Theories of Surplus Value, Marx 1861-3


[Chapter XXI]  Opposition to the Economists (Based on the Ricardian Theory)

||852| During the Ricardian period of political economy its antithesis, communism (Owen) and socialism (Fourier, St. Simon, the latter only in his first beginnings), [comes] also [into being].  According to our plan we are here concerned only with that opposition, which takes as its starting-point the premises of the economists.

It will be seen from the works which we quote that in fact they all derive from the Ricardian form.


1.  [The Pamphlet] “The Source and Remedy of the National Difficulties”

[a) Profit, Rent and Interest Regarded as Surplus Labour of the Workers.  The Interrelation Between the Accumulation of Capital and the so-called “Labour Fund”]

The Source and Remedy of the National Difficulties, [deduced from Principles of Political Economy, in] a Letter to Lord John Russell, London, 1821.  (anonymous).

This scarcely known pamphlet (about 40 pages) [which appeared] at a time when McCulloch, “this incredible cobbler”, began to make a stir, contains an important advance on Ricardo.  It bluntly describes surplus-value—or “profit”, as Ricardo calls it (often also “surplus produce”), or “interest”, as the author of the pamphlet terms it—as “surplus labour”, the labour which the worker performs gratis, the labour he performs over and above the quantity of labour by which the value of his labour-power is replaced, i.e., by which he produces an equivalent for his wages.  Important as it was to reduce value to labour, it was equally important [to present] surplus-value, which manifests itself in surplus product, as surplus labour.  This was in fact already stated by Adam Smith and constitutes one of the main elements in Ricardo’s argumentation.  But nowhere did he clearly express it and record it in an absolute form.

Whereas the only concern of Ricardo and others is to understand the conditions of capitalist production, and to assert them as the absolute forms of production, the pamphlet and the other works of this kind to be mentioned seize on the mysteries of capitalist production which have been brought to light in order to combat the latter from the standpoint of the industrial proletariat.

[We read in the pamphlet:]

“… whatever may be due to the capitalist” (from the viewpoint of the capitalist) “he can only receive the surplus labour of the labourer; for the labourer must live…” (The Source and Remedy of the National Difficulties, p. 23).

To be sure, these conditions of life, the minimum on which the worker can live, and consequently also the quantity of surplus labour which can be squeezed out of him, are relative magnitudes.

“… if capital does not decrease in value as it increases in amount, the capitalists will exact from the labourers the produce of every hour’s labour beyond what it is possible for the labourer to subsist on: and however horrid and disgusting it may seem, the capitalist may eventually speculate on the food that requires the least labour to produce it, and eventually say to the labourers, ‘You sha’n’t eat bread, because barley meal is cheaper; you sha’n’t eat meat, because it is possible to subsist on beet root and potatoes’.  And to this point have we come!” (loc. cit., pp. 23-24).

“… if the labourer can be brought to feed on potatoes instead of bread, it is indisputably true that more can be exacted from his labour; that is to say,[a] if when he fed on bread he was obliged to retain for the maintenance of himself and family the labour of Monday and Tuesday, he will, on potatoes, require only the half of Monday; and the remaining half of Monday and the whale of Tuesday are available either for the service of the state or the capitalist” (loc. cit., p. 26).

Here profit, etc., is reduced directly to appropriation of the labour-time for which the worker receives no equivalent.

“It is admitted that the interest paid to the capitalists, whether in the nature of rents, interests of money, or profits of trade, is paid out of the labour of others” (loc. cit., p. 23).

Rent, money interest, industrial profit, are thus merely different forms of “interest of capital”, which again is reduced to the “surplus labour of the labourer”.  This surplus labour takes the form of surplus produce.  The capitalist is the owner of the surplus labour or of the surplus produce.  The surplus produce is capital.

“Suppose … there is no surplus labour, consequently, nothing that can be allowed to accumulate as capital” (op. cit., p. 4).

And, immediately after this he says:

“… the possessors of the surplus produce, or capital…” (loc. cit., p. 4).

The author says, in a quite different sense from the whining Ricardians:

“… the natural and necessary consequence of an increased capital, [is] its decreasing value…” (op. cit., pp. 21-22).

And in reference to Ricardo:

“Why set out by telling us that no accumulation of capital will lower profits, because nothing will lower profits but increased wages, when it appears that if population does not increase with capital, wages would increase from the disproportion between capital and labour; and if population does increase, wages would increase from the difficulty of producing food” (loc. cit., p. 23, note).

||853| If the value of capital, that is, the interest of capital, i.e., the surplus labour which it commands, which it appropriates, did not decrease when the amount of capital increases, the [accumulation of] interest from interest would follow in geometrical progression, and just as, calculated in money (see Price), this presupposes an impossible accumulation (rate of accumulation), so, reduced to its real element—labour, it would swallow up not only the surplus labour, but also the necessary labour as “being due” to capital.  (We shall return to Price’s fantasy in the section on Revenue and its Sources.)

“… if it were possible to continue to increase capital and keep up the value of capital, which is proved by the interest of money continuing the same, the interest to be paid for capital would soon exceed the whole produce of labour…  capital tends in more than arithmetical progression to increase capital.  It is admitted that the interest paid to the capitalists, whether in the nature of rents, interests of money, or profits of trade, is paid out of the labour of others.  If then[b] capital go on accumulating […] the labour to be given for the use of capital must go on increasing, interest paid for capital continuing the same, till all the labour of all the labourers of the society is engrossed by the capitalist.  […] that it is[c]b […] impossible to happen; for whatever may be due to the capitalist, he can only receive the surplus labour of the labourer; for the labourer must live…” (loc. cit., p. 23).

But it is not clear to him how the value of capital decreases.  He himself says, when dealing with Ricardo, that this recurs because wages rise when capital accumulates more rapidly than the population grows, or because the value of wages (not the quantity) increases when the population grows more rapidly than capital accumulates (or even if population increases simultaneously) as a result of decreasing productivity of agriculture.  But how does he explain it?  He does not accept the latter alternative; he assumes that wages are reduced more and more to the minimum possible.  [A reduction of “interest” on capital] can only take place, he says, because the portion of capital which is exchanged for living labour declines relatively, although the worker is exploited more than, or just as much as, before.

In any case, it is a step forward that the nonsense about the geometrical progression of interest is reduced to its true sense, that is, nonsense.*

There are, by the way, according to the pamphleteer, two methods which, in spite of the growth of surplus product or surplus labour, prevent capital from being forced to give a greater share of its plunder back to the workers.

The first is the conversion of surplus product into fixed capital, which prevents the labour fund—or the part of the product consumed by the worker—from necessarily increasing with the accumulation of capital.

The second is foreign trade, which enables the capitalist to exchange the surplus product for foreign luxury articles and thus to consume it himself, In this way, even that part of the product which exists as necessaries may quite well increase without the need for it to be returned to the worker in the form of a proportionate increase in wages.

It should be noted that the first method—which is only effective for a time and then neutralises its own effect (at least as regards the fixed capital consisting of machinery, etc., which itself is used in the production of necessaries)—implies the transformation of surplus product into capital, whereas the second method implies consumption of an ever-increasing portion of the surplus product by the capitalists—increasing consumption on the part of the capitalists and not the reconversion of surplus product into capital.  If the same surplus product were to remain in the form in which it immediately exists, a greater part of it would have to be exchanged with the workers as variable capital.  The result would be an increase in wages and a reduction in the amount of absolute or relative surplus-value.  Here is the real secret of the necessity for increasing consumption by “the rich”, advocated by Malthus, in order that the part of the product which is exchanged for labour and converted into capital, should have great value, yield large profits, absorb a large amount of surplus labour.  He does not however propose that the industrial capitalists themselves should increase their consumption, but [allots] this function to landlords, sinecurists, etc., because the urge for accumulation and the urge for expenditure, if united in the same person, would play tricks on each other.  It is here also that the erroneousness of the view of Barton, Ricardo, and others stands out.  Wages are not determined by that portion of the total product that is either consumed as, or can be converted into, variable capital, but by that part of it which is actually converted into variable capital.  A part can be consumed by retainers even in its natural form, another can be consumed in the shape of luxury products by means of foreign trade, etc.

Our pamphleteer overlooks two things:

As a result of the introduction of machinery, a mass of workers is constantly being thrown out of employment, a section of the population is thus made redundant; the surplus product therefore finds fresh labour for which it can be exchanged without any increase in population and without any need to extend the absolute working-time.  Let us assume that 500 workers were employed previously, whereas now there are 300 workers, who perform relatively more surplus labour.  The other 200 can be employed by the surplus product as soon as it has increased sufficiently.  One portion of the old [variable] capital is converted into fixed capital, the other gives employment to fewer workers but extracts from them more surplus-value in relation to their number and in particular also more surplus product.  The remaining 200 are material created for the purpose of capitalising additional surplus product.

||853a| The transformation of necessaries into luxuries by means of foreign trade, as interpreted in the pamphlet, is important in itself:

1) because it puts an end to the nonsensical idea that wages depend on the amount of necessaries produced, as if these necessaries had to be consumed in this form by the producers or even by the whole body of people engaged in production, in other words that they must be transformed again into variable capital or “circulating capital”, as it is termed by Barton and Ricardo;

2) because it determines the whole social pattern of backward nations—for example, the slave-holding states in the United States of North America (see Cairnes) or Poland, etc. (as was already understood by old Büsch, unless he stole the idea from Steuart)—which are associated with a world market based on capitalist production.  No matter how large the surplus product they extract from the surplus labour of their slaves in the simple form of cotton or corn, they can adhere to this simple, undifferentiated labour because foreign trade enables them [to convert] these simple products into any kind of use-value.

The assertion that the portion of the annual product which must be expended as wages depends on the size of the circulating capital, is equal to the assertion that, when a large part of the product consists of “buildings”, houses for workers are built in large numbers relative to the size of the working population, and that consequently the workers must live in cheap and well-built houses because the supply of houses increases more quickly than the demand for them.

It is correct, on the other hand, that, if the surplus product is large and the greater part of it is to be employed as capital, then there must be an increase in the demand for labour and therefore also in that part of the surplus product which is exchanged for wages (provided large numbers of workers did not have to be thrown out of work in order to obtain a surplus product of this size).  At all events, it is not the absolute size of the surplus product (in whatever form it may exist, even that of necessaries) which necessarily requires it to be expended as variable capital and which consequently causes an increase in wages, but it is the desire to capitalise which results in a large part of the surplus product being laid out in variable capital and this would consequently make wages grow with the accumulation of capital if machinery did not constantly make [a section of] the population redundant and if an ever greater portion of capital (in particular as a result of foreign trade) were not exchanged for capital, not for labour.  The portion of surplus product which is already produced directly in a form in which it can only serve as capital, and that portion of it which acquires this form as a result of foreign trade, grow more rapidly than the portion which must be exchanged against immediate labour.

The proposition that wages depend on existing capital and that therefore a rapid accumulation of capital is the sole means by which wages are made to rise, amounts to this:

On the one hand, to a tautology, if we disregard the form in which the conditions of labour exist as capital.  How rapidly the number of workers can be increased without worsening their living conditions depends on the productivity of labour which a given number of workers perform.  The more raw materials, tools and means of subsistence they produce, the greater the means at their disposal not only to bring up their children so long as these cannot work themselves, but to realise the labour of the new, growing generation, and consequently to make the growth of production keep up with, and even outdo, the growth of population, since with the growth of the population, the [workers’] skill increases, division of labour grows, the possibility [for using] machinery grows, constant capital grows, in short, the productivity of labour grows.

While the growth of population depends on the productivity of labour, the productivity of labour depends on the growth of population.  It is a case of reciprocity.  But this, expressed in capitalist terms, signifies that the means of subsistence of the working population depend on the productivity of capital, on the largest possible portion of their product confronting them as a force which commands their labour.  Ricardo himself expresses the matter correctly—I mean the tautology—when he makes wages depend on the productivity of capital, and the latter de-pendent on the productivity of labour.[d]

That labour depends on the growth of capital signifies nothing more than, on the one hand, the tautology ||854| that the increase in the means of subsistence and the means of employment of the population depends on the productivity of the population’s own labour and, secondly, expressed in capitalist terms, that it depends on the fact that the population’s own product confronts them as alien property and that as a consequence their own productivity confronts them as the productivity of the things which they create.

In practice this means that the worker must appropriate the smallest possible part of his product in order that the largest possible part of it may confront him as capital; he must surrender as much as possible to the capitalist gratis, in order that the latter s means for purchasing his labour—with what has been taken away from the worker without compensation—may increase as much as possible.  In this case it can happen that, if the capitalist has made the worker work a great deal for nothing, he may then, in exchange for what he has received for nothing, allow the worker to do a little less work for nothing.  However, since this prevents the achievement of what is aimed at, namely, accumulation of capital as rapidly as possible, the worker must live in such circumstances that this reduction in the amount of labour he performs for nothing is in turn counteracted by a growth of the working population, either relatively as a result of the use of machinery, or absolutely as a result of early marriage.  (It is the same relationship which is derided by the Ricardians when the Malthusians preach it between landlords and capitalists.)  The workers must relinquish the largest possible part of their product to the capitalist without receiving anything in return, so as, when conditions are more favourable, to buy back with new labour a part of the product so relinquished.  However, since the conditions for the favourable change are at the same time counteracted by this favourable change, it can only be temporary and must turn again into its own opposite.

3) What applies to the transformation of necessaries into luxuries by means of foreign trade, applies in general to luxury production, whose unlimited diversification and expansion depends, however, on foreign trade.  Although the workers engaged in luxury production produce capital for their employers, their product, in the form in which it exists, cannot be transformed into capital, either constant or variable capital.

Luxury products, apart from those which are sent abroad to be exchanged for necessaries which enter into variable capital either in whole or in part, simply constitute surplus labour and [moreover] surplus labour which is immediately in the shape of surplus products which the rich consume as revenue.  But they do not represent only the surplus labour of the workers who produce them.  On the average, these perform the same surplus labour as the workers in other branches of industry.  But in the same way as one-third of the product, which contains a third of the surplus labour, can be considered as the embodiment of this surplus labour, and the remaining two-thirds as reproduction of the capital advanced, so the surplus labour of the producers of those necessaries which constitute the wages of the producers of luxuries can also be considered as the necessary labour of the work-in g class as a whole.  Their surplus labour consists 1) of that part of the necessaries which is consumed by the capitalists and their retainers; and 2) of the total amount of luxuries.  With regard to the individual capitalist or a particular branch of industry the matter appears quite different.  For the capitalist, one part of the luxuries created by him represents merely an equivalent for the capital laid out.

If too large a part of surplus labour is embodied directly in luxuries, then clearly, accumulation and the rate of reproduction will stagnate, because too small a part is reconverted into capital.  If too small a part [of surplus labour] is embodied in luxuries, then the accumulation of capital (that is, of that part of the surplus product which can in kind serve as capital again) will proceed more rapidly than increase in population, and the rate of profit will fall, unless a foreign market for necessaries exists.

[b) On the Exchange Between Capital and Revenue in the Case of Simple Reproduction and of the Accumulation of Capital]

In the exchange between capital and revenue I have regarded wages, too, as revenue and have merely examined the relationship of constant capital to revenue.  The fact that the revenue of the worker is at the same time variable capital is important only insofar as in the accumulation of capital—the formation of new capital—the surplus consisting of means of subsistence (necessaries) in the possession of the capitalist producing them can be exchanged directly for the surplus consisting of raw materials or machinery in the possession of the capitalist producing constant capital.  Here one form of revenue is exchanged for the other, ||855| and, once the exchange is effected, the revenue of A is converted into the constant capital of B and the revenue of B into the variable capital of A.

In considering this circulation, reproduction and manner of replacement of the different capitals, etc., one must first of all disregard foreign trade.

Secondly, it is necessary to distinguish between the two aspects of the phenomenon:

1) Reproduction on the existing scale,

2) Reproduction on an extended scale, or accumulation; transformation of revenue into capital.

With regard to 1.

I have shown:

That what the producers of necessaries have to replace is 1) their constant capital, 2) their variable capital.  The part of their product in excess of these two constitutes the surplus product, the material existence of surplus-value, which in its turn only represents surplus labour.

Variable capital, that part of their product which represents it, is made up of wages, the revenue of the workers.  This part already exists here in the natural form in which it serves as variable capital once again.  With this part, the equivalent reproduced by the worker, the labour of the worker is bought once again.  This is the exchange of capital for immediate labour.  The worker receives this part in the form of money with which he buys back his own product, or other products of the same category.  This is the exchange of the different portions of the variable part of capital for one another after the worker has in the form of money received an assignment to his quota.  This is exchange of one part of newly added labour for another part within the same category (necessaries).

The part of the surplus product (newly added labour) consumed by the capitalists (who produce necessaries) themselves, is either consumed by them in kind or they exchange one type of surplus product existing in consumable form against another type.  This is exchange of revenue for revenue, both of them consisting of newly added labour.

We cannot really speak of exchange between revenue and capital in the above transaction.  Capital (necessaries) is exchanged against labour (labour-power).  This is therefore not an exchange of revenue for capital.  It is true that as soon as the worker receives his wages, he consumes them.  But what he exchanges for capital is not his revenue, but his labour.

The third part [of the product of the producer of necessaries which constitutes] constant capital is exchanged for a part of the product of those manufacturers who produce constant capital; namely, for that part which represents newly added labour.  This consists of an equivalent for the wages (that is, of variable capital) and of the surplus product, the surplus-value, the revenue of the capitalists which exists in a form in which it can only be consumed industrially and not individually.  On the one hand, this is therefore exchange of the variable capital of these producers for a part of the necessaries which constitute the constant capital [of the producers of necessaries].  In fact they exchange a part of their product which constitutes variable capital but exists in the form of constant capital, for a part of the product of those manufacturers who produce necessaries, a part which constitutes constant capital but exists in the form of variable capital.  Here newly added labour is exchanged for constant capital.

On the other hand, that part of the product which represents surplus product but exists in the form of constant capital is exchanged for a portion of necessaries which represents constant capital for its producers.  Here revenue is exchanged for capital.  The revenue of the capitalists who produce constant capital is exchanged for necessaries and replaces the constant capital of the capitalists who produce necessaries.

Finally, a part of the product of the capitalists who produce constant capital, namely, that part which itself represents constant capital, is replaced partly in kind, partly through barter (concealed by money) between the producers of constant capital.

It is assumed in all this that the scale of reproduction is the same as the original scale of production.

If we enquire what part of the total annual product is made up of newly added labour, then the calculation is quite simple.

A.  Consumable articles [for individual consumption.  These] consist of three parts.  [Firstly,] the revenue of the capitalist which equals the surplus labour added during the year.

Secondly, wages, i.e., variable capital, which is equal to the newly added labour by which the workers have reproduced their wages.

Finally, the third part, raw materials, machinery, etc.  This is constant capital, that part of the value of the product which is only retained, not produced.  That is, it is not labour newly added during the course of the year.

||856| If we call constant capital [in this category] c', variable capital v', and surplus product, the revenue r', then this category consists of [c' and v'+r']:

c' (which constitutes a part of the product) is merely retained value and does not consist of newly added labour; on the other hand, v'+r' consist of labour newly added during the course of the year.

The total product [of the category A] (or its value) Pa after deduction of c', therefore, consists of newly added labour.

Thus the product of category A, namely: Pa–c', is equal to the labour newly added during the course of the year.

B.  Articles for industrial consumption.

Here also v''+r'' are made up of newly added labour.  But not c'', the constant capital which operates in this sphere.

But v''+r''=c' for which they are exchanged.  c' is transformed into variable capital and revenue for B.  On the other hand, v'' and r'' are transformed into c', into constant capital for A.

The product of the category [B, that is] PbPb–c'' is equal to the labour newly added during the course of the year.

But Pb-c''=c', for the whole product of Pb after deduction of c'', the constant capital employed in this category, is exchanged for c'.

After v''+r'' have been exchanged for c', the matter can be presented as follows:

Pa consists solely of newly added labour, the product of which is divided between profits and wages, that is, it constitutes the equivalent of necessary labour and the equivalent of surplus labour.  For the v''+r'' which now replace c' are equal to the newly added labour in category B.

Thus the whole product Pa—not only its surplus product, but also its variable capital and its constant capital—consists of the products of labour newly added during the course of the year.

On the other hand, Pb can be regarded in such a way that it does not represent any part of the newly added labour, but merely old labour which is retained, For its part c'' does not represent newly added labour.  Neither does the part c' which it has received in exchange for v''+r'', for this c' represents the constant capital laid out in A, and not newly added labour.

The whole part of the annual product which, as variable capital, constitutes the revenue of the workers and as surplus product constitutes the consumption fund of the capitalist, therefore consists of newly added labour, whereas the remaining part of the product, which represents constant capital, consists merely of old labour which has been retained and simply replaces constant capital.

Consequently, just as it is correct to say that the whole portion of the annual product which is consumed as revenue, wages and profits (together with the branches of profit, rent, interest, etc., as well as the wages of the unproductive labourers) consists of newly added labour, so it is false to assert that the total annual product resolves itself into revenue, wages and profits and thus merely into portions of newly added labour.  A part of the annual product resolves itself into constant capital, which regarded as value does not comprise newly added labour and, as regards use does not form part of either wages or profits.  Its value represents accumulated labour in the real sense of the word, and its use-value, the utilisation of this accumulated past labour.

On the other hand, it is equally correct that the labour added during the year is not represented entirely by that part of the product which constitutes wages and profits.  For these wages and profits also buy services, that is, labour which does not enter into the product of which wages and profit form [a part].  These services are labour which is used up in the consumption of the product and does not enter into its immediate production.

||857| With regard to 2.

It is a different matter with regard to accumulation, transformation of revenue into capital, reproduction on an extended scale, insofar as this latter does not simply result from more productive employment of the old capital.  Here the whole new capital consists of newly added labour, that is, of surplus labour in the form of profit, etc.  But although it is correct that here the entire element in new production arises from and consists of newly added labour—which is a part of the surplus labour of the labourers—it is wrong to assume, as the economists do, that, when it is converted into capital, it constitutes only variable capital, that is, wages.  Let us suppose for example that a part of the surplus product of the farmer is exchanged for a part of the surplus product of the machine manufacturer.  It is then possible that the latter will convert the corn into variable capital and employ more workers, directly or indirectly.  On the other hand, the farmer has converted a part of his surplus product into constant capital, and it is possible that, as a result of this conversion, he will discharge some of his old workers instead of taking on new ones.  The farmer may cultivate more land.  In this case, a part of his corn will be converted not into wages, but into constant capital, etc.

It is precisely accumulation which reveals clearly that everything—i.e., revenue, variable capital and constant capital—is nothing but appropriated alien labour; and that both the means of labour with which the worker works, and the equivalent he receives for his labour, consist of labour performed by the worker and appropriated by the capitalist, who has not given any equivalent for it.

[The same applies] even to original accumulation.  Let us assume that I have saved £500 from my wages.  In fact, therefore, this Sum represents not only accumulated labour but, in contrast to the “accumulated labour” of the capitalist, my own labour accumulated by me and for me.  I convert the £500 into capital, buy raw material, etc., and take on workers.  Profit is, say, 20 per cent, that is, £100 a year.  In five years I shall have “eaten up” my capital in the form of revenue (provided new accumulation does not continuously take place and the £100 [profit] is consumed).  In the sixth year, my capital of £500 itself consists of other people’s labour appropriated without any equivalent.  If, on the other hand, I had always accumulated half of the profit made, the process [of eating up my original capital] would have been slower, for I would not have consumed so much, and [the process of appropriating other people’s labour] more rapid.

capital Profit Consumed
First year 500 100 50
Second year 550 110 55
Third year 605 121 60
Fourth year 665 133 66
Fifth year 731 146 73
Sixth year 804 160 So
Seventh year 884 176 88
Eighth year 972 194 97

My capital will have been almost doubled in eight years although I have consumed more than my original capital.  The capital of £972 does not contain a single farthing of paid labour or of labour for which I have returned any kind of equivalent.  I have consumed my entire original capital in the form of revenue, that is, I have received an equivalent for it, which I have consumed.  The new capital consists solely of the appropriated labour of other people.

In considering surplus-value as such, the original form of the product, hence of the surplus product, is of no consequence.  It becomes important when considering the actual process of reproduction, partly in order to understand its forms, and partly in order to grasp the influence of luxury production, etc., on reproduction.  Here is another example of how use-value as such acquires economic significance.

[c) The Merits of the Author of the pamphlet and the Theoretical Confusion of His Views.  The Importance of the Questions He Raises about the Role of Foreign Trade in Capitalist society and of “Free Time” as Real Wealth]

||858|| Now to return to our pamphlet.

“Suppose the whole labour of the country to raise just sufficient for the support of the whole population; it is evident there is no surplus labour, consequently, nothing that can be allowed to accumulate as capital.  Suppose the whole labour of the country to raise as much in one year as would maintain it two years, it is evident one year’s consumption must perish, or for one year men must cease from productive labour.  But the possessors of the surplus produce, or capital, will neither maintain the population the following year in idleness, nor allow the produce to perish; they will employ them upon something not directly and immediately productive, for instance, in the erection of machinery, etc., etc., etc.  But the third year, the whole population may again return to productive labour, and the machinery erected in the last year coming now into operation, it is evident the produce […] will be greater than the first year’s produce [… ] and[e] the produce of the machinery in addition.  […] this surplus labour must[f] perish, or be put to use as before; and this usance again adds to the productive power […] of the society […] till men must cease from productive labour for a time, or the produce of their labour must perish, This is the palpable consequence in the simplest state of society” (op. cit., pp. 4-5).

“The demand of other countries is limited, not only by our power to produce, but by their power to produce… ”

<This is the answer to Say’s assertion that we do not produce too much, but they produce too little.  Their power to produce is not necessarily equal to our power to produce.>

“For do what you will, in a series of years the whole world can take little more of us, than we take of the world […] so that all your foreign trade, of which there is so much talking, never did, never could, nor ever can, add one shilling, or one doit to the wealth of the country, as for every bale of silk, chest of tea, pipe of wine that ever was imported, something of equal value was exported; and even the profits made by our merchants in their foreign trade are paid by the consumer of the return goods here” (op. cit., pp. 17-18).

“…foreign trade is mere barter and exchange for the convenience and enjoyment of the capitalist: he has not a hundred bodies, nor a hundred legs: he cannot consume, in cloth and cotton stockings, all the cloth and cotton stockings that are manufactured; therefore they are exchanged for wines and silks; but those wines and silks represent the surplus labour of our own population, as much as the cloths and cottons, and in this way the destructive power of the capitalist list is increased beyond all bounds:—by foreign trade the capitalists contrive to outwit nature, who had put a thousand natural limits to their exactions, and to their wishes to exact; there is no limit now, either to their power, or […] desires…” (loc. cit., p. 18).

One sees that he accepts Ricardo’s teaching on foreign trade.  In Ricardo’s work its only purpose is to support his theory of value or to demonstrate that his views on foreign trade are not at variance with it.  But the pamphlet stresses that it is not only national labour, but also national surplus labour which is embodied in the outcome of foreign trade.

If surplus labour or surplus-value were represented only in the national surplus product, then the increase of value for the sake of value and therefore the exaction of surplus labour would be restricted by the limited, narrow circle of use-values in which the value of the [national] labour would be represented.  But it is foreign trade which develops its [the surplus product’s] real nature as value by developing the labour embodied in it as social labour which manifests itself in an unlimited range of different use-values, and this in fact gives meaning to abstract wealth.

“… It is the infinite variety of wants, and of the kinds of commodities” <and therefore also the infinite variety of real labour, which produces those different kinds of commodities> “necessary to their gratification, which alone renders the passion for wealth” (and hence the passion for appropriating other people’s labour) “indefinite and insatiable” (Wakefield’s edition of Adam Smith, An Inquiry into the Nature and Source of the Wealth of Nations, Vol. 1, London, 1835, p. 64, note).

But it is only foreign trade, the development of the market to a world market, which causes money to develop into world money and abstract labour into social labour.  Abstract wealth, value, money, hence abstract labour, develop in the measure that concrete labour becomes a totality of different modes of labour embracing the world market.  Capitalist production rests on the value or the transformation of the labour embodied in the product into social labour.  But this is only [possible] on the basis of foreign trade and of the world market.  This is at once the pre-condition and the result of capitalist production.

||859| The pamphlet is no theoretical treatise.  [It is a] protest against the false reasons given by the economists for the distress and the “national difficulties” of the times.  It does not, consequently, make the claim that its conception of surplus-value as surplus labour carries with it a general criticism of the entire system of economic categories, nor can this be expected of it.  The author stands rather on Ricardian ground and is only consistent in stating one of the consequences inherent in the system itself and he advances it in the interests of the working class against capital.

For the rest, the author remains a captive of the economic categories as he finds them.  Just as in the case of Ricardo the confusion of surplus-value with profit leads to undesirable contradictions, so in his case the fact that he christens surplus-value the interest of capital.

To be sure, he is in advance of Ricardo in that he first of all reduces all surplus-value to surplus labour, and when he calls surplus-value interest of capital, he at the same time emphasises that by this he understands the general form of surplus labour in contrast to its special forms—rent, interest of money and industrial profit.

“…interest paid to the capitalists, whether in the nature” (it should be shape, form) “of rents, interests of money, or profits of trade” ([The Source and Remedy of the National Difficulties, London, 1821,] p. 23).

He thus distinguishes the general form of surplus labour or surplus-value from their particular forms, something which neither Ricardo nor Adam Smith [does], at least not consciously or consistently.  But on the other hand, he applies the name of one of these particular forms—interest—to the general form.  And this suffices to make him relapse into economic slang.

“The progress of […] increasing capital would, in established societies, he marked by the decreasing interest of money, or, which is the same thing,[g] the decreasing quantity of the labour of others that would be given for its use…” (op. cit., p. 6).

This passage reminds one of Carey.  But with him it is not the labourer who uses capital, but capital which uses the labourer.  Since by interest he understands surplus labour in any form, the matter of the remedy of our “national difficulties” amounts to an increase in wages; for the reduction of interest means a reduction of surplus labour.  However, what he really means is that in the exchange of capital for labour the appropriation of alien labour should be reduced or that the worker should appropriate more of his own labour and capital less.

Reduction of surplus labour can mean two things:

Less work should be performed over and above the time which is necessary to reproduce the labour-power, that is, to create an equivalent for wages;

or, less of the total quantity of labour should assume the form of surplus labour, that is, the form of time worked gratis for the capitalist; therefore less of the product in which labour manifests itself should take the form of surplus product; in other words, the worker should receive more of his own product and less of it should go to the capitalist.

The author is not quite clear about this himself, as can be seen from the following passage which is really the last word in this matter as far as the pamphlet is concerned:

A[h] nation is really rich only if no interest is paid for the use of capital; when only six hours instead of twelve hours are worked…  “Wealth […] is disposable time, and nothing more” (loc. cit., p. 6).

Since what is understood by interest here is profit, rent, interest—in short, all the forms of surplus-value—and since, according to the author himself, capital is nothing but the produce of labour, i.e., accumulated labour which is able to exact in exchange for itself not only an equal quantity of labour, but surplus labour, according to him the phrase: capital bears no interest, therefore means that capital ||860| does not exist.  The product is not transformed into capital.  No surplus product and no surplus labour exist.  Only then is a nation really rich.

This can mean however: There is no product and no labour over and above the product and the labour required for the reproduction of the workers.  Or, they [the workers] themselves appropriate this surplus either of the product or of the labour.

That the author does not simply mean the latter is, however, clear from the fact that the words “no interest is paid for the use of capital” are juxtaposed to the proposition that a nation is really rich when only six hours not twelve hours are worked[i]; “wealth […] is disposable time, and nothing more”.

This can now mean:

If everybody has to work, if the contradiction between those who have to work too much and those who are idlers disappears—and this would in any case be the result of capital ceasing to exist, of the product ceasing to provide a title to alien surplus labour—and if, in addition, the development of the productive forces brought about by capitalism is taken into account, society will produce the necessary abundance in six hours, [producing] more than it does now in twelve, and, moreover, all will have six hours of “disposable time”, that is, real wealth; time which will not be absorbed in direct productive labour, but will be available for enjoyment, for leisure, thus giving scope for free activity and development, Time is scope for the development of man’s faculties, etc.  The economists themselves justify the slave-labour of the wage-labourers by saying that it creates leisure, free time for others, for another section of society—and thereby also for the society of wage-labourers.

Or it can also mean:

The workers now work six hours more than the time (now) required for their own reproduction.  (This can hardly be the author’s view, since he describes what they use now as an in human minimum.)  If capital ceases to exist, then the workers will work for six hours only and the idlers will have to work the same amount of time.  The material wealth of all would thus be depressed to the level of the workers.  But all would have disposable time, that is, free time for their development.

The author himself is obviously not clear about this.  Nevertheless, there remains the fine statement:

A nation is really rich when six hours instead of twelve hours are worked.  “Wealth […] is disposable time, and nothing more.”

Ricardo himself, in the chapter entitled “Value and Riches, Their Distinctive Properties”, also says that real wealth consists in producing the greatest possible amount of values in use having the least possible [exchange-] value.  This means, in other words, that the greatest possible abundance of material wealth is created in the shortest possible labour-time.  Here also, the “disposable time” and the enjoyment of that which is produced in the labour-time of others, appear as the real wealth, but like everything in capitalist production—and consequently in its interpreters—it appears in the form of a contradiction.  In Ricardo’s work the contradiction between riches and value later appears in the form that the net product should be as large as possible in relation to the gross product, which again, in this contradictory form, amounts to saying that those classes in society whose time is only partly or not at all absorbed in material production although they enjoy its fruits, should be as numerous as possible in comparison with those classes whose time is totally absorbed in material production and whose consumption is, as a consequence, a mere item in production costs, a mere condition for their existence as beasts of burden.  There is always the wish that the smallest possible portion of society should be doomed to the slavery of labour, to forced labour.  This is the utmost that can be accomplished from the capitalist standpoint.

The author puts an end to this.  Labour-time, even if exchange-value is eliminated, always remains the creative substance of wealth and the measure of the cost of its production.  But free time, disposable time, is wealth itself, partly for the enjoyment of the product, partly for free activity which—unlike labour—is not dominated by the pressure of an extraneous purpose which must be fulfilled, and the fulfilment of which is regarded as a natural necessity or a social duty, according to one’s inclination.

It is self-evident that if labour-time is reduced to a normal length and, furthermore, labour is no longer performed for someone else, but for myself, and, at the same time, the social contradictions between master and men, etc., being abolished, it acquires a quite different, a free character, it becomes real social labour, and finally the basis of disposable time—the labour of a man who has also disposable time, must be of a much higher quality than that of the beast of burden.

2.  Ravenstone.  [The View of Capital as the Surplus Product of the Worker.  Confusion of the Antagonistic Form of Capitalist Development with Its Content.  This Leads to a Negative Attitude Towards the Results of the Capitalist Development of the Productive Forces]


||861| Piercy Ravenstone, M. A., Thoughts on the Funding System, and its Effects, London, 1824.

A most remarkable work.

The author of The Source and Remedy of the National Difficulties discussed above understands surplus-value in its original form, i.e., that of Surplus labour.  Consequently his attention is mainly centred on the extent of labour-time.  In particular, the conception of surplus labour or [surplus-] value in its absolute form; the extension of labour-time beyond that required for the reproduction of the labourer himself, not the reduction of necessary labour as a result of the development of the productive power of labour.

The reduction of this necessary labour is the principal aspect examined by Ricardo, but in the way it is carried out in capitalist production, namely, as a means for extending the amount of labour-time accruing to capital.  This pamphlet, on the contrary, declares that the final aim is the reduction of the producers’ labour-time and the cessation of labour for the possessor of surplus produce.

Ravenstone seems to assume the working-day as given.  Hence, what he is particularly interested in—just as was also the author of the pamphlet previously discussed, so that the theoretical questions only crop up incidentally—is relative surplus-value or the surplus product (which accrues to capital) as a result of the development of the productive power of labour.  As is usual with those who adopt this standpoint, surplus labour is conceived here more in the form of surplus product, whereas in the previous [pamphlet], surplus product is conceived more in the form of surplus labour.

“To teach that the wealth and power of a nation depend on its capital is to make industry ancillary to riches, to make men subservient to property” ([Ravenstone, Thoughts on the Funding System, and its Effects, London, 1824,] p. 7).

The opposition evoked by the Ricardian theory—on the basis of its own assumptions—has the following characteristic feature.

To the same extent as political economy developed—and this development finds its most trenchant expression in Ricardo, as far as fundamental principles are concerned—it presented labour as the sole element of value and the only creator of use-values, and the development of the productive forces as the only real means for increasing wealth; the greatest possible development of the productive power of labour as the economic basis of society.  This is, in fact, the foundation of capitalist production.  Ricardo’s work, in particular, which demonstrates that the law of value is not invalidated either by landed property or by capitalist accumulation, etc., is, in reality, only concerned with eliminating all contradictions or phenomena which appear to run counter to this conception.  But in the same measure as it is understood that labour is the sole source of exchange-value and the active source of use-value, “capital” is likewise conceived by the same economists, in particular by Ricardo (and even more by Torrens, Malthus, Bailey, and others after him), as the regulator of production, the source of wealth and the aim of production, whereas labour is regarded as wage-labour, whose representative and real instrument is inevitably a pauper (to which Malthus’s theory of population contributed), a mere production cost and instrument of production dependent on a minimum wage and forced to drop even below this minimum as soon as the existing quantity of labour is “superfluous” for capital.  In this contradiction, political economy merely expressed the essence of capitalist production or, if you like, of wage-labour, of labour alienated from itself, which stands confronted by the wealth it has created as alien wealth, by its own productive power as the productive power of its product, by its enrichment as its own impoverishment and by its social power as the power of society.  But this definite, specific, historical form of social labour which is exemplified in capitalist production is proclaimed by these economists as the general, eternal form, as a natural phenomenon, and these relations of production as the absolutely (not historically) necessary, natural and reasonable relations of social labour.  Their thoughts being entirely confined within the bounds of capitalist production, they assert that the contradictory form in which social labour manifests itself there, is just as necessary as labour itself freed from this contradiction.  Since in the self-same breath they proclaim on the one hand, labour as such (for them, labour is synonymous with wage-labour) and on the other, capital as such—that is the poverty of the workers and the wealth of the idlers—to be the sole source of wealth, they are perpetually involved in absolute contradictions without being in the slightest degree aware of them.  (Sismondi was epoch-making in political economy because he had an inkling of this contradiction.)  Ricardo’s phrase “labour or capital” reveals in a most striking fashion both the contradiction inherent in the terms and the naïvety with which they are stated to be identical.

Since the same real development which provided bourgeois political economy with this striking theoretical expression, unfolded the real contradictions contained in it, especially the contradiction between the growing wealth of the English “nation” and the growing misery of the workers, and since moreover these contradictions are given a theoretically compelling if unconscious expression in the Ricardian theory, etc., it was natural for those thinkers ||XV-862| who rallied to the side of the proletariat to seize on this contradiction, for which they found the theoretical ground already prepared.  Labour is the sole source of exchange-value and the only active creator of use-value.  This is what you say.  On the other hand, you say that capital is everything, and the worker is nothing or a mere production cost of capital.  You have refuted yourselves.  Capital is nothing but defrauding of the worker.  Labour is everything.

This, in fact, is the ultimate meaning of all the writings which defend the interests of the proletariat from the Ricardian standpoint basing themselves on his assumptions.  Just as little as he [Ricardo] understands the identity of capital and labour in his own system, do they understand the contradiction they describe.  That is why the most important among them—Hodgskin, for example—accept all the economic pre-conditions of capitalist production as eternal forms and only desire to eliminate capital, which is both the basis and necessary consequence [of these preconditions].

Ravenstone’s main idea is as follows:

The development of the productive power of labour creates capital or property, in other words a surplus product for “idlers”, non-workers; and indeed the more the productive power of labour develops, the more it produces this, its parasitical excrescence which sucks it dry.  Whether the title to this surplus product, or the power to appropriate the product of other people’s labour, accrues to the non-worker because he already possesses wealth, or because he possesses land, landed property, does not affect the case.  Both are capital, that is, mastery over the product of other people’s labour.  For Ravenstone property is merely appropriation of the products of other people’s labour and this is only possible insofar as and in the degree that productive industry develops.  By productive industry Ravenstone understands industry which produces necessaries.  Unproductive industry, the industry of consumption, is a consequence of the development of capital, or property.  Ravenstone appears ascetic like the author of the pamphlet discussed above.[j] In this respect he himself remains a captive of the notions set forth by the economists.  Without capital, without property, the necessaries of the workers would be produced in abundance, but there would be no luxury industry.  Or it can also be said that Ravenstone, like the author of the pamphlet discussed above, understands or at least in fact admits the historical necessity of capital; since capital, according to the author of the pamphlet, produces surplus labour over and above the labour strictly necessary for the maintenance [of the worker] and at the same time leads to the creation of machinery (what he calls fixed capital) and gives rise to foreign trade, the world market, in order to utilise the surplus product filched from the workers partly to increase productive power, partly to give this surplus product the most diverse forms of use-value far removed from those required by necessity.  Similarly, according to Ravenstone, no conveniences, no machinery, no luxury products would be produced without capital and property, neither would the development of the natural sciences have taken place, nor the literary and artistic productions which owe their existence to leisure, nor the urge of the wealthy to receive an equivalent for their “surplus product” from the non-workers.  Ravenstone and the pamphleteer do not say this in justification of capital, but simply seize on it as a point of attack because all this is done in opposition to [the interest of] the workers and not for them.  But in fact they thus admit that this is a result of capitalist production, which is therefore a historical form of social development, even though it stands in contradiction to that part of the population which constitutes the basis of that whole development, In this respect they share the narrow-mindedness of the economists (although from a diametrically opposite position) for they confuse the contradictory form of this development with its content.  The latter wish to perpetuate the contradiction on account of its results.  The former are determined to sacrifice the fruits which have developed within the antagonistic form, in order to get rid of the contradiction.  This distinguishes their opposition to [bourgeois] political economy from that of contemporary people like Owen; likewise from that of Sismondi, who harks back to antiquated forms of the contradiction in order to be rid of it in its acute form.

[Ravenstone writes:]

It is the “wants” of the poor which “constitute his” (the rich man’s) “wealth…  When all were equal, none would labour for another.  The necessaries of life would be overabundant whilst its comforts were entirely wanting” (op. cit., p. 10).

The industry which produces is the parent of property; that which aids consumption is its child” (loc. cit., p. 12).

“It is this[k] growth of property, this greater ability to maintain idle men, and unproductive industry, that in political economy is called capital” (loc. cit., p. 13).

“As the destination of property is expense, as without that it is wholly useless to its owner, its existence is intimately connected with that ||863| of the industry of consumption” (loc. cit.).

“If each man’s labour were but enough to procure his own food, there could be no property, and no part of a people’s industry could be turned away to work for the wants of the imagination” (loc. cit., pp. 14-15).

“In every [subsequent] stage of society, as increased numbers and better contrivances add to each man’s power of production, the number of those who labour is gradually diminished…  Property grows from the improvement of the means of production; its sole business is the encouragement of idleness.  When each man’s labour is barely sufficient for his own subsistence, as there can be no property, there will be no idle man.  When one man’s labour can maintain five, there will be four idle men for one employed in production: in no other way can the produce be consumed…  the object of society is to magnify the idle at the expense of the industrious, to create power out of plenty” (loc. cit., p. 11).

<With regard to rent he says (not quite correctly, for it is precisely here that it is necessary to explain why rent accrues to the landlord and not to the farmer, the industrial capitalist) what applies to surplus-value in general, insofar as it develops as a result of the increase in the productivity of labour.

“In the early stages of society, when men have no artificial assistance to their powers of industry, the proportion of their earnings which can be afforded to rent is exceedingly small: for land […] has no natural value, it owes all its produce to industry.  But every increase of skill adds to the proportion which can be reserved for rent.  Where the labour of nine is required for the maintenance of ten, only one-tenth of the gross produce can be given to rent.  Where one man’s labour is sufficient for the maintenance of five, four—fifths will go to rent, or the other charges of the state, which can only be provided for out of the surplus produce of industry.  The first proportion seems to have prevailed in England at the time of the Conquest, the last is that which actually takes place” now since “only one-fifth part of the people are […] employed in the cultivation of the land”… (op. cit., pp. 45-46).

“… so true it is that society turns every improvement but to the increase of idleness”… (loc. cit., p. 48).>

Note.  An original piece of work.  Its real subject is the modern system of national debt, as its title indicates.

Amongst other things he says:

“…the history of the last thirty years[l] […] has achieved no higher adventure than the turning of a few Jews into gentlemen, and a few blockheads into political economists” (op. cit., pp. 66-67).

The funding system has one beneficial consequence although “the ancient gentry of the land” are robbed “of a large portion of their property” in order “to transfer it to these new fangled hidalgos as a reward for their skill in the arts of fraud and peculation…  If it encourage fraud and meanness; if it clothe quackery and pretension in the garb of wisdom; if it turn a whole people into a nation of jobbers … if it break down all the prejudices of rank and birth to render money the only distinction among men … it destroys the perpetuity of property…” (op. cit., pp. 51-52).

[See Labour Defended against the Claims of Capital, Hodgskin 1825.]

3.  Hodgskin

Labour Defended against the Claims of Capital; or, the Unproductiveness of Capital Proved, By a Labourer, London, 1825.  (With reference to the Present Combinations amongst Journeymen.)


Thomas Hodgskin, Popular Political Economy.  Four Lectures delivered at the London Mechanics’ Institution, London, 1827.

The anonymous first work is also by Hodgskin.  Whereas the pamphlets mentioned previously and a series of similar ones have disappeared without trace, these writings, especially the first one, made a considerable stir and are still regarded as belonging to the most important works of English political economy (see John Lalor, Money and Morals, London, 1852).  We shall consider each of these works in turn.

[a) The Thesis of the Unproductiveness of Capital as a Necessary Conclusion from Ricardo’s Theory]

Labour Defended etc.  As the title indicates, the author wishes to prove the “unproductiveness of capital”.

Ricardo does not assert that capital is productive of value.  It only adds its own value to the product, and its own value depends on the labour-time required for its reproduction.  It only has value as accumulated labour (or rather ||864|, materialised labour) and it only adds this—its value—to the product in which it is embodied.  It is true that he is inconsistent when discussing the general rate of profit.  But this is precisely the contradiction which his opponents attacked.

As far as the productivity of capital in relation to use-value is concerned, this is construed by Smith, Ricardo and others, and by political economists in general, as meaning nothing else than that products of previous useful work serve anew as means of production, as objects of labour, instruments of labour and means of subsistence for the workers.  The objective conditions of labour do not face the worker, as in the primitive stages, as mere natural objects (as such, they are never capital), but as natural objects already transformed by human activity.  But in this sense the word “capital” is quite superfluous and meaningless.  Wheat is nourishing not because it is capital but because it is wheat.  The use-value of wool derives from the fact that it is wool, not capital.  In the same way, the action of steam-powered machinery has nothing in common with its existence as capital.  It would do the same work if it were not “capital” and if it belonged, not to the factory owner, but to the workers.  All these things serve in the real labour process because of the relationship which exists between them as use-values—not as exchange-values and still less as capital—and the labour which sets them in motion.  Their productivity in the real labour process, or rather the productivity of the labour materialised in them, is due to their nature as objective conditions of real labour and not to their social existence as alienated, independent conditions which confront the worker and are embodied in the capitalist, the master over living labour.  It is as wealth, as Hopkins (not our Hodgskin) rightly says, and not as “net” wealth, as product and not as “net” product, that they are here consumed and used.  It is true that the particular social form of these things in relation to labour and their real determinateness as factors of the labour process are as confused and inseparably interwoven with one another in the minds of the economists as they are in the mind of the capitalist.  Nevertheless, as soon as they analyse the labour process, they are compelled to abandon the term capital completely and to speak of material of labour, means of labour, and means of subsistence.  But the determinate form of the product as material, instrument and means of subsistence of the worker expresses nothing but the relationship of these objective conditions to labour; labour itself appears as the activity which dominates them.  It says however nothing at all about [the relationship of] labour and capital, only about the relationship of the purposeful activity of men to their own products in the process of reproduction.  They neither cease to be products of labour nor mere objects which are at the disposal of labour.  They merely express the relationship in which labour appropriates the objective world which it has created itself, at any rate in this form; but they do not by any means express any other domination of these things over labour, apart from the fact that activity must be appropriate to the material, otherwise it would not be purposeful activity, labour.

One can only speak of the productivity of capital if one regards it as the embodiment of definite social relations of production.  But if it is conceived in this way, then the historically transitory character of this relationship becomes at once evident, and the general recognition of this fact is incompatible with the continued existence of this relationship, which itself creates the means for its abolition.

But the economists do not regard it [capital] as such a relationship because they cannot admit its relative character, and do not understand it either.  They simply express in theoretical terms the notions of the practical men who are engrossed in capitalist production, dominated by it and interested in it.

In his polemic [with the bourgeois economists], Hodgskin himself starts out from a standpoint which is economically narrow-minded.  Insofar as they [the economists] define capital as an eternal production relation, they reduce it to the general relations of labour to its material conditions, relations which are common to all modes of production and do not express the specific nature of capital.  Insofar as they hold that capital produces “value”, the best of them and [especially] Ricardo, admit that it does not produce any value which it has not received and constantly continues to receive from labour, since the value of a product is determined by the labour-time necessary to reproduce it, that is, its value is the result of living, present labour and not of past labour.  And as Ricardo emphasises, increase in the productivity of labour is marked by the continuous devaluation of the products of past labour.  On the other hand, the economists continually mix up the definite, specific form in which these things constitute capital with their nature as things and as simple elements of every labour process.  The mystification contained in capital—as employer of labour—is not explained by them, but it is constantly expressed by them unconsciously, for it is inseparable from the material aspect of capital.

||867| The first pamphlet[m] draws the correct conclusions from Ricardo and reduces surplus-value to surplus labour.  This is in contrast to Ricardo’s opponents and followers who continue to adhere to his confusion of surplus-value with profit.

In opposition to them, the second pamphlet[n] defines relative surplus-value more exactly as being dependent on the level of development of the productive power of labour.  Ricardo says the same thing, but he avoids the conclusion drawn by the second pamphlet [that by Ravenstone], namely, that the increase in the productive power of labour only increases capital, the wealth of others which dominates labour.

Finally, the third pamphlet[o] bursts forth with the general statement, which is the inevitable consequence of Ricardo’s presentation—that capital is unproductive.  This is in contrast to Torrens, Malthus and others, who, taking one aspect of the Ricardian theory as their point of departure, turn Ricardo’s statement that labour is the creator of value into the opposite—that capital is the creator of value.  The pamphlet, moreover, disputes the statement—which recurs in all of them, from Smith to Malthus, especially in the latter where it is elevated into an absolute dogma (ditto in the case of James Mill)—that labour is absolutely dependent on the amount of capital available, as this is the condition of its existence.

Pamphlet No. 1 ends with the statement:

“Wealth is disposable time, and nothing more”.[p]

[b) Polemic against the Ricardian Definition of Capital as Accumulated Labour.  The Concept of Coexisting Labour.  Underestimation of the Importance of Materialised Past Labour.  Available Wealth in Relation to the Movement of Production]

According to Hodgskin, circulating capital is nothing but the juxtaposition of the different kinds of social labour (coexisting labour) and accumulation is nothing but the amassing of the productive powers of social labour, so that the accumulation of the skill and knowledge (scientific power) of the workers themselves is the chief form of accumulation, and infinitely more important than the accumulation—which goes hand in hand with it and merely represents it—of the existing objective conditions of this accumulated activity.  These objective conditions are only nominally accumulated and must be constantly produced anew and consumed anew.

“… productive capital and skilled labour are […] one.” “Capital and a labouring population are precisely synonymous” ( [Hodgskin, Labour Defended against the Claims of Capital, London, 1825,] p. 33).

These are simply further elaborations of Galiani’s thesis:

“… The real wealth … is man” (Della Moneta, Custodi.  Parte Moderna, t. III, p. 229).

The whole objective world, the “world of commodities”, vanishes here as a mere aspect, as the merely passing activity, constantly performed anew, of socially producing men.  Compare this “idealism” with the crude, material fetishism into which the Ricardian theory develops in the writings “of this incredible cobbler”, McCulloch, where not only the difference between man and animal disappears but even the difference between a living organism and an inanimate object.  And then let them say that as against the lofty idealism of bourgeois political economy, the proletarian opposition has been preaching a crude materialism directed exclusively towards the satisfaction of coarse appetites.

In his investigations into the productivity of capital, Hodgskin is remiss in that he does not distinguish between how far it is a question of producing use-values or exchange-values.

Further—but this has historical justification—he takes capital as it is defined by the economists.  On the one hand (insofar as it operates in the real process of production) as a merely physical condition of labour, and therefore of importance only as a material element of labour, and (in the process of the production of value) nothing more than the quantity of labour measured by time, that is, nothing different from this quantity of labour itself.  On the other hand, although in fact, insofar as it appears in the real process of production, it is a mere name for, and re-christening of, labour itself, it is represented as the power dominating and engendering labour, as the basis of the productivity of labour and as wealth alien to labour.  And this without any intermediate links.  This is how he found it.  And he counterposes the real aspect of economic development to this bourgeois humbug.

“…capital is a sort of cabalistic word, like church or state, or any other of those general terms which are invented by those who fleece the rest of mankind to conceal the hand that shears them” (Labour Defended etc., p.17).

In accordance with the tradition he found prevailing among the economists, he distinguishes between circulating and fixed capital; circulating capital moreover is described as that part which mainly consists of, or is used as, means of subsistence for the workers.

It is maintained “that division of labour is a consequence of previous accumulation of capital”.  But “the effects attributed to a stock of commodities, under the name of circulating capital, are caused by coexisting labour”(op. cit., pp. 8, 9).

Faced with the crude conception of the economists, it is quite correct to say that “circulating capital” is only “the name” for “a stock of” certain “commodities”.  Since the economists have not analysed the specific social relationship which is represented in the metamorphosis of commodities, they can understand only the material aspect of circulating capital.  All the differentiations in capital arising from the circulation process ||868|—in fact the circulation process itself—are actually nothing but the metamorphosis of commodities (determined by their relationship to wage-labour as capital) as an aspect of the reproduction process.

Division of labour is, in one sense, nothing but coexisting labour, that is, the coexistence of different kinds of labour which are represented in different kinds of products or rather commodities.  The division of labour in the capitalist sense, as the breaking down of the particular labour which produces a definite commodity into a series of simple and coordinated operations divided up amongst different workers, presupposes the division of labour within society outside the workshop, as separation of occupations.  On the other hand, it [division of labour] increases it [separation of occupations].  The product is increasingly produced as a commodity in the strict sense of the word, its exchange-value becomes the more independent of its immediate existence as use-value—in other words its production becomes more and more independent of its consumption by the producers and of its existence as use-value for the producers—the more one-sided it itself becomes, and the greater the variety of commodities for which it is exchanged, the greater the kinds of use-values in which its exchange-value is expressed, and the larger the market for it becomes.  The more this happens, the more the product can be produced as a commodity; therefore also on an increasingly large scale.  The producer’s indifference to the use-value of his product is expressed quantitatively in the amounts in which he produces it, which bear no relation to his own consumption needs, even when he is at the same time a consumer of his own product.  The division of labour within the workshop is one of the methods used in this mass production and consequently in the production of the product [as a commodity].  Thus the division of labour within the workshop is based on the division of occupations in society.

The size of the market has two aspects.  First, the mass of consumers, their numbers.  But secondly, also, the number of occupations which are independent of one another.  The latter is possible without the former.  For example, when spinning and weaving become divorced from “domestic” industry and agriculture, all those engaged in agriculture become a market for spinners and weavers.  They likewise [form markets] for one another as a consequence of the separation of their occupations.  What the division of labour in society presupposes above all, is that the different kinds of labour have become independent of one another in such a way that their products confront one another as commodities and must be exchanged, that is, undergo the metamorphosis of commodities and stand in relation to one another as commodities.  (This is why in the Middle Ages, the towns prohibited the spread of as many professions as possible to the countryside, not merely for the purpose of preventing competition—the only aspect seen by Adam Smith—but in order to create markets for themselves.)  On the other hand, the proper development of the division of labour presupposes a certain density of population.  The development of the division of labour in the workshop depends even more on this density of population.  This latter division is, to a certain extent, a pre-condition for the former and in turn intensifies it still further.  It does this by splitting formerly correlated occupations into separate and independent ones, also by differentiating and increasing the indirect preliminary work they require; and as a result of the increase in both production and the population and the freeing of capital and labour it creates new wants and new modes of satisfying them.

Therefore when Hodgskin says “division of labour” is the effect not of a stock of Commodities called circulating capital but of “coexisting labour”, it would be tautologous if in this context he understood by division of labour the separation of trades.  It would only mean that division of labour is the cause or the effect of the division of labour.  He can therefore only mean that division of labour within the workshop depends on the separation of occupations, the social division of labour, and is, in a certain sense, its effect.

It is not a stock of commodities which gives rise to this separation of occupations and with it the division of labour in the workshop, but it is the separation of occupations (and division of labour) that is manifested in the stock of commodities, or rather in the fact that a stock of products becomes a stock of commodities.  (The properties, the characteristic features of the capitalist mode of production and therefore of capital itself insofar as it expresses a definite relation of the producers to one another and to their products, are inevitably always described by the economists as the properties of the objects.)

||869| If, however, “previous accumulation of capital” is being discussed from an economic standpoint (see Turgot, Smith, etc.)  as a condition for the division of labour, then what is understood by this is the previous concentration of a stock of commodities as capital in the possession of the buyer of labour, since the kind of co-operation characteristic of the division of labour presupposes a conglomeration of workers—consequently, accumulation of the means of subsistence necessary for them while they are working—increased productivity of labour—consequently, increase in the amount of raw materials, tools and auxiliary materials which must be available in order that labour proceeds continuously, since it constantly requires large amounts of these things—in short, of the objective conditions of production on a large scale.

Here, accumulation of capital cannot mean increase in the amount of means of subsistence, raw materials and instruments of labour as a condition for the division of labour, for insofar as the accumulation of capital is taken to mean this, it is a consequence of the division of labour, not its pre-condition.

Similarly, accumulation of capital cannot here mean that means of subsistence for the workers must be available in general before new necessaries are reproduced, or that products of their labour must constitute the raw material and means of labour for the new production which they carry out.  For this is the pre-condition of labour in general and was just as true before the development of the division of labour as it is after it.

On the one hand: if we consider the material element of accumulation, it means nothing more than that the division of labour requires the concentration of means of subsistence and means of labour at particular points, whereas formerly these were scattered and dispersed as long as the workers in individual trades—which could not have been very numerous under these conditions—themselves carried out all the manifold and consecutive operations required for the production of one or more products.  Not an increase in absolute terms is presupposed, but concentration, the gathering together of more at a given point, and of relatively more [means of labour] compared with the numbers of workers brought together there.  More flax, for example, [is used] by the workers in manufacture (in proportion to their numbers) than the relative amount of flax required in proportion to all the peasants—both men and women—who used to spin flax as a sideline.  Hence, conglomeration of workers, concentration of raw materials, instruments, and means of subsistence.

On the other hand: if we consider the historical foundation on which this process develops, from which manufacture arises, the industrial mode of production whose characteristic feature is the division of labour, then this concentration can only take place in the form that these workers are assembled together as wage-workers, that is, as workers who must sell their labour-power because their conditions of labour confront them as alien property, as an independent, alien force.  This implies that these conditions of labour confront them as capital; in other words, these means of subsistence and means of labour (or, what amounts to the same thing, the disposal of them through the intermediary of money) are in the hands of individual owners of money or of commodities, who, as a result, become capitalists.  The loss of the conditions of labour by the workers is expressed in the fact that these conditions become independent as capital or as things at the disposal of the capitalists.

Thus primitive accumulation, as I have already shown, means nothing but the separation of labour and the worker from the conditions of labour, which confront him as independent forces.  The course of history shows that this separation is a factor in social development.  Once capital exists, the capitalist mode of production itself evolves in such a way that it maintains and reproduces this separation on a constantly increasing scale until the historical reversal takes place.

It is not the ownership of money which makes the capitalist a capitalist.  For money to be transformed into capital, the prerequisites for capitalist production must exist, whose first historical presupposition is that separation.  The separation, and therefore the existence of the means of labour as capital, is given in capitalist production; this separation which constantly reproduces itself and expands, is the foundation of production.

Accumulation by means of the reconversion of profit, or surplus product, into capital now becomes a continuous process as a result of which the increased products of labour which are at the same time its objective conditions, conditions of reproduction, continuously confront labour as capital, i.e., as forces—personified in the capitalist—which are alienated from Labour and dominate it.  Consequently, it becomes a specific function of the capitalist to accumulate, that is, to reconvert a part of the surplus product into conditions of labour.  And the stupid economist concludes from this that if this operation did not proceed in this contradictory, specific way, it could not take place at all.  Reproduction on an extended scale is inseparably connected in his mind with accumulation, the capitalist form of this reproduction.

||870| Accumulation merely presents as a continuous process what in primitive accumulation appears as a distinct historical process, as the process of the emergence of capital and as a transition from one mode of production to another.

The economists, caught as they are in the toils of the notions proper to the agents of the capitalist mode of production, advance a double quid pro quo, each side of which depends on the other.

On the one hand, they transform capital from a relationship into a thing, a stock of commodities (already forgetting that commodities themselves are not things) which, insofar as they serve as conditions of production for new labour, are called capital and, with regard to their mode of reproduction, are called circulating capital.

On the other hand, they transform things into capital, that is, they consider the social relationship which is represented in them and through them as an attribute which belongs to the thing as such as soon as it enters as an element into the labour process or the technological process.

[On the one hand,] the concentration in the hands of non-workers of raw materials and of the disposition over the means of subsistence, i.e., the powers dominating labour, the preliminary condition for the division of labour (later on, the division of labour increases not only concentration, but also the amount [available for] concentration by increasing the productivity of labour), in other words the preliminary accumulation of capital as the condition for the division of labour therefore means for them the augmentation or concentration (they do not differentiate between the two) of means of subsistence and means of labour.

On the other hand, these necessaries and means of labour would not operate as objective conditions of production if these things did not possess the attribute of being capital, if the product of labour, the condition of labour, did not absorb labour itself; [if] past labour did not absorb living labour, and if these things did not belong to them selves or by proxy to the capitalist instead of to the worker.

As if the division of labour was not just as possible if its conditions belonged to the associated workers (although historically it could not at first appear in this form, but can only achieve it as a result of capitalist production) and were regarded by the latter as their own products and the material elements of their own activity, which they are by their very nature.

Furthermore, because in the capitalist mode of production capital appropriates the surplus product of the worker, consequently, because it has appropriated the products of labour and these now confront the worker in the form of capital, it is clear that the conversion of the surplus product into conditions of labour can only be initiated by the capitalist and only in the form that he turns the products of labour—which he has appropriated without any equivalent—into means of production of new labour performed without receiving an equivalent.  Consequently, the extension of reproduction appears as the transformation of profit into capital and as a saving by the capitalist who, instead of consuming the surplus product which he has acquired gratis, converts it anew into a means of exploitation, but is able to do this only insofar as he converts the surplus product again into productive capital; this entails the conversion of surplus product into means of labour.  As a result, the economists conclude that the surplus product cannot serve as an element of new production if it has not been transformed previously from the product of the worker into the property of his employer in order to serve as capital once again and to repeat the old process of exploitation.  The more inferior economists add to this the idea of hoarding and the accumulation of treasure.  Even the better ones—Ricardo, for example—transfer the notion of renunciation from the hoarder to the capitalist.

The economists do not conceive capital as a relation.  They cannot do so without at the same time conceiving it as a historically transitory, i.e., a relative—not an absolute—form of production.  Hodgskin himself does not share this concept.  Insofar as it justifies capital it does not justify its justification by the economists, but on the contrary refutes it.  Thus Hodgskin is not concerned in all this.

As far as matters stood between him and the economists, the kind of polemic he had to wage seemed to be mapped out beforehand and quite simple.  To put it simply, he had to vindicate the one aspect which the economists elaborate “scientifically” against the fetishistic conception they accept without thinking, naïvely and unconsciously from the capitalist way of looking at things.

The utilisation of the products of previous labour, of labour in general, as materials, tools, means of subsistence, is necessary if the worker wants to use his products for new production.  This particular mode of consumption of his products is productive.  But what on earth has this kind of utilisation, this mode of consumption of his product, to do with the domination of his product over him, with its existence as capital, with the concentration ||870a| in the hands of individual capitalists of the right to dispose of raw materials and means of subsistence and the exclusion of the workers from ownership of their products?  What has it to do with the fact that first of all they have to hand over their product gratis to a third party in order to buy it back again with their own labour and, what is more, they have to give him more labour in exchange than is contained in the product and thus have to create more surplus product for him?

Past labour exists here in two forms.  [In one] as product, use-value.  The process of production requires that the workers consume one portion of this product [as means of subsistence, and use] another portion as raw materials and instruments of labour.  This applies also to the technological process and merely demonstrates the relations that have to exist in industrial production between the workers and the products of their own labour, their own products, in order to turn them into means of production.

Or, [past labour exists as] value.  This only shows that the value of their new product represents not only their present, but also their past labour, and that by increasing it they retain the old value, because they increase it.

The claim put forward by the capitalist has nothing to do with this process as such.  It is true that he has appropriated the products of labour, of past labour, and that he therefore possesses a means for acquiring new products and living labour.  This, however, is precisely the kind of procedure against which protests are made.  The preliminary concentration and accumulation necessary for the “division of labour” must not take the form of accumulation of capital.  It does not follow that because this [concentration] is necessary, the capitalist must inevitably have the disposal of the conditions of labour of today created by the labour of yesterday.  If accumulation of capital is supposed to be nothing but accumulated labour, it by no means implies that accumulation of other people’s labour has to take place.

Hodgskin however does not follow this simple path, and at first this seems strange.  In his polemic against the productivity of capital, to begin with, against circulating and then even more, against fixed capital, he seems to oppose or to reject the importance of past labour, or of its product for the reproduction process as a condition of new labour.  From this follows the importance of past labour embodied in products for labour as present έύέργεια[q] Why this change?

Since the economists identify past labour with capital—past labour being understood in this case not only in the sense of concrete labour embodied in the product, but also in the sense of social labour, materialised labour-time—it is understandable that they, the Pindars of capital, emphasise the objective elements of production and overestimate their importance as against the subjective element, living, immediate labour.  For them, labour only becomes efficacious when it becomes capital and confronts itself, the passive element confronting its active counterpart.  The producer is therefore controlled by the product, the subject by the object, labour which is being embodied by labour embodied in an object, etc.  In all these conceptions, past labour appears not merely as an objective factor of living labour, subsumed by it, but vice versa; not as an element of the power of living labour, but as a power over this labour.  The economists ascribe a false importance to the material factors of labour compared with labour itself in order to have also a technological justification for the specific social form, i.e., the capitalist form, in which the relationship of labour to the conditions of labour is turned upside-down, so that it is not the worker who makes use of the conditions of labour, but the conditions of labour which make use of the worker.  It is for this reason that Hodgskin asserts on the contrary that this physical factor, that is, the entire material wealth, is quite unimportant compared with the living process of production and that, in fact, this wealth has no value in itself, but only insofar as it is a factor in the living production process.  In doing so, he underestimates somewhat the value which the labour of the past has for the labour of the present, but in opposing economic fetishism this is quite all right.

If in capitalist production—hence in political economy, its theoretical expression—past labour were met with only as a pedestal etc. created by labour itself, then such a controversial issue would not have arisen.  It only exists because in the real life of capitalist production, as well as in its theory, materialised labour appears as a contradiction to itself, to living labour.  In exactly the same way in religious reasoning, the product of thought not only claims but exercises domination over thought itself.  |870a|| .

||865| The proposition

“… the effects attributed to a stock of commodities, under the name of circulating capital, are caused by coexisting labour” (op. cit., p. 9),

means first of all:

the simultaneous coexistence of living labour brings about a large part of the effects which are attributed to the product of previous labour called circulating capital.

For example, a part of circulating capital consists of the stock of means of subsistence which the capitalist is supposed to have stored up to support the labourer while working.

The formation of a reserve stock is by no means a feature peculiar to capitalist production although, since under it production and consumption are greater than ever before, the amount of commodities on the market—the amount of commodities in the sphere of circulation—is likewise greater than ever before.  Here memories of hoarding, of accumulation of treasure by hoarders are still discernible.

The consumption fund must be disregarded first of all because we are speaking here of capital and of industrial production.  What has reached the sphere of individual consumption, whether it is consumed more quickly or more slowly, has ceased to be capital.  (Although it can be partly reconverted into capital, for instance, houses, parks, crockery.)

“Do all the capitalists of Europe possess at this moment one week’s food and clothing for all the labourers they employ?  Let us first examine the question as to food.  One portion of the food of the people is bread, which is never prepared till within a few hours of the time when it is eaten…  The produce […] of the baker, cannot be stored up.  In no case can the material of bread, whether it exist as corn or flour, be preserved without continual labour.  […] His conviction[r] that he will obtain bread when he requires it, and his master’s conviction that the money he pays him will enable him to obtain it, arise simply from the fact that the bread has always been obtained when required” (loc. cit., p. 10).

“Another article of the labourer’s food is milk, and milk is manufactured … twice a day.  If it be said that the cattle to supply it are already there;—why the answer is, they require constant attention and constant labour, and their food, through the greater part of the year, is of daily growth.  The fields in which they pasture, require the hand of man.  […] The meat, also […] it cannot be stored up, for it begins instantly to deteriorate after it is brought to market” (loc. cit., p. 10).

Because of moths, even of clothing “… only a very small stock is ever prepared, compared to the general consumption” (loc. cit., p. 11).

“Mr. Mill says, and says justly, ‘what is annually produced is annually consumed’, so that, in fact, to enable men to carry on all those operations which extend beyond a year, there cannot be any stock of commodities stored up.  Those who undertake them must rely, therefore, not on any commodities already created, but that other men will labour and produce what they are to subsist on till their own products are completed.  Thus, should the labourer admit that some accumulation of circulating capital is necessary for operations terminated within the year […] it is plain, that in all operations which extend beyond a year, the labourer does not, and he cannot, rely on accumulated capital” (loc. cit., p. 12).

“If we duly consider the number and importance of those wealth-producing operations which are not completed within the year, and the numberless products of daily labour, necessary to subsistence, which are consumed as soon as produced, we shall […] be sensible that the success and productive power of every different species of labour is at all times more dependent on the coexisting productive labour of other men than on any accumulation of circulating capital” (loc. cit., p. 13).

“… it is by the command the capitalist possesses over the labour of some men, not by his possessing a stock of commodities, that he is enabled to support and consequently employ other labourers” (loc. cit., p. 14).

“… the only thing which can be said to be stored up or previously prepared, is the skill of the labourer” (loc. cit., p. 12).

“ …all the effects usually attributed to accumulation of circulating capital are derived from the accumulation and storing up of skilled labour; and […] this most important operation is performed, as far as the great mass of the labourers is concerned without any circulating capital whatever” (loc. cit., p. 13).

“… the number of labourers must at all times depend on the quantity of circulating capital; or, as I should say, on the quantity of the products of coexisting labour, which labourers are allowed to consume…” (op. cit., p. 20).

||866| “Circulating capital […] is created only for consumption; while fixed capital […] is made, not to be consumed, but to aid the labourer in producing those things which are to be consumed” (loc. cit., p. 19).

Thus first of all:

“… the success and productive power of every different species of labour is at all times more dependent on the coexisting productive labour of other men than on any accumulation of circulating capital” [op. cit., p. 13], that is, of “commodities already created”.  These “already created commodities” confront “the products of coexisting labour”.

{The part of capital which consists of instruments and materials of labour is as “commodities already created” always a pre-condition in each particular branch of production.  It is impossible to spin cotton which has not yet been produced, to operate spindles which have yet to be manufactured, or to burn coal which has not yet been brought up from the mine.  These always enter the [production] process as forms of existence of previous labour.  Existing labour thus depends on antecedent labour and not only on coexisting labour, although this antecedent labour, whether in the form of means of labour or materials of labour, can only be of any use (productive use) when it is in contact with living labour as a material element of it.  Only as an element of industrial consumption, i.e., consumption by labour.

But when considering circulation and the reproduction process, we have seen that it is only possible to reproduce the commodity after it is finished and converted into money, because simultaneously all its elements have been produced and reproduced by means of coexisting labour.

A twofold progression takes place in production.  Cotton, for example, advances from one phase of production to another.  It is produced first of all as raw material, then it is subjected to a number of operations until it is fit to be exported or, if it is further worked up in the same country, it is handed over to a spinner.  It then goes on from the spinner to the weaver and from the weaver to the bleacher, dyer, finisher, and thence to various workshops where it is worked up for definite uses, i.e., articles of clothing, bed-linen, etc.  Finally it leaves the last producer for the consumer and enters into individual consumption if it does not enter into industrial consumption as means (not material) of labour.  But whether it is to be consumed industrially or individually, it has acquired its final form as use-value.  What emerges from one sphere of production as a product enters another as a condition of production, and in this way, goes through many successive phases until it receives its last finish as use-value.  Here previous labour appears continually as the condition for existing labour.

Simultaneously, however, while the product is advancing in this way from one phase to another, while it is undergoing this real metamorphosis, production is being carried on at every stage.  While the weaver spins the yarn, the spinner is simultaneously spinning cotton, and fresh quantities of raw cotton are in the process of production.

Since the continuous, constantly repeated process of production is, at the same time, a process of reproduction, it is therefore equally dependent on the coexisting labour which produces the various phases of the product simultaneously, while the product is passing through metamorphosis from one phase to another.  [Raw] cotton, yarn, fabric, are not only produced one after the other and from one another, but they are produced and reproduced simultaneously, alongside one another.  What appears as the effect of antecedent labour, if one considers the production process of the individual commodity, presents itself at the same time as the effect of coexisting labour, if one considers the reproduction process of the commodity, that is, if one considers this production process in its continuous motion and in the entirety of its conditions, and not merely an isolated action or a limited part of it.  There exists not only a cycle comprising various phases, but all the phases of the commodity are simultaneously produced in the various spheres and branches of production.  If the same peasant just plants flax, then spins it, then weaves it, these operations are performed in succession, but not simultaneously as the mode of production based on the division of labour within society presupposes.

No matter what phase of the production process of an individual commodity is considered, the antecedent labour only acquires significance as a result of the living labour which it provides with the necessary conditions of production.  On the other hand, however, these conditions of production without which living labour cannot realise itself always appear as the result of antecedent labour.  Thus the co-operating labour of the contributing branches of labour always appears as a passive factor and, as such a passive factor, it is a pre-condition.  The economists emphasise this aspect.  In production and circulation, on the other hand, the mediating social labour on which the [production] process of the commodity in each particular phase depends and by which it is determined, appears as present, coexisting, contemporaneous labour.  The early forms of the commodity and its successive or completed forms are produced simultaneously.  Unless this happened it would not be possible, after it has undergone its real metamorphosis, to reconvert it from money into its conditions of existence.  ||870b| A commodity is thus the product of antecedent labour only insofar as it is the product of contemporaneous living labour.  From the capitalist point of view, therefore, all material wealth appears only as a fleeting aspect of the flow of production as a whole, which includes the process of circulation.}

[c)] So-called Accumulation as a Mere Phenomenon of Circulation.  (Stock, etc.—Circulation Reservoirs)

Hodgskin examines only one of the constituent parts of circulating capital.  One part of circulating capital is however continuously converted into fixed capital and auxiliary materials and only the other part is converted into articles of consumption.  Moreover, even that part of circulating capital which is ultimately transformed into commodities intended for individual consumption always exists, alongside the final form in which it emerges from the finishing phase as end product, simultaneously in the earlier phases of production in its rudimentary forms—as raw material or semi-manufactured goods, removed in various degrees from the final form of the product—in which it cannot as yet enter into consumption.

The problem Hodgskin is concerned with is: what is the relation of the present labour performed by the worker for the capitalist to the labour embodied in his articles of consumption, the labour contained in those articles on which his wages are spent, which, in actual fact, are the use-values of which variable capital consists?  It is admitted that the worker cannot labour without finding these articles ready for consumption.  And that is why the economists say that circulating capital—the previous labour, commodities already created which the capitalist has stored up—is the condition for labour and, amongst other things, also the condition for the division of labour.

When the conditions of production, and especially circulating capital in Hodgskin’s sense of the term, are being discussed, it is usual to declare that the capitalist must have accumulated the food which the worker has to consume before his new commodity is finished, that is, while he works, while the commodity he produces is only in statu nascendi.[s] This is shot through with the notion that the capitalist either gathers things like a hoarder or that he stores up a supply of food like the bees their honey.

This however is merely a modus loquendi.[t]

First of all, we are not speaking here of the shopkeepers who sell means of subsistence.  These must naturally have a full stock in trade.  Their stores, shops, etc. are simply reservoirs in which the various commodities are stored once they are ready for circulation.  This kind of storing is merely an interim period in which the commodity remains until it leaves the sphere of circulation and enters that of consumption.  It is its mode of existence as a commodity on the market.  Strictly speaking, as a commodity it exists only in this form.  It does not affect the matter whether, instead of being in the possession of the first seller (the producer), the commodity is in the possession of the third or fourth and finally passes into the possession of the seller who sells it to the real consumer.  It merely means that, in the intermediate stage, exchange of capital (really of capital plus profit, for the producer sells not only the capital in the commodity but also the profit made on the capital) for capital is taking place, and in the last stage exchange of capital for revenue (provided the commodity is intended not for industrial but for individual consumption, as is assumed here).

The commodity which is a finished use-value and marketable, enters the market as a commodity, in the phase of circulation; all commodities enter this phase when they undergo their first metamorphosis, the transformation into money.  If this is called “storing up” then it means nothing more than “circulation” or the existence of commodities as commodities.  This kind of “storing” is exactly the opposite of treasure-hoarding, the aim of which is to retain commodities permanently in the form in which they are capable of entering into circulation, and it achieves this only by withdrawing commodities in the form of money from circulation.  If production, and therefore also consumption, is varied and on a mass scale, then a greater quantity of the most diverse commodities will be found continually at this stopping place, at this intermediate station, in a word, in circulation or on the market.  Regarded from the standpoint of quantity, storing on a large scale in this context means nothing more than production and consumption on a large scale.

The stop made by the commodities, their sojourn at this stage of the process, their presence on the market instead of in the mill or in a private house (as articles of consumption) or in the shop or the store of the shopkeeper, is only ||871| a tiny fraction of time in their life-process.  The immobile, independent existence of this world of commodities, of things, is only illusory.  The station is always full, but always full of different travellers.  The same commodities (commodities of the same kind) are constantly produced anew in the sphere of production, available on the market and absorbed in consumption.  Not the identical commodities, but commodities of the same type, can always be found in these three stages simultaneously.  If the intermediate stage is prolonged so that the commodities which emerge anew from the sphere of production find the market still occupied by the old ones, then it becomes overcrowded, a stoppage occurs, the market is glutted, the commodities decline in value, there is over-production.  Where, therefore, the intermediate stage of circulation acquires independent existence so that the flow of the stream is not merely slowed down, where the existence of the commodities in the circulation phase appears as storing up, then this is not brought about by a free act on the part of the producer, it is not an aim or an immanent aspect of production, any more than the flow of blood to the head leading to apoplexy is an immanent aspect of the circulation of the blood.  Capital as commodity capital (and this is the form in which it appears in the circulation phase, on the market) must not become stationary, it must only constitute a pause in the movement.  Otherwise the reproduction process is interrupted and the whole mechanism is thrown into confusion.  This materialised wealth which is concentrated at a few points is—and can only be—very small in comparison to the continuous stream of production and consumption.  Wealth, therefore, according to Smith, is “the annualreproduction.  It is not, that is to say, something out of the dim past.  It is always something which emerges from yesterday.  lf, on the other hand, reproduction were to stagnate due to some disturbances or others, then the stores etc. would soon empty, there would be shortages and it would soon be evident that the permanency which the existing wealth appears to possess, is only the permanency of its being replaced, of its reproduction, that it is a continuous materialisation of social labour.

The movement C—M—C also takes place in the transactions of the shopkeeper.  Insofar as he makes a “profit”, it is a matter which does not concern us here.  He sells goods and buys the same goods (the same type of goods) over again.  He sells them to the consumer and buys them again from the producer.  Here the same (type of) commodity is converted perpetually into money and money back again continuously into the same commodity.  This movement, however, simply represents continuous reproduction, continuous production and consumption, for reproduction includes consumption.  (The commodity must be sold, must reach the sphere of consumption in order that it can be reproduced.)  It must be accepted as a use-value.  (For C—M for the seller is M—C for the buyer, that is, the conversion of money into a commodity as use-value.)  The reproduction process, since it is a unity of circulation and production, includes consumption, which is itself an aspect of circulation.  Consumption is itself both an aspect and a condition of the reproduction process.  If one considers the process in its entirety, the shopkeeper, in fact, pays the producer of the commodities with the same sum of money as the consumer pays him when he buys from him.  He represents the consumer in his dealings with the producer and the producer in his dealings with the consumer.  He is both seller and buyer of the same commodity.  The money with which he pays is, in fact, considered from a purely formal standpoint, the final metamorphosis of the consumer’s commodity.  The latter transforms his money into the commodity as a use-value.  The passing of the money into the shopkeeper’s hands thus signifies the consumption of the commodity or, considered formally, the transition of the commodity from circulation into consumption.  Insofar as he buys again from the producer with the money, this constitutes the first metamorphosis of the producer’s commodity and signifies the transition of the commodity into the intermediate stage, where it remains as a commodity in the sphere of circulation.  C—M—C, insofar as it concerns the transformation of the commodity into the consumer’s money and the transformation back again of the money, whose owner is now the shopkeeper, into the same commodity (a commodity of the same kind), expresses merely the constant passing over of commodities into consumption, for the vacuum left by the commodity reaching the sphere of consumption must be filled by the commodity emerging from the production process and now entering this stage.

||872| The period during which the commodity stays in circulation and is replaced by new commodities naturally depends also on the length of time in which the commodities remain in the production sphere, that is, on the duration of their reproduction time, and varies in accordance with their different length.  For example, the reproduction of corn requires a year.  The corn harvested in the autumn, for example, of 1862 (insofar as it is not used again for seed) must suffice for the whole coming year—until autumn 1863.  It is thrown all at once into circulation (it is already in circulation when it is placed in the farmers’ granaries) and absorbed in the various reservoirs of circulation—storehouses, corn merchants, millers, etc.  These reservoirs serve as channels both for the commodities issuing from production and those going to the consumer.  As long as the commodities remain in one of them, they are commodities and are therefore on the market, in circulation.  They are withdrawn only piecemeal, in small quantities, by the annual consumption.  The replacement, the stream of new commodities which are to displace them, arrives only in the following year.  Thus these reservoirs are only depleted gradually, in the measure that their replacements move forward.  If there is a surplus and if the new harvest is above the average, then a stoppage takes place.  The space which these particular commodities were to have occupied in the market is overstocked.  In order to permit the whole quantity to find a place on the market, the price of the commodities is reduced, and this causes them to move again.  If the total quantity of use-values is too large, they accommodate themselves to the space they have to occupy by a reduction of their prices.  If the quantity is too small, it is expanded by an increase of their prices.

On the other hand, commodities which quickly deteriorate as use-values remain only for a very short time in the reservoirs of circulation.  The period of time during which they have to be converted into money and reproduced, is prescribed by the nature of their use-value which, if it is not consumed daily or almost daily, is spoilt and consequently ceases to be a commodity. For exchange-value along with its basis, use-value, disappears provided the disappearance of use-value is not itself an act of production.

In general, it is clear that although in absolute terms the quantity of the commodities which have been stored up in the reservoirs of circulation increases as a result of the development of industry, because production and consumption increase, this same quantity represents a decrease in comparison with the total annual production and consumption.  The transition of commodities from circulation to consumption takes place more rapidly.  And for the following reasons.  The speed of reproduction increases:

1) When the commodity passes rapidly through its various production phases, that is, when each production phase of the production process is reduced in length; this is due to the fact that the labour-time necessary to produce the commodity in each one of its forms is reduced, this is a result, therefore, of the development of the division of labour, use of machinery, application of chemical processes, etc.  <The development of chemistry makes it possible to speed up the transition of commodities from one state of aggregation to another, their combination with other material which, for instance, occurs in dyeing, their separation from [other] substances as in bleaching; in short, both [modifications in] the form of the same substance (its state of aggregation) as well as changes to be brought about in the substance, are artificially accelerated quite apart from the fact, that for vegetative and organic reproduction, plants, animals, etc., are supplied with cheaper substances, that is, substances which cost less labour-time.>

2) Partly as a result of the combination of various branches of industry, that is, the establishment of centres of production for particular industrial branches, [partly] through the development of means of communication, the commodity proceeds rapidly from one phase to another; in other words, the interim period, the interval during which the commodity remains in the intermediate station between one production phase and another is reduced, that is, the transition from one phase of production to another is shortened.

3) This whole development—the shortening both of the various phases of the production process and of the transition from one phase to another—presupposes production on a large scale, mass production and, at the same time, production based on a large amount of constant capital, especially fixed capital; [it requires] therefore a continuous flow of production.  But not in the sense in which we have earlier considered the flow, that is, not as the closing of and overlapping of the separate production phases, but in the sense that there are no deliberate breaks in production.  These occur as long as work is done to order, as in ||873| the handicrafts, and continue even in manufacture properly so-called (insofar as this has not been reshaped by large-scale industry).  In modern industry, however, work is carried out on the scale allowed by the capital.  This process does not wait on demand, but is a function of capital.  Capital works on the same scale continuously (if one disregards accumulation or expansion) and constantly develops and extends the productive forces.  Production is therefore not only rapid, so that the commodity quickly acquires the form in which it is suitable for circulation, but it is continuous.  Production here appears only as constant reproduction and at the same time it takes place on a mass scale.

Thus if the commodities remain in the circulation reservoirs for a long time—if they accumulate there—then they will soon glut them as a result of the speed with which the waves of production follow one another and the huge amount of goods which they deposit continuously in the reservoirs.  It is in this sense that Corbet, for example, says the market is always overstocked.  But the same circumstances which produce this speed and mass scale of reproduction likewise reduce the necessity for the accumulation of commodities in the reservoirs.  In part—insofar as it is concerned with industrial consumption—this is already implied by the close succession of the production phases which the commodity itself or its ingredients have to undergo.  If coal is produced daily on a mass scale and brought to the manufacturer’s door by railways, steamships, etc., he does not need to have a stock of coal, or at most only a very small one; or, what amounts to the same thing, if a merchant acts as an intermediary, he only needs to keep a small amount of stock over and above the amount he sells daily and which is daily delivered to him.  The same applies to yarn, iron, etc.  But apart from industrial consumption, in which the stock of commodities (that is, the stock of the ingredients of commodities) must decline in this way, the shopkeeper likewise enjoys the benefits of the speed of communications first of all, and secondly, the certainty of a continuous and rapid renewal and delivery.  Although his stock of commodities may grow in size, each element of it will remain in his reservoir, in a state of transition, for a shorter period of time.  In relation to the total amount of commodities which he sells, that is, in relation to the scale of both production and consumption, the stock of commodities which he accumulates and keeps in store, will be small.  It is different in the less developed stages of production where reproduction proceeds slowly—where therefore more commodities must remain in the circulation reservoirs—the means of transport are slow, the communications difficult and, as a consequence, the renewal of stock can be interrupted and a great deal of time elapses as a result between the emptying and the refilling of the reservoir—that is, the renewal of the stock in hand.  The position is then similar to that of products whose reproduction takes place yearly or half-yearly, in short in more or less prolonged periods of time, owing to the nature of their use-values.

<For example, cotton is an illustration of how transport and communications affect the emptying of the reservoir.  Since ships continually ply between Liverpool and the United States—speed of communications is one factor, continuity another—all the cotton supply is not shipped at once.  It comes on to the market gradually (the producer likewise does not want to flood the market all at once).  It lies at the docks in Liverpool, that is, already in a kind of circulation reservoir, but not in such quantities—in relation to the total consumption of the article—as would be required if the ship from America arrived only once or twice a year, after a journey of six months.  The cotton manufacturer in Manchester and other places stocks his warehouse roughly in accordance with his immediate consumption needs, since the electric telegraph and the railway make the transfer from Liverpool to Manchester possible at a moment’s notice.>

Special filling of the reservoirs—insofar as this is not due to the overstocking of the market, which can happen much more easily in these circumstances than under archaically slow conditions—occurs only for speculative reasons and merely in exceptional cases because of a real or suspected fall or rise of prices.  Regarding this relative decline in stock, that is, the commodities which are in circulation, compared with the amount of production and consumption, see Lalor, The Economist, Corbet (give the corresponding quotations ||874| after Hodgskin).  Sismondi wrongly saw something lamentable in all this (his writings to be looked up as well).

(On the other hand, there is indeed a continuous extension of the market and in the degree that the interval of time decreases in which the commodity remains on the market, its flow in space increases, that is, the market expands spatially, and the periphery in relation to the centre, the production sphere of the commodity, is circumscribed by a constantly extending radius.)

The fact that consumption lives from hand to mouth, changes its linen and its coat as rapidly as it does its opinions and does not wear the same coat ten years running, etc. is connected with the speed of reproduction, or is another expression of it.  To an increasing extent consumption—even of articles where this is not demanded by the nature of their use-value—takes place almost simultaneously with production and becomes therefore more and more dependent on the present, coexisting labour (since it is, in fact, exchange of coexisting labour).  This takes place in the same degree in which past labour becomes an ever more important factor of production, even though this past itself is after all a very recent and only relative one.

(The following example demonstrates how closely the keeping of a stock is linked with deficiencies of production.  As long as it is difficult to keep cattle throughout the winter, there is no fresh meat in winter.  As soon as stock-farming is able to overcome this difficulty, the stock previously made up of substitutes for fresh meat—pickled or smoked varieties—ceases of itself.)

The product only becomes a commodity where it enters into circulation.  The production of goods as commodities, hence circulation, expands enormously as a result of capitalist production for the following reasons:

1.  Production takes place on a large scale, the quantity, the huge amounts produced, therefore, do not stand in any kind of quantitative relationship to the producer’s needs [of his own product]; in fact it is pure chance whether he consumes any, even a small part of his own product.  He only consumes his own product on a mass scale where he produces some of the ingredients of his own capital.  On the other hand, in the earlier stages [of economic development] only those products which exceed the amount required by the producer himself become commodities or, at any rate, this is mainly the case.

2.  The narrow range of goods produced [stands] in inverse ratio to the increased variety of needs.  This is due to previously combined branches of production becoming increasingly separated and independent—in short, to increasing division of labour within society—a contributing factor is the establishment of new branches of production and the increasing variety of commodities produced.  ([To be inserted] at the end, after Hodgskin, also Wakefield about this.)  This increased variety and differentiation of commodities arises in two ways.  The different phases of one and the same product, as well as the auxiliary operations (that is, the labour connected with various constituent parts, etc.) are separated and become different branches of production, independent of one another; or various phases of one product become different commodities.  But secondly, owing to labour and capital (or labour and surplus product) becoming free; on the other hand, to the discovery of new practical applications of the same use-value, either because new needs arise as a result of the modification of No. 1 (for example, the need for more rapid and universal means of transport and communication arising with the application of steam in industry) and therefore new means of satisfying them, or new possibilities of utilising the same use-value are discovered, or new substances or new methods (plastic-galvanisation, for instance) for treating well-known substance in different ways.

All this amounts to the following: successive phases or states of one product are converted into separate commodities.  New products or new values in use are created and become commodities.

3.  Transformation of the majority of the population who formerly consumed a mass of products in naturalibus[u] into wage-workers.

4.  Transformation of the tenant farmer into an industrial capitalist <and with it the conversion of rent into money rent and generally of all payments in kind (taxes, etc., rent) into money payments>.  In general—industrial exploitation of the land with the result that it is no longer confined to its own muck-heap as previously, but that both its chemical and mechanical conditions of production—even seeds, fertilisers, cattle, etc. are subjected to the process of exchange.

5.  Mobilisation of a mass of previously “inalienable” possessions by conversion into commodities and the creation of forms of property which only exist in negotiable papers.  On the one hand, alienation of landed property (the lack of property of the masses causes them, for example, to regard the dwelling in which they live as a commodity).  [On the other hand,] railway shares, in short, all kinds of shares.

[d) Hodgskin’s Polemic Against the conception that the Capitalists “store Up” Means of Subsistence for the Workers.  His Failure to Understand the Real causes of the Fetishism of Capital]

||875| Back again to Hodgskin now.

It is obvious that by “storing up” [means of subsistence] for the workers by the capitalists one cannot understand that commodities which are passing from production into consumption are in the circulation reservoirs, in the circulation system, on the market.  This would mean that the products circulate for the benefit of the worker and become commodities for his sake; and that in general, the production of products as commodities is undertaken for his sake.

The worker shares with every other [commodity owner the need] to transform the commodity he sells—which in actual fact, though not in form, is his labour—at first into money in order to convert the money back again into commodities which he can consume.  It is perfectly obvious that [no] division of labour (insofar as it is based on commodity production), [no] wage-labour and, in general, no capitalist production can take place without commodities—whether they be means of consumption or means of production—being available on the market; that this kind of production is impossible without commodity circulation, without the commodities spending a period of time in the circulation reservoir.  For the product is a commodity in the strict sense of the word only within the framework of circulation.  It is as true for the worker as for anybody else that he must find his means of subsistence in the form of commodities.

The worker, moreover, does not confront the shopkeeper as a worker confronts a capitalist, but as money confronts the commodity, as a buyer faces the seller.  There is no relationship of wage-labour to capital here, except of course, where the shopkeeper is dealing with his own workers.  But even they, insofar as they buy things from him, do not confront him as workers.  They confront him as workers only insofar as he buys from them.  Let us therefore leave this circulation agent.

But as far as the industrial capitalist is concerned, his stock, his accumulation, consists of:

[First] his fixed capital, i.e., buildings, machinery, etc., which the worker does not consume or, insofar as he does consume them, does so through labour, and thus consumes them industrially for the capitalist, and although they are means of labour they are not means of subsistence for him.

Secondly, his raw materials and auxiliary materials, the stock of which, insofar as it does not enter directly into production, declines, as we have seen.  This likewise does not consist of means of subsistence for the workers.  This accumulation by the capitalist for the workers means nothing more than that he does the worker the favour of depriving the latter of his conditions of labour and converting the means of his labour (which are themselves merely the transformed product of his labour) into means for the exploitation of labour.  In any case, the worker, while he uses the machines and the raw materials, does not live on them.

Thirdly, the commodities, which he keeps in the storehouse or warehouse before they enter into circulation.  These are products of labour, not means of subsistence stored in order to maintain labour during the course of production.

Thus the “accumulation” of means of subsistence by the capitalist for the worker means merely that he must possess enough money in order to pay wages with which the worker withdraws the articles of consumption he needs from the circulation reservoir (and, if we consider the [working] class as a whole, with which he buys back part of his own product).  This money, however, is simply the transformed form of the commodity which the worker has sold and handed over.  In this sense, the means of subsistence are “stored up” for him in the same way as they are stored up for his capitalist, who likewise buys consumption goods etc. with money (the transformed form of the same commodity).  This money may be a mere token of value, it therefore does not have to be a representation “of previous labour” but, in the hands of whoever possesses it, simply expresses the realised price not of past labour (or previously [sold] commodities) but of the contemporaneous labour or commodities which he sells.  [Money has] merely a formal existence.  Or—since in previous modes of production the worker also had to eat and consume during the course of production irrespective of the period of time required for the production of his product—“storing up” may mean that the worker must first of all transform the product of his labour into the product of the capitalist, into capital, in order to receive back a portion of it in the form of money, in lieu of payment.

||876| What interests Hodgskin about this whole process (with regard to the process as such it is indeed a matter of indifference whether the worker receives the product of contemporaneous or previous labour, just as it does not matter whether he receives the product of his own previous labour or the product of labour performed simultaneously in a different branch) is this:

A great part, [or] the greatest part of the products consumed daily by the worker—which he must consume whether his own product is finished or not—represent by no means stored up labour of bygone time.  On the contrary he uses to a large extent products of labour performed the same day or during the same week in which the worker produces his own commodity.  For example, bread, meat, beer, milk, newspapers, etc.  Hodgskin could also have added that they are partly the products of future labour, for the worker who buys an overcoat with what he has saved out of six months’ wages buys one which has only been made at the end of the six months, etc.  (We have seen that the whole of production presupposes simultaneous reproduction of the required constituent parts and products in their different forms as raw materials, semi-manufactured goods, etc.  But all fixed capital presupposes future labour for its reproduction and for the reproduction of its equivalent, without which it cannot be reproduced.)  Hodgskin says that during the course of the year the worker must rely to some degree on previous labour (because of the nature of the production of corn, vegetable raw materials, etc.).  <This does not apply to a house, for example.  As regards use-values which, by their nature, only wear out slowly, are not consumed at once, but gradually used up, it is not due to any action specially devised for the benefit of the workers that these products of previous labour are available on “the market”.  The worker also used to have a “dwelling” before the capitalist “piled up” deadly stink-holes for him.  (See Laing on this.)> (Apart from the enormous mass of day-to-day needs which are of decisive importance especially to the worker.  Who at best, can only satisfy his everyday needs, we have seen that, in general, consumption becomes more and more contemporaneous with production, and therefore, if one considers society as a whole, consumption depends more and more on simultaneous production, or rather on the products of simultaneous production.)  But when operations extend over several years, the worker must “depend” on his own production, on the simultaneous and future producers of other commodities.

The worker always has to find his means of subsistence in the form of commodities on the market (the “services” he buys are ipso facto only brought into being at the moment they are bought); as far as he is concerned they must therefore be the products of antecedent labour, that is of labour which is antecedent to their existence as products but which is by no means antecedent to his own labour with whose price he buys these products.  They can be—and mostly are—contemporaneous products, especially for those who live from hand to mouth.

Taking it all in all the “storing up” of means of subsistence for the workers by the capitalists comes to this.

1) Commodity production presupposes that articles of consumption which one does not produce oneself are available on the market as commodities, or that in general, commodities are produced as commodities.

2) The majority of the commodities consumed by the worker in the final form in which they confront him as commodities, are in fact products of simultaneous labour (they are therefore by no means stored up by the capitalist).

3) In capitalist production, the means of labour and the means of subsistence produced by the worker himself confront him as capital, the one as constant, the other as variable capital; these, the worker’s conditions of production, appear as the property of the capitalist; their transfer from the worker to the capitalist and the partial return of the worker’s product to the worker, or of the value of his product to the worker, is called the “storing up” of circulating capital for the worker.  These means of subsistence which the worker must always consume before his product is finished, become “circulating capital” because he [the worker], instead of buying them direct or paying for them with the value either of his past or of his future product ||877|, must first of all receive a draft (money) on it; a draft moreover which the capitalist is entitled to issue only thanks to the worker’s past, present or future product.

Hodgskin is concerned here with demonstrating the dependence of the worker on the coexisting labour of other workers as against his dependence on previous labour,

1) in order to do away with the phrase about “storing up”;

2) because “present labour” confronts capital, whereas the economists always consider previous labour as such to be capital, that is, an alienated and independent form of labour which is hostile to labour itself.

To grasp the all-round significance of contemporaneous labour as against previous labour is however in itself a very important achievement.

Hodgskin thus arrives at the following:

Capital is either a mere name and pretext or it does not express a thing; the social relation of the labour of one person to the coexisting labour of another, and the consequences, the effects of this relationship, are ascribed to the things which make up so-called circulating capital.  Despite the fact that the commodity exists as money, its realisation in use-values depends on contemporaneous labour.  ([The labour performed in] the course of a year is itself contemporaneous [labour].)  Only a small portion of the commodities entering into direct consumption are the product of more than one year’s labour and when they are—such as cattle etc., they require renewed labour every year.  All operations requiring more than a year depend on continuous annual production.

“… it is by the command the capitalist possesses over the labour of some men, not by his possessing a stock of commodities, that he is enabled to support and consequently employ other labourers” (Labour Defended etc.,p.14).

Money however gives everyone “command” over “the labour of some men”, over the labour contained in their commodities as well as over the reproduction of this labour, and to that extent therefore over labour itself.

What is really “stored up”, not however as a dead mass but as something living, is the skill of the worker, the level of development of labour.  <It is true, however, that the stage of the development of the productivity of labour which exists at any particular time and serves as the starting-point, comprises not only the skill and capacity of the worker, but likewise the material means which this labour has created and which it daily renews.  (Hodgskin does not emphasise this because, in opposing the crude views of the economists, it is important for him to lay the stress on the subject—so to speak, on the subjective in the subject—in contrast to the object.)> This is really the primary factor, the point of departure and it is the result of a process of development.  Accumulation in this context means assimilation, continual preservation and at the same time transformation of what has already been handed over and realised.  In this way Darwin makes “accumulation” through inheritance the driving principle in the formation of all organic things, of plants and animals; thus the various organisms themselves are formed as a result of “accumulation” and are only “inventions”, gradually accumulated inventions of living beings.  But this is not the only prerequisite of production.  Such a prerequisite in the case of animals and plants is external nature, that is both inorganic nature and their relationship with other animals and plants.  Man, who produces in society, likewise faces an already modified nature (and in particular natural factors which have been transformed into means of his own activity) and definite relations existing between the producers.  This accumulation is in part the result of the historical process, in part, as far as the individual worker is concerned, transmission of skill.  Hodgskin says that as far as the majority of the workers are concerned, circulating capital plays no part in this accumulation.

He has demonstrated that “the stock of commodities” (means of subsistence) “prepared” is always small in comparison with the total amount of consumption and production.  On the other hand, the degree of skill of the existing population is always the pre-condition of production as a whole; it is therefore the principal accumulation of wealth and the most important result of antecedent labour; its form of existence, however, is living labour itself.

||878| “…all the effects usually attributed to accumulation of circulating capital are derived from the accumulation and storing up of skilled labour; and, […] this most important operation is performed, as far as the great mass of labourers is concerned without any circulating capital whatever” (op. cit., p. 13).

With regard to the assertion of the economists that the number of workers (and therefore the well-being or poverty of the existing working population) depends on the amount of circulating capital available, Hodgskin comments correctly, as follows:

“… the number of labourers must at all times depend on the quantity of circulating capital; or, as I should say, on the quantity of the products of coexisting labour, which labourers are allowed to consume” (op. cit., p. 20).

What is attributed to circulating capital, to a stock of commodities, is the effect of “coexisting labour”.

In other words, Hodgskin says that the effects of a certain social form of labour are ascribed to objects, to the products of labour; the relationship itself is imagined to exist in material form.  We have already seen that this is a characteristic of labour based on commodity production, on exchange-value, and this quid pro quo is revealed in the commodity, in money (Hodgskin does not see this), and to a still higher degree in capital.  The effects of things as materialised aspects of the labour process are attributed to them in capital, in their personification, their independence in respect of labour.  They would cease to have these effects if they were to cease to confront labour in this alienated form.  The capitalist, as capitalist, is simply the personification of capital, that creation of labour endowed with its own will and personality which stands in opposition to labour.  Hodgskin regards this as a pure subjective illusion which conceals the deceit and the interests of the exploiting classes.  He does not see that the way of looking at things arises out of the actual relationship itself; the latter is not an expression of the former, but vice versa.  In the same way, English socialists say “We need capital, but not the capitalists”.  But if one eliminates the capitalists, the means of production cease to be capital.


<The “Verbal Observer”, Bailey, and others remark that “value”, “valeur” express a property of things.  In fact the terms originally express nothing but the use-value of things for people, those qualities which make them useful or agreeable etc. to people.  It is in the nature of things that “value”, “valeur”, “Wert” can have no other etymological origin.  Use-value expresses the natural relationship between things and men, in fact the existence of things for men.  Exchange-value, as the result of the social development which created it, was later superimposed on the word value, which was synonymous with use-value.  It [exchange-value] is the social existence of things.

The Sanskrit—Wer [means] cover, protect, consequently respect, honour and love, cherish.  From these the adjective Wertas (excellent, respectable) is derived; Gothic, wairths; Old German, Old Frankish, wert; Anglo-Saxon, weorth, vordh, wurth; English, worth, worthy; Dutch, waard, waardig; Alemanic, werth; Lithuantan, wertas (respectable, precious, dear, estimable).

The Sanskrit, wertis; Latin, virtus; Gothic, wairthi; German, Werth[v] [Chavée, Essai d’étymologie philosophique, Brussels, 1844, p. 176].

The value of a thing is, in fact, its own virtus[w], while its exchange-value is quite independent of its material qualities.

The SanskritWal [means] to cover, to fortify; [Latin] vallo,[x] valeo,[y] vallus[z]: that which protects and defends, valor is the power itself.” Hence valeur, value.  “Compare Wal with the German walle, walte[aa] and English wall, wield” [op. cit., p. 70].)


Hodgskin now turns to fixed capital.  It is productive power which has been produced and, in its development in large-scale industry, it is an instrument which social labour has created.

As far as fixed capital is concerned:

“… all instruments and machines are the produce of labour.  […] As long as they are merely the result of previous labour, and are not applied to their respective uses by labourers, they do not repay the expense of making them.  […] most of them diminish in value from being kept.  […] Fixed capital does not derive its utility from previous, but present labour; and does not bring its owner a profit because it has been stored up, but because it is a means of obtaining command over labour” ([Thomas Hodgskin,] Labour Defended etc., pp. 14-15).

Here at last, the nature of capital is understood correctly.

||879| “After any instruments have been made, what do they effect?  Nothing.  On the contrary, they begin to rust or decay unless used or applied by labour.” “Whether an instrument shall be regarded as productive capital or not, depends entirely on its being used, or not, by some productive labourer” (loc. cit., pp. 15-16).

“One easily comprehends why […] the road-maker should receive some of the benefits, accruing only to the road-user; but I do not comprehend why all these benefits should go to the road itself, and be appropriated by a set of persons who neither make nor use it, under the name of profit for their capital” (loc. cit., p. 16).

“Its vast utility does[bb] not depend on stored up iron and wood, but on that practical and living knowledge of the powers of nature which enables some men to construct it, and others to guide it” (loc. cit., p. 17).

“Without knowledge they” (the machines) “could not be invented, without manual skill and dexterity they could not be made, and without skill and labour they could not be productively used.  But there is nothing more than knowledge, skill, and labour requisite, on which the capitalist can found a claim to any share of the produce” (loc. cit., p. 18).

After he” (man) “has inherited the knowledge of several generations, and when he lives congregated in great masses, he is enabled by his mental faculties to complete […] the work of nature…” (loc. cit., p. 18).

“… it is not […] the quantity but the quality of the fixed capital on which the productive industry of a country depends.  […] fixed capital as a means of nourishing and supporting men, depends for its efficiency, altogether on the skill of the labourers, and consequently the productive industry of a country, as far as fixed capital is concerned, is in proportion to the knowledge and skill of the people” (loc. cit., pp. 19-20).

[e)] Compound Interest: Fall in the Rate of Profit Based on This

“A mere glance must satisfy every mind that simple profit does not decrease but increase in the progress of society—that is, the same quantity of labour which at any former period produced 100 quarters of wheat, and 100 steam-engines, will now produce somewhat more [… ] In fact, also, we find that a much greater number of persons now live in opulence on profit in this country than formerly.  It is clear, however, that no labour, no productive power, no ingenuity, and no art can answer the overwhelming demands of compound interest.  But all saving is made from the revenue” (that is from simple profit) “of the capitalist, so that actually these demands are constantly made, and as constantly the productive power of labour refuses to satisfy them.  A sort of balance is, therefore, constantly struck” (loc. cit., p. 23).

For example, if the profit were always accumulated, a capital of 100 at 10 per cent would amount to something like 673, or—since a little more or less makes no difference here—say 700, in 20 years.  Thus the capital will have multiplied itself sevenfold over a period of 20 years.  According to this yardstick, if only simple interest were paid, it would have to be 30 per cent per annum instead of 10 per cent, that is, three times as much profit, and the more we increase the number of years that elapse, the more the rate of interest or the rate of profit calculated at simple interest per annum will increase, and this increase is the more rapid, the larger the capital becomes.

In fact, however, capitalist accumulation is nothing but the reconversion of interest into capital (since interest and profit for our purpose, i.e., for the purpose of our calculation, are identical).  Thus it is compound interest.  First there is a capital of 100; it yields 10 per cent profit (or interest).  This is added to the capital which is now 110.  This now becomes the capital.  The interest on this amount is therefore not simply interest on a capital of 100 but interest on 100 capital plus 10 interest.  That is compound interest.  Thus, at the end of the second year, we have (100 capital + 10 interest) +10 interest+1 interest=(100 capital+ 10 interest)+11 interest=121.  This is the capital at the beginning of the third year.  In the third year we get (100 capital+10 interest)+11 interest+ 121/10 interest, so that at the end of it the capital is 1331/10

||880| We have:

Capital Interest Total
First year 100 10 110
Second year 100 + 10 = 110 10 + 1’* 121
Third year 100 + 20 + 1 = 121 10 + 2’ + 1/10 1331/10
Fourth year 100 + 30 + 3 1/10 = 1331/10 10 + 331/100 14641/100
Fifth year 100 + 40 + 641/100 =14641/100 10 + 4641/1,000 16151/1,000


Inthesecondyearthecapitalcomprises10 interest (simple)
""third""""21 interest
""fourth""""311/10 interest

*The sign ‘ indicates interest on interest.

In other words, more than half the capital is made up of interest in the ninth year and the portion of capital consisting of interest thus increases in geometrical progression.

We have seen that over 20 years, capital increased sevenfold, whereas, even according to the “most extreme” assumption of Malthus, the population can only double itself every twenty-five years.  But let us assume that it doubles itself in twenty years, and therefore the working population as well.  Taking one year with another, the interest would have to be 30 per cent—three times greater than it is.  If one assumes, however, that the rate of exploitation remained unchanged, in 20 years the doubled population would only be able to produce twice as much labour as it did previously (and [the new generation] would be unfit for work during a considerable part of these 20 years, scarcely during half this period would it be able to work, in spite of the employment of children); it would therefore produce only twice as much surplus labour, but not three times as much.

The rate of profit (and consequently the rate of interest) is determined:

1) If the rate of exploitation is assumed to be constant—by the number of workers in employment, by the absolute mass of workers employed, that is, by the growth of the population.  Although this number increases, its ratio to the total amount of capital employed declines with the accumulation of capital and with industrial development (consequently the rate of profit declines if the rate of exploitation remains the same).  Likewise the population does not by any means [increase] in the same geometrical progression as the computed compound interest.  The growth of the population at a given stage of industrial development is the explanation for the increase in the amount of surplus-value and of profit, but also for the fall in the rate of profit.

2) [By] the absolute length of the “normal” working-day, that is, by increasing the rate of surplus-value.  Thus the rate of profit can increase as a result of the extension of labour-time beyond the normal working-day.  However, this has its physical and—by and large—its social limits.  That in the same measure as workers set more capital in motion, the same capital commands more absolute labour-time ||881| is out of the question.

3) If the normal working-day remains the same, surplus labour can be increased relatively by reducing the necessary labour-time and reducing the prices of the necessaries which the worker consumes, in comparison with the development of the productive power of labour.  But this very development of productive power reduces variable capital relative to constant.  It is physically impossible that the surplus labour-time of, say, two men who displace twenty, can, by any conceivable increase of the absolute or relative [surplus] labour-time, equal that of the twenty.  If each of the twenty men only work 2 hours of surplus labour a day, the total will be 40 hours of surplus labour, whereas the total life span of the two men amounts only to 48 hours in one day.

The value of labour-power does not fall in the same degree as the productivity of labour or of capital increases.  This increase in productive power likewise increases the ratio between constant and variable capital in all branches of industry which do not produce necessaries (either directly or indirectly) without giving rise to any kind of alteration in the value of labour.  The development of productive power is not even.  It is in the nature of capitalist production that it develops industry more rapidly than agriculture.  This is not due to the nature of the land, but to the fact that, in order to be exploited really in accordance with its nature, land requires different social relations.  Capitalist production turns towards the land only after its influence has exhausted it and after it has devastated its natural qualities.  An additional factor is that, as a consequence of landownership, agricultural products are expensive compared with other commodities, because they are sold at their value and are not reduced to their cost-price.  They form, however, the principal constituent of the necessaries.  Furthermore, if one-tenth of the land is dearer to exploit than the other nine-tenths, these latter are likewise hit “artificially” by this relative barrenness, as a result of the law of competition.

The rate of profit would in fact have to grow if it is to remain constant while accumulation of capital is taking place.  The same worker as long as capital yields 10 of surplus labour must, as soon as interest accumulates on interest and thus increases the capital employed, produce threefold, fourfold, fivefold in progression of compound interest, which is nonsense.

The amount of capital which the worker sets in motion, and whose value is maintained and reproduced by his labour, is something quite different from the value which he adds, and therefore from the surplus-value.  If the amount of capital is 1,000 and the labour added equals 100, then the capital reproduced amounts to 1,100.  If the capital is 100 and the labour added is 20, then the capital reproduced is 120.  The rate of profit in the first case is 10 per cent and in the second, it is 20 per cent.  Nevertheless, more can be accumulated from 100 than from 20.  Thus the flow of capital or its “accumulation” continues (apart from the reduction in its value as a result of the increase in productive power) in proportion to the force it already possesses, but not in proportion to the size of the rate of profit.  This explains that accumulation—its amount—may increase in spite of a falling rate of profit, apart from the fact that, while productivity rises, a larger portion of the revenue can be accumulated, even when the rate of profit declines, than when there is a higher rate of profit together with lower productivity.  A high rate of profit—insofar as it is based on a high rate of surplus-value—is possible if very long hours are worked, although the labour is unproductive.  It is possible because the workers’ needs, and therefore the minimum wage, are small, although the labour is unproductive.  The lack of energy with which the labour is performed will correspond to the low level of the minimum wage.  Capital is accumulated slowly in both cases despite the high rate of profit.  The population is stagnant and the labour-time which the product costs is high, although the wages received by the workers are small.

||882| I have explained the decline in the rate of profit in spite of the fact that the rate of surplus-value remains the same or even rises, by the decrease of the variable capital in relation to the constant, that is, of the living, present labour in relation to the past labour which is employed and reproduced.  Hodgskin and the man who wrote The Source and Remedy of the National Difficulties explain it by the fact that it is impossible for the worker to fulfil the demands of capital which accumulates like compound interest.

“… no labour, no productive power, no ingenuity, and no art can answer the overwhelming demands of compound interest.  But all saving is made from the revenue of the capitalist” (that is from simple profit) “so that actually these demands are constantly made, and as constantly the productive power of labour refuses to satisfy them.  A sort of balance is, therefore, constantly struck” (op. cit., p. 23).

In its general sense, this amounts to the same thing.  If I say that, as capital accumulates, the rate of profit declines because constant capital increases in relation to variable capital, it means that, disregarding the specific form of the different portions of capital, the capital employed increases in relation to the labour employed.  [The rate of] profit falls not because the worker is exploited less, but because altogether less labour is employed in relation to the capital employed.

For example, let us assume that the ratio of variable to constant capital is 1:1.  Then, if the total capital amounts to 1,000, c [constant capital] will be 500, and v [variable capital] likewise 500.  If the rate of surplus-value is 50 per cent, then 50 per cent of 500 is 50×5, or 250.  Thus the rate of profit on 1,000 yields a profit of 250, or 250/1,000 or 25/100 or 1/4 which is 25 per cent.  If the total capital is 1,000 and if c equals 750 and v 250, then at 50 per cent [the rate of surplus-value] 250 will yield 125.

But 125/1,000 comes to 1/8, or 121/2 per cent.

But in comparison with the first case [less] living labour is employed in the second case.  If we assume that the annual wage of the worker is £25, then in the first case £500 [wages] will employ 20 workers; in the second case £250 wages will employ 10 workers.  The same capital [£1,000] employs 20 workers in one case and only 10 in the other.  In the first case, the ratio of total capital to the number of working-days is as 1,000:20; in the second as 1,000:10.  In the first case, for each of the 20 workers £50 capital (constant and variable) is used (for 20×50=500×2=1,000).  In the second case, the capital employed per individual worker is £100 (for 100×10=1,000).  Nevertheless, in both cases, the capital which is allocated to wages is, pro rata, the same.

The formula I have given provides a new ground for explaining why, with accumulation, less workers are employed by the same amount of capital or, what amounts to the same thing, why a greater amount of capital has to be used for the same amount of labour.  It comes to the same thing if I say that one worker is employed for a capital outlay of 50 in the one case, and one worker for a capital outlay of 100 in the other, that therefore only half the number of workers is employed by a capital of 50; in other words, if I say that in one case there is one worker for 50 capital and only half a worker for 50 capital in the other, or if I say that in one case 50 capital is used by one worker and in the other case 50x2 capital is used by one worker.

This latter formula is the one used by Hodgskin and others.  According to them, accumulation means in general the demand for compound interest; in other words, that more capital is expended on one worker and that he has therefore to produce more surplus labour proportionally to the amount of capital expended on him.  Since the capital expended on him increases at the same rate as compound interest, but on the other hand, his labour-time has very definite limits which even relatively no [development of the] productive powers can reduce in accordance with the demands of this compound interest “a sort of balance is constantly struck”.  “Simple profit” remains the same, or rather it grows.  (This is in fact the surplus labour or surplus-value.)  But as the result of the accumulation of capital it is compound interest which is disguised in the form of simple interest.

||883| It is clear furthermore that if compound interest equals accumulation, then, apart from the absolute limits of accumulation, the growth of this interest depends on the extent, the intensity, etc., of the accumulation process itself, that is, on the mode of production.  Otherwise compound interest is nothing but appropriation of the Capital (property) of others in the form of interest as was the case in Rome and in general with usurers.

Hodgskin’s view is as follows: Originally £50 capital, for example, falls to the share of one worker, on which he produces, let us say, a profit of [£]25.  Later, as a result of the conversion of a part of the interest into capital and of the fact that this process repeats itself again and again, a capital of £200 is allocated to the worker.  If the entire interest of 50 per cent received per annum was always capitalised, the process would be complete in less than four years.  Just as the worker produced [a profit of] 25 on [a capital of] 50, he is now expected to produce [a profit of] 100 on a capital of 200, or four times as much.  But that is impossible.  To do that either the worker would have to work four times as long, that is, 48 hours a day if he worked 12 hours previously, or the value of labour would have to fall by 75 per cent as a result of increased productivity of labour.

If the working-day is 12 hours, £25 the [annual] wage, and the worker produces £25 profit [per annum], then he has to work as much for the capitalist as he does for himself.  That is for 6 hours or half the working-day.  In order to produce 100, he would have to work 4×6 hours for the capitalist in a 12-hour working-day—which is nonsense.  Let us assume that the working-day is lengthened to 15 hours, then the worker still cannot produce 24 hours work in 15 hours.  And still less can he work for 30 hours, which is what would be necessary, since [he would have to work] 24 hours for the capitalist and 6 for himself.  If he worked the whole of his working-time for the capitalist, he would be able to produce only £50; he would only double the amount of interest, that is, he would produce 50 profit on a capital of 200, whereas he produced £25 for £50 capital.  The rate of profit is 50 per cent in the second case and 25 per cent in the first.  But even this is impossible, since the worker must live.  No matter how much productive power increases, if, as in the above example, the value of 12 hours is 75, then that of 24 hours adds up to 2×75, or 150.  And since the worker must live, he can never produce 150 profit, still less 200.  His surplus labour is always a part of his working-day, from which it does not at all follow, as Mr. Rodbertus thinks, that profit can never reach 100 per cent.  It can never be 100 per cent if it is calculated on the working-day as a whole (for it is itself included in it).  But it can most certainly be 100 per cent in relation to that part of the working-day which is paid for.

Let us take the above example of 50 per cent.

Capital Surplus-value Rate of surplus-value Rate of Profit
constant variable
25 25 25 100 per cent 50 percent

Here the profit, half a working-day, is equal whole [product].

||884| If the worker worked three-quarters day for the capitalist then:

Capital Surplus-value Rate of surplus-value Rate of Profit
constant variable
25 121/2 371/2 300 per cent 100 percent
Total capital 371/2

[calculated on a capital] of 100

Capital Surplus-value Rate of surplus-value Rate of Profit
constant variable
66 2/3 33 1/3 100 300 per cent 100 percent
Total capital 100

Let us examine this a little more closely and see what is implied by the view that [the rate of] profit falls because, in consequence of progressive accumulation, it does not constitute simple profit (consequently the rate of exploitation of the worker does not decline but, as Hodgskin says, increases) but compound profit and it is impossible for labour to keep pace with the demands of compound interest.

It has to be noted first of all that this has to be defined in more detail if it is to make any sense at all.  Regarded as a product of accumulation (that is, of the appropriation of surplus labour)—and this approach is necessary if one considers reproduction as a whole—all capital is made up of profit (or of interest, if this word is considered to be synonymous with profit and not with interest in the strict sense).  If the rate of profit is 10 per cent, then this is “compound interest”, compound profit.  And it would be impossible to see how 10 to 100 could—in economic terms—differ from 11 to 110.  So what emerges is that “simple profit” too is impossible, or at least that simple profit must also decline, because, in fact, simple profit is made up in exactly the same way as compound profit.  If one narrows the problem, that is, considers solely interest-bearing capital, then compound interest would swallow up profit and more than profit; and the fact that the producer (capitalist or not) has to pay the lender compound interest means that sooner or later, in addition to profit he has to pay him part of his capital as well.

Thus it should be noted first of all that Hodgskin’s view only has meaning if it is assumed that capital grows more rapidly than population, that is, than the working population.  (Even this latter is a relative growth.  It is in the nature of capitalism to overwork one section of the working population while it turns another into paupers.)  If the population grows at the same rate as capital, then there is no reason whatsoever why I should not be able to extract from 8x workers with £800 the [same rate of] surplus labour that I can extract from x workers with £100.  ||885| Eight times 100 C makes no greater demand on 8 times x workers than 100 C on x workers.  Thus “Hodgskin’s” argument becomes groundless.  (In reality, things turn out differently.  Even if the population grows at the same rate as capital, capitalist development nevertheless results in one part of the population being made redundant, because constant capital develops at the expense of variable capital.)

<“…it is very material, with reference to labour, whether you distribute them” (goods) “so as to induce a greater supply of labour or a less: whether you distribute them where they will be conditions for labour, or where they will be opportunities for idleness” (An Inquiry into those Principles, respecting the Nature of Demand and the Necessity of Consumption, lately advocated by Mr. Malthus etc., London, 1821, p. 57).

“… that increased supply of labour is promoted by the increased numbers of mankind…”(loc. cit., p. 58).

“The not being able to command so much labour as before, too, is only important where that[cc] labour would produce no more than before.  If labour has been rendered more productive, production will not be checked, though the existing mass of commodities should command less labour than before”(loc. cit., p. 60).

(This is directed against Malthus.  True, production would not be checked, but the rate of profit would.  These cynical propositions stating that a “mass of commodities commands labour”, reflect the same cynicism which finds expression in Malthus’s explanation of value[dd]; command of the commodity over labour is very good and is absolutely characteristic of the nature of capital.)

The same author makes the following correct observation directed against West:

The author of the Essay […] observes[ee] […] that more will be given for labour when there is most increase of stock, and that […] will be when profits on stock are highest.  ‘The greater the profits of stock’, he adds, ‘the higher will be the wages of labour.’  The fault of this is, that a word or two is left out.  ‘The greater have been the profits of stock’ … ‘the higher will be the wages of labour’…  The high profits and the high wages are not simultaneous; they do not occur in the same bargain; the one counteracts the other, and reduces it to a level.  It might as well be argued, ‘the supply of a commodity is most rapid when the price is highest, therefore, large supply and high price go together’.  It is a mixing up of cause and effect” (op. cit., pp. 100-01).>

Hodgskin’s proposition, therefore, has meaning only if, as a result of the process of accumulation, more capital is set in motion by the same workers, or if the capital grows in relation to labour.  That is, if, for example, the capital was 100 and becomes 110 by accumulation, and if the same worker who produced a surplus-value of 10, is to produce a surplus-value of 11, corresponding to the growth of capital, i.e., compound interest.  So that it is not simply the same capital he set in motion previously which, after its reproduction, is to yield the same profit (simple profit) but this capital has been increased by his surplus labour [so that] he has to provide surplus labour for the original capital (or its value) and also for his own accumulated (i.e. capitalised) surplus labour.  And since this capital increases every year, the same worker would constantly have to furnish more labour.

It is however only [under the following conditions] possible for more capital to be applied per worker:

First.  If the productive power of labour remains the same, then this is only possible if the worker prolongs his working-time absolutely, i.e., for example, if he works 15 hours instead of 12 hours, or if he works more intensively and performs 15 hours’ labour in 12 hours, does 5 hours’ labour in 4 hours or 1 hour’s labour in 4/5 of an hour.  Since he reproduces his means of subsistence in a definite number of hours, then, in this case, three hours of labour are won for the capitalist in the same way as if the productive power of labour had been increased, while, in fact, it is labour which has been increased, not its productive power.  If the intensification of labour were to become general, then the value of commodities would fall in proportion to the reduced labour-time which they cost.  The degree of intensity would become the average [intensity of labour], its natural quality.  If, however ||886| , this only occurs in particular spheres, then it amounts to more complex labour, simple labour raised to a higher power.  Less than an hour of more intensive labour then counts as much—and creates as much value—[as an hour of] the more extensive labour.  For example, in the above case, 4/5 of an hour [produces] as much as 5/5, or an hour.

Both the extension of labour-time and the increase of labour through its greater intensification by means of the compression of the pores of Labour as it were, have their limits (although the London bakers, for example, regularly work 17 hours [a day] if not more), very definite, physical, limitations, and it is when encountering these that compound interest—composite profit—ceases.

Within these limitations the following applies:

If the capitalist pays nothing for the extension or intensification of labour, then his surplus-value (his profit as well, provided there is no change in the value of the constant capital, for we assume that the mode of production remains the same)—and, in accordance with the proviso, his profit—increases more rapidly than his capital.  He pays no necessary labour for the capital which has been added.

If he pays for the surplus labour at the same rate as previously, then the growth of the surplus-value is proportionate to the increase in capital.  The profit grows more rapidly.  For there is a more rapid turnover of fixed capital, while the more intensive use of the machinery does not cause the wear and tear to increase at the same rate.  There is a reduction of expenditure on fixed capital, for less machinery, workshops etc. are required for 100 workers who work longer hours than for 200 workers employed simultaneously.  Likewise fewer overseers, etc.  (This gives rise to a most satisfactory situation for the capitalist, who is able to expand or contract his production without hindrance, in accordance with the market conditions.  In addition, his power grows, since that portion of labour which is over-employed, has its counterpart in an unemployed or semi-employed reserve army, so that competition amongst the workers increases.)

Although there is in this case no change in the purely numerical ratio between necessary labour and surplus labour—this is however the only case where both can simultaneously increase in the same proportion—the exploitation of labour has nevertheless grown, both by means of an extension of the working-day and by its intensification (condensation) provided the working-day is not shortened at the same time (as with the 10 Hours Bill).  The period for which the worker is fit to work is reduced and his labour-power is exhausted in a much greater measure than his wages increase and he becomes even more of a work machine.  But disregarding the latter aspect, if he lives for 20 years working a normal working-day and only 15 years when his working-day is extended and intensified, then he sells the value of his labour-power in 15 years in the latter case and in 20 years in the former.  In one case it has to be replaced in 15 years, in the other, in 20 years.

A value of 100 which lasts for 20 years is replaced if 5 per cent is paid on it annually, for 5×20=100.  A value of 100 which lasts 15 years is replaced if 610/15 or 62/3 per cent is paid on it annually.  But in the given case, the worker receives for 3 hours of additional labour only an amount equivalent to the daily value of his labour calculated over 20 years.  Assuming that he works 8 hours necessary labour and 4 hours surplus labour, then he receives two-thirds of each hour for 12×2/3=8 And in the same way he receives 2 out of the 3 hours over-time that he works.  Or two-thirds of each hour.  But this is only the value of his hourly labour-power on the assumption that it will last for 20 years.  If he uses it up in 15 years, its value [per hour] increases.

Anticipation of the future—real anticipation—occurs in the production of wealth only in relation to the worker and to the land.  The future can indeed be anticipated and ruined in both cases by premature over-exertion and exhaustion, and by the disturbance of the balance between expenditure and income.  In capitalist production this happens to both the worker and the land.  As far as so-called anticipation is concerned, in relation to the national debt for example, Ravenstone remarks with justice:

||887| “In pretending to stave off the expenses of the present hour to a future day, in contending that you can burthen posterity to supply the wants of the existing generation, they in reality assert the monstrous proposition[ff] that you can consume what does not yet exist, that you can feed on provisions before their seeds have been sown in the earth” (Piercy Ravenstone, [Thoughts on the Funding System, and Its Effects, London, 1824], p. 8.)

“All the wisdom of our statesmen will have ended in a great transfer of property from one class of persons to another, in creating an enormous fund for the reward of jobs and peculation” (loc. cit., p. 9).

It is different in the case of the worker and the land.  What is expended here exists as δίναμις[gg] and the life span of this δίναμις is shortened as a result of accelerated expenditure.

Finally, if the capitalist is forced to pay more for over-time than for normal working-time, then, according to the facts outlined above, this is by no means an increase in wages, but only compensation for the increased value of over-time—and in reality over-time pay is rarely sufficient to cover this.  In fact, in order to pay for the increased wear and tear of the labour-power, when over-time is worked, a higher rate ought to be paid for every working hour not merely for the additional hours.

Thus there is in any case an increased exploitation of labour.  At the same time, as a result of the accumulation of capital, a reduction in surplus-value takes place at all events and also a decline in the rate of profit, insofar as this is not counteracted by saving on constant capital.  |887||

||887| This is therefore a situation where, in consequence of the accumulation of capital—of the appearance of compound profit—the rate of profit must decline.  If on a capital of [£] 300 (the original amount) the rate of profit was 10 per cent (that is profit came to [£] 30), and if for an additional [£] 100 it is 6 per cent, then profit is [£] 36 for [£] 400.  Thus on the whole it is 9 for 100.  And the rate of profit has fallen from 10 per cent to 9 per cent.

But, as has been stated, on this basis (if the productivity of labour remains the same) not only must the profit on additional capital fall, hut at a certain point it must cease altogether, thus the whole accumulation based on this compound profit would be stopped.  In this case, the decline in profit is linked with increased exploitation of labour and the cessation of profit at a certain point is not due to the worker or someone else receiving the whole product of his labour, hut to the fact that it is physically impossible to work over and above a certain amount of labour-time or to increase the intensity of labour beyond a certain degree.

Secondly.  The only other case, where, with the number of workers remaining constant, more capital is applied per worker, and therefore the additional capital can be laid out and used for the increased exploitation of the same number ||888| of workers, occurs when the productivity of labour increases, i.e. the method of production is changed.  This presupposes a change in the organic ratio between constant and variable capital.  In other words, the increase in the capital in relation to labour is here identical with the increase of constant capital as compared with variable capital and, in general, with the amount of living labour employed.

This is where Hodgskin’s view merges with the general law which I have outlined.

The surplus-value, i.e. the exploitation of the worker, increases, but, at the same time, the rate of profit falls because the variable capital declines as against the constant capital, because in general, the amount of living labour falls relatively in comparison with the amount of capital which sets it in motion.  A larger portion of the annual product of labour is appropriated by the capitalist under the signboard of capital, and a smaller portion under the signboard of profit.

<Hence the phantasy of the Rev. Thomas Chalmers to the effect that the smaller the amount of the annual product laid out by the capitalists as capital, the larger the profit they pocket.  The Established Church then comes to their assistance and sees to it that a large part of the surplus product is consumed instead of being capitalised.  The miserable priest confuses cause with effect.  Moreover, with a smaller rate [of profit] the amount of profit increases as the size of the capital laid out grows.  In addition, the quantity of use-value which this smaller proportion represents, increases.  At the same time, however, this leads to the centralisation of capital, since the conditions of production now demand the application of capital on a mass scale.  It brings about the swallowing up of the smaller capitalists by the bigger ones and the “decapitalisation” of the former.  This is once again, only in a different form, the separation of the conditions of labour from labour (for there is still a great deal of self-employment amongst the smaller capitalists; in general the labour done by the capitalist stands in inverse proportion to the size of his capital, that is, to the degree in which he is a capitalist.  This process would soon bring capitalist production to a head if it were not for the fact that, alongside the centripetal forces, counteracting tendencies exist, which continuously exert a decentralising influence; this need not be described here, for it belongs to the chapter dealing with the competition of capitals).  It is this separation which constitutes the concept of capital and of primitive accumulation, which then appears as a continual process in the accumulation of capital and here finally takes the form of the centralisation of already existing capitals in a few hands and of many being divested of capital.>

The fact that the (proportionally) declining quantity of labour is not fully offset by increased productivity, or that the ratio of surplus labour to the capital expended does not increase at the same rate as the relative amount of labour employed declines, is due partly to the fact that the development of the productive power of labour reduces the value of labour, the necessary labour, only in certain capital investment spheres, and that, even in these spheres, it does not develop uniformly, and that factors exist which nullify this effect; for example, the workers themselves, although they cannot prevent reductions in (real) wages, will not permit them to be reduced to the absolute minimum; on the contrary, they achieve a certain quantitative participation in the general growth of wealth.

But this growth of surplus labour too is relative, [and is only possible] within certain limits.  In order to make this growth correspond to the demands of compound interest, the necessary labour-time in this case would have to be reduced to zero in the same way as [the surplus labour-time] had to be extended endlessly in the case considered previously.

The rise and fall in the rate of profit—insofar as it is determined by the rise or fall of wages resulting from the conditions of demand and supply [in the labour market], or caused by the temporary rise or fall in the prices of necessaries compared with those of luxuries, as a result of the changes in demand and supply and the rise or fall in wages to which this leads—has as little to do with the general law of ||889| the rise or fall in the profit rate as the rise or fall in the market prices of commodities has to do with the determination of value in general.  This has to be analysed in the chapter on the real movement of wages.  If the conditions of demand and supply are favourable to the workers and wages rise, then it is possible (but by no means certain) that the prices of certain necessaries, especially food, will rise correspondingly for a time.  The author of the Inquiry into Those Principles etc. rightly remarks in this connection:

In this case there will be “… an increase of demand for necessaries, in proportion to that for superfluities, as compared with what would have been the proportion between these two sorts of demand, if he had exerted that command” (i.e., the capitalist, his command over commodities) “to procure things for his own consumption.  Necessaries will thereby exchange for more of things in general…  And, in part, at least, these necessaries will be food” (op. cit., p. 22).

He then correctly expresses the Ricardian view as follows:

“At all events, then, the increased price of corn was not the original cause of that rise of wages which made profits fall, but, on the contrary, the rise of wages was the cause of the increased price of corn at first, and the nature of land, yielding less and less proportional returns to increased tillage, made part of that increase of price permanent, prevented a complete reaction from taking place through the principle of population” (loc. cit., p. 23).

Hodgskin and the author of The Source and Remedy etc. since they explain the fall of profits by the impossibility of living labour to fulfil the demands of compound interest, and although they do not analyse this, are much nearer the truth than Smith and Ricardo, who explain the fall of profits by the rise in wages, one of them, [by the rise in] real and nominal wages, the other [by the rise in] nominal wages, with rather a decrease of real wages.  Hodgskin and all the other proletarian opponents have enough common sense to emphasise the fact that the proportional number of those who live on profit has increased with the development of capital.

[f) Hodgskin on the Social Character of Labour and on the Relation of Capital to Labour]

Now a few concluding passages from Hodgskin’s Labour Defended etc.

The treatment of the exchange-value of the product, hence of the labour embodied in the commodity, as social labour.

“Almost every product of art and skill is the result of joint and combined labour… ”

(This is the result of capitalist production.)

“… So dependent is man on man, and so much does this dependence increase as society advances, that hardly any labour of any single individual … is of the least value but as forming part of the great social task…”

<This passage has to be quoted, and in doing so [it is necessary to emphasise] that it is only on the basis of capitalism that commodity production or the production of products as commodities becomes all-embracing and affects the nature of the products themselves.>

Wherever the division of labour is introduced […] the judgement of other men intervenes before the labourer can realise his earnings, and there is no longer any thing which we can call natural reward of individual labour.  Each labourer produces only some part of a whole, and each part, having no value or utility of itself, there is nothing on which the labourer can seize and say, ‘this is my product, this I will keep to myself’.  Between the commencement of any joint operation, such as that of making cloth, and the division of its product among the different persons whose combined exertions have produced it, the judgement of men must intervene several times, and the question is, how much of this joint product should go to each of the individuals whose united labour produced it?” ( [Thomas Hodgskin, Labour Defended etc., London, 1825,] p. 25.)

“… I know no way ||890| of deciding this but by leaving it to be settled by the unfettered judgements of the labourers themselves” (loc. cit., p. 25).

“I must [… ] add that it is doubtful whether one species of labour is more valuable than another; certainly it is not more necessary” (loc. cit., p. 26).

Finally Hodgskin writes about the relation of capital [and labour]:

“Masters […] are labourers as well as their journeymen.  In this character their interest is precisely the same as that of their men.  But they are also either capitalists or the agents of the capitalist, and in this respect their interest is decidedly opposed to the interest of their workmen” (loc. cit., p. 27).

“The wide spread of education among the journeymen mechanics of this country, diminishes daily the value of the labour and skill of almost all masters and employers, by increasing the numbers of persons who possess their peculiar knowledge” (loc. cit., p. 30).

“But put the capitalist, the oppressive middleman out of view”[hh] then “… it is plain that capital, or the power to employ labour, and coexisting labour, are one; and […] productive capital and skilled labour are also one; consequently capital and a labouring population are precisely synonymous.  In the system of nature, mouths are united with hands and with intelligence” (loc. cit., p. 33).

The capitalist mode of production disappears with the form of alienation which the various aspects of social labour bear to one another and which is represented in capital.  This is the conclusion arrived at by Hodgskin.


The primitive accumulation of capital.  Includes the centralisation of the conditions of labour.  It means that the conditions of labour acquire an independent existence in relation to the worker and to labour itself.  This historical act is the historical genesis of capital, the historical process of separation which transforms the conditions of labour into capital and labour into wage-labour.  This provides the basis for capitalist production.

Accumulation of capital on the basis of capital itself, and therefore also on the basis of the relationship of capital and wage-labour, reproduces the separation and the independent existence of material wealth as against labour on an ever increasing scale.

Concentration of capital.  Accumulation of large amounts of capital by the destruction of the smaller capitals.  Attraction.  Decapitalisation of the intermediate links between capital and labour.  This is only the last degree and the final form of the process which transforms the conditions of labour into capital, then reproduces capital and the separate capitals on a larger scale and finally separates from their owners the various capitals which have come.  into existence at many points of society, and centralises them in the hands of big capitalists.  It is in this extreme form of the contradiction and conflict that production—even though in alienated form—is transformed into social production.  There is social labour, and in the real labour process the instruments of production are used in common.  As functionaries of the process which at the same time accelerates this social production and thereby also the development of the productive forces, the capitalists become superfluous in the measure that they, on behalf of society, enjoy the usufruct and that they become overbearing as owners of this social wealth and commanders of social labour.  Their position is similar to that of the feudal lords whose exactions in the measure that their services  became superfluous with the rise of bourgeois society, became mere outdated and inappropriate privileges and who therefore rushed headlong to destruction.  |XV-890||

[g) Hodgskin’s Basic Propositions as Formulated in His Book—”Popular Political Economy”]


||XVIII-1084| Thomas Hodgskin, Popular Political Economy.  Four Lectures delivered at the London Mechanics’ Institution, London, 1827.

“Easy labour is only transmitted skill” (p. 48).

“But as all the advantages derived from the division of labour naturally centre in, and […] belong to the labourers, if they are deprived of them, and in the progress of society those only are enriched by their improved skill who never labour,—this must arise from unjust appropriation; from usurpation and plunder in the party enriched, and from consenting submission in the party impoverished” (op. cit., pp. 108-09).

||1085| “The labourers, to be sure, multiply too rapidly when that multiplication is only compared with the want of the capitalist for their services…”[ii] (op. cit., p. 120).

“Mr. Malthus points out the effects which an increase in the number of labourers has in lessening the share which each one receives of the annual produce—the portion of that distributed amongst them being a definite and determinate quantity, not regulated in any degree by what they annually create” (op. cit., p. 126).

“… labour […] the exclusive standard of value,” but “labour, the creator of all wealth” [is] “not a commodity” (op. cit., p. 186, note).

Regarding the influence of money on the expansion of wealth, Hodgskin remarks correctly:

“As a man can dispose of small portions of produce that is corruptible, for what is incorruptible, he is under no temptation to throw it away; and thus the use of money adds to wealth, by preventing waste” (op. cit., p. 197).

The chief advantage of retail trade derives from the fact that the quantity in which commodities are best produced is not that in which they are best distributed[jj] (op. cit., p. 146).

“Both the theory relative to capital, and the practice of stopping labour at that point where it can produce, in addition to the subsistence of the labourer, a profit for the capitalist, seem opposed to the natural laws which regulate production” (op. cit., p. 238).

With regard to the accumulation of capital, Hodgskin advances roughly the same ideas as those contained in his first book.  Nevertheless—for the sake of completeness—we will reproduce the main passages.

“Taking only fixed capital into consideration […] the subject most favourable to the idea of capital aiding production [… ] For this purpose we may distinguish three classes of circumstances under which the effects of an accumulation of capital will be very different.  First, if it is made and used by the same persons […][kk] every accumulation in his possession of the instruments he makes and uses, facilitates his labour.  The limit to such an accumulation is […] the power of the labourer to make and use the instruments in question.”

“… second, if it be[ll] made and used by different […] persons, who share between them in just proportion the produce of their combined labour.[… ] Capital may be made by one labourer and used by another […] both may[mm] divide the commodity […] in proportion as each has contributed by his labour to produce it…  I should rather express this fact, however, by saying that a part of the society employed in making instruments, while another part uses them, is a branch of division of labour which aids productive power and adds to the general wealth.  As long as the produce of the two […] classes of labourers.-be[nn] divided between them, the accumulation or[oo] increase of such instruments as they can make and use, is as beneficial as if they were made and used by one person.”

Third, “if it be owned by a class of persons who neither make nor use it [… ] The capitalist being the mere owner of the instruments, is not, as such, a labourer.  He in no manner assists production.”

<In other words, production is assisted by the instrument, but not by the title which A holds to the instrument, i.e. not by the circumstance that the instrument is owned by a non-labourer.>

“He acquires possession of the produce of one labourer, which he makes over to another, either for a time—as is the case with most kinds of fixed capital, or for ever, as is the case with wages—whenever he thinks it can be used or consumed for his advantage.  He never does allow the produce of one labourer, when it comes into his possession, to be either used or consumed by another, unless it is for his benefit.  He employs or lends his property to shore the produce, or natural revenue, of labourers; and every accumulation of such property in his hands is a mere extension of his power over the produce of labour, and retards the progress of national wealth, […] this [is] at present the case…  When the capitalist, being.  the owner of all the produce, will allow labourers neither to make nor use instruments, unless he obtains a profit over and above the subsistence of the labourer, it is plain that bounds are set to productive labour much within what Nature prescribes.  In proportion as capitol in the hands of a third party is accumulated, so the whole amount of profit required by the capitalist increases, and so there arises an artificial check to production and population…  In the present state of society, the labourers being la no case the owners of capital, every accumulation of it adds to the amount of profit demanded from them, and extinguishes all that labour which would only procure the labourer his comfortable subsistence… when it is admitted that labour produces all things, even capital, it is nonsense to attribute productive power to the instruments labour makes and uses…”

“…wages do not, like instruments, facilitate production.[pp] […] labour, not capital, pays all wages” (op. cit., pp. 243-47).

||1086| “…the greater part of […] the advances of capitalists consists of such promises.”[qq]

“…the invention and employment of paper-money had done nothing else but show [the incorrectness of the notion] that capital is something saved[rr] [… ] As long as the capitalist, to realise his wealth, or command over other people’s labour, was obliged to have in his possession an actual accumulation of the precious metals or of commodities, we might have continued to suppose,[ss] that accumulation of capital was the result of an actual saving, and that on it depended the progress of society.  But when paper-money and parchment securities were invented—when the possessor of nothing but such a piece of parchment received an annual revenue in pieces of paper with which he obtained whatever was necessary for his own use and consumption, and not giving away all the pieces of paper, was richer at the end of the year than at the beginning, or was entitled next year to receive a still greater number of pieces of paper, obtaining a still greater command over the produce of labour, it became evident […] that capital was not any thing saved; and that the individual capitalist did not grow rich by an actual and material saving, but by doing something which enabled him … to obtain more of the produce of other men’s[tt] labour” (loc. cit., p. 248, note).

“The master manufacturer has either money or paper with which he pays wages; those wages his labourer exchanges for the produce of other labourers, who will not keep the wages, whether money or paper; and it is returned to the manufacturer, who gives in exchange for it the cloth which his own labourers have made.  With it he again pays wages, and the money or paper again goes the same round …”

“It ascribes to his” (the capitalist’s) “property merely, whether he employ it to pay wages, or whether it consist in useful instruments, all that vast assistance, which knowledge and skill, when realised in machinery, give to labour.  […] the united labours of the miner, the smelter, the smith, the engineer, the stoker, and of numberless other persons, and not the lifeless machines, perform whatever is done by steam engines…  By the common mode of speaking, the productive power of this skill is attributed to its visible products, the instruments, the mere owners of which, who neither make nor use them, imagine themselves to be very productive persons…” (loc. cit., pp. 248-51).

With regard to his polemic against “the danger of forcing […] capital out of the country” [loc. cit., p. 253], and against the interest of capital as a necessary stimulus for [the development of] industry, or concerning the savings theory, see IX, 47.  To be included in the chapter on the vulgar economists.

“As their numbers are increased,[uu] both increased production and consumption take place, which is all that is ever meant by the terms accumulation or increase of national wealth” (op. cit., p. 257).  |XVIII-1086||


[h) Hodgskin on the Power of Capital and on the Upheaval in the Right of Property]

|XIII-670a| [Hodgskin,] The Natural and Artificial Right of Property Contrasted, London, 1832.

“At present, all the wealth of society goes first into the possession of the capitalist, and even most of the land has been purchased by him; he pays the landowner his rent, the labourer his wages, the tax and tithe gatherer their claims, and keeps a large, indeed the largest and continually augmenting share, of the annual produce of labour for himself.  The capitalist may now be said to be the first owner of all the wealth of the community; though no law has conferred on him the right to this property” (p. 98).

“… this change has been effected by the taking of interest on capital, and by the process of compound interest; and it is not a little curious, that all the lawgivers of Europe, endeavoured to prevent this by statutes, viz., statutes against usury” (loc. cit., p. 98, note).

“… the power of the capitalist over all the wealth of the country, is a complete change in the right of property, and by what law, or series of laws, was it effected?” (loc. cit., p. 99).  |XIII-670a||

[4.]  Bray as an Opponent of the Economists

|X-441| J. F. Bray, Labour’s Wrongs and Labour’s Remedy, etc., Leeds, 1839.

Since human existence is determined by labour, and labour presupposes instruments of labour … “the great field for all exertion and the raw material of all wealth—the earth—is[vv] the common property of all its inhabitants” (p. 28).

“… life is dependent upon food, […] food […] upon labour […], those dependencies are absolute […] therefore, if labour be evaded by any human being, it can be thus evaded by individuals only on the condition of increased labour by the mass” (loc. cit., p. 31).

“… all the wrongs and the woes which man has ever committed or endured, may be traced to the assumption of a right in the soil, by certain individuals and classes, to the exclusion of other individuals and classes… The next step which man has ever taken, after having claimed property in land, has been to claim property in man…” (loc. cit., p. 34).

Bray declares that his purpose is:

“…fighting them” (the economists) “upon their own ground, and with their own weapons” (loc. cit., p. 41) (in order to prove that poverty need not be the lot of the workers under every social system).  “Before the conclusions arrived at by such a course of proceeding can be overthrown, the economists must unsay or disprove those established truths and principles on which their arguments are founded” (loc. cit., p. 41).

According to the economists the production of wealth requires: 1) labour, 2) accumulation of previous labour, or capital, and 3) exchange.[ww] These are, according to the economists themselves, the universal conditions of production.

“They are applied to society at barge, and, from their nature, cannot exempt any individual or any class from their operation” (loc. cit., p. 42).

“The ban—‘Thou shalt babour’—rests alike on all created beings…  Man only can escape this law; and, from its nature, it can be evaded by one man only at the expense of another” (loc. cit., p. 43).

“From the very nature of labour and exchange, strict justice not only requires” <in this context, Bray refers to the economic definitions of the exchange-value of commodities> “that all exchangers should be mutually, but that they should likewise be equally, benefited…  If a just system of exchanges were acted upon, the value of all articles would he determined by the entire cost of production; and equal values should always exchange for equal values…  the workmen have given the capitalist the labour of a whole year, in exchange for the value of only half a year—and from this […] has arisen the inequality of wealth and power which at present exists around us.  It is an inevitable condition of inequality of exchanges—of buying at one price and selling at another—that capitalists shall continue to be capitalists, and working men be working men—the one a class of tyrants and the other a class of slaves—to eternity” (op. cit., pp. 48-49).

“By the present […] system, exchanges are not only not mutually beneficial to all parties, as the political economists have asserted, but it is plain […] that there is, in most transactions between the capitalist and the producer, […] no exchange whatever … what is it that the capitalist, whether he be manufacturer or banded proprietor gives […] for the labour of the working man?  The capitalist gives no labour, for he does not work—he gives no capital, for his store of wealth is being perpetually augmented… the capitalist […] cannot […] make an exchange with anything that belongs to himself.  The whole transaction, therefore, plainly skews that the capitalists and proprietors do no more than give the working man, for his labour of one week, a part of the wealth which they obtained from him the week before!—which just amounts to giving him nothing for something…  The wealth which the capitalist appears to give in exchange for the workmen’s labour was generated neither by the labour nor the riches of the capitalist, but it was originally obtained by the labour of the workman; and it is still daily taken from him, by a fraudulent system of unequal exchanges” (loc. cit., pp. 49-50).  “The whole transaction […] between the producer and the capitalist, is a palpable deception, a mere farce” (loc. cit., p. 50).

“…the law which says ‘There shall be accumulation’, is only half fulfilled, and is made to subserve the interests of a particular class, to the detriment of all the rest of the community…” (loc. cit., p. 50).

“Under the present social system, the whole of the working class are dependent upon the capitalist or employer for the means of labour; and where one class, by its position in society, is thus dependent upon another class for the means of labour, it is dependent, likewise, for the means of life; and this is a condition so contrary to the very intention of society—so revolting to reason … that it cannot for one moment be palliated or defended.  It confers on man a power which ought to be vested in nothing mortal” (loc. cit., p. 52).

“Our daily experience teaches us, that if we take a slice from a loaf, the slice never grows on again: the loaf is but an accumulation of slices, and the more we eat of it, the less will there remain to be eaten.  Such is the ||442| case with the loaf of the working man; but that of the capitalist follows not this rule.  His loaf continually increases instead of diminishing: with him, it is cut and come again, for ever. … if exchanges were equal, would the wealth of the present capitalists gradually go from them to the working classes: every shilling that the rich man spent, would leave him a shilling less rich” (loc. cit., pp. 54-55).

Bray also shows in his work that:

“… it is […] impossible that any capitalist can have derived even one thousand pounds sterling from the actual hoarded labour of his working-class progenitors” (loc. cit., p. 55).

It follows from the teachings of the economists themselves that “…there can be no exchanges without accumulations—no accumulations with-out labour” (loc. cit., p. 55).

“…under the present system, every working man gives to an employer at least six days’ labour for an equivalent worth only four or five days’ labour, the gains of the last man are necessarily the losses of the first man” (loc. cit., p. 56).

“Thus, in whatever light” [the genesis of wealth is] “examined—whether as a gift, […] individual accumulation, […] exchange, […] inheritance—there is proof upon proof that there is a flaw in the rich man’s title which takes away at once its very show of justice, and its value” (loc. cit., pp. 56-57).

“… this wealth has all been derived from the bones and sinews of the working classes during successive ages, and it has been taken from them by the fraudulent and slavery-creating system of unequal exchanges” (loc. cit., p. 57).

If “a working man under the present system […] would become wealthy, he […] instead of exchanging his own labour, must become a capitalist, or exchanger of the labour of other people; and thus, by plundering others in the same manner as he was plundered, through the medium of unequal exchanges, he will be enabled to acquire great gains from the small losses of other people” (loc. cit., p. 57).

“The political economists and capitalists have written and printed many books to impress upon the working man the fallacy that ‘the gain of the capitalist is not the boss of the producer’.  We are told that Labour cannot move one step without Capital—that Capital is as a shovel to the man who digs—that Capital is just as necessary to production as Labour itself is…  this mutual dependency between Capital and Labour has nothing to do with the relative position of the capitalist and the working man; nor does it show that the former should be maintained by the latter…  It is the capital, and not the capitalist, that is essential to the operations of the producer; and there is as much difference between the two, as there is between the actual cargo and the bill of lading” (loc. cit., p. 59).

“From the relation which capital and labour bear to each other, it is evident that the more capital or accumulated produce there is in a country, the greater will be the facilities for production, and the less labour will it require to obtain a given result.  Thus the people of Great Britain, with the aid of their present vast accumulations of capital—their buildings, machinery, ships, canals and railways—can produce more manufactured wealth in one week, than their ancestors of a thousand years since could have created in half a century.  It is not our superior physical powers,[xx] but our capital, which enables us to do this; for, wherever there is a deficiency of capital, production will progress slowly and laboriously, and vice versa.  From these considerations, then, it is apparent, that whatever is gained to Capital, is likewise gained to Labour—that every increase of the former tends to diminish the toil of the latter—and that, therefore, every loss to Capital must also be a loss to Labour.  This truth, though long since observed by the political economists, has never yet been fairly stated by them” [loc. cit., pp. 59-60].

<In fact, the fellows argue in the following way:

Accumulated products of labour, i.e., products not consumed, lighten labour and make it more productive.  As a consequence, the fruits of this lightening and so on must go not to labour itself but to accumulation.  Consequently, it is not accumulation which must be the property of labour but labour must be the property of accumulation—[that is, it must be the property 1 of its own products.  Consequently, the worker must not accumulate for himself but for someone else, and the accumulation must confront him as capital.

For the economists, the material element of capital is so integrated with its social form as capital—with its antagonistic character as the product of labour dominating labour—that they cannot write a single sentence without contradicting themselves.>

“They have even identified Capital with one class of the community, and Labour with another class—although the two powers have naturally, and should have artificially, no such connection.  The economists always attempt to make the prosperity, if not the very existence, of the working man dependent upon the condition of maintaining the capitalist in luxury and idleness.  They would not have the working man to eat a meal until he has produced two—one for himself and the other for his master—the batter receiving his portion indirectly, by unequal exchanges” (ibid., p. 60).

When the workman has produced a thing, it is his no longer—it belongs to the capitalist—it has been conveyed from the one to the other by the unseen magic of unequal exchanges” (loc. cit., p. 61).

“Under the present social system, Capital and Labour—the shovel and the digger—are two separate and antagonistic powers” (loc. cit., p. 60).

||443| “But even if all the land and the machinery and the houses did belong to the capitalists, and the working class were not in being, the former would not thereby be enabled to evade the great condition ‘that there shall be labour’.  Their wealth would leave them in the choice only of working or starving.  They cannot eat the land and the houses; and the land will not yield sustenance, nor the machinery make clothing, without the application of human labour.  Therefore, when the capitalists and proprietors say that the working class must support them, they likewise say, in effect, that the producers belong to them as well as the houses and bands do—that the working man was created only for the rich man’s use!” (op. cit., p. 68).

“… the producer […] receives, in exchange for what he gives to the capitalist—not the labour nor the produce of the labour of the capitalist, but—work!  Through the instrumentality of money, the working class are not only compelled to perform the labour which the preservation of existence naturally imposes upon them, but they are likewise saddled with the labour of other classes.  It matters not whether the producers now receive gold, or silver, or other commodities from a non-producing class: it all amounts to this—that the working class perform their own labour, and support them-selves, and likewise perform the labour of the capitalist, and maintain him into the bargain!  Whatever may be the nominal receipts which the producers receive from the capitalists, their actual receipts are—the transfer of that labour which ought to be rendered by the capita lists” (op. cit., pp. 153-54).

“… we will suppose the population of the United Kingdom […] to be [… ] 25,000,000 of human beings.  […] we may […] estimate the entire maintenance of the twenty-five millions of people to be worth,[yy] on the average, at least £15 per head annually.  This gives £375,000,000 as the yearly value of the maintenance of the whole people of the United Kingdom.  We do not, however, employ ourselves merely in producing articles of subsistence, for our labour creates, likewise, many unconsumable articles.  We every year add to our stock of accumulations, or capital, by increasing the number of our houses, ships, implements, machines, roads, and other assistants to further production, beside making good all wear and tear.  Thus, although our subsistence may be worth but three hundred and seventy-five millions sterling a year, the total annual value of the wealth created by the people […] will not be loss than five hundred millions sterling” (op. cit., p. 81).

“… we cannot calculate upon having above one-fourth of our population, or about six millions of men—that is, those between the ages of fourteen and fifty—as effective producers.  Of this number […] scarcely five millions can be said, under the present arrangements […] to assist in production;” (Bray writes later on that only four millions are directly employed in actual production) “for thousands of able-bodied men […] are compelled to stand idle while the work which they ought to do is being performed by women and children; and hundreds of thousands of men in Ireland can obtain no employment whatever.  Thus less than five millions of men, assisted by a few thousands of women and children, have […] to create produce for […] twenty-five millions…” (loc. cit., pp. 81-82).

“… the present number of working men, if unassisted by machinery, could not support themselves and the present number of idlers and unprofitable labourers [… ] The agricultural and manufacturing machinery of every kind which we bring to our aid in the business of productions, has been computed to perform the labour of about one hundred millions of effective men…  this machinery—and its application under the present system, which has generated the hundreds of thousands of idlers and livers on profit who now press the working class into the earth” (loc. cit., p. 82).

“The present constitution of society has been fertilised by machinery, and by machinery will it be destroyed…  The machinery itself is good—is indispensable; it is the application of it—the circumstance of its being possessed by individuals instead of by the nation—that is bad” (loc. cit., pp. 82-83).

“The five millions of men already enumerated as assisting in production will include all who labour little or much.  Some […] do not work five hours a day, while others again toil on fifteen hours;[zz] and when to this is added the time lost by the compulsory idleness of great numbers in times of depression in trade, it will be found that our annual production is created and distributed by less than one-fifth of the community, working, on the average, ten hours a day” (loc. cit., p. 83).

“… we suppose that the wealthy non-producers of every description, with their families, and dependents, amount only to two millions of persons, yet this number alone would cost the working classes 230,000,000 annually, if their maintenance were averaged, bike that of the latter, at £15 per head… therefore,[aaa] upon the most moderate computation their maintenance will cost not less than £50 per head.  This gives a total of £100,000,000 as the annual cost of the mere drones of society—the utterly unproductive…” (loc. cit., pp. 83-84).

“… likewise[bbb] the double and quadruple allowance received by the various classes of small proprietors, manufacturers, and tradesmen, in the shape of profit and interest, ||444| Upon the most moderate computation, the share of wealth enjoyed by this extensive portion of the community will amount to not less than £140,000,000 annually, above the average of what is received by an equal number of the best paid of the working class.  Thus, along with their government, the two classes of idlers and livers on profit—comprising perhaps one-fourth of the entire population—absorb about £300,000,000 annually, or above one half of the entire wealth produced […] an average boss of above £50 per head to every working man in the empire!—This leaves no more than an average of £11 per head per annum, to be divided amongst the remaining three-fourths of the nation.  From calculations made in 1815, it appears that the annual income of the whole people of the United Kingdom amounted to about £430,000,000; of which the working class received £99,742,547, and the rent, pension, and profit class £330,778,825!  The whole property of the country was at the same time calculated to be worth nearby three thousand millions of pounds sterling” (loc. cit., pp. 84-85).

Cf. the list of Gregory King etc.

England, 1844.  Population: Nobility and gentry—1,181,000.  Trades men, farmers, etc.—4,221,000 (combined total—5,402,000).  Labourers, paupers, etc.—9,567,000.  Banfleld (T.C.), The Organisation of Industry, second ed., London, 1848.  |X-444||

[a] In the manuscript “i.e.” instead of “that is to say”.—Ed.

[b]  In the manuscript “Consequently, if” instead of “If then”.—Ed.

[c]  In the manuscript “But this is” instead of “that it is”.—Ed.


* ||XV-862a| Because surplus-value and surplus labour are identical, a qualitative limit is set to the accumulation of capital, [it is determined by] the total working-day (the period in the 24 hours during which labour-power can be active), the given stage of development of the productive forces and the population, which limits the total number of working-days that can be utilised simultaneously at a given time.  If, on the contrary, surplus yield is understood in the abstract form of interest, that is, as the proportion in which capital increases itself by means of a mythical “sleight of hand”, then the limit is purely quantitative and it is absolutely impossible to see why capital does not daily add to itself interest as capital every morning, thus creating interest on interest in infinite progression.  |XV-862a||

[d]  See Theories of Surplus-Value, Part II, pp. 541-42 and this volume, pp. 114-15.—Ed.

[e] In the manuscript “for”.—Ed.

[f] Instead of “this surplus labour must”, the manuscript has “This surplus labour, that is an even larger amount, must”.—Ed.

[g] Instead of “which is the same thing”, the manuscript has “which comes to the same thing”.—Ed.

[h] The following sentence is Marx’s paraphrase (written in German) of the ideas the author sets forth in the pamphlet.—Ed.

[i] The first part of the sentence up to the words: “are worked” is not a quotation but a paraphrase by Marx (in German).—Ed.

[j] The Source and Remedy of the National Difficulties, deduced from Principles of Political Economy, etc.—Ed.

[k] In the manuscript “The”—Ed.

[l] In the manuscript “The entire war against the French Revolution” instead of “the history of the last thirty years”.—Ed.

[m] The Source and Remedy of the National Difficulties, published anonymously.—Ed.

[n] Ravenstone, Thoughts on the Funding System, and its Effects.—Ed.

[o] Labour Defended against the Claims of Capital; or, the Unproductiveness of Capital Proved, which Hodgskin published anonymously.—Ed.

[p]  In the manuscript “Wealth is nothing but disposable time”.—Ed.

[q] Activity.—Ed.

[r] In the manuscript this reads: “The conviction of the worker employed by the cotton spinner… ”—Ed.

[s] In the nascent state.—Ed.

[t] A mode of expression, a figure of speech.—Ed.

[u] In kind, in this context it means: within the framework of a natural economy.—Ed.

[v] This is not a quotation from Chavée but a free summary of some of his ideas.—Ed.

[w] Virtue.—Ed.

[x] To surround with a wall, to fortify, to defend.—Ed.

[y] To be strong, vigorous.—Ed.

[z] Wall.—Ed.

[aa] Rule, govern, control.—Ed.

[bb] In the manuscript “the vast utility of the steam-engine does”.—Ed.

[cc] In the manuscript “the”.—Ed.

[dd] See this volume, pp. 16-17 and 31-32.—Ed.

[ee] In the manuscript “The Author of An Essay on the Application of Capital to Land says”.—Ed.

[ff] Instead of the phrase: “they in reality assert the monstrous proposition” Marx wrote in the manuscript in German: they assert the absurd proposition.—Ed.

[gg] Power—Ed.

[hh] In the manuscript “The capitalist is the oppressive middleman between the different labourers.  If he is put out of view…”.—Ed.

[ii]  The words up to “rapidly” represent Marx’s own synopsis of Hodgskin’s argument and have been translated here from the German.  The rest of the sentence is quoted directly from Hodgskin.—Ed.

[jj] Marx paraphrases this proposition of Hodgskin in German (apart from the words “retail trade” and “quantity”) and his rendering has been translated here.—Ed.

[kk] This part of the quotation is slightly condensed and partly translated into German in the manuscript; rendered in English it reads: “If one considers for example fixed capital, the most favourable position for the idea of capital aiding production, three classes of circumstances are to be distinguished under which [the results of] accumulation of capital are very different.”

1.  When it is made and used by the same person.  It is obvious [that]”.—Ed.

[ll] In the manuscript “when” instead of “if it be”.—Ed.

[mm] In the manuscript “they” instead of “both may”.—Ed.

[nn] In the manuscript “is”.-Ed.

[oo] In the manuscript “and”.-Ed.

[pp] In the manuscript “wages do not facilitate production, like instruments”.—Ed.

[qq] In the manuscript “consists of promises to pay”.—Ed.

[rr] In the manuscript “The invention and employment of paper-money has revealed that capital is by no means something saved”.—Ed.

[ss] In the manuscript “one could suppose”.—Ed.

[tt] In the manuscript “people”.—Ed.

[uu] In the manuscript “As the population increases.”—Ed.

[vv] In the manuscript “must be”.—Ed.

[ww] Marx here summarises Bray’s ideas and presents them in German.—Ed.

[xx]  In the manuscript “forces”.—Ed.

[yy] Instead of “we may estimate the entire maintenance of the 25 millions of people to be worth”, in the manuscript “We assume that their maintenance is”.—Ed.

[zz] In the manuscript the two sentences, which are translated into German, are condensed to read as follows: “Of the five million men who at present assist in production some work only five hours a day, others fifteen.”—Ed.

[aaa] In the manuscript “But”.—Ed.

[bbb] In the manuscript “Add to this”.—Ed.