cannot consume more and produce less than the slave… All consumption presumes an equivalent produced to pay for it. If the free labourer consumes more than the slave, the products of his labour must he more considerable than those of the slave’s labour” (Ganilh, t. I, p. 234).
As if the size of the wage depended only on the productivity of the labourer, and not, with a given productivity, on the division of the product between labourer and master.
“I know,” he continues, “that it can be said with some reason that the economies made by the master at the expense of the slave” (according to this there are after all economies made on the wages of the slave) “serve to augment his personal expenses,” etc. “But it is more advantageous to the general wealth that there should be well-being in all classes of society rather than no excessive opulence among a small number of individuals” (pp. 234-35).
How does that tally with the net product? And for that matter Monsieur Ganilh at once retracts his liberal tirades (l.c., pp. 236-37). He wants Nigger-slavery for the colonies, He is only liberal in so far as he does not want to reintroduce it into Europe, having grasped that the free labourers here are slaves, that they only exist to produce net product for capitalists, landlords and their retainers.
“He” (Quesnay) “definitely denies that economies made by the wage-earning classes have the faculty to increase capital; and the reason he gives for this is that these classes should not have any means on which to make economics, and that if they had a surplus, an excess, this could only be due to an error or to some disorder in the society’s economy” (l.c., p. 274).
Ganilh cites in evidence the following passage from Quesnay:
“If the sterile class saves in order to augment its cash … its labours and its gains will diminish in the same proportion, and it will fall into decay”(Physiocratie, p. 321).
The ass! He does not understand Quesnay.
Monsieur Ganilh puts on the keystone in the following paragraph:
“The larger they” (wages) “are, the less is the revenue of the society” (society stands on them, but they do not stand in society), “and all the skill of governments should be applied to reducing the amount [of the wages]… A task …worthy of the enlightened century in which we live” (t. II, p. 24).
Then there are still Lauderdale (Brougham’s insipit jests are not worth examining after him), (Ferrier?), Tocqueville, Storch, Senior, and Rossi to be considered briefly on productive and unproductive labour.
{To be distinguished: 1. The part of the revenue which is trans-formed into new capital; that is, the part of the profit which is itself again capitalised. Here we leave this entirely out of account—it belongs to the section on accumulation. 2. The revenue which is exchanged with capital consumed in production, so that by means of this exchange not new capital is formed, but old capital replaced—in a word, the old capital is conserved. In this inquiry, therefore, we can put the part of the revenue which is transformed into new capital as equal to nil, and treat the subject as if all revenue covers either revenue or capital consumed.
The whole amount of the annual product is therefore divided into two parts: one part is consumed as revenue, the other part replaces in kind the constant capital consumed.
Revenue is exchanged for revenue, when for example the producers of linen exchange a portion of that part of their product—the linen—which represents their profits and wages, their revenue, for corn that represents a portion of the profits and ||380| wages of farmers. Here therefore there is the exchange of linen for corn, those two commodities which both enter into individual consumption—exchange of revenue in the form of linen for revenue in the form of corn. There is absolutely no difficulty in this. If consumable products are produced in proportions corresponding to needs, which means also that the proportionate amounts of social labour required for their production are proportionately distributed <which of course is never exactly the case, there being constant deviations, disproportions, which as such are adjusted; but in such a way that the continuous movement towards adjustment itself presupposes continuous disproportion>, then revenue, for example in the form of linen, exists in the exact quantity in which it is required as an article of consumption, therefore in which it is replaced by the articles of consumption of other producers. What the producer of linen consumes in corn, etc., the farmers and others consume in linen. The part of his product which represents revenue, which he exchanges for other commodities (articles of consumption), is thus taken in exchange as an article of consumption by the producers of these other commodities. What he consumes in the product of others, these others consume in his product.
It may be noted in passing: that no more necessary labour-time is employed on a product than is required by society—that is to say, no more time than on the average is required for the production of this commodity—is the result of capitalist production, which even continuously reduces the minimum of necessary labour-time. But in order to do so, it must constantly produce on a rising scale.
If 1 yard of linen costs only 1 hour and this is the necessary labour-time that society has to use to satisfy its need for 1 yard of linen, it by no means follows from this that if 12 million yards are produced—that is, 12 million hours’ labour, or what is the same thing, 1 million days’ labour—1 million labourers being employed as linen weavers, society [needs] to employ such a part of its labour-time “necessarily” on the weaving of linen. If the necessary labour-time is given, and therefore also that a certain quantity of linen can be produced in one day, the question arises how many such days are to be used in the production of linen? The labour-time used on the total of particular products, in a year for example, is equal to a definite quantity of this use-value—for example, 1 yard of linen (say equivalent to 1 day’s labour)—multiplied by the number of days’ labour used in all. The total quantity of labour-time used in a particular branch of production may be under or over the correct proportion to the total available social labour, although each aliquot part of the product contains only the labour-time necessary for its production, or although each aliquot part of the labour-time used was necessary to make the corresponding aliquot part of the total product.
From this standpoint, the necessary labour-time acquires another meaning. The question is, in what quantities the necessary labour-time itself is distributed among the various spheres of production. Competition constantly regulates this distribution, just as it equally constantly disorganises it. If too large a quantity of social labour-time is used in one branch, the equivalent can be paid only, as if the correct quantity had been used. The total product—that is to say, the value of the total product—is in this case therefore not equal to the labour-time contained in it, but is equal to the proportionate labour-time which would have been used had the total product been in proportion to production in the other spheres. But in as much as the price of the total product falls below its value, the price of each aliquot part of it falls. If 6,000 yards of linen instead of 4,000 are produced, and if the value of the 6,000 yards is 12,000 shillings, they are sold for 8,000. The price of each yard is 1 1/3 shillings instead of 2—one-third below its value. It therefore amounts to the same thing as if 1/3 too much labour-time had been used to produce one yard. Assuming that the commodity has use-value, the fall of its price below its value therefore shows that, although each part of the product has cost only the socially necessary labour-time <here it is assumed that the conditions of production remain unchanged>, a superfluous—more than necessary —total quantity of social labour has been employed in this one branch.
The sinking of the relative value of the commodity as a result of altered conditions of production is something entirely different; ||381| this piece of linen on the market has cost 2s., equal for example to 1 day’s labour. But it can be reproduced every day for 1s. Since the value is determined by the socially necessary labour-time, not by the labour-time used by the individual producer, the day that the producer has used for the production of the one yard is now only equal to half the socially determined day. The fall of the price of his yard from 2s. to 1s.—that is, of its price below the value it has cost him—shows merely a change in the conditions of production, that is, a change in the necessary labour-time itself. On the other hand, if the production costs of the linen remain the same while those of all other articles rise—with the exception of gold, the material of money; or even [if the rise applies to] certain articles such as wheat, copper, etc., in a word, to articles which do not enter into the component parts of the linen—then one yard of linen would be equal to 2s. as before. Its price would not fall, but its relative value expressed in wheat, copper, etc., would have fallen.
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Of the part of the revenue in one branch of production (which produces consumable commodities) which is consumed in the revenue of another branch of production, it can be said that the demand is equal to its own supply (in so far as production is kept in the right proportion). It is the same as if each branch itself consumed that part of its revenue. Here there is only a formal metamorphosis of the commodity: C—M—C’. Linen— money—wheat.
Both commodities which are exchanged here represent only a part of the new labour added in the year. But in the first place it is clear that this exchange—in which two producers mutually consume a part of their product which represents revenue in each other’s commodities—only takes place in those branches of production which produce consumable articles, articles which enter directly into individual consumption, in which consequently revenue can be spent as revenue. Secondly, it is just as clear: that only regarding this part of the exchange of products it is true that the producer’s supply is equal to the demand for other products which he wishes to consume. Here in fact it is only a question of a simple exchange of commodities. Instead of producing his means of subsistence himself, he produces the means of subsistence for another, who produces his. No relation between revenue and capital enters into this. Revenue in one form of consumable articles is exchanged against revenue in another form of consumable articles, and so in fact consumable articles are exchanged for consumable articles. What determines their process of exchange is not that both are revenue, but that both are consumable articles. Their definite form as revenue does not enter into it at all. It shows itself however in the use-value of the interchangeable commodities, in that both enter into individual consumption; which in turn however means no more than that one part of consumable products is exchanged for another part of consumable products.
The form of revenue can only intervene or make itself manifest where the form of capital confronts it. But even in this case what Say and other vulgar economists assert is not true— that if A cannot sell his linen or can only sell it under its price—that is, the part of his linen which he wishes to consume himself as revenue—then this happens because B, C, etc., have produced too little wheat, meat, etc. It may be because they have not produced enough of these. But it may also be because A has produced too much linen. For assuming that B, C, etc., have enough wheat, etc., to buy all A’s linen, they nevertheless do not buy it, because only a definite quantity of linen is consumed by them, Or it may also be because A has produced more linen than the part of their revenue which can be spent on clothing materials altogether—that is, absolutely, because each person can expend as revenue only a definite quantity of his own product, and A’s production of linen presupposes a greater amount of revenue than in total there is. It is ridiculous, however, when it is only a matter of the exchange of revenue against revenue, to suppose that what is wanted is not the use-value of the product but the quantity of this use-value, thus once again forgetting that this exchange concerns only the satisfaction of needs, not, as in exchange-value, the quantity.
But everyone will prefer to have a large rather than a small quantity of an article. If this is supposed to solve the difficulty, then ||382| it is absolutely impossible to understand why the producer of linen, instead of exchanging his linen for other articles of consumption and piling these up en masse, does not carry out the simpler process of enjoying a part of his revenue in his superfluous linen. Why does he at all transform his revenue from the form of linen into other forms? Because he has to satisfy other needs than the need for linen. Why does he himself consume only a certain part of the linen? Because only a quantitatively determined part of the linen has use-value for him. The same thing, however, holds for B, C, etc. If B sells wine and C books and D mirrors, each may prefer to consume the surplus of his revenue in his own product—wine, books, mirrors—rather than in linen. Thus it cannot be said that, necessarily, too little wine, books and mirrors have been produced because A cannot transform his revenue in the form of linen (or cannot transform it at its value) into wine, books and mirrors. It is still more ridiculous, however, when this exchange of revenue against revenue—this one section of the exchange of commodities—is passed off as the whole of commodity exchange.
We have thus disposed of one part of the product. A part of the consumable products changes hands between the producers of these consumable products themselves. Each consumes a part of his revenue (profit and wages) in the other’s consumable product instead of in his own consumable product, and in fact he can only do this in so far as there is the reciprocal consumption by the other of someone else’s consumable product instead of his own. It is the same as if each had consumed that part of his consumable product which represents his own revenue.
For all the rest of the products, however, complicated relations intervene, and it is only here that the commodities exchanged confront each other as revenue and capital, and not only as revenue.
First a distinction has to be made. In all branches of production a part of the total product represents revenue, labour added (during the year), profit and wages. <Rent, interest, etc., are parts of profit; the income of the State good-for-nothings is part of profit and wages; the income of other unproductive labourers is the part of profit and wages which they buy with their unproductive labours—it therefore does not increase the product existing as profit and wages, but only determines how much of it they consume, and how much is consumed by the labourers and capitalists themselves.> But only in one section of the spheres of production can the part of the product representing revenue enter directly in kind into the revenue, or in its use-value be consumed as revenue. All products which are only means of production cannot be consumed in kind, in their immediate form, as revenue, but only their value. This however must be consumed in the branches of production which produce directly consumable articles. A part of the means of production may be immediate articles of consumption—it may be one or the other according to the use made of it, as for example a horse, a cart, etc. A part of the immediate articles of consumption may be means of production, like corn for spirits, wheat for seed, and so on. Almost all articles of consumption can re-enter the production process as excrements of consumption, as for example worn-out and half-rotten rags of linen in the manufacture of paper. But no one produces linen in order that it should become, as rags, the raw material for paper. It only gets this form after the linen weaver’s product as such has entered consumption. Only as excrement of this consumption, as residuum and product of the consumption process, can it then go into a new production sphere as means of production. This case, therefore, is not relevant here.
The products therefore—of which the aliquot part that represents revenue can be consumed by their own producers as value, but not as use-value (so that they must sell the part for example of their machines which represents wages and profit in order to consume it, [as they] cannot directly satisfy any individual need with it as a machine)— [these products] can just as little be consumed by the producers of other products; they cannot enter into their individual consumption, and hence cannot form part of the products on which they spend their revenue, since this would be in contradiction to the use-value of these commodities: their use-value by the nature of the case excludes individual consumption. The producers of these unconsumable products, therefore, can only consume their exchange-value; that is to say, they must first transform them into money in order to retransform this money into consumable commodities. But to whom are they to sell ||383| them? To producers of other individually unconsumable products? Then they would merely have one unconsumable product in the place of the other. It is however presupposed that this part of the product forms their revenue; that they sell these commodities in order to consume their value in consumable products. For that reason they can only sell them to the producers of products that can be consumed individually.
This part of the exchange of commodities represents exchange of one man’s capital for another man’s revenue, and of one man’s revenue for another man’s capital. Only one part of the total product of the producer of consumable products represents revenue; the other part represents constant capital. He can neither himself consume the latter, nor can he exchange it for the consumable products made by others. He can neither consume in kind the use-value of this part of the product, nor can he consume its value by exchanging it for other consumable products. He must on the contrary transform it again into the natural elements of his constant capital. He must consume industrially this part of his product, that is, use it as means of production.
But in its use-value his product is only capable of entering individual consumption; he cannot therefore transform it again in kind into his own elements of production. Its use-value excludes industrial consumption. So he can only industrially consume its value, [by selling it] to the producers of those elements of production needed for his product. He can neither consume in kind this part of his product, nor can he consume its value by selling it for other products that can be consumed individually. Just as little as this part of his product can enter into his own revenue, can it be replaced out of the revenue of producers of other individually consumable products; since this would only be possible if he exchanged his product for their product and so consumed the value of his product, which cannot happen. But since this part of his product, as well as the other part which he can consume as revenue, by its use-value can only be consumed as revenue, must enter into individual consumption and cannot replace constant capital, it must enter into the revenue of the producers of unconsumable products —it must be exchanged against that part of their products whose value they can consume, or in other words which represents their revenue.
If we look at this exchange from the standpoint of each of the people exchanging, for A, the producer of the consumable product, it represents a transformation of capital into capital. He transforms the part of his total product which is equal to the value of the constant capital it contains back again into the natural form in which it can function as constant capital. Both before and after the exchange it represents, in its value, only constant capital. For B, the producer of the product that cannot be consumed, it is the reverse: the exchange represents merely the transformation of revenue from one form into another. He transforms the part of his total product which forms his revenue—equal to the part of the total product which represents labour newly added, his own labour (capital and labourer)—into the natural form in which only he can consume it as revenue. Both before and after the exchange it represents, in its value, only his revenue.
If we look at the relation from both sides there, A exchanges his constant capital for B’s revenue, and B exchanges his revenue for A’s constant capital. B’s revenue replaces A’s constant capital, and A’s constant capital replaces B’s revenue.
In the exchange itself <irrespective of the purposes of those carrying it out> only commodities confront each other—and a simple exchange of commodities takes place—the relation between which is merely that of commodities, the designations of revenue and capital having no significance here. Only the different use-value of these commodities shows that one lot can only serve for industrial consumption, and the other only for individual consumption, can only enter into this consumption. The various practical uses of the various use-values of various commodities, however, concern their consumption and do not affect the process of their exchange as commodities. It is quite a different thing when the capitalist’s capital is transformed into wages, and labour is transformed into capital. Here the commodities do not confront each other as simple commodities, but capital as capital. In the exchange we have just been considering sellers and buyers face each other only as sellers and buyers, only as simple commodity owners.
It is further clear that the whole of the product destined for individual consumption or the whole product entering into individual consumption, in so far as it enters into it, can only be exchanged for revenue. The fact that it cannot be industrially consumed means precisely that it can only be consumed as revenue, i.e., only individually. <As noted above, we here abstract from the transformation of profit into capital.>
If A is a producer of a product that can only be individually consumed, let his revenue be equal to one-third of his total product, his constant capital to two-thirds. The assumption implies that he himself consumes the first one-third, whether he ||384| consumes it all himself in kind or only partly or not at all, or whether he consumes its value in other articles of consumption; the sellers of these articles of consumption then consume their own revenue in A’s product. So the part of the consumable product which represents the revenue of the producers of consumable products is consumed by them either directly, or indirectly, through exchanging among themselves the products to be consumed by them; in regard to this part, therefore, where revenue is exchanged for revenue—here it is the same as if A represented the producers of all consumable products. He himself consumes one-third of this aggregate amount, the aliquot part which represents his revenue. This part, however, represents exactly the quantity of labour which during the year category A has added to its constant capital, and this quantity is equal to the total sum of wages and profits produced by category A during the year.
The other two-thirds of category A’s total product are equal value of the constant capital, and must therefore be replaced by the product of the annual labour of category B, which produces products that cannot be [individually] consumed and only enter into industrial consumption as means of production in the production process. But as this two-thirds of A’s total product, just the same as the first one-third, must enter into individual consumption, it is taken by the producers of category B, in exchange for the part of their product which represents their revenue. Category A has therefore exchanged the constant part of its total product for constant capital in its original natural form, retransforming it into the newly-produced products of category B; but category B has only paid for it with that part of its product which represents its revenue but which it can only consume in the products of A. It has thus in fact paid with its newly-added labour, which is completely represented by the part of B’s product that is exchanged for the last two-thirds of A’s product. Thus A’s total product is exchanged for revenue, or passes entirely into individual consumption. On the other hand (on the assumption that the transformation of revenue into capital is here left out of account, being taken as equal to nil) the total revenue of society is expended on product A; for the producers of A consume their revenue in A, and so do the producers of category B. And there is no other category besides these two.
The total product A is consumed, although it contains two-thirds constant capital, which cannot be consumed by the producers of A but must be retransformed into the natural form of their elements of production. The total product A is equal to the total revenue of society. The total revenue of society, however, represents the total labour-time which it has added during the year to the existing constant capital. Now although the total product A consists of newly-added labour only as to one-third, and as to two-thirds of past labour that has to be replaced, it can be bought in its entirety by newly-added labour, because two-thirds of this total annual labour must be consumed not in their own products but in the products of A. A is replaced by two-thirds more newly-added labour than it itself contains, because these two-thirds are labour newly added in B, and B can only consume it individually in A, just as A can only consume the two-thirds industrially in B. Thus the total product of A can in the first place be entirely consumed as revenue, and at the same time its constant capital can be replaced. Or rather it can only be entirely consumed as revenue because two-thirds of it are replaced by the producers of constant capital, who cannot consume in kind the part of their product representing revenue, but are obliged to consume it in A, that is, through exchanging it for two-thirds of A.
We have thus disposed of the final two-thirds of A.
It is clear that it makes no difference if a third category C exists, whose products are consumable both industrially and individually; for example, corn, by men or by cattle or as seed or as bread; vehicles, horses, cattle, etc. In so far as these products enter into individual consumption they must be consumed as revenue, direct or indirect, by their own producers, or by the producers (direct or indirect) of the part of the constant capital contained in them. They therefore come under A. In so far as they do not enter into individual consumption, they come under B.
The process of this second kind of exchange, where it is not revenue that is exchanged against revenue but capital against revenue —in which the whole constant capital must in the end be resolved into revenue, that is, into newly-added labour —can be thought of in two ways. Let A’s product be for example linen. The two-thirds of the linen which are equal to the constant capital of A (or its value) pay for yarn, machinery and auxiliary materials. But the yarn manufacturer and the manufacturer of machinery ||385| can only consume as much of this product as represents their own revenue. The linen manufacturer pays the whole price of the yarn and machinery with these two-thirds of his product. By so doing he has thus replaced for the spinner and the machinery manufacturer their total product which entered into the linen as constant capital. But this total product is itself equal to the constant capital and revenue—one part being equal to the labour added by the spinner and machinery manufacturer, and another part representing the value of their own means of production, that is, for the spinner flax, oil, machinery, coal, etc., and for the machinery manufacturer coal, iron, machinery, etc. A’s constant capital, equal to two-thirds, has thus replaced the total product of the spinner and machinery manufacturer, their constant capital plus the labour newly added by them—their capital plus their revenue. But they can only consume their revenue in A. After deducting the part of the two-thirds of A which is equal to their revenue, with the rest they pay for their raw materials and machinery. According to our assumption, however, the latter need not replace any constant capital. Only so much of their product can enter into product A—and therefore also into the products which are means of production for A—as A can pay for. But A can only pay with his two-thirds for as much as B can buy with his revenue, that is to say, as much as the product exchanged by B contains revenue, newly-added labour. If the producers of the final elements of production of A had to sell to the spinner a quantity of their product which represented a part of their own constant capital— that is, which represented more than the labour they had added to their constant capital—then they could not accept payment in A, because they cannot consume one part of this product. Consequently what takes place is the opposite.
Let us trace the stages in reverse. Let us assume that the total linen is equal to 12 days. The product of the flax-grower, of the iron manufacturer, etc., is equal to 4 days; this product is sold to the spinner and the machinery manufacturer, who in turn add 4 days to it; these sell it to the weaver, who again adds 4 days. The linen weaver can thus himself consume one-third of his product; 3 days replace his constant capital for him and pay for the product of the spinner and machinery manufacturer; these can consume 4 of the 8 days, and with the other 4 they pay the flax-grower, etc., and thus replace their constant capital; the last-named have only their labour to replace with the last 4 days in linen.
The revenue, although it is assumed to be of the same size— equal to 4 days—in all three cases, is of different proportions in the products of the three classes of producers who participate in producing product A. For the linen weaver, it is one-third of his product, equal to one-third of 12; for the spinner and for the machinery manufacturer it is equal to one-half of his product, equal to one-half of 8; for the flax-grower it is equal to his product, 4. In relation to the total product it is however exactly the same, equal to one-third of 12, that is, 4. But for the weaver, the labour newly added by spinner, machinery manufacturer and flax-grower takes the form of constant capital. For the spinner and machinery manufacturer, the total product represents the labour newly added by themselves and by the flax-grower, the labour-time of the flax-grower appearing as constant capital. For the flax-grower, this phenomenon of constant capital has ceased to exist. Because of this, the spinner for example can use machinery, or constant capital in general, in the same proportions as the weaver. For example, 1/3 : 2/3. But in the first place the amount (the total amount) of the capital employed in spinning must be smaller than that used in weaving, since its total product enters as constant capital into weaving. Secondly, if the spinner also has the proportion of 1/3 : 2/3, his constant capital would be equal to 16/3 his labour added to 8/3; the former equal to 5 1/3 days’ labour, the latter to 2 2/3. In this case there would be proportionately more days’ labour contained in the branch which supplies him with flax, etc. He would then have to pay 5 1/3 for newly-added labour, instead of 4 days.
It is self-evident that only that part of category A’s constant capital has to be replaced by new labour which enters into the process of giving value to A, that is, is consumed by A during the labour-process. The whole of the raw material and the auxiliary materials enter into it, and the wear and tear of the fixed capital. The other part of the fixed capital does not enter into it, and therefore has not got to be replaced.
A large part of the existing constant capital—large as regards the relation of the fixed capital to the total capital—does not therefore require to be replaced annually by new labour. For that reason the (absolute) amount [of the capital to be annually replaced] may be considerable, but nevertheless it is not large in relation to the total (annual) product. This entire part of the constant capital, in A and B, which enters into the determination of the rate of profit (with a given surplus-value), does not enter as a determining element into the current reproduction of the fixed capital. The larger this part in relation to the total capital—the greater the scale on which present, already existing, fixed capital is employed in production—the greater the current volume of reproduction will be that is used for the replacement of the worn-out fixed capital, but the smaller relatively will be the proportional amount, in relation to the total capital,
Let the reproduction period (the average) for all kinds of fixed capital be ten years. ||386| Let us assume that the different kinds of fixed capital have a turnover of 20, 17, 15, 12, 11, 10, 8, 6, 4, 3, 2, 1, 4/6 and 2/6 years (14 kinds), so that the fixed capital has an average turnover of 10 years.
On the average, therefore, the capital would have to be replaced in 10 years. If the total fixed capital amounted to 1/10 of the total capital, then 1/10 of this would mean that only 1/100 of the total capital would have to be replaced annually.
If it amounted to 1/3, then 1/30 of the total capital would have to be replaced annually.
But let us now compare fixed capitals with different reproduction periods—the capital with a 20-year period, for example, in contrast to the capital with a period of 1/3 of a year.
Only 1/20 of the fixed capital which is reproduced in 20 years has to be replaced annually. So that if it amounts to 1/2 of the total capital, only 1/40 of the total capital has to be replaced annually, and if it amounts even to 4/5 of the total capital, only 4/100=1/25 of the total capital has to be replaced annually. On the other hand, if the capital which has a reproduction period of 2/6 of a year—that is, turns over three times a year—amounts to only 1/10 of the capital, then the fixed capital has to be replaced three times a year, so that 3/10 of the capital has to be replaced annually, nearly one-third of the total capital. On the average, the larger the fixed capital in proportion to the total capital, the longer is its relative (not absolute) period of reproduction; and the smaller it is, the shorter its relative period of reproduction. Implements form a much smaller part of handicraft capital than machinery does of machine-production capital. But handicraft implements wear out much more quickly than machinery.
Although the absolute magnitude of its reproduction—or its wear and tear—grows with the absolute size of the fixed capital, as a rule its proportional magnitude falls, in so far as its period of turnover, its duration, as a rule increases in proportion to its size. This proves among other things that the quantity of labour reproducing machinery or fixed capital is not at all proportional to the labour which originally produced these machines (conditions of production remaining the same), since only the annual wear and tear has to be replaced. If the productivity of labour rises—as it constantly does in this branch of production—the quantity of labour required for the reproduction of this part of the constant capital diminishes still more. However, account has to be taken of the means of consumption daily used by the machine (which however have nothing directly to do with the labour employed in the machine-building industry itself). But machinery, which needs merely coal and a little oil or tallow, lives on an infinitely stricter diet than the labourer—not only the labourer whom it replaces, but the labourer who built the machine itself.
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We have now disposed of the product of the entire category A and of a part of category B’s product. A is completely consumed: one-third by its own producers, two-thirds by the producers of B, who cannot consume their own revenue in their own product. The two-thirds of A, in which they consume the part of the value of their product which represents revenue, at the same time replace their constant capital in kind for the producers of A, that is, provide them with the commodities which they consume industrially. But with the consumption of A’s entire product, and with two-thirds of it replaced by B in the form of constant capital, we have also disposed of the entire part of the product which represents the labour newly added annually. This labour cannot therefore buy any other part of the total product. In fact, the whole of the labour added annually (leaving out of account the capitalisation of profit) is equal to the labour contained in A. For one-third of A which is consumed by its own producers represents the labour newly added by them during the year to the two-thirds of A which represent A’s constant capital. They have performed no labour apart from this, which they consume in their own product. And the other two-thirds of A, which are replaced by B’s product and consumed by the producers of B, represent all the labour-time which the producers of B have added to their own constant capital. They have added no more in labour, and there is nothing more for them to ||387| consume.
In its use-value, product A represents the whole part of the annual total product which enters annually into individual consumption. In its exchange-value, it represents the total quantity of labour newly added by the producers during the year.
Thus, however, we have as residuum a third part of the total product whose constituent parts, when exchanged, can represent neither the exchange of revenue against revenue nor of capital against revenue and vice versa. This is the part of product B which represents B’s constant capital. This part is not included in B’s revenue and therefore cannot be replaced by or exchanged against product A, and therefore also cannot enter as a constituent part into A’s constant capital. This part is likewise consumed, industrially consumed, to the extent that it enters not only into B’s labour-process but also into the formation of value in B. This part, therefore, like all other parts of the total product, must be replaced in the proportion in which it forms a component part of the total product, and indeed it must be replaced in kind by new products of the same sort. On the other hand, it is not replaced by any new labour. For the total quantity of newly-added labour is equal to the labour-time contained in A, which is completely replaced only by B consuming his revenue in two-thirds of A and supplying to A in exchange all the means of production which are consumed in A and must be replaced. For the first one-third of A, which is consumed by its own producers, consists only—as exchange-value—of the labour newly added by themselves, and it contains no constant capital.
Let us now examine this residuum.
It consists of the constant capital which enters into raw materials, and secondly of the constant capital which enters into the formation of the capital, and thirdly of the constant capital which enters into auxiliary materials.
First, the raw materials. Their constant capital consists in the first place of fixed capital, machinery, instruments of labour and buildings, and perhaps auxiliary materials, which are means of consumption for the machinery employed. In regard to the directly consumable part of the raw materials —such as cattle, corn, grapes, and such like—this difficulty does not arise. In this aspect they belong to class A. This part of the constant capital contained in them enters into the two-thirds of the constant part of A, which is exchanged as capital against the unconsumable products of B or in which B consumes his revenue. This holds good too in general for such raw materials that cannot be immediately consumed as far as they enter in kind into the consumable product itself, however many intermediate stages they may pass through in the processes of production. The part of flax that is transformed into yarn and later into linen enters in its entirety into the consumable product.
But a part of these vegetative raw materials, such as timber, flax, hemp, leather and so on, partly enters directly into the components of the fixed capital itself, and partly into the auxiliary materials for the fixed capital. For example, in the form of oil, tallow, etc.
Secondly, however, seed [belongs to the constant capital expended for the production of raw materials]. Vegetative materials and animals reproduce themselves. Vegetation and generation. By seed we mean actual seed, and in addition fodder which reverts to the land as dung, pedigree cattle, etc. This large part of the annual product—or of the constant part of the annual product—itself serves directly as material for regeneration, it reproduces itself.
Non-vegetative raw materials. Metals, stones, etc. Their value consists of only two parts, since here there is no seed—which represents the raw materials of agriculture. Their value consists only of added labour and machinery consumed (including the means of consumption for the machinery). In addition therefore to the part of the product which represents newly-added labour and is hence included in the exchange of B for the two-thirds of A, there is nothing to be replaced but the wear and tear of the fixed capital and its means of consumption (such as coal, oil, etc.). But these raw materials form the principal component part of the constant capital, of the fixed capital (machinery and instruments of labour, buildings, etc.). They therefore replace their constant capital in kind by the exchange [of capital against capital].
||388| Secondly, the fixed capital (machinery, buildings, instruments of labour, containers of all kinds).
Their constant capital consists of: (1) their raw materials, metals, stones, vegetative raw materials such as timber, leather belting, rope, etc. But though these raw materials form the raw material for them, they themselves enter as instruments of labour into the production of these raw materials. Hence they replace themselves in kind. The iron producer has to replace machinery, the machine builder iron. In quarrying there is wear and tear of machinery, but in factory buildings there is wear and tear of building stone, etc. (2) The wear and tear of machine—building machinery, which within a certain period has to be replaced by a new product of the same kind. But the product of the same kind can, of course, replace itself. (3) The means of consumption for the machine (auxiliary materials). Machinery consumes coal, but coal consumes machinery, and so on. In the form of containers, tubes, pipes, etc., machinery of all kinds enters into the production of the means of consumption for machinery, as in the case of tallow, soap, gas (for lighting). Therefore also in these cases the products of these spheres enter reciprocally into each other’s constant capital, and consequently replace each other in kind.
If beasts of burden are included among machines, what has to be replaced in their case is fodder and in certain conditions stabling (buildings). But if fodder enters into the production of cattle, so do cattle into the production of fodder.
In the third place, auxiliary materials. Some of these require raw materials, like oil, soap, tallow, gas, etc. On the other hand, in the form of fertilisers, etc., they in turn enter in part into the production of these raw materials. Coal is required for making gas, but gas lighting is used in producing coal, etc. Other auxiliary materials consist only of labour added and fixed capital (machinery, containers, etc.). Coal must replace the wear and tear of the steam-engine used to produce it. But the steam-engine consumes coal. Coal itself enters into the means of production of coal. Thus it replaces itself in kind. Transport by rail enters into the production costs of coal, but coal in turn enters into the production costs of the locomotive.
Later on, there is something special to be added about chemical factories, all of which in greater or smaller degree produce auxiliary materials, such as the raw material of containers (for example, glass, porcelain), as well as articles which enter directly into consumption.
All colouring materials are auxiliary materials. But they enter into the product not only as to their value, as for example coal consumed enters into cotton; but they reproduce themselves in the form of the product (its colours).
Auxiliary materials are either means of consumption for machinery —in this case either fuel for the prime mover, or means of reducing the friction of the operating machinery, such as tallow, soap, oil, etc.—or they are auxiliary materials for buildings, like cement, etc. Or they are auxiliary materials for carrying on the production process in general, such as lighting, heating, etc. (in this case they are auxiliary materials required by the labourers themselves to enable them to work).
Or they are auxiliary materials which enter into the formation of the raw materials as do all types of fertilisers and all chemical products consumed by the raw materials.
Or they are auxiliary materials which enter into the finished product—colouring matter, polishing materials, and so on.
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The result is therefore:
A replaces his own constant capital, [equal to] two-thirds [of the product], by exchange with that part of B’s unconsumable product which represents B ‘s revenue—that is, the labour added in category B during the year. But A does not replace B’s constant capital. B for his part must replace this constant capital in kind by new products of the same sort. But B has no labour-time over to replace them with. For all the new labour-time added by him forms his revenue, and is therefore represented by the part of B’s product which enters as constant capital into A. How then is B’s constant capital replaced?
Partly by his own reproduction (vegetative or animal), as in all agriculture and stock-raising; partly by exchange in kind of parts of one constant capital for parts of another constant capital, because the product of one sphere enters as raw material or means of production into the other sphere, and vice versa; that is, because the products of the various spheres of production, the ||389| various sorts of constant capital, enter reciprocally in kind into each other’s sphere as conditions of production.
The producers of unconsumable products are the producers of constant capital for the producers of consumable products. But at the same time their products serve them reciprocally as elements or factors of their own constant capital. That is to say, they consume each other’s products industrially.
The whole product A is consumed. Therefore also the whole of the constant capital it contains. The producers of A consume one-third of A, the producers of the unconsumable products B consume two-thirds of A. A’s constant capital is replaced by the products of B which form B’s revenue. This is in fact the only part of the constant capital that is replaced by newly-added labour; and it is replaced by it because the quantity of products B that is the newly-added labour in B, is not consumed by B, but on the contrary is industrially consumed by A, while B consumes individually the two-thirds of A.
Let A be equal to 3 days’ labour; his constant capital, on our assumption, is equal to 2 days’ labour. B replaces the product of two-thirds of A, and so supplies unconsumable products equal to 2 days’ labour. Now 3 days’ labour have been consumed, and 2 are left. In other words, the 2 days of past labour in A are replaced by 2 days of newly-added labour in B, but only because the 2 days of newly-added labour in B consume their value in A and not in product B itself.
B’s constant capital, in so far as it has entered into the total product B, must likewise be replaced in kind by new products of the same sort—that is, by products which are required for industrial consumption by B. But it is not replaced by new labour-time, although it is replaced by the products of the labour-time newly applied during the year.
Let the whole constant capital in B’s total product be two-thirds. Then if the newly-added labour (equal to the total wages and profit) is 1, the past labour which served it as material and means of labour is equal to 2. How then are these 2 replaced? The proportion of constant and variable capital may vary considerably within the various spheres of production of B. But on our assumption the average is as 1/3 : 2/3, or 1 : 2. Each of the producers of B is now Laced by two-thirds of his product, such as coal, iron, flax, machinery, cattle, wheat (i.e., the part of his cattle and wheat that does not enter into consumption), etc.; whose elements of production must be replaced, or which must be reconverted into the natural form of their elements of production. But all these products themselves re-enter industrial consumption. The wheat (as seed) is in turn also its own raw material, and a part of the cattle produced replaces what has been consumed, that is, itself. In these spheres of production of B (agriculture and stock-raising) this part of their product therefore replaces their own constant capital in its natural form. A part of this product, therefore, does not go into circulation (at least need not go into circulation, and can only do so in a formal sense). Others of these products, such as flax, hemp, etc., coal, iron, timber, machinery, in part enter into their own production as means of production, in the same way as seed in agriculture: for example, coal in the production of coal, and machinery in the production of machinery. A part of the product consisting of machinery and coal, and in fact a part of that part of this product which represents its constant capital, thus replaces itself and merely changes its place in the process of production. It changes from a product into its own means of production.
Another part of these and of other products reciprocally enter into each other as elements of production—machinery into iron and timber, timber and iron into machinery, oil into machinery and machinery into oil, coal into iron, iron (tram-rails, etc.) into coal, and so on. In so far as the two-thirds of these products of B are not self-replacing in this way—that is, do not come back in their natural form into their own productions so that a part of B is directly consumed industrially by its own producers, just as a part of A is directly consumed individually by its own producers—the products of the producers of B replace each other reciprocally as means of production. The product of a goes into b’s industrial consumption and the product of b into a’s industrial consumption; or in a roundabout way, a’s product into b’s industrial consumption, b’s product into that of c, and that of c into that of a. What therefore is consumed as constant capital in one of B’s spheres of production is newly produced in another; but what is consumed in the latter is produced in the former. What in one sphere passes from the form of machinery and coal into the form of iron, passes in the other from the form of iron and coal into machinery, and so on.
||390| What has to be done is to replace B’s constant capital in its natural form. If we consider B’s total product, it represents the entire constant capital in all its natural forms. And where the product of one particular sphere of B cannot replace its own constant capital in kind, purchase and sale, a change of hands, puts everything here in its proper place again.
Here, therefore, there is replacement of constant capital by constant capital; in so far as this does not occur directly and without exchange, here therefore there is exchange of capital for capital, that is, of products for products on the basis of their use-value; the products enter reciprocally into their respective production processes, so that each of them is industrially consumed by the producers of the other.
This part of the capital consists neither of profit nor of wages. It contains no newly-added labour. It is not exchanged against revenue. It is neither directly nor indirectly paid for by consumers. It makes no difference whether this reciprocal replacement of capitals is carried through with the aid of merchants (that is, by merchant’s capitals) or not.
But since these products are new (machinery, iron, coal, timber, etc., which reciprocally replace each other), since they are the products of the last year’s labour—thus the wheat which serves as seed is just as much a product of new labour as the wheat which passes into consumption, etc.—how can it be said that no newly-added labour is contained in these products? And moreover isn’t their form striking evidence to the contrary? Even if not in the case of wheat or cattle, surely in the case of a machine its form bears witness to the labour which has transformed it from iron, etc., into a machine, and so forth.
This problem has been solved earlier, It is not necessary to go into it here again.
<Adam Smith’s statement that the trade between dealers and dealers must be equal to the trade between dealers and consumers (by which he means direct, not industrial, consumers, since he himself includes industrial consumers among dealers) is therefore wrong. It is based on his false assertion that the whole product consists of revenue, and in fact only means that the part of the exchange of commodities which is equal to the exchange between capital and revenue is equal to the total exchange of commodities. As the assertion is wrong, the practical applications Tooke made of it for the circulation of money are also wrong (especially the relation between the quantity of money circulating between dealers and the quantity of money circulating between dealers and consumers).
Let us take as the final dealer confronting the consumer the merchant who buys the product of A; this product is bought from him by the revenue of A, equal to one-third of A, and by the revenue of B, equal to two-thirds of A. These replace his merchant’s capital for him. The total of their revenues must cover his capital. (The profit which the rascal makes must be accounted for by his retaining a part of A for himself, and selling a smaller part of A for the value of A. Whether the rascal is thought of as a necessary agent of production or as a sybaritic intermediary does not in any way alter the case.) This exchange between dealer in A and consumer of A covers in value the exchange between the dealer in A and all the producers of A, and consequently all dealings between these producers among themselves.
The merchant buys the linen. This is the last dealing between dealer and dealers. The linen weaver buys yarn, machinery, coal, etc. This is the last but one dealing between dealer and dealers. The spinner buys flax, machinery, coal, etc. This is the last dealing but two between dealer and dealers. The flax-grower and machine builder buy iron, machines, etc., and so on. But the dealings between the producers of flax, machinery, iron, coal, [which are carried out] to replace their constant capital, and the value of these dealings, do not enter into the dealings which A’s product passes through, whether as the exchange of revenue for revenue, or as the exchange of revenue for constant capital. These dealings—not those between the producers of B and the producers of A, but those between the producers of B— have not to be replaced by the buyer of A to the seller of A, any more than the value of this part of B enters into the value of A. These dealings too require money, and are carried out through merchants. But the part of the circulation of money which exclusively belongs to this sphere is completely separate from that between dealers and consumers.>
||391| Two questions are still to be solved:
1. In our investigation up to now wages have been treated as revenue, without being distinguished from profit. How far in this connection have we to take account of the fact that wages are at the same time part of the circulating capital of the capitalist?
2. Up to now it has been assumed that the total revenue is spent as revenue. The alteration that comes in when a part of the revenue, of the profit, is capitalised, has therefore to be considered. This in fact comes up in the examination of the process of accumulation—but not in its formal aspect. That a part of the product which represents surplus-value is reconverted, partly into wages and partly into constant capital, presents no difficulty. Here we have to examine how this affects the exchange of commodities under the headings previously considered—under which it can be examined in relation for its holders, that is to say, as exchange of revenue for revenue, exchange of revenue for capital, or finally, exchange of capital for capital.}
<This intermezzo has therefore to be completed in this historico-critical section, as occasion warrants.>
Ferrier (François-Louis-Auguste) (Sub-inspector of Customs): Du Gouvernement considéré dans ses rapports avec le commerce, Paris, 1805. (This was the main source for Friedrich List.) This fellow eulogises the Bonapartist system of prohibitions, etc. In fact the Government (therefore also State officials —those unproductive labourers) is in his view important, as a manager directly intervening in production. This customs officer is consequently extremely angry with Adam Smith for calling State officials unproductive.
“The principles which Smith has laid down in regard to the economy of nations have as their basis a distinction in labour, which he calls productive or unproductive …”
<Because in fact he wants the largest possible part to be spent as capital, i.e., in exchange for productive labour, and the smallest possible part as revenue, in exchange for unproductive labour.>
“This distinction is in essence false. There is no unproductive labour” (p. 141). “There is therefore economy and prodigality on the part of nations; but a nation is only prodigal or economic in its relations with other peoples, and it is from this standpoint that the question should be considered” (l.c., p. 143).
In a moment we shall quote for comparison the context of the passage from Adam Smith which Ferrier regards with such abomination.
“There is an economy on the part of nations, hut it is very different from what Smith recommends…, It consists in not buying foreign products except in so far as a nation can pay for them with its own, It consists sometimes in doing without them altogether” (l.c., pp. 174-75).
<Book I, Chapter VI, (t. I, éd. Garnier, pp. 108-09) Adam Smith says at the end of this chapter which deals with the component parts of the price of commodities:
“As in a civilised country there are but few commodities of which the exchangeable value arises from labour only, rent and profit contributing largely to that of the far greater part of them, so the annual produce of its labour will always be sufficient to purchase or command a much greater quantity of labour than what was employed in raising, preparing, and bringing that pro duce to market. 1f the society were annually to employ all the labour which it can annually purchase, as the quantity of labour would increase greatly every year, so the produce of every succeeding year would be of vastly greater value than that of the foregoing. But there is no country in which the whole annual produce is employed in maintaining the industrious. The idle everywhere consume a great part of it; and, according to the different proportions in which it is annually divided between those two different orders of people, its ordinary or average value must either annually increase or diminish, or continue the same from one year to another” [Smith, Wealth of Nations, O.U.P. edition, Vol. 1, pp. 59-60].
There is confusion of all kinds in this passage, in which Smith is in fact trying to solve the problem of accumulation.
First, once again there is the wrong assumption that the “exchangeable value” of the annual product of labour, and so also “the annual produce of labour”, resolves itself into wages and profits (including rents). We will not deal again with this nonsense. We only observe: the amount of the annual product—or of the funds, the stocks of commodities which are the annual product of labour—consists for the most part ||392| of commodities in kind which can only enter as elements into constant capital <raw materials, seed, machinery, etc.>, which can only be consumed industrially. The very use-value of these commodities (and they form the larger part of the commodities entering into constant capital) shows that they are not suitable for individual consumption; that therefore revenue cannot be expended on them, whether it is wages, profit or rent. A part of the raw materials (in so far as it is not required for the reproduction of raw materials themselves, or in so far as it does not enter into the fixed capital as auxiliary material or directly as a component part) will, it is true, later on be given a consumable form, but only through the labour of the current year. As a product of the previous year’s labour these raw materials themselves form no part of revenue. It is only the consumable part of the product that can be consumed, can enter into individual consumption and thus form revenue. But even a part of the consumable product cannot be consumed without making reproduction impossible. One part even of the consumable part of commodities therefore must be deducted which must be consumed industrially, that is, it must serve as material of labour, as seed, etc., not as means of subsistence, whether for labourers or for capitalists. This part of the product therefore has first to be deducted from Adam Smith’s calculation—or rather has to be added to it. If the productivity of labour remains the same, then this part of the product which does not consist of revenue remains the same from year to year; provided that, with the productivity of labour remaining the same, the same quantity of labour-time as before is employed.
On the assumption therefore that a greater quantity of labour than before is used each year, we have to see what happens to the constant capital. In short: in order to employ a greater quantity of labour, it is not enough either that a greater quantity of labour should be available, or that a greater quantity should be paid for, that is, more should be spent in wages; but the means of labour—raw material and fixed capital—must also be there in order to absorb a greater quantity of labour. Hence this point is still to be discussed after the points raised by Adam Smith have been cleared up.
So then, once more [we take] his first sentence:
“As in a civilised country there are but few commodities of which the exchangeable value arises from labour only, rent and profit contributing largely to that of the far greater part of them, so the annual produce of its labour will always he sufficient to purchase or command a much greater quantity of labour than what was employed in raising, preparing, and bringing that produce to market” (in other words, to produce it).
Here different things are obviously mixed up. Not only living labour, living labour employed during the current year, enters into the exchangeable value of the total annual product, but also past labour, product of the labour of past years. Not only labour in living form, but labour in materialised form. The exchangeable value of the product is equal to the total labour-time which it contains, a part of which consisted of living labour and a part of materialised labour.
Let the proportion of the former to the latter be as 1/3 : 2/3 or 1 : 2. Then the value of the total product is equal to 3, of which 2 are materialised labour-time and 1 living labour-time. The value of the total product can therefore buy more living labour than is contained in it, on the assumption that materialised labour and living labour exchanged for each other as equivalents, that a definite quantity of materialised labour commanded only a quantity of living labour equal to itself. For the product is equal to 3 days’ labour; but the living labour-time contained in it is only equal to 1 day’s labour. 1 day’s living labour sufficed to produce the product (in fact, only to give the final form to its elements). But 3 days’ labour is contained in it. Therefore if it was exchanged entirely against living labour-time, if it was employed only “to purchase or command” quantities of living labour, it would be able to command, to purchase, 3 days’ labour.
This however is evidently not what Adam Smith has in mind, and would be a quite useless premise for him. What he means is that a large part of the exchangeable value of the product does not resolve itself (or as he wrongly expresses it, because of a confusion of ideas noted earlier) into wages but into profits and rents, or, as we will say to simplify things, into profits. In other words, the part of the value of the product which is equal to the quantity of labour added during the last year—thus in fact the part of the product which in the proper meaning of the word is the product of last year’s labour—pays first the labourers and secondly enters into the capitalist’s revenue, his fund for consumption. This whole part of the total product arises from labour, and indeed exclusively from labour; but it consists of paid and unpaid labour. The wages are equal to the total of the paid labour, the profits ||393| to the total of the unpaid labour. If therefore this total product was expended in wages, it could naturally set in motion a greater quantity of labour than that of which it was the product; and in fact the proportion in which the product can set in motion more labour-time than it itself contains depends exactly on the proportion in which the working-day is divided into paid and unpaid labour-time.
Let us assume that the proportion is such that the labourer produces or reproduces his wages in 6 hours, that is, in half a day. Then the other 6 hours or the other half day forms the surplus. Thus for example of a product which contained 100 days’ labour [newly-added labour], equal to £50 (when the day’s labour is equal to 10s., making 100 days’ labour equal to 1,000s., or £50), there would be £25 for wages and £25 for profit (rent). With the £25—equal to 50 days’ labour—l00 labourers would have been paid, who would have worked precisely half their labour-time for nothing or for their masters. If therefore the whole product (of the 100 days’ labour) were to be expended in wages, then 200 labourers could be set in motion with the £50, each of whom would receive as wages 5s. or half the product of his labour as before. The product of this labour would be equal to £100 (that is, 200 days’ labour, equal to 2,000s., or £100), with which 400 labourers (5s. the labourer, making 2,000s.) could be set in motion, whose product would be equal to £200, and so on.
And this is what Adam Smith means by saying that “the annual produce of labour” will always be sufficient “to purchase or command a much greater quantity of labour” than what was employed to produce the product. (If the labourer were paid the whole product of his labour, that is, £50 for 100 days’ labour, then the £50 too could only set in motion 100 days’ labour.) And so Smith goes on to say:
“if the society were annually to employ all the labour which it can annually purchase, as the quantity of labour would increase greatly every year, so the produce of every succeeding year would be of vastly greater value than that of the foregoing.”
A part of this product however is consumed by the owners of profit and rent; a part by their parasites. The part of the product that can be expended again in (productive) labour is consequently determined by the part of the product which the capitalists, landlords and their parasites (that is the unproductive labourers) do not themselves consume.
But nevertheless there is always a new fund (a new fund of wages) to set in motion, with the previous year’s product, a greater quantity of labourers in the current year. And as the value of the annual product is determined by the quantity of labour-time employed, the value of the annual product will grow each year.
Of course it would be of no use to have the fund “to purchase or command” a “much greater quantity of labour” than in the previous year unless a greater quantity of labour was on the market. It is of no use to me to have more money to buy a commodity, unless more of this commodity is on the market. Let us assume that the £50 set in motion, instead of the 100 as before (who received £25), not 200 but only 150 labourers, while the capitalists themselves consumed £12.l0s. instead of £25. The 150 labourers ([receiving] £37.l0s.) would perform 150 days’ labour, equal to 1,500s. or £75. But if the quantity of labourers available were, as before, only 100, instead of £25 as before, they would receive £37.l0s, as wages, though their product [would amount to I only £50 as before. Thus the revenue of the capitalist would have fallen from £25 to £l2.l0s., because wages had risen by 50 per cent. Adam Smith knows, however, that an increasing quantity of labour will be available. Partly [due to] the annual increase of the population (though this is supposed to be provided for in the old wages), partly unemployed paupers, or half-employed labourers, etc. Then the large numbers of unproductive labourers, part of whom can be transformed into productive labourers by a different way of using the surplus-produce. Finally the same number of labourers can perform a greater quantity of labour. And whether I pay 125 labourers instead of 100, or whether the 100 work 15 hours a day instead of 12, would be quite the same thing.
It is incidentally an error of Adam Smith’s—directly connected with his analysis of the total product into revenue—to say that with the increase of the productive capital—or with the growth of the part of the annual product which is destined for reproduction—the labour employed (the living labour, the part of capital expended in wages) must increase in the same proportion.
||394| Thus first Adam Smith has a fund of consumable means of subsistence, which can “purchase or command” a greater quantity of labour this year than the foregoing year; he has more labour; and at the same time more means of subsistence for this labour. Now we must see how this additional quantity of labour is to be realised.>
Had Adam Smith adhered with full consciousness to the analysis of surplus-value which in substance is to be found in his work—which is created only in the exchange of capital against wage-labour—it would have followed that productive labour is only that which is exchanged against capital: never labour which is exchanged with revenue as such. In order for revenue to be exchanged against productive labour, it must first be transformed into capital.
But taking as his starting-point one aspect of the traditional view—that productive labour is labour which directly produces material wealth of any kind—and at the same time combining with this his distinction in so far as it is based on the exchange of either capital for labour or of revenue for labour, with Smith the following became possible: The kind of labour for which capital is exchanged is always productive (it always creates material wealth, etc.). The kind of labour which is exchanged for revenue may be productive or it may not; but the spender of revenue as a rule prefers to set in motion directly unproductive labour rather than productive. One can see how Adam Smith, by this compound of his two distinctions, very much weakens and blunts the principal distinction.
The following quotation shows that Adam Smith does not take the fixation of labour in a purely external sense; among the various component parts of the fixed capital is enumerated:
“Fourthly, of the acquired and useful abilities of all the inhabitants and members of the society. The acquisition of such talents, by the maintenance of the acquirer during his education, study, or apprenticeship, always costs a real expense, which is a capital fixed and realised, as it were, in his person. Those talents, as they make a part of his fortune, so do they likewise that of the society to which he be Longs. The improved dexterity of a workman may be considered in the same light as a machine or instrument of trade which facilitates and abridges labour, and which, though it costs a certain expense, repays that expense with a profit” ([Wealth of Nations, O.U.P, edition, Vol. I, p. 308], [Garnier], l.c., t. II, ch, I, pp. 204-05).
The strange origin of accumulation and its necessity:
“In that rude state of society, in which there is no division of labour, in which exchanges are seldom made, and in which every man provides every thing for himself, it is not necessary that any stock should be accumulated, or stored up beforehand, in order to carry on the business of the society” (that is, after assuming that there is no society). “Every man endeavours to supply, by his own industry, his own occasional wants, as they occur. When he is hungry, he goes to the forest to hunt”—and so on ([ibid., p.301], [Garnier], l.c., t, II, pp. 191-92) (l. II, Introduction). “But when the division of labour has once been thoroughly introduced, the produce of a man’s own labour can supply but a vary small part of his occasional wants. The far greater part of them are supplied by the produce of other men’s labour, [which he purchases with the produce ], or, what is the same thing, the price of the produce of his own, But this purchase cannot be made till such time as the produce of his own labour has not only been completed, but sold.”
(Even in the first case he could not eat the hare before he had killed it, and he could not kill it before he had produced for himself the classical “bow” or something similar. The only thing that seems to be added in case II is therefore not the necessity of a stock of any sort, but the “time… to sell the produce of his labour”.)
“A stock of goods of different kinds, therefore, must be stored up somewhere, sufficient to maintain him, and to supply him with the materials and tools of his work, till such time at least as both these events can be brought about. A weaver cannot apply himself entirely to his peculiar business, unless there is beforehand stored up somewhere, either in his own possession, or in that of some other persons, a stock sufficient to maintain him, and to supply him with the materials and tools of his work, till he has not only completed, but sold his web. This accumulation must evidently be previous to his applying his industry for so long a time to such a peculiar business, … The accumulation of s t o c k must, in the nature of things, be previous to the division of labour…” ([ibid., pp. 301-02], [Garnier], l.c., pp. 192-93).
(On the other hand, according to what he has stated at the beginning, it appears that no accumulation of capital takes place before the division of labour, just as there is no division of labour before the accumulation of capital.)
He continues:
“… Labour can be more and more subdivided in proportion only as stock is previously more and more accumulated. The quantity of materials which the same number of people can work up, increases in a great proportion as labour comes to be more and more subdivided; and as the operations of each workman are gradually reduced to a greater degree of simplicity, a variety of new machines come to be invented for facilitating and ||395| abridging those operations. As the division of labour advances, therefore, in order to give constant employment to an equal number of workmen, an equal stock of provisions, and a greater stock of materials and tools than what would have been necessary in a ruder state of things, must be accumulated be forehand”, ([ibid., p. 302], [Garnier], l.c., pp. 193-94). “As the accumulation of stock is previously necessary for carrying on this great improvement in the productive powers of labour, so that accumulation naturally leads to this improvement. The person who employs his stock in maintaining labour, necessarily wishes to employ it in such a manner as to produce as great a quantity of work as possible. He endeavours, therefore, both to make among his workmen the most proper distribution of employment, and to furnish them with the best machines which he can either invent or afford to purchase. His abilities, in both these respects, are generally in proportion to the extent of his stock, or to the number of people whom it can employ. The quantity of industry, therefore, not only increases in every country with the increase of the stock which employs it, but, in consequence of that increase, the same quantity of industry produces a much greater quantity of work” ( [ibid., pp. 302-03], [Garnier], l.c., pp. 194-95).
Adam Smith treats the objects which are already in the fund for consumption in exactly the same way as productive and unproductive labour. For instance:
“A dwelling-house, as such, contributes nothing to the revenue of its inhabitant; and though it is, no doubt, extremely useful to him, it is as his clothes and household furniture are useful to him, which, however, make a part of his expense, and not of his revenue” ( [ibid., pp. 306-07 ], [Garnier], l.c., t. 11, pp. 201-02). On the other hand, fixed capital includes “all those profitable buildings which are the means of procuring a revenue, not only to their proprietor who lets them for a rent, but to the person who possesses them, and pays that rent for them; such as shops, warehouses, workhouses, farm-houses, with all their necessary buildings, stables, granaries, etc, These are very different from mere dwelling-houses. They are a sort of instruments of trade… “ ( [ibid., p. 308 ], [Garnier], l.c., t. II, pp. 203-04).
“… All such improvements in mechanics, as enable the same number of workmen to perform an equal quantity of work with cheaper and simpler machinery than had been usual before, are always regarded as advantageous to every society. A certain quantity of materials, and the labour of a certain number of workmen, which had before been employed in supporting a more complex and expensive machinery, can afterwards be applied to augment the quantity of work which that or any other machinery is useful only for performing” ( [ibid., p. 315 ], [Garnier], l.c., t, II, pp. 216-17).
“… The whole expense of maintaining the fixed capital is … necessarily excluded from the neat revenue of the society” ( [ibid., p. 316 ], [Garnier], l.c., t, II, p. 218). “Every saving, therefore, in the expense of maintaining the fixed capital, which does not diminish the productive powers of labour, must increase the fund which puts industry into motion, and consequently the annual produce of land and labour, the real revenue of every society” ( [ibid., p. 321 ], [Garnier ], l.c., t. II, pp. 226-27).
Gold and silver money forced to go abroad by bank-notes and by paper money in general—if spent “in purchasing foreign goods for home consumption”—buys either luxury products such as foreign wines, foreign silks, etc., in a word, “goods … likely to be consumed by idle people, who produce nothing… or .., they may purchase on additional stock of materials, toots, and provisions, in order to maintain and employ an additional number of industrious people, who reproduce, with a profit, the value of their annual consumption” ([ibid., p. 324], [Garnier], l.c., t. II, pp. 231-32).
The first manner of employment, says Smith, promotes prodigality, “increases expense and consumption, without increasing production, or establishing any permanent fund for supporting that expense, and is in every respect hurtful to the society” ([ibid., p. 324], [Garnier], l.c., t. II, p. 232). On the other hand “employed in the second way, it promotes industry; and though it increases the consumption of the society, it provides a permanent fund for supporting that consumption; the people who consume reproducing, with a profit, the whole value of their annual consumption” ( [ibid., p. 324], [Garnier], l.c., t, II, p. 232).
“The quantity of industry which any capital can employ, must evidently be equal to the number of workmen whom it can supply with materials, tools, and a maintenance suitable to the nature of the work” ( [ibid., p.326], [Garnier], l.c., t, II, p. 235).
||396| In Chapter III of Book II (l.c., t. II, p. 314 sqq.) [we find]:
“Both productive and unproductive labourers, and those who do not labour at all, are all equally maintained by the annual produce of the land and labour of the country. This produce … must have certain limits. According, therefore, as a smaller or greater proportion of it is in any one year employed in maintaining unproductive hands, the more in the one case, and the less in the other, will remain for the productive, and the next year’s produce will be greater or smaller accordingly…
“Though the whole annual produce of the land and labour of every country is … ultimately destined for supplying the consumption of its inhabitants, and for procuring a revenue to them; yet when it first comes either from the ground, or from the hands of the productive labourers, it naturally divides itself into two parts. One of them, and frequently the largest, is, in the first place, destined for replacing a capital, or for renewing the p r o v i s i o n s, materials, and finished work, which had been withdrawn from a capital; the other for constituting a revenue either to the owner of this capital, as the profit of his stock, or to some other person, as the rent of his land…
“That part of the annual produce of the land and labour of any country which replaces a capital, never is immediately employed to maintain any but productive hands. It pays the wages of productive labour only. That which is immediately destined for constituting a revenue… may maintain indifferently either productive or unproductive hands. …
“Unproductive labourers, and those who do not labour at all, are all maintained by revenue; either, first, by that part of the annual produce which is originally destined for constituting a revenue to some particular persons, either as the rent of land, or as the profits of stock; or, secondly, by the part which, though originally destined for replacing a capital, and for maintaining productive labourers only, yet when it comes into their hands, whatever part of it is over and above their necessary subsistence, may be employed in maintaining indifferently either productive or unproductive hands. Thus … even the common workman, if his wages are considerable, may maintain a menial servant; or he may sometimes go to a play or a puppet-show, and so contribute his share towards maintaining one set of unproductive labourers; or he may pay some taxes, and thus help to maintain another set … equally unproductive, No part of the annual produce, however, which had been originally destined to replace a capital, is ever directed towards maintaining unproductive hands, till after it has put into motion its full complement of productive labour, … The workman must have earned his wages by work done, before he can employ any part of them in this manner,.,, The rent of land and the profits of stock are everywhere… the principal sources from which unproductive hands derive their subsistence, “ These two sorts of revenue “might both maintain indifferently, either productive or unproductive hands. They seem, however, to have some predilection for the latter….
“The proportion, therefore, between the productive and unproductive hands, depends very much in every country upon the proportion between that part of the annual produce, which, as soon as it comes either from the ground, or from the hands of the productive labourers is destined for replacing a capital, and that which is destined for constituting a revenue, either as rent or as profit. This proportion is very different in rich from what it is in poor countries” [Wealth of Nations, O.U.P. edition, Vol. I, pp. 370-73].
[Adam Smith] then contrasts the “very large, frequently the largest, portion of the produce of the land” which “in the opulent countries of Europe […] is destined for replacing the capital of the rich and independent farmer”with “the prevalency of the feudal government”, when “a very small portion of the produce was sufficient to replace the capital employed in cultivation”.
It is the same with commerce and manufactures. Large capitals are now employed in them, formerly very small capitals, but they
“yielded very large profits. The rate of interest was nowhere less than ten per cent, and their profits must have been sufficient to afford this great interest. At present, the rate of interest, in the improved parts of Europe, is nowhere higher than six per cent; and in some of the most improved, it is so low as four, three, and two per cent. Though that part of the revenue of the inhabitants which is derived from the profits of stock, is always much greater in rich than in poor countries, it is because the stock is much greater; in proportion to the stock, the profits are generally much less.
“That part of the annual produce, therefore, which, as soon as it comes either from the ground, or from the hands of the productive labourers, is destined for replacing a capital, ||397| is not only much greater in rich than in poor countries, but bears a much greater proportion to that which is immediately destined for constituting a revenue either as rent or as profit. The funds destined for the maintenance of productive labour are not only much greater in the former than in the latter, but bear a much greater proportion to those which, though they may be employed to maintain either productive or unproductive hands, have generally a predilection for the latter,”
(Smith falls into the error of identifying the size of the productive capital with the size of that part of it which is destined to provide subsistence for productive labour. But in fact large-scale industry, as he knew it, was as yet only in its beginnings.)
“The proportion between those different funds necessarily determines in every country the general character of the inhabitants as to industry or idleness.” Thus he says for example: in English and Dutch manufacturing towns “where the inferior ranks of people are chiefly maintained by the employment of capital, they are in general industrious, sober and thriving”. On the other hand, in “towns which are principally supported by the [constant or occasional] residence of a court, and in which the inferior ranks of people are chiefly maintained by the spending of revenue, they are in general idle, dissolute, and poor; as at Rome, Versailles”,* etc. [ibid., pp. 372-75].
“The proportion between capital and revenue, therefore, seems everywhere to regulate the proportion between industry and idleness. Wherever capital predominates, industry prevails: wherever revenue, idleness. Every increase or diminution of capital, therefore, naturally tends to increase or diminish the real quantity of industry, the number of productive hands, and consequently the exchangeable value of the anneal produce of the land and labour of the country, the real wealth and revenue of all its inhabitants. …
“What is annually saved, is as regularly consumed as what is annually spent, and nearly in the same time, too: but it is consumed by a different set of people.” The first portion “by idle guests and menial servants, who leave nothing behind them in return for their consumption”. The second [portion] “by labourers […] who, reproduce, with a profit, the value of their annual consumption… The consumption is the same, but the consumers are different” [ibid., pp. 377-78].
Hence Smith’s homilies (further on [Garnier], 1, c., t. II, l. II, ch. III, pp. 328-29 sqq.) on the frugal man, who by his annual savings provides something like a public workhouse for an additional number of productive hands, and thus
“establishes, as it were, a perpetual fund for the maintenance of an equal number in all times to come”, while the prodigal diminishes “the funds destined for the employment of productive labour… If the quantity of food and clothing, which were thus” (as a result of the prodigal’s prodigality) “consumed by unproductive, had been distributed among productive hands, they would have reproduced, together with a profit, the full value of their consumption” [ibid., pp. 378-79].
The conclusion of this moral tale is that these (frugality and prodigality) average out among private individuals, that in fact “wisdom” prevails.
“Great nations are never impoverished by private, though they sometimes are by public prodigality and misconduct. The whole, or almost the whole public revenue is, in most countries, employed in maintaining unproductive hands.” [These include] the people of the court, the church, fleets and armies, “who in time of peace produce nothing, and in time of war acquire nothing which can compensate the expense of maintaining them, even while the war lasts. Such people, as they themselves produce nothing, are all maintained by the produce of other men’s labour. When multiplied, therefore, to an unnecessary number, they may in a particular year consume so great a share of this produce, ns not to leave a sufficiency for maintaining the productive labourers, who should reproduce it next year” [ibid., pp. 382-83].
[In] Chapter IV of Book II [Smith writes]:
“The demand for productive labour, by the increase of the funds which are destined for maintaining it, grows every day greater and greater. Labourers easily find ||398| employment; but the owners of capitals find it difficult. To get labourers to employ. Their competition raises the wages of labour, and sinks the profits of stock” ([ibid., p. 395], [Garnier], l.c., t. II, p. 359).
In Chapter V of Book II (p. 369 sqq., t. II) of the “Different Employments of Capitals”, Smith classifies them according as they employ more or less productive labour, and, consequently, raise “the exchange-value” of the annual product. First agriculture. Then manufacture. Then commerce, and finally retail trade. This is the order of precedence in which they set in motion quantities of productive labour. Here too we get a completely new definition of productive labourers:
“The persons whose capitals are employed in any of those four ways, are themselves productive labourers. Their labour, when properly directed, fixes and realises itself in the subject or vendible commodity upon which it is bestowed, and generally adds to its price the value at least of their own maintenance and consumption” ([ibid., p. 404], [Garnier], l.c., p. 374).
(On the whole he sees their productivity in the fact that they put into motion productive labour.)
He says of the farmer:
“No equal capital puts into motion a greater quantity of productive labour than that of the farmer, Not only his labouring servants, but his labouring cattle are productive labourers” [ibid., p. 405.].
So in the end the ox too is a productive labourer.
Lauderdale (Earl of): An Inquiry into the Nature and Origin of Public Wealth, etc., [Edinburgh and] London, 1804. (The French translation: Recherches sur la nature et l’origine de la richesse publique etc. par Lagentie de Lavaïsse, Paris, 1808.)
Lauderdale’s apologetic justification of profit will be examined only later on, in Section III. It regards profit as arising from capitals themselves, because they “supplant” labour. They are paid for doing what otherwise, without them, the hand of man would have to do, or could not do at all.
“Now it is apprehended, that in every instance where capital is so employed as to produce a profit, it uniformly arises, either—from its supplanting a portion of labour which would otherwise be performed by the hand of man; or—from its performing a portion of labour, which is beyond the personal exertion of man to accomplish” (French translation, p. 119)* [p. 161].
The “Earl” is a great enemy of Smith’s doctrine of accumulation and saving, Also of his distinction between productive and unproductive labourers; but according to him what Smith calls “productive powers of labour” are only the “productive power of capital”. He flatly denies the derivation of surplus-value put forward by Smith, on the following grounds:
“If this, however, was a just and accurate idea of the profit of capital, it would follow that the profit of stock must be derivative, and not an original source of revenue: and capital could not therefore be considered as a source of wealth, its profit being only a transfer from the pocket of the labourer into that of the proprietor of stock” (l.c., pp. 116-17) [p. 157 ].
It is clear that on these premises he picks on the most superficial points in his polemic against Smith. Thus he says:
“Thus the same labour may appear either productive or unproductive, according to the use subsequently made of the commodity on which it was bestowed. If my cook, for example, makes a tart which I immediately consume, he is considered as an unproductive labourer; and the net of making the tart is unproductive labour: because that service has perished at the moment of its performance: but if the same labour is performed in a pastry cook’s shop, it becomes productive labour” (l.c., p. 110) [pp. 149-50].
(Garnier has the copyright in this argument, as his edition and notes on Smith appeared in 1802, two years before Lauderdale.)
“This extraordinary distinction, founded on the mere durability of the services performed, classes as unproductive labourers some of those who are occupied in rendering the most important services to society. Thus the sovereign, and all who are employed in the maintenance of religion, the justice, or the defence of the State, as well as those whose skill and care are occupied in superintending the health and education of the society, are alike deemed unproductive Labourers” (l.c., pp. 110-11) [p. 151 ], (Or, as Adam Smith [Garnier trans.] l. II, ch. III, p. 313) presents the elegant sequence: “churchmen, lawyers, physicians, men of letters of all kinds; players, buffoons, musicians, opera-singers, opera-dancers, etc.” [Wealth of Nations, O.U.P, edition, Vol. I, p. 370 ].)
“If exchangeable value is to be considered as the basis of wealth,—it is needless to use much argument to explain the errors of this doctrine. ||399| The practice of mankind, in estimating these services, if we can judge by what is paid for them, bears sufficient testimony of its inaccuracy” ( [Lauderdale ], l.c., p. 111) [pp. 151-52].
Further: “The labour of the manufacturer fixes and realises itself in some vendible commodity… Neither the labour performed by the menial servant, nor that of which the necessity is supplanted by circulating capital,” < by this he means money> “do naturally stock, or store themselves up in such a manner as to be transferred from one to another for a defined value. The profit of the one and the other alike arises from saving the labour of the owner or master. The similarity is indeed such that it is natural to suppose the same circumstances which led the one to be deemed unproductive, would naturally create the same impression with relation to the other.” > And thereupon he quotes Smith, Book II, Chapter II, > (Lauderdale, l.c., pp. 144-45) [pp. 195-97].
Thus we would have the succession: Ferrier, Garnier, Lauderdale, Ganilh. The latter phrase about the “saving of labour” is particularly hard ridden by Tocqueville.
After Garnier appeared the inane Jean-Baptiste Say’s Traité d’économie politique. He reproaches Smith in that “he refuses the name of products to the results of these activities [e.g., those of the physician, actor, etc.]. He gives the labour spent on them the name unproductive” (3me éd., t. I, p. 117).
Smith does not at all deny that these activities produce a “result”, a “product” of some kind. He even expressly mentions “the protection, security, and defence of the commonwealth” as “the effect of their labour this year” (the labour of the servants of the public) ([Wealth of Nations], O.U.P. edition, Vol. I, pp. 369-70] Smith, t. II, éd, Garnier, l. II, ch. III, p. 313).
Say for his part sticks to Smith’s secondary definition, that these “services” and their product “generally perish in the very instant of their performance”, “in the very instant of their production” (Smith, l.c.).
Monsieur Say calls these consumed “services”, or their products, results—in a word, their use-value—“immaterial products or values, which are consumed in the instant of their production”. Instead of calling them “unproductive”, he calls them “productive of immaterial products”. He gives them another name. But then he declares further:
“that they do not serve to augment the national capital” (t, I, p. 119). “A nation in which there were a multitude of musicians, priests and officials, might be pleasantly entertained, well educated and governed admirably well, but that would be all, Its capital would not receive any direct increase from all the labour of these industrious men, because their products would be, consumed as fast as they were created” (l.c., p. 119).
Thus Monsieur Say declares these labours to be unproductive in the most restricted sense used by Smith. But at the same time he wants to appropriate Garnier’s “step forward”. Hence he invents a new name for unproductive labours. This is his kind of originality, his kind of productivity and way of making discoveries, And with his customary logic, he refutes himself again, He says:
“It is […] impossible to accept the view of Monsieur Garnier, who concludes from the fact that the labour of physicians, lawyers and other similar persons is productive, that it is as advantageous for a nation to increase it as any other labour” (l.c., p. 120).
And why not, if one kind of labour is as productive as the other, and the increase of productive labour is in general “advantageous for a nation”? Why is it not as advantageous to increase this kind of labour as any other? Because, Say replies with his characteristic profundity, because it is not at all advantageous to increase productive labour of any kind above the need for this labour. But then surely Garnier is right. For it is equally advantageous—that is, equally disadvantageous— to increase the one kind of labours as to increase the other kind above a certain quantity.
“The case is the same,” Say continues. “as with physical labour expended on a product beyond what is necessary to make it.”
(Not more joiner’s labour should be employed to make a table than is necessary for the production of the table. Or to patch up a sick body, not more than is necessary to cure it. So lawyers and physicians should perform only the necessary labour for the production of their immaterial product.)
“The labour which is productive of immaterial products, like all other labour, is only productive up to the point at which it increases the utility, and consequently the value” (that is the use-value, but Say mistakes the utility for the exchange-value) “of a product: beyond this point, it is a purely unproductive labour” (l.c., p. 120).
Say’s logic is therefore this:
It is not so useful for a nation to increase the “producers of immaterial products” as to increase the producers of material products. Proof: it is absolutely useless to increase the producers of any kind of product, whether material or immaterial, beyond what is necessary. Therefore it is more useful to increase the useless producers of material products than those of immaterial products. It does not follow in both cases that it is useless to increase these producers, but only the producers of a particular kind in their corresponding branch of production.
[According to Say], too many material products cannot ||400| be produced, nor can too many immaterial. But a change is diverting. So different kinds must be produced in both departments. And moreover Monsieur Say teaches: “Sluggishness in the sale of some products arises from the scarcity of some others” (l.c., p. 438).
Therefore there can never be too many tables produced, but at most perhaps too few dishes to be put on the tables. If physicians increase too much in number, what is wrong is not that their services are available in superfluity, but perhaps that the services of other producers of immaterial products are in short supply—for example, prostitutes (see l. c., p. 123, where the industries of street-porters, prostitutes, etc., are grouped together, and where Say ventures to assert that the “apprenticeship” for a prostitute “amounts to nothing”).
In the end, the scales come down on the side of the “unproductive labourers”. With given conditions of production, it is known exactly how many labourers are needed to make a table, how great the quantity of a particular kind of labour must be in order to make a particular product. With many “immaterial products” this is not the case. The quantity of labour required to achieve a particular result is as conjectural as the result itself. Twenty priests together perhaps bring about the conversion that one fails to make; six physicians consulting together perhaps discover the remedy that one alone cannot find, In a bench of judges perhaps more justice is produced than by a single judge who has no control but himself. The number of soldiers required to protect a country, of police to establish order in it, of officials “to govern it” well, etc. —all these things are problematical and are very often discussed for example in the English Parliament; although how much spinning labour is needed to spin 1,000 lbs. of twist is known very exactly in England. As for other “productive” labourers of this kind, the concept of them includes the fact that the utility which they produce depends only on their number, consists in their number itself. For example, lackeys, who should bear witness to their master’s wealth and elegance. The greater the number of them, the greater the effect they are supposed to “produce”. Thus Monsieur Say sticks to his point: “unproductive labourers” can never be sufficiently increased in numbers. |400||
||400| Le comte Destutt de Tracy: Élémments d’idéologie, IVe et Ve parties. Traité de la volonté et de ses effets, Paris, 1826 ([First edition] 1815).
“All useful labour is really productive, and the whole labouring class of society equally deserves the name productive” (p. 87).
But in this productive class he distinguishes “the labouring class which directly produces all our wealth” (p. 88) —that is, what Smith calls the productive labourers.
As against these, the sterile class consists of the rich, who consume their rent of land or rent on money. They are the idle class.
“The real sterile class is the class of idlers, who do nothing but live what is called nobly on the products of labours performed before them, whether these products are realised in landed property which they farm out, that is to say, which they lease to a labourer, or whether they consist in money or goods that they lend for a return, which also means to lease them. Those are the real drones of the hive (fruges consumere nati*)” (p. 87): these idlers “can expend nothing but their revenue. If they break into their funds ||401| , nothing replaces diem; and their consumption, increased for the moment, ceases for ever” (p. 237).
“This revenue is … only a deduction from the products of activity of the industrious citizens” (p. 236).
How then does it stand with the labourers whom these idlers directly employ? In so far as they consume commodities, they do not consume actual labour, but the products of the productive labourers, Here therefore we are dealing with labourers for whose labour the idlers directly exchange their revenue, that is, with labourers who draw their wages directly from revenue, not from capital.
“Since the men to whom it” (the revenue) “belongs are idle, it is obvious that they do not direct any Productive labour. All these labourers whom they pay are intended only to procure some enjoyment for them. No doubt these enjoyments are of different kinds… The expenditure of all this class of men … feeds a numerous population whose existence it makes possible, but one whose labour is completely sterile. … Some of it may he more or less fruitful, as for example the construction of a house, the improvement of e landed estate; but these are particular cases when for the tine being they cause productive labour to be performed, Apart from these minor exceptions, the whole consumption of this species of capitalists is absolutely pure loss from the standpoint of reproduction, and an equally great diminution of the wealth that has been acquired” (p. 236).
<Real political economy à la Smith treats the capitalist only as personified capital, M—C—M, agent of production. But who is to consume the products? The labourers? —but they don’t. The capitalist himself? Then he is acting as a big idle consumer and not as a capitalist. The owners of land and money rents? They do not reproduce their consumption, and thereby are of disservice to wealth, Nevertheless, there are also two correct aspects in this contradictory view, which regards the capitalist only as a real amasser of wealth, not an illusory one like the miser proper: (1) capital (and hence the capitalist, its personification) is treated only as an agent for the development of the productive forces and of production; (2) it expresses the standpoint of emerging capitalist society, to which what matters is exchange-value, not use-value; wealth, not enjoyment. The enjoyment of wealth seems to it a superfluous luxury, until it itself learns to combine exploitation and consumption and to subordinate itself to the enjoyment of wealth.>
“To find how these revenues” (on which the Idlers live) “have been formed it is always necessary to go back to the industrial capitalists”(p 237, note)
The industrial capitalists—the second sort of capitalists—
“include all the entrepreneurs in any industry whatever, that Is to say, all the persons who, having capitals, … employ their talent and their labour in turning them to account themselves instead of hiring them to others, and who consequently live neither on wages nor on revenues but on profits” (p. 237).
In Destutt it is quite clear —as with Adam Smith before him —that what on the surface is glorification of the productive labourer is in fact only glorification of the industrial capitalist in contrast to landlords and such moneyed capitalists as live only on their revenue.
“They have … in their hands almost all the wealth of society… It is not only the income from this wealth that they spend annually, but even the fund itself, and sometimes many times in the year, when the course of business is rapid enough to make this possible. For since in their capacity as industrialists they spend only in order that the money shall come back to them with a pro fit, the more they can do so on this condition, the greater their profits” (pp. 237-38).
As for their personal consumption, it is the same as that of the idle capitalists. But it is
“in total moderate, because industrialists are usually unassuming” (p. 238). But it is different with their industrial consumption, it “is nothing less than final; it returns to them with profits” (l.c.). Their profit must be large enough not only for their “personal consumption, but also” for “the rents for the land and for the money which they hold from the idle capitalists” (p. 238).
Destutt is right on this. Rents of land and interest on money are only “deductions” from industrial profit, portions of the latter given by the industrial capitalist from his gross profit to landlords and moneyed capitalists.
“The revenues of the rich idlers are only rents taken from industry; it is industry alone that creates them” (p. 248). The industrial capitalists “rent their” (that is, the idle capitalists’) “land, their houses and their money, and they make use of them in such a way as to draw profits from them hi g her than this rent” [p. 237]. That is, the rent which they pay to the idlers, which therefore is only a part of this profit. This rent that they thus pay to the idlers is “the sole revenue of these idlers and the sole fund for their annual expenditures” (p. 238).
Up to here, all right. But how then does it stand with the wage-labourers (the productive labourers, who are employed by the industrial capitalists)?
“These have no other treasure but their everyday labour. This labour obtains wages for them… But whence come these wages? It is clear that they come from the properties of those to whom the ||402| wage-labourers sell their labour, that is to say, from the funds which are in their possession beforehand, and which are nothing but the accumulated products of labours previously performed. It follows from this that the consumption paid for by this wealth is the consumption of the wage-labourers, in the sense that it is they whom it maintains, but at bottom it is not they who pay it. Or at least they only pay for it with funds existing beforehand in the hands of those who employ them. Their consumption should therefore be regarded as having been made by those who hire them. They only receive with one hand and return with the other,.,, It is therefore necessary to regard not only all that they” (the wage-labourers) “spend but even all that they receive as the real expenditure and consumption of those who buy their labour. That is so true that in order to see whether this consumption is more or less destructive of wealth that has been acquired, or even if it tends to increase it … it is necessary to know what use the capitalists make of the labour that they buy” (pp. 234-35).
Very well. And whence come the profits of the entrepreneurs which enable them to pay revenue to themselves and to the idle capitalists, etc.?
“I will be asked how these industrial entrepreneurs can make such large profits, and whence they can draw them? I reply that it is through their selling everything that they produce at a higher price than it has cost them to produce” (p. 239).
And to whom do they sell everything at a higher price than it costs them?
“They sell it,
“1. to themselves, for the whole part of their consumption destined for the satisfaction of their needs, which they pay for with a portion of their profits;
“2. to the wage-labourers, both those whom they pay and those paid by the idle capitalists; in this way they take beck from these labourers the total amount of their wages, apart from any small economies which these may be able to make;
“3. to the idle capitalists, who pay them with the part of their revenue which they have not already given to the labourers directly employed by them, so that all the rent which they annually pay to the idle capitalists comes back to them in one or other of these ways” (p. 239).
Let us now have a look at these three categories of sales.
1. The industrial capitalists themselves consume one part of their product (or profit). They cannot possibly enrich themselves by swindling themselves and selling their products to themselves at a dearer price than they themselves have paid for them. Nor can any one of them swindle the others in this way. If A sells his product, which the industrial capitalist B consumes, at too dear a price, then B sells his product, which the industrial capitalist A consumes, at too dear a price. It is the same thing as if A and B had sold their products to each other at their real value. Category 1 shows us how the capitalists spend a part of their profit; it does not show us whence they draw the profit. In any case they make no profit by selling “to one another” “everything that they produce at a higher price than it has cost to produce “.
2. They can likewise draw no profit from the part of the product which they sell to their labourers above the costs of production, It is presupposed that the whole consumption of the labourers is in fact “the consumption of those who buy their labour “. Moreover Destutt rubs this in by remarking that the capitalists, by selling their products to the wage-labourers (their own and those of the idle capitalists), only “get back their total wages ”. And in fact not even the total, but after deducting their economies. It is all the same whether they sell the products to them cheap or dear, since they always only get back what they have given them, and, as said above, the wage-labourers only “receive with one hand and return with the other”. First the capitalist pays money to the labourer as wages. Then he sells him his product “too dear”, and by so doing draws the money back again. But as the labourer cannot pay back to the capitalist more money than he has received from him, so the capitalist can never sell his products to him dearer than he has paid him for his labour. He can always only get back from him as much money for the sale of his products as the money he has given him for his labour. Not a farthing more. How then can his money increase through this “circulation”?
||403| In addition to this, there is another absurdity in Destutt. Capitalist C pays the labourer L a weekly wage of £1, and then draws back the £1 for himself again by selling him commodities for £1. By this means, Tracy thinks, he has drawn back to himself the total of the wages paid. But first he gives the labourer £1. And then he gives him commodities for £1. So what in fact he has given him is £2: £1 in commodities and £1 in money. Of this £2, he takes back £1 in the form of money. Therefore in fact he has not drawn back a farthing of the £1 wage. And if he intended to enrich himself by this kind of “drawing back” the wages (instead of by the labourer giving him back in labour what he advanced to him in commodities), he would soon come to his senses.
Here, therefore, the noble Destutt confuses the circulation of money with the real circulation of commodities. Because the capitalist, instead of giving the labourer directly commodities to the value of £1, gives him £1, with which the labourer then decides as he likes which commodities he wants to buy, and returns to the capitalist in the form of money the draft he had given him on his merchandise—after he, the labourer, has appropriated his aliquot share of the merchandise—Destutt imagines that the capitalist “draws back” the wages, because the same piece of money flows back to him, And on the same page Monsieur Destutt remarks that the phenomenon of circulation is “little known” (p. 239). Totally unknown to himself, at any rate. If Destutt had not explained “the drawing back of the total wages” in this peculiar way, the nonsense might at least have been conceivable in a way we shall mention now.
(But before that, a further illustration of his sapience. If I go into a shop and the shopkeeper gives me £1 and I then use this £1 to buy commodities to the value of £1 in his shop, he then draws back the £1 again. No one will assert that he has enriched himself by this operation. Instead of £1 in money and £1 in commodities he now has only £1 in money left. Even if his commodity was only worth l0s. and he sold it to me for £1, in this case too he is 10s. poorer than he was before the sale, even though he has drawn back the whole of one pound sterling.)
If C, the capitalist, gives the labourer £1 wages, and afterwards sells him commodities to the value of 10s. for £1, he would certainly have made a profit of 10s. because he had sold the commodities to the labourer 10s. too dear. But from Monsieur Destutt’s point of view even so it could not be understood how any profit from this transaction arises for C. (The profit arises from the fact that he has paid him less wages—in fact has given the labourer a smaller aliquot part of the product in exchange for his labour—than he gives him nominally.) If he gave the labourer 10s. and sold his commodity for 10s., he would be just as rich as if he gives him £1 and sells him his 10s. commodity for £1. Moreover, Destutt bases his argument on the assumption of necessary wages. In the best case any profit here would only be explained by the labourer having been cheated over his wages.
This case 2 therefore shows that Destutt has absolutely forgotten what a productive labourer is, and has not the slightest idea of the source of profit. At most it could be said that the capitalist makes a profit by raising the price of the products above their value, in so far as he sells them not to his own wage-labourers but to the wage-labourers of idle capitalists. But since the consumption of unproductive labourers is in fact only a part of the consumption of idle capitalists, we come now to case 3.
3. The industrial capitalist sells his products “too dear”, above their value, to the
“idle capitalists, who pay them with the part of their revenue which they have not already given to the labourers directly employed by them, so that all the rent which they annually pay to the idle capitalists comes back to them” (the industrial capitalists) “in one or other of these ways”.
Here again there is the childish conception of the rent, etc., coming back, as there was above of the drawing back of the whole of the wages. For example, C pays £100 rent for land and money to I (the idle capitalist). The £100 are means of payment for C. They are means of purchase for I, who with them draws £100 of commodities from C’s warehouse. Thus the £100 return to C as the transformed form of his commodity. But he has £100 less in commodities than before. Instead of giving them direct to I, he has given him £100 in money, with which the latter buys £100 of his commodities. But he buys these £100 worth of commodities with C’s money, not with his own funds. And Tracy imagines that in this way the rent which C has paid over to I comes back to C. What imbecility! First absurdity.
Secondly, Destutt himself has told us that rent of land and interest on money are only deductions from the industrial capitalist’s profit, and therefore only quotas of profit given away to the idler. On the assumption that C drew back this whole quota ||404| to himself by some sort of trick, though not in one or other of the ways described by Tracy —in other words, that capitalist C paid no rent at all, neither to the landlord nor to the moneyed capitalist—lie would retain his whole profit, but the question is precisely how to explain whence he derived the profit, how he has made it, how it arose. As this cannot be explained by his having or retaining it without giving a quota of it to landlord and moneyed capitalist, just as little can it be explained by the fact that either part or the whole of the quota of profit which he has given away to the idler under one category or another is entirely or partially, in one way or another, dragged back by him from the hand of the idler into his own hand again. Second absurdity!
Let us disregard these absurdities. C has to pay I —the idler—rent to the amount of £100 for the land or the capital that he has rented (loué) from him. He pays the £100 out of his profit (whence the latter arises we do not yet know). Then he sells his products to I, which are consumed either by I directly or through his retainers (the unproductive wage-labourers), and he sells them to him too dear, for example, 25 per cent above their value. He sells him products worth £80 for £100. In this transaction C undoubtedly makes a profit of £20. He has given I a draft for £100 worth of commodities. When the latter presents the draft, he gives his commodities only to the value of £80, by fixing the nominal price of his goods 25 per cent above their value. Even if I would be satisfied with consuming commodities worth £80 and paying £100 for them, C’s profit could never rise above 25 per cent. The prices and the fraud would be repeated every year. But I wants to consume to the value of £100. If he is a landlord, what is he to do? He mortgages property to C for £25, in exchange for which C gives him commodities worth £20—for he sells his commodities at 25 per cent (one-quarter) above their value, If he is a money-lender, he hands over to C £25 of his capital, in exchange for which C gives him commodities worth £20.
Let us assume that the capital (or value of the land) was lent at 5 per cent. Then it amounted to £2,000. Now it amounts to only £1,975. His rents are now £98 3/4. And so it would go on, with I constantly consuming commodities to the real value of £100, but his rents constantly falling, because in order to have commodities to the value of £100 he must always consume an ever greater part of his capital itself. Thus bit by bit C would get the whole of I’s capital into his own hands, and the rents of it together with the capital—that is to say, along with the capital itself he would appropriate that portion of the profit which he makes from borrowed capital. Mr. Destutt evidently has this process in view, for he continues:
“But, I will he told, if that is so and if industrial entrepreneurs in effect reap each year more than they have sown, in a very short time they must have attracted to themselves the whole public fortune, and soon there would be nothing left in a State but labourers without funds and capitalist entrepreneurs. That is true, and things would in fact be so if the entrepreneurs or their heirs did not take the course of resting as they grow wealthy, and did not thus continually go to recruit the class of idle capitalists; and even in spite of this frequent emigration, it still happens that when industry has been at work in a country for some time without too great disturbances, its capitals are always being augmented not only because of the growth of the total wealth, but also in a much greater proportion… It might be added this effect would he felt even more strongly but for the immense levies that all governments impose each year on the industrious class by means of taxes (pp. 240-41),
And Monsieur Destutt is quite right up to a certain point, although not at all in what he wants to explain. In the period of the declining Middle Ages and rising capitalist production the rapid enrichment of the industrial capitalists is in part to be explained by the direct fleecing of the landlords. As the value of money fell, as a result of the discoveries in America, the farmers paid them nominally, but not really, the old rent, while the manufacturers sold them commodities above their value —not only on the basis of the higher value of money. Similarly in all countries, as for example the Asiatic, where the principal revenue of the country is in the hands of landlords, princes, etc., in the form of rent, the manufacturers, few in number and therefore not restricted by competition, sell them their commodities at monopoly prices, and in this way appropriate a part of their revenue; they enrich themselves ||405| not only by selling to them “unpaid” labour, but by selling the commodities at over the quantity of labour contained in them. Only Monsieur Destutt is again wrong if he believes that money-lenders let themselves be fleeced in this way. On the contrary, they share, through the high interest they draw, in those high profits, in that fleecing, directly and indirectly.
The following passage shows that this phenomenon was in Monsieur Destutt’s mind:
“One has only to see how weak they” (the industrial capitalists) “were throughout all Europe three or four centuries ago, in comparison with the immense wealth of all the powerful men of those days, and how today they have increased and grown in number, while the others have diminished” (l.c., p. 241).
What Monsieur Destutt wanted to explain to us was the profits and the high profits of industrial capital. He has explained it in two ways. First, because the money which these capitalists pay out in the form of wages and rents flows back to them again, since these wages and rents buy products from them. In fact, what this explains is only why they do not pay wages and rents twice, first in the form of money, and secondly in the form of commodities to the same amount in money. The second explanation is that they sell their commodities above their price, they sell them too dear, first to themselves, thus cheating themselves; secondly to the labourers, thus again cheating themselves, as Monsieur Destutt tells us that the consumption of the wage-labourers “must be regarded as the consumption of those who pay them” (p. 235); finally, in the third place, to the gentlemen living on rents, whom they fleece, and this would in fact explain why the industrial capitalists always keep for themselves a larger part of their profit, instead of giving it away to the idlers. It would show why the distribution of the total profit between the industrial and non-industrial capitalists is increasingly to the advantage of the former at the cost of the latter. It would not help one iota to an understanding of whence this total profit comes. Let us assume that the industrial capitalists had got the whole of it for themselves, the question remains where does it come from?
Therefore Destutt has not only given no answer, but he has only revealed that he thinks the reflux of the money is a reflux of the commodity itself. This reflux of money means only that the capitalists first pay wages and rents in money, instead of paying them in commodities; that their commodities are bought with this money and hence they have paid in commodities in this roundabout way. This money therefore constantly flows back to them, but only to the extent that commodities to the same money value are definitively taken from them and fall to the share of the consumption of the wage-labourers and drawers of rent.
Monsieur Destutt (in a really French way—similar exclamations of astonishment about himself are to be found in Proudhon) is altogether astonished at the “clarity” which this
“way of looking at the consumption of our wealth…sheds on the whole progress of society. Whence comes this consistency and this lucidity? From the fact that we have lighted upon the truth. This recalls the effect of those mirrors in which objects are outlined clearly and in their right proportions when one is in the right spot from which to view them, and in which everything appears confused and disjointed when one is too near or too far” (pp.242-43).
Later, quite incidentally, Monsieur Destutt recalls (from Adam Smith) the real course of things, which however in essence he only repeats as a phrase which he has not understood—as otherwise he (this Member of the Institute of France) would have been unable to shed the streams of light referred to above. Destutt writes (p. 246):
“Whence come their revenues to these idle men? Is it not from the rent which those who set their capitals to work pay to them out of their profits, that is to say, those who use their funds to pay labour which produces more than it costs, in a word, the men of industry? ”
<Aha! So the rents (and also their own profits) which the industrial capitalists pay to the idle capitalists for the funds borrowed from the latter come from their using these funds to pay wages to labour “which produces more than it costs”; that is to say, therefore, whose product has more value than is paid to them —in other words, profit comes from what the wage-labourers produce over and above what they cost; a surplus-product which the industrial capitalist appropriates for himself, and of which he gives away only one part to those receiving rent from land and money.>
Monsieur Destutt concludes from this: not that we must go back to these productive labourers, but that we must go back to the capitalists who set them in motion.
“It is these who really maintain even the labourers employed by the others” (p. 246).
To be sure; inasmuch as they directly exploit labour, and the idle capitalists only do it through their agency. And in this sense it is correct to regard industrial capital as the source of wealth. ||406|
“We must therefore always go back to these” (the industrial capitalists) “in order to find the source of all wealth” (p. 246).
“In the coarse of time, wealth has accumulated in greater or less quantity, because the result of previous labours has not been entirely consumed as soon as produced. Some of the possessors of this wealth are content to draw a rent from it and consume it. These are those whom we have called idle. The other more active ones set to work both their own funds and those which they borrow. They employ them to pay labour which reproduces them with a profit.”< Hence, therefore, not only the reproduction of this fund, but [the production ] of the surplus, which forms profit.> “With this profit they pay for their own consumption and defray that of others. By these consumptions themselves” (their own and that of the idlers? Here again the same absurdity) “their funds come back to them somewhat increased, and they start again. That is what constitutes circulation” (pp. 246-47).
The inquiry into the “productive labourer”, and the result that only one whose buyer is an industrial capitalist is a productive labourer—one whose labour produces profit for its immediate buyer—led Monsieur Destutt to the conclusion that in fact the industrial capitalists are the sole productive labourers in the higher meaning of the word.
“They” (the industrial capitalists) “who live on profits maintain all the others and alone augment the public fortune and create all our means of enjoyment. That must be so, because labour is the source of oil wealth and because they alone give a useful direction to current labour, by making a useful application of accumulated labour” (p. 242).
That they give “a useful direction to current labour” in fact means only that they employ useful labour, labour which results in use-values. But that they make “useful application of accumulated labour” —if it is not to mean the same thing again, that they make industrial use of accumulated wealth for the production of use-values —means that they make “useful application of accumulated labour” by buying with it more current labour than is contained in it. In the passage just cited Destutt naïvely epitomises the contradictions which make up the essence of capitalist production. Because labour is the source of all wealth, capital is the source of all wealth; the actual propagator of wealth is not he who labours, but he who makes a profit out of another’s labour. The productive powers of labour are the productive powers of capital.
“Our faculties are our only original wealth; our labour produces all other wealth, and all labour, properly directed, is productive” (p. 243).
Hence, according to Destutt, it follows as a matter of course that the industrial capitalists “maintain all the others and alone augment the public fortune and create all our means of enjoyment”.
Our faculties (facultés) are our only original wealth, therefore the faculty of labour is not wealth. Labour produces all other wealth, that means: it produces wealth for all others except for itself, and it itself is not wealth, but only its product is wealth. All properly directed labour is productive; that means: all productive labour, all labour which yields profit to the capitalist, is properly directed.
The following remarks of Destutt —which refer not to the different classes of consumers, but to the different nature of the articles of consumption —are a very good paraphrase of Adam Smith’s views in Book II, Chapter III, at the end of which he inquires into what kind of (unproductive) expenditure, that is to say, of individual consumption, consumption of revenue, is more or less advantageous. He opens this inquiry (Garnier, t. II, p. 345) with the words:
“As frugality increases, and prodigality diminishes, the public capital, so the conduct of those whose expense just equals their revenue, without either accumulating or encroaching, neither increases nor diminishes it. Some modes of expense, however, seem to contribute more to the growth of public opulence than others” [Wealth of Nations, O.U.P, edition, Vol. I, pp. 387-88].
Destutt summarises Smith’s exposition as follows:
“If consumption is very different according to the kind of consumer, it varies also according to the nature of the things consumed. All indeed represent labour, but its value is fixed more securely in some than in others. As much trouble may have been taken in making a firework as in finding and cutting a diamond, and consequently one may have as much value as the other. But when I have bought, paid for and used both, at the end of half an hour I shall have nothing left of the first, and the second can still be a resource for my grandchildren a century later..,, It is the same with what ||4O7| are called” that is, (by Say) “immaterial products. An invention is of eternal utility. An intellectual work, a picture also have a utility that is more or less durable, while that of a ball, a concert, a play is instantaneous and disappears immediately. The same can be said of the personal services of doctors, lawyers, soldiers, domestic servants, and in general of all who are called employed persons. Their utility is that of the moment of need… The most ruinous consumption is the quickest, because it is that which destroys more labour in the same time, or an equal quantity of labour in less time; in comparison with it, consumption which is slower is a kind of treasuring up, since it leaves to times to come the enjoyment of part of the present sacrifices… Everyone knows that it is more economical to get, for the same price, a coat that will last three years than a similar one which will only last three months” (pp. 243-44).
Most of the writers who contested Smith’s view of productive and unproductive labour regard consumption as a necessary spur to production. For this reason they regard the wage-labourers who live on revenue—the unproductive labourers whose hire does not produce wealth, but is itself a new consumption of wealth—as equally productive even of material wealth as the productive labourers, since they widen the field of material consumption and therewith the field of production. This was therefore for the most part apologetics from the standpoint of bourgeois economy, partly for the rich idlers and the “unproductive labourers” whose services they consume, partly for “strong governments” whose expenditure is heavy, for the increase of the State debts, for holders of church and State benefices, holders of sinecures, etc. For these “unproductive labourers”—whose services figure in the expenses of the idle rich—all have in common the fact that although they produce “immaterial products”, they consume “material products”, that is, products of the productive labourers.
Other economists, like Malthus, admit the distinction between productive labourers and unproductive, but prove to the industrial capitalist that the latter are as necessary to him as the former, even for the production of material wealth.
To say that production and consumption are identical or that consumption is the purpose of all production or that production is the pre-condition of all consumption, is of no help in this connection. What—apart from the tendentious purpose—is at the bottom of the whole dispute is rather this:
The labourer’s consumption on the average is only equal to his costs of production, it is not equal to his output. He therefore produces the whole surplus for others, and so this whole part of his production is production for others. Moreover, the industrial capitalist who drives the labourer to this overproduction (that is, production over and above his own subsistence needs) and makes use of all expedients to increase it to the greatest extent possible—to increase this relative overproduction as distinct from the necessary production—directly appropriates the surplus-product for himself. But as personified capital he produces for the sake of production, he wants to accumulate wealth for the sake of the accumulation of wealth. In so far as he is a mere functionary of capital, that is, an agent of capitalist production, what matters to him is exchange-value and the increase of exchange-value, not use-value and its increase. What he is concerned with is the increase of abstract wealth, the rising appropriation of the labour of others. He is dominated by the same absolute drive to enrich himself as the miser, except that he does not satisfy it in the illusory form of building up a treasure of gold and silver, but in the creation of capital, which is real production. If the labourer’s overproduction is production for others, the production of the normal capitalist, of the industrial capitalist as he ought to be, is production for the sake of production. It is true that the more his wealth grows, the more he falls behind this ideal, and becomes extravagant, even if only to show off his wealth. But he is always enjoying wealth with a guilty conscience, with frugality and thrift at the back of his mind. In spite of all his prodigality he remains, like the miser, essentially avaricious.
When Sismondi says that the development of the productive powers of labour makes it possible for the labourer to obtain ever-increasing enjoyments, but that these very enjoyments, if put at his disposal, would make him unfit for labour (as a wagelabourer)*; it is equally true that the industrial capitalist becomes more or less unable to fulfill his function as soon as he personifies the enjoyment of wealth, as soon as he wants the accumulation of pleasures instead of the pleasure of accumulation.
He is therefore also a producer of overproduction, production for others. Over against this overproduction on one side must be placed overconsumption on the other, production for the sake of production must be confronted by consumption for the sake of consumption. What the industrial capitalist has to surrender to landlords, the State, creditors of the State, the church, and so forth, who only consume revenue, ||408| is an absolute diminution of his wealth, but it keeps his lust for enrichment going and thus preserves his capitalist soul. If the landlords, moneylenders, etc., were to consume their revenue also in productive instead of unproductive labour, the purpose would not be achieved. They would become themselves industrial capitalists, instead of representing the function of consumption as such. With regard to this point we shall examine later an extremely comical dispute between a Ricardian and a Malthusian.
Production and consumption are in their nature [an sich] inseparable. From this it follows that since in the system of capitalist production they are in fact separated, their unity is restored through their opposition—that if A must produce for B, B must consume for A. Just as we find with every individual capitalist that he favours prodigality on the part of those who are co-partners with him in his revenue, so the older Mercantile system as a whole depends on the idea that a nation must be frugal as regards itself, but must produce luxuries for foreign nations to enjoy. The idea here is always: on the one side, production for production, therefore on the other side consumption of foreign production. This idea of the Mercantile system is expressed for example by Dr. Paley, Moral Philosophy, Vol. II, Ch.XI:
“… A laborious, frugal people, ministering to the demands of an opulent, luxurious nation.” [W. Paley, Principles of Moral and Political Phylosophy, Edinburgh, 1788, Vol. II, p. 359.]
“They” (our politicians, Garnier, etc.) says Destutt, “put forward as a general principle that consumption is the cause of production, that therefore it is good for it to be very plentiful. They declare that it is this which constitutes a great difference between public economy and the economy of individuals” (l.c., pp. 249-50).
One more fine phrase:
“The poor nations are those where the people are comfortably off; and the rich nations, those where the people are generally poor” (l.c., p. 231).
Henri Storch, Cours d’économie politique, etc., edited by Jean— Baptiste Say, Paris, 1823 (Lectures read to Grand Duke Nicholas, concluded in 1815), Vol. III.
After Garnier, Storch is in fact the first writer to polemise against Adam Smith’s distinction between productive and unproductive labour on a new basis.
He distinguishes the “internal goods or the elements of civilisation”, with the laws of whose production the “Theory of Civilisation” has to concern itself, from material goods, component parts of material production (l.c., t. III, p. 217).
(On p age 136 of t. I [he says]: “It is evident that man only attains to the production of wealth in so far as he is endowed with internal goods, that is to say, in so far as he has developed his physical, intellectual and moral faculties, which implies the means for their development such as social institutions, etc. Thus the more civilised a people, the more its national wealth can grow.” The reverse is also true.)
Against Smith:
“Smith…excludes from productive labours all those which do not contribute directly to the production of wealth: but also he only considers the national wealth.” His error is “not to have distinguished immaterial values from wealth” (t. III, p. 218).
And that is really all there is to it. The distinction between productive labours and unproductive labours is of decisive importance for what Smith was considering: the production of material wealth, and in fact one definite form of that production, the capitalist mode of production. In spiritual production another kind of labour appears as productive. But Smith does not take it into consideration. Finally, the interaction and the inner connection between the two kinds of production also do not fall within the field be is considering; moreover, they can only lead to something more than empty phrases when material production is examined in its own form. In so far as he speaks of workers who are not directly productive, this is only to the extent that they participate directly in the consumption of material wealth but not in its production.
With Storch himself the theory of civilisation does not get beyond trivial phrases, although some ingenious observations slip in here and there—for example, that the material division of labour is the pre-condition for the division of intellectual labour. How much it was inevitable that Storch could not get beyond trivial phrases, how little he had even formulated for himself the task, let alone its solution, is apparent from one single circumstance. In order to examine the connection between spiritual ||409| production and material production it is above all necessary to grasp the latter itself not as a general category but in definite historical form. Thus for example different kinds of spiritual production correspond to the capitalist mode of production and to the mode of production of the Middle Ages. If material production itself is not conceived in its specific historical form, it is impossible to understand what is specific in the spiritual production corresponding to it and the reciprocal influence of one on the other. Otherwise one cannot get beyond inanities. This because of the talk about “civilisation”.
Further: from the specific form of material production arises in the first place a specific structure of society, in the second place a specific relation of men to nature. Their State and their spiritual outlook is determined by both. Therefore also the kind of their spiritual production.
Finally, by spiritual production Storch means also all kinds of professional activities of the ruling class, who carry out social functions as a trade. The existence of these strata, like the function they perform, can only be understood from the specific historical structure of their production relations.
Because Storch does not conceive material production itself historically—because he conceives it as production of material goods in general, not as a definite historically developed and specific form of this production—he deprives himself of the basis on which alone can be understood partly the ideological component parts of the ruling class, partly the free spiritual production of this particular social formation. He cannot get beyond meaningless general phrases. Consequently, the relation is not so simple as he presupposes. For instance, capitalist production is hostile to certain branches of spiritual production, for example, art and poetry. If this is left out of account, it opens the way to the illusion of the French in the eighteenth century which has been so beautifully satirised by Lessing. Because we are further ahead than the ancients in mechanics, etc., why shouldn’t we be able to make an epic too? And the Henriade in place of the Iliad!
Storch, however, rightly stresses—with special reference to Garnier, who was actually the father of this attack on Smith —that Smith’s opponents had set about it the wrong way.
“What do his critics do? Far from establishing this distinction” (between immaterial values and wealth), “they succeed in confusing two kinds of value that are so evidently different.”
(They assert that the production of spiritual products or the production of services is material production.)
“In regarding immaterial labour as productive, they assume it is productive of wealth” (that is, directly), “that is to say, of material and exchangeable values, while it produces only immaterial and immediate values: they assume that the products of immaterial labour are subject to the same laws as those of material labour: and yet the former are governed by other principles than the latter” (t, III, p. 218).
The following passages from Storch are to be noted as having been copied from him by later authors:
“From the fact that internal goods are in part the product of services. the conclusion has been drawn that they are no more lasting than the services themselves, and that they were necessarily consumed as they were produced” (l.c., t. III, p. 234). “The original” [internal] “goods, far from being destroyed by the use made of them, expand and grow with use, so that even the consumption of them augments their value” (l.c., p. 236). “Internal goods are susceptible of being accumulated like wealth, and of forming capitals that can be used in reproduction”, etc. (l.c., p. 236). “Material labour must be divided up and its products must be accumulated before the dividing up of immaterial labour can be thought of” (p. 241).
These are nothing but general superficial analogies and relations between spiritual and material wealth. So for example is his observation that undeveloped nations borrow their spiritual capitals from abroad, just as materially undeveloped nations borrow their material capitals (l.c., p. 306); and that the division of immaterial labour depends on the demand for it, in a word, on the market, etc. (p. 246).
Here are the passages which have actually been copied:
||410| “The production of internal goods, far from diminishing the national wealth by the consumption of material products it requires, is on the contrary a powerful means of increasing it; as the production of wealth, in its turn, is an equally powerful means of increasing civilisation” (l.c., p. 517). “It is the equilibrium of the two kinds of production that causes the advance of national prosperity” (l.c., p. 521).
According to Storch, the physician produces health (but also illness), professors and writers produce enlightenment (but also obscurantism), poets, painters, etc., produce good taste (but also had taste), moralists, etc., produce morals, preachers religion, the sovereign’s labour security, and so on (pp. 347-50). It can just as well be said that illness produces physicians, stupidity produces professors and writers, lack of taste poets and painters, immorality moralists, superstition preachers and general insecurity produces the sovereign. This way of saying in fact that all these activities, these services, produce a real or imaginary use-value is repeated by later writers in order to prove that they are productive workers in Smith’s sense, that is to say, that they directly produce not products suigeneris* but products of material labour and consequently immediate wealth. In Storch there is not yet this nonsense, which for that matter can be reduced to the following:
1. that the various functions in bourgeois society mutually presuppose each other;
2. that the contradictions in material production make necessary a superstructure of ideological strata, whose activity— whether good or bad—is good, because it is necessary;
3. that all functions are in the service of the capitalist, and work out to his “benefit”;
4. that even the most sublime spiritual productions should merely be granted recognition, and apologies for them made to the bourgeoisie, that they are presented as, and falsely proved to be, direct producers of material wealth.
Nassau William Senior, Principes fondamentaux de 1’économie politique, traduit par Jean Arrivabene, Paris, 1836. Nassau Senior mounts his high horse:
“According to Smith, the lawgiver of the Hebrews was an unproductive labourer” (l.c., p. 198).
Was it Moses of Egypt or Moses Mendelssohn? Moses would have been very grateful to Mr. Senior for calling him a “productive labourer” in the Smithian sense. These people are so dominated by their fixed bourgeois ideas that they would think they were insulting Aristotle or Julius Caesar if they called them “unproductive labourers”. Aristotle and Caesar would have regarded even the title “labourers” as an insult.
“Does not the doctor who, by a prescription, heals a sick child and thus assures him many years of life, produce a durable result?” (l.c.)
Rubbish! If the child dies, the result is no less durable. And if the child is no better after treatment, the doctor’s service has to be paid for just the same. According to Nassau doctors should only be paid in so far as they cure, and lawyers in so far as they win lawsuits, and soldiers in so far as they are victorious. But now he gets really lofty:
“Did the Dutch produce temporary results by fighting against the tyranny of the Spaniards, or the English by revolting against a tyranny that threatened to be even more terrible?” (l.c., p. 198).
Belletristic trash! Dutch and English revolted at their own cost. No one paid them for labouring “in revolution”. But with either productive or unproductive labourers there is always a buyer and seller of labour. Hence what rubbish!
These insipid literary flourishes used by these fellows when they polemise against Smith show only that they are representatives of the “educated capitalist”, while Smith was the interpreter of the frankly brutal bourgeois upstart. The educated bourgeois and his mouthpiece are both so stupid that they measure the effect of every activity by its ||411| effect on the purse. On the other hand, they are so educated that they grant recognition even to functions and activities that have nothing to do with the production of wealth; and indeed they grant them recognition because they too “indirectly” increase, etc., their wealth, in a word, fulfill a “useful” function for wealth.
Man himself is the basis of his material production, as of any other production that he carries on. All circumstances, therefore, which affect man, the subject of production, more or less modify all his functions and activities, and therefore too his functions and activities as the creator of material wealth, of commodities. In this respect it can in fact be shown that all human relations and functions, however and in whatever form they may appear, influence material production and have a more or less decisive influence on it.
“There are countries where it is quite impossible for people to work the land unless there are soldiers to protect them. Well, according to Smith’s classification, the harvest is not produced by the joint labour of the man who guides the plough and of the man at his side with arms in hand: according to him, the ploughman alone is a productive worker, and the soldier’s activity is unproductive” (l.c., p. 202).
First, that is not true. Smith would say that the soldier’s protective care is productive of defence, but not of the corn. If order was restored in the country, the ploughman would produce the corn just as before, without being compelled to produce the maintenance, and therefore the life, of the soldiers into the bargain. The soldier belongs to the incidental expenses of production, in the same way as a large part of the unproductive labourers who produce nothing themselves, either spiritual or material, but who are useful and necessary only because of the faulty social relations—they owe their existence to social evils.
However, Nassau might say: if a machine is invented that makes nineteen out of twenty labourers superfluous, then these nineteen too are incidental expenses of production. But the soldier can drop out although the material conditions of production, the conditions of agriculture as such, remain unchanged. The nineteen labourers can only drop out if the labour of the one remaining labourer becomes twenty times more productive, that is to say, only through a revolution in the actual material conditions of production. Moreover, Buchanan already observes:
“If the soldier, for example, be termed a productive labourer because his labour is subservient to production, the productive labourer might, by the same rule, lay claim to military honours; as it is certain that without his assistance no army could ever take the field to fight battles or to gain victories” (David Buchanan, Observations on the Subjects Treated of in Dr. Smith’s Inquiry, etc., Edinburgh, 1814, p. 132).
“The wealth of a nation does not depend on a numerical proportion between those who produce services and those who produce values, but on the proportion between them that is most fitted to render the labour of each more efficacious” (Senior, l.c., p. 204).
Smith never denied this, as he wants to reduce the “necessary unproductive labourers like State officials, lawyers, priests, etc., to the extent in which their services are indispensable. And this is in any case the “proportion” in which they make the labour of productive labourers most efficacious. As for the other “unproductive labourers”, whose labours are only bought voluntarily by anyone in order to enjoy their services, that is, as an article of consumption of his own choice, different cases must be distinguished. If the number of these labourers living on revenue is large in proportion to the “productive” labourers, it is, either, because the total wealth is small or is of a one-sided character—for example the medieval barons with their retainers. Instead of consuming manufactured goods on any considerable scale, they and their retainers consumed their agricultural products. When instead of these products they began to consume manufactured goods, the retainers had to be set to labour. The number of those living on revenue was only large because a large part of the annual product was not reproductively consumed. Along with this, the total population was small. Or, the number of those living on revenue is large, because the productivity of the productive labourers is large, and therefore their surplus-produce upon which the retainers feed. In this case the labour of the productive labourers is not productive because there are so many retainers, but on the contrary—there are so many retainers because the labour of the productive labourers is so productive.
Taking two countries with equal populations and an equal development of the productive powers of labour, it would always be true to say, with Adam Smith, that the wealth of the two countries must be measured according to the proportion of productive and of unproductive labourers. For that means only that in the country which has a relatively greater number of productive labourers, a relatively greater amount of the annual revenue is reproductively consumed, and consequently a greater mass of values is produced annually. Therefore Mr. Senior has only paraphrased a statement of ||412| Adam’s, instead of counterposing it with a novelty. Moreover, he himself here makes the distinction between the producers of services and the producers of values, and so it is the same with him as with most of those who polemise against the Smithian distinction —they accept and themselves use this distinction, at the same time as they reject it.
It is characteristic that all “unproductive” economists, who achieve nothing in their own speciality, [come out] against the distinction between productive labour and unproductive labour. However, in relation to the bourgeois, it is on the one hand an expression of their servility that they present all functions as serving the production of wealth for him; then on the other hand, they present the bourgeois world as the best of all possible worlds, in which everything is useful, and the bourgeois himself is so educated that he understands this.
In relation to the labourers, [what it expresses is:] it is quite all right that the unproductive ones consume the great mass [of products], since they contribute just as much as the labourers to the production of wealth even though in their own way.
Finally however Nassau blurts out, showing that he has not understood one word of the essential distinction made by Smith:
“It seems, in truth, that in this case Smith’s attention was entirely absorbed by the position of the great landowners, the only ones to whom his observations on the unproductive classes can in general be applied. I do not know how otherwise to account for his supposition that capital is only employed to maintain productive labourers, while unproductive labourers live from revenue, The greater number of those whom be calls preeminently unproductive—teachers, and those who govern the State—are maintained at the expense of capital, that is to say, by means of what is spent in advance for reproduction” (l.c., pp. 204-05).
This, in fact, is past all understanding. Mr. Nassau’s discovery that State and schoolmasters live at the cost of capital and not at the cost of revenue needs no further commentary. Does Mr. Senior mean by it that they live on profit from capital, and in this sense at the expense of capital? If so, he only forgets that revenue from capital is not capital itself, and that this revenue, the result of capitalist production, is not spent in advance for reproduction, of which on the contrary it is the result. Or does he mean that it is so because certain taxes enter into the production costs of particular commodities? That is, enter into the expenses of certain branches of production? Then he should know that this is only a form of levying taxes on revenue.
With reference to Storch Nassau Senior, the sophist, also remarks:
“Mr. Storch is doubtless in error when he expressly asserts that these results” (health, good taste, etc.) “like other things which have value, form part of the revenue of those who possess them, and that they are also exchangeable” (that is, in so far as they can be bought from their produces). “If this was so, if good taste, morality, religion, were really things which could be bought, wealth would have an importance very different from that given to it by the economists. What we buy is not health, knowledge or piety. The doctor, the priest, the teacher…can only produce the instruments by means of which with greater or less certainty and perfection, these ulterior results will be produced… If in each particular case the most suitable means to obtain success have been employed, the producer of these means has a right to a reward, even when he has not succeeded or when he has not produced the results expected. The exchange is completed as soon as the advice or the lesson has been given and the payment for it has been received” (l.c., pp. 288-89).
Finally, the great Nassau himself adopts the Smithian distinction. For in fact he distinguishes between “productive consumption and unproductive consumption” (p. 206) instead of between productive and unproductive labour. But the object of consumption is either a commodity—which is not referred to here —or direct labour.
Consumption would be productive if it employed labour that either produced labour-power itself (which for example the schoolmaster’s or the physician’s labour might do) or reproduced the value of the commodities with which it was bought. The consumption of labour which accomplished neither the one nor the other of these would be unproductive. And indeed Smith says: the labour which can only be consumed productively (i.e., industrially) I call productive labour, and that which can be consumed unproductively, whose consumption is by its nature not industrial consumption, I call unproductive labour. Mr. Senior has therefore proved his genius by giving things new names.
In general, Nassau copies from Storch.
||413| Pellegrino Rossi, Cours d’économie politique (année 1836 to 1837), édit. Bruxelles, 1842.
Here is wisdom!
“The indirect means” (of production) “include everything that furthers production, everything which tends to remove an obstacle, to make production more active, more speedy, easier.” (Earlier, p. 268, be says: “There are direct and indirect means of production. That is to say, there are means which are a cause sine qua non of the effect in question, forces which make this production. There are others which contribute to production, but do not make it. The former can act even by themselves, the latter can only help the former to produce.”) “.., The whole labour of government is an indirect means of production, … The man who has made this hat must surely recognise that the gendarme who goes by in the street, the judge who sits in his court, the gaoler who takes over a criminal and keeps him in prison, the army which defends the frontier against enemy invasions, contribute to production” (p. 272).
What a pleasure it must be for the hatter, that everyone gets moving so that he can produce and sell this hat! Inasmuch as he makes these gaolers, etc., contribute indirectly, not directly, to material production, Rossi in fact makes the same distinction as Adam (lecture XII).
In the following lecture XIII, Rossi takes the field particularly against Smith —indeed rather [the same as] his predecessors.
The erroneous distinction between productive labourers and unproductive labourers, he says, arises for three reasons.
1. “Among the buyers, some buy products or labour for their own direct consumption; others only buy them in order to sell the new products that they obtain by means of the products and the labour that they have acquired.”
The determining factor for the former is the use-value; for the latter, the exchange-value. But in paying attention only to exchange-value, one falls into Smith’s error.
“My servant’s labour is unproductive for me: let us admit that for a moment; is it unproductive for him?” (l.c., pp. 275-76).
As all capitalist production rests on the direct purchase of labour in order to appropriate a part of it without purchase in the process of production; which part however is sold in the product—since this is the basis of existence of capital, its very essence —is not the distinction between labour which produces capital and that which does not produce it the basis for an understanding of the process of capitalist production? Smith does not deny that the servant’s labour is productive for him. Every service is productive for its seller. To swear false oaths is productive for the person who does it for cash. Forging documents is productive for anyone paid to do it. A murder is productive for a man who gets paid for doing it. The trade of sycophant, informer, toady, parasite, lickspittle, is productive for people who do not perform these “services” gratis. Hence they are “productive labourers”, producers not only of wealth but of capital. The thief, too, who pays himself—just as the law-courts and the State do —“employs his energy, uses it in a particular way, produces a result which satisfies a human need”, i.e., the need of the thief and perhaps also that of his wife and children. Consequently [he is a] productive labourer if it is merely a question of producing a “result” which satisfies a “need”, or as in the cases mentioned above, if selling his “services” is enough to make them “productive”.
2. “A second error has been not to distinguish between direct production and indirect production.” That is why Adam Smith thinks that a magistrate is not productive. But “if production is almost impossible” (without the magistrate’s labour) “is it not clear that this labour contributes to it, if not by direct and material co-operation, at least by an indirect action which cannot be left out of account?” (l.c., p. 276).
It is precisely this labour which participates indirectly in production (and it forms only a part of unproductive labour) that we call unproductive labour. Otherwise we would have to say that since the magistrate is absolutely unable to live without the peasant, therefore the peasant is an indirect producer of justice! And so on. Utter nonsense! There is yet another point of view hearing on the division of labour, with which we shall deal later.
[3.] “The three principal facts of the phenomenon of production have not been carefully distinguished: the force or productive means, the application of this force, the result.”
We buy a clock at a clockmarker’s; we are only interested in the result of the labour. The same applies when we buy a coat at the tailor’s. But:
“There are still people, men of the old school, who do not understand things in this way. They make a workman come to their home and get him to make such-and-such a piece of clothing, giving him the material and everything he needs for this labour. What is it that these people buy? They buy a force” <hut also an application of this force>, “a means to produce results of some kind at their peril and risk… The object of the contract is the purchase of a force.”
(The point here is only that these “men of the old school” make use of a mode of production that has nothing in common with the capitalist mode, and in which all development of labour’s productive powers, such as capitalist production brings with it, is impossible. It is characteristic that for Rossi and all the rest of them such a specific distinction is inessential.)
In the case of a servant, “you buy a force”, capable of doing “a thousand different things. The results it produces depend on the use that you make of the force” (p. 276).
All this has nothing to do with the matter.
||414| “To buy or to hire…a definite application of this force ….You do not buy a product, you do not buy the result that you have in view.” Will the lawyer’s pleading win your case? Who knows? “What is certain. what passes between you and your lawyer, is that, for a certain value, he will go on a certain day to a certain place to speak on your behalf, to apply his intellectual powers in your interests” (p. 276).
<One further point on this. In lecture XII, p. 273, Rossi says:
“I am far from seeing producers only in those who pass their hives in making cotton cloth or shoes. I honour labour, whatever it may be…but this respect should not be the exclusive privilege of the manual labourer.”
Adam Smith does not do this. For him, a person who produces a book, a painting, a musical composition or a statue, is a “productive labourer” in the second sense, although the person who improvises, recites, plays a musical instrument, etc., is not. And Adam Smith treats services, in so far as they directly enter into production, as materialised in the product, both the labour of the manual labourer and that of the manager, clerk, engineer, and even of the scientist in so far as he is an inventor, an indoor or outdoor labourer for the workshop. In dealing with the division of labour, Smith explains how these operations are distributed among different persons; and that the product, the commodity, is the result of their co-operative labour, not of the labour of any individual among them. But the “spiritual” labourers à la Rossi are anxious to justify the large share which they draw out of material production.>
After this discourse, Rossi continues:
“Thus in exchange transactions attention is fixed on one or other of the three principal facts of production. But can these different forms of exchange deprive certain products of the character of wealth and deprive the exertions of a class of producers of the quality of being productive labours? Clearly, there is no link between these ideas such as would justify a deduction of this kind. Because instead of buying the result, I buy the force necessary to produce it, why should the action of the force not be productive and the product not be wealth? Take again the example of the tailor. Whether one buys ready-made clothes from a tailor, or whether one gets them from a jobbing tailor who has been given the material and a wage, as far as the results are concerned the two actions are perfectly similar. No one will say that the former is a productive labour and the latter an unproductive labour; only in the second case the man who wants a coat has been his own entrepreneur. Well, from the standpoint of productive forces what difference is there between the jobbing tailor you have brought to your home and your domestic servant? None” (l.c., p. 277).
Here we have the quintessence of the whole superwise and would-be profound windbag! When Adam Smith, in his second and more superficial presentation, distinguishes between productive and unproductive labour, according to whether it is or is not directly realised in a vendible commodity for the buyer of the labour, he calls the tailor productive in both cases. But according to his more profound definition the latter is an “unproductive” labourer. Rossi only shows that he “evidently” does not understand Adam Smith.
That the “forms of exchange” seem to Rossi to be a matter of complete indifference is just as if a physiologist said that the different forms of life are a matter of complete indifference, that they are all only forms of organic matter. It is precisely these forms that are alone of importance when the question is the specific character of a mode of social production. A coat is a coat. But have it made in the first form of exchange, and you have capitalist production and modern bourgeois society; in the second, and you have a form of handicraft which is compatible even with Asiatic relations or those of the Middle Ages, etc. And these forms are decisive for material wealth itself.
A coat is a coat—that is Rossi’s wisdom. But in the first case the jobbing tailor produces not only a coat, he produces capital; therefore also profit; he produces his master as a capitalist and himself as a wage-labourer. When I have a coat made for me at home by a jobbing tailor, for me to wear, that no more makes me my own entrepreneur (in the sense of an economic category) than it makes the entrepreneur tailor an entrepreneur when ||415| he himself wears and consumes a coat made by his workmen. In one case the purchaser of tailoring labour and the jobbing tailor confront each other as mere buyers and sellers. One pays money and the other supplies the commodity into whose use-value my money is transformed. In this transaction there is no difference at all from my buying the coat in a shop. Buyer and seller confront each other simply as such. In the other case, on the contrary, they confront each other as capital and wage-labour. As for the domestic servant, he has the same determinate form as the jobbing tailor No. II, whom I buy for the sake of the use-value of his labour. Both are simply buyers and sellers. But the way in which the use-value is enjoyed in this case in addition bears a patriarchal form of relation, a relation of master and servant, which modifies the relation in its content, though not in its economic form, and makes it distasteful.
For that matter Rossi only repeats in other phrases what Garnier said:
“When Smith wrote that nothing remained of the servant’s labour, he was mistaken, to a greater extent, we must say, than an Adam Smith should be mistaken. A manufacturer manages himself a larger manufactory which requires very active and very assiduous supervision… This man, not wanting to have unproductive labourers around him, has no servants, He is then compelled to serve himself… What becomes of his productive labour during the time that he has to devote to this so-called unproductive labour? Is it not evident that your serving people perform a labour which enables you to apply yourself to a labour more appropriate to your abilities? Then how can it be said that no trace remains of their services? There remains everything that you do and that you could not have done if they had not replaced you in the service of your person and your home” (l.c., p. 277).
This is once more the labour-saving idea of Garnier, Lauderdale and Ganilh. According to this, unproductive labours would only be productive in so far as they save labour and leave more time for a person’s own labour, whether he is an industrial capitalist or a productive labourer, who can perform a more valuable labour through this replacement by a less valuable labour. A large part of the unproductive labourers who would be excluded by this are menial servants (in so far as they provide only luxury articles), and all unproductive labourers who produce merely enjoyment and whose labour I can only enjoy in so far as I use just as much time to enjoy it as its seller uses to produce it, to provide it for me. In both cases there can be no talk of “saving” labour. Finally, even really labour-saving personal services would only be productive in so far as their consumer is a producer. If he is an idle capitalist, they only save him the labour of doing anything at all: like a slut having her hair curled or her nails cut instead of doing it herself, or a foxhunter employing a stable-lad instead of being his own stable-lad, or someone who is just a glutton keeping a cook instead of cooking for himself.
Then these labourers would include too those who, according to Storch (l.c.), produce “leisure”, through which a man gets free time for pleasure, spiritual labour, and so on. The police-man saves me the time of being my own gendarme, the soldier of defending myself, the government official of governing myself, the shoe cleaner of cleaning my shoes myself, the priest the time required for thinking, and so on.
What is correct in this matter is—the division of labour. Everyone, apart from his productive labour or the exploitation of productive labour, would have a number of functions to fulfill which would not be productive and would in part enter into the costs of consumption. (The real productive labourers have to bear these consumption costs themselves and to perform their unproductive labour themselves.) If these “services” are pleasant, then sometimes the master performs them for the servant, as the jus primae noctis* shows, or as is shown by the labour of ruling, etc., which the masters have always taken on themselves. This in no way obliterates the distinction between productive and unproductive labour, but this distinction itself appears as a result of the division of labour and thus furthers the general productivity of the labourers by making unproductive labour the exclusive function of one section of labourers and productive labour the exclusive function of another section.
But even the labour of a number of menial servants for mere show, to satisfy vanity, “is not unproductive”. Why? Because it produces something, the satisfaction of vanity, ostentation, the exhibition of wealth (l.c., p.277). Here once again we meet the nonsense that every kind of services produces something —the courtesan sensual pleasure, the murderer homicide, etc. Moreover Smith said that every form of this trash has its value. All that is missing ||416| is that these services are rendered gratis. That is not the point in question. But even if they are rendered gratis, they will not increase (material) wealth by a single farthing.
Then the belletristic piffle:
“The singer (they claim), when he has finished singing, leaves us nothing—He leaves us a memory!” (Very fine!) “When you have drunk champagne, what remains?…Whether the consumption does or does not follow closely on the act of production, whether it takes place more or less rapidly, will bring about different economic results, but the fact of consumption, of whatever kind it may be, cannot deprive the product of its character as wealth. There are immaterial products which are of greater durability than certain material products. A palace lasts a long time, but the Iliad is a source of even more durable pleasures” (pp. 277-78).
What bosh!
In the sense in which he is here speaking of wealth, as use-value, it is precisely consumption, whether slow or rapid (its length depends on its own nature and on the nature of the object), and only consumption, that makes the product wealth at all. Use-value has only value for use, and its existence for use is only existence as an object for consumption, its existence is in consumption. Drinking champagne, although this may produce a “hangover”, is as little productive consumption as listening to music, although this may leave behind “a memory”. If the music is good and if the listener understands music, the consumption of music is more sublime than the consumption of champagne, although the production of the latter is a “productive labour” and the production of the former is not.
If we consider all the twaddle against Smith’s distinction between productive and unproductive labour, we find that Garnier, and perhaps also Lauderdale and Ganilh (though the latter said nothing new), exhausted [these polemics]. Those who came later (apart from Storch’s unsuccessful effort) [produced] merely pretentious literary arguments, learned prattle. Garnier is the economist of the Directory and the Consulate, Ferrier and Ganilh are the economists of the Empire. On the other hand Lauderdale, the Earl, was far more concerned to make apologies] or consumers by presenting them as the producers of “unproductive labour”. The glorification of servility and flunkeyism, of tax-gatherers and parasites, runs through the lot of them. Compared with these, the rough cynical character of classical economy stands out as a critique of existing conditions.
One of the most fanatic Malthusians is the Reverend Thomas Chalmers, who thinks that the only means for curing all social ills is the religious education of the labouring class (by which he means ramming down their throats the Malthusian population theory with edifying Christian priestly trimmings); at the same time he is a great defender of all abuses, of wasteful expenditure by the State, of fat livings for the clergy and of wild extravagance on the part of the rich. He laments (p. 260 sqq.) the spirit of the time, the “hard and hunger-bitten economy”; and he wants heavy taxes, a good deal to eat for the “higher” and unproductive workers, clergymen and so on (l.c.). Naturally, he blusters about the Smithian distinction. He devoted a whole chapter to it (Chapter XI) which contains nothing new except that parsimony, etc., only harms “the productive labourers”, but whose tendency is exemplified in the following summing up: This “distinction seems to be nugatory […I; and withal, mischievous in application” (l.c., p. 344). And in what does this mischief consist?
“We have entered at so much length into this argument, because we think the political economy of our days bears a hard and hostile aspect towards an ecclesiastical establishment; and we have no doubt, that to this, the hurtful definition* of Smith has largely […] contributed” (Thomas Chalmers, Professor of Divinity, On Political Economy, in Connexion with the Moral State and Moral Prospects of Society, 2nd ed., London, 1832, p. 346).
By the “ecclesiastical establishment” the cleric means his own church, the Church of England as by law “established”. Moreover he was one of the fellows who had fostered this “Establishment” upon Ireland. The parson is at least plain spoken.
||417| Before we finish with Adam Smith, we will cite two further passages, the first, in which he gives vent to his hatred of the unproductive government; the second, in which he aims to explain why the advance of industry, etc., presupposes free labour. Concerning Smith’s hatred of the clergy.
The first passage runs:
“it is the highest impertinence and presumption, therefore, in kings and ministers, to pretend to watch over the economy of private people, and to restrain their expense, either by sumptuary laws, or by prohibiting the importation of foreign luxuries. They are themselves always, and with out any exception, the greatest spendthrifts in the society. Let them look well after their own expense, and they may safely trust private people with theirs. If their own extravagance does not ruin the State, that of their subjects never will” ([Wealth 0f Nations], t, II, l. II, ch. III, ed. McCulloch, p. 122).
And once more the following passage —*
“The labour of some of the most respectable orders in the** society is, like that of mental servants, unproductive of any value,” <it has value, and therefore costs an equivalent, but it produces no value> “and does not fix or realise itself in any permanent subject, or vendible commodity. … The sovereign, for example, with all the officers both of justice and war who serve*** under him, the whole army and navy, are unproductive labourers. They are the servants of the public, and are maintained by a part of the annual produce of the industry of other people… In the same class must be ranked…churchmen, lawyers, physicians, men of letters of all kinds; players, buffoons, musicians, opera-singers, opera-dancers, etc.” (l.c., pp. 94-95).
This is the language of the still revolutionary bourgeoisie, which has not yet subjected to itself the whole of Society, the State, etc. All these illustrious and time-honoured occupations— sovereign, judge, officer, priest, etc., —with all the old ideological professions to which they give rise, their men of letters, their teachers and priests, are from an economic standpoint put on the same level as the swarm of their own lackeys and jesters maintained by the bourgeoisie and by idle wealth—the landed nobility and idle capitalists. They are mere servants of the public, just as the others are their servants. They live on the produce of other people’s industry, therefore they must be reduced to the smallest possible number. State, church, etc., are only justified in so far as they are committees to superintend or administer the common interests of the productive bourgeoisie; and their costs —since by their nature these costs belong to the overhead costs of production—must be reduced to the unavoidable minimum. This view is of historical interest in sharp contrast partly to the standpoint of antiquity, when material productive labour bore the stigma of slavery and was regarded merely as a pedestal for the idle citizen, and partly to the standpoint of the absolute or aristocratic-constitutional monarchy which arose from the disintegration of the Middle Ages—as Montesquieu, still captive to these ideas, so naïvely expressed them in the following passage (Esprit des lois, l. VII, ch. IV): “If the rich do not spend much, the poor will perish of hunger”.
When on the other hand the bourgeoisie has won the battle, and has partly itself taken over the State, partly made a compromise with its former possessors; and has likewise given recognition to the ideological professions as flesh of its flesh and everywhere transformed them into its functionaries, of like nature to itself; when it itself no longer confronts these as the representative of productive labour, but when the real productive labourers rise against it and moreover tell it that it lives on other people’s industry; when it is enlightened enough not to be entirely absorbed in production, but to want also to consume “in an enlightened way”; when the spiritual labours themselves are more and more performed in its service and enter into the service of capitalist production—then things take a new turn, and the bourgeoisie tries to justify “economically”, from its own standpoint, what at an earlier stage it had criticised and fought against. Its spokesmen and conscience-salvers in this line are the Garniers, etc. In addition to this, these economists, who them-selves are priests, professors, etc., are eager to prove their “productive” usefulness, to justify their wages “economically”.
||418| The second passage, referring to slavery, runs:
“Such occupations” (as artificer and manufacturer) “were considered” (in several of the ancient states) “as fit only for slaves, and the free citizens of the State were prohibited from exercising them. Even in those States where no such prohibition took place, as in Rome and Athens, the great body of the people were in effect excluded from all the trades which are now commonly exercised by the lower sort of the inhabitants of towns. Such trades were, at Athens and Rome., all occupied by the slaves of the rich, who exercised them for the benefit of their masters, whose wealth, power, and protection, made it almost impossible for a poor freeman to find a market for his work, when it came into competition with that of the slaves of the rich. Slaves, however, are very seldom inventive; and all the most important improvements, either in machinery, or in the arrangement and distribution of work, which facilitate and abridge labour have been the discoveries of freemen. Should a slave propose any improvement of this kind, his master would be very apt to consider the proposal as the suggestion of laziness, and of a desire to save his own labour at the master’s expense. The poor slave, instead of reward would probably meet with much abuse, perhaps with some punishment. In the manufactures carried on by slaves, therefore, more labour must generally have been employed to execute the same quantity of work, than in those carried on by freemen. The work of the former must, upon that account, generally have been dearer than that of the latter. The Hungarian mines, it is remarked by Mr. Montesquieu, though not richer, have always been wrought with less expense, and therefore with more profit, than the Turkish mines in their neighbourhood. The Turkish mines are wrought by slaves; and the arms of those slaves are the only machines which the Turks have ever thought of employing. The Hungarian mines are wrought by freemen, who employ a great deal of machinery, by which they facilitate and abridge their own labour. From the very little that is known about the price of manufactures in the times of the Greeks and Romans, it would appear that those of the finer sort were excessively dear” ( [Wealth of Nations, O.U.P. edition, Vol. II, pp. 305-06 I l.c., t. III, l. IV, ch. IX, pp. 549-51, ed. Garnier).
----------------
Adam Smith himself says, l.c., t. III, l. IV, ch. I, p. 5:
“Mr. Locke remarks a distinction between money and other movable goods. All other movable goods, he says, are of so consumable a nature, that the wealth which consists in them cannot be much depended on… Money, on the contrary, is a steady friend” and so on [ibid., p. 3 ].
And again, [Garnier], l. c., pp. 24-25:
“Consumable commodities, it is said, are soon destroyed; whereas gold and silver are of a more durable nature, and were it not for this continual exportation, might be accumulated for ages together, to the incredible augmentation of the real wealth of the country” [ibid., p. 14].
The man of the Monetary system raves about gold and silver because they are money, the independent, tangible form of existence of exchange-value; and a form of its existence that is indestructible, everlasting —in so far as they are not allowed to become means of circulation, the merely transient form of the exchange-value of commodities. The accumulation of gold and silver, piling it up, hoarding it, is therefore his way of growing rich. And as I showed in the quotation from Petty, other commodities are themselves valued according to the degree in which they are more or less durable, that is, remain exchange-value.
Now in the first place Adam Smith repeats this idea of the relatively greater or less durability of commodities in the section where he speaks of consumption which is more or less advantageous for the formation of wealth, according as it is consumption of less or more durable articles of consumption. Here therefore the Monetary system peeps through; and necessarily so, since even in direct consumption there is the mental reservation that the ||419| article of consumption remains wealth, a commodity, therefore a unity of use-value and exchange-value; and the latter depends on the degree to which the use-value is durable, that is, on how slowly consumption deprives it of the possibility of being a commodity or bearer of exchange-value.
Secondly, in his second distinction between productive and unproductive labour he completely returns —in a wider form —to the distinction made by the Monetary system.
Productive labour “fixes and realises itself in some particular subject or vendible commodity, which lasts jar some time at least after that labour is past. It is, as it were, a certain quantity of labour stocked and stored up to be employed, if necessary, upon some other occasion”.
On the other hand, the unproductive labour’s results or services “generally perish in the very instant of their performance, and seldom leave any trace or value behind them, for which an equal quantity of service could afterwards be procured” (Vol. II, b. II, ch. III, ed. McCulloch, p. 94).
Thus Smith makes the same difference between commodities and services as the Monetary system did between gold and silver and the other commodities. With Smith too the distinction is made from the point of view of accumulation —no longer however in the form of building a hoard, but in the real form of reproduction. The commodity perishes in consumption, but then it reproduces in turn a commodity of higher value; or, if it is not so used, it is itself value, with which another commodity can be bought. It is the nature of the product of labour that it exists in a more or less durable, and therefore again salable, use-value; in a use-value in which it is a vendible commodity, a bearer of exchange-value, a commodity, or, in essence, money. The services of unproductive labourers do not again become money. I can neither pay debts nor buy commodities nor buy labour which produces surplus-value with the services for which I pay the lawyer, doctor, priest, musician, etc., the statesman or the soldier, etc. They have gone, like perishable articles of consumption.
Thus at bottom Smith says the same thing as the Monetary system. For them, only that labour is productive which produces money, gold and silver. For Smith, only that labour is productive which produces money for its buyer; although he discerns the money character in all commodities in spite of its mask, while the Monetary system sees it only in the commodity which is the independent existence of exchange-value.
This distinction is founded on the nature of bourgeois production itself, since wealth is not the equivalent of use-value, but only the commodity is wealth, use-value as bearer of exchange-value, as money. What the Monetary system did not understand is how this money is made and is multiplied through the consumption of commodities, and not through their transformation into gold and silver —in which they are crystallised as independent exchange-value, in which however they not only lose their use-value, but do not alter the magnitude of their value.
* In translating this passage Marx has abridged it somewhat.—Ed.
*In the manuscript: “it does”.—Ed.
* Sterile—Ed.
+* Unproductive.—Ed.
* Incidental expenses, that is “mere expenses, unproductive expenditure either of living labour or of materialised labour” (Marx).- Ed.
* Gods of the lesser tribes.-Ed
*“Born to consume the fruits” (Horace).—Ed.
* In the manuscript: “in a variety”.—Ed.
** In the manuscript: “a plenty of silver and gold”.—Ed.
*This passage was translated by Marx into German and slightly shortened —Ed.
* Other things being equal. —Ed.
** In the manuscript: “when there”.—Ed.
*** Per day.—Ed.
* Lit.: bridges and roads—in France this designated the administration of roads and communications—Ed
* Return to an Address of the House of Commons, dated 24 April, 1861 (printed II February, 1862).
* Return to an Address of the House of Commons, dated 24 April, 1861 (printed II February, 1862).
* Marx quotes Schmalz from the French translation—Ed.
** In the manuscript there is a pun upon the name of the author that cannot be translated, Marx calls him Schmalzschmiertopf. (The German noun “Schmalz” means grease, lard, dripping; “Schmiertopf”—grease can, scribbler.)—Ed.
* <And so the same fellow says one page later “that all labour is productive of wealth, in proportion to its exchange-value determined by supply and demand” (it produces wealth, not in proportion to the exchange-value it produces, but in proportion to its own exchange-value; that is to say, not on the basis of what it produces but of what it costs), “that its respective value only contributes to the accumulation of capitals by the saving and non-consumption of the products that this value is entitled to take out of total production”.>
* You work, but not for yourselves (Virgil).—Ed.
* This refers to the capitalist mode of production.—Ed.
* This refers to the capitalist mode of production.—Ed.
* Marx put the passage in his own words and slightly abbreviated it.—Ed.
* Marx refers to the French translation from which be takes this and the following passages ( see Appendix, p. 450). The page reference in square brackets is to the English edition of 1804.—Ed.
* Born to consume the fruits (Horace).—Ed.
* Sismondi says: “Because of the progress made by industry and science, each labourer is able to produce each day more, and much more, than he needs to consume. But at the same time as his labour produces wealth, this wealth, if he was called upon to enjoy it, would make him little fitted for labour” (Nouveaux principes…, t. I, p. 85).
* Of their own peculiar kind.—Ed.
* The right of the first night.—Ed.
* In the manuscript: “distinction”.—Ed.
* See pp. 160, 161 and 264 of the present volume—Ed.
* in the manuscript: “of”.—Ed.
** In the manuscript: “are”.—Ed