From the crises in history he demonstrates that ‘they occur only after a considerable increase of productivity’.[249] Rodbertus opposes what he terms the vulgar view which conceives of crises as mere disturbances in the monetary and credit system, and he criticises the whole of Peel’s currency legislation as an error of judgment, arguing the point in detail in his essay On Commercial Crises and the Mortgage Problem. There he makes the following comment among others: ‘We would therefore deceive ourselves if we were to regard commercial crises merely as crises of the monetary, banking, or credit system. This is only their outer semblance when they first emerge.’[250]
Rodbertus also shows a remarkably acute grasp of the part played by foreign trade in the problem of crises. Just like Sismondi, he states the necessity of expansion for capitalist production, but he simultaneously emphasises the fact that the periodical crises are bound to grow in volume.
‘Foreign trade’, he says, ‘is related to slumps only as charity is related to poverty. They ultimately only enhance one another.’[251] And further: ‘The only possible means of warding off further outbreaks of crises is the application of the two-edged knife of expanding foreign markets. The violent urge towards such expansion is largely no more but a morbid irritation caused by a sickly organ. Since one factor on the home market, productivity, is ever increasing, and the other factor, purchasing power, remains constant for the overwhelming majority of the population, commerce must endeavour to conjure up a similarly unlimited amount of purchasing power on the foreign market.’[252] In this way, the irritation may be soothed to some extent so that at least there will not be a new outbreak of the calamity right away. Every foreign market opened defers the social problem in a like manner. Colonisation of primitive countries would have similar effects: Europe rears a market for herself in places where none had been before. Yet such a medicine would essentially do no more than appease the ill. As soon as the new markets are supplied, the problem will revert to its former state—a conflict between the two factors: limited purchasing power versus unlimited productivity. The new attack would be warded off the small market only to re-appear, in even wider dimensions and with even more violent incidents, on a larger one. And since the earth is finite and the acquisition of new markets must some time come to an end, the time will come when the question can no longer be simply adjourned. Sooner or later, a definite solution will have to be found.’[253]
Rodbertus also recognises the anarchical character of capitalist private enterprise to be conducive to crises, but only as one factor among many, seeing it as the source of a particular type of crises, not as the real cause of crises in general. About the crises at v. Kirchmann’s Ort, e.g., he says: ‘I maintain that a slump of this kind does not occur in real life. The market of to-day is large, there are countless wants and many branches of production, productivity is considerable and the data of commerce are obscure and misleading. The individual entrepreneur does not know how much others are producing, and so it may easily happen that he over-estimates the demand for a certain commodity with which he will then overstock the market.’
Rodbertus says outright that the only remedy for these crises is the ‘complete reversal’ of contemporary property-relations or a planned economy, concentrating all means of production ‘in the hands of a single social authority’. To set troubled minds at rest, however, he is quick to add that he reserves judgment as to whether there can actually be such a state of affairs—‘yet this would be the only possible way to prevent slumps of this kind’. Thus he expressly regards anarchy in the modern mode of production as responsible for only a specific and partial manifestation of crises.
Rodbertus scornfully rejects Say-Ricardo’s axiom of a natural equilibrium between consumption and production; just like Sismondi, he emphasises that everything turns on the purchasing power of society, and also takes it to be dependent upon the distribution of income. All the same, he does not endorse Sismondi’s theory of crises and disagrees sharply with the conclusions drawn from it. If Sismondi saw the source of all evil in the unlimited expansion of production without regard to the limitations of incomes, and advocated a restriction of production, Rodbertus, quite on the contrary, champions the most powerful and unrestricted expansion of production, of wealth and of the productive forces, believing this to be a social necessity. Whoever rejects the wealth of society, rejects at the same time its power, its progress, and, with its progress, its virtues. Whoever stands in the way of growing wealth, stands in the way of all social progress whatever. Every increase in knowledge, resolve and capacity is conceived as bound up with an increase in wealth.[254] From this point of view, Rodbertus is strongly in favour of issuing houses which he regards as the indispensable foundations for a rapid and unrestricted expansion of company promoting. Both his essay of 1859 on the mortgage problem and the treatise on the Financial Crisis in Prussia[255] are devoted to this plea. He even polemises outright against the Sismondian type of caveat, as usual broaching the matter first from his peculiar Utopian ethics.
‘The entrepreneurs’, he holds forth, ‘are essentially civil servants of economy. By the institution of property, they are once and for all entrusted with the nation’s means of production. If they set them to work and strain all their energies in the process, they do but their duty, since capital—let me repeat—exists entirely for the sake of production.’ And a further, factual argument: ‘Or would you have them (the entrepreneurs) turn acute attacks of suffering into a chronic state by working persistently and from the first with fewer forces than are given by the means of production; are they to pay for a less severe form of the evil with its permanent duration? Even if we were silly enough to give them this advice, they would not be able to follow it. How could the entrepreneurs of the world recognise the limits beyond which the market would cease to be healthy? They engage in production without knowing the one of the other, they are producing in the most distant corners of the earth for a market hundreds of miles away, they produce with such vast forces that a month’s production may already overstep the limit. How could production—so divided and yet so powerful—conceivably estimate in good time what will be enough? Where, for instance, are the organisations, the up-to-date statistical bureaux and the like to help them in this task? What is worse, the price alone, its rise and fall, indicates the position of the market, and this is not like a barometer which predicts the temperature of the market, but more like a thermometer which only registers it. If the price falls, the limit has been passed already, and the evil is with us.’[256]
These thrusts, obviously aimed at Sismondi, exhibit quite fundamental differences between the two opponents. If Engels then says in his Anti-Duehring that Sismondi first explained the crises as resulting from under-consumption, and that Rodbertus borrowed this view from him, he is not strictly accurate. All that Rodbertus and Sismondi have in common is their opposition against the classical school and the general explanation of crises as the result of the distribution of incomes. Even in this connection Rodbertus mounts his own particular hobby horse: over-production is not caused by the low level of working class incomes, nor yet, as Sismondi maintains, by the capitalists’ limited capacity for consumption, but solely by the fact that with a growing productivity of labour, the workers’ income, in terms of value, represents an ever smaller share of the product. Rodbertus takes pains to convince the opposition that it is not the small volume of the workers’ share which causes the crises.
‘Just imagine’, he goes on to lecture v. Kirchmann, ‘these shares to be so small as to ensure only a bare subsistence for those who are entitled to them. As long as you establish them as representing a proportion of the national product, you will have a constant “vessel for value” which can absorb ever increasing contents, and an ever increasing prosperity of the working classes as well.... And now imagine on the contrary as large a share for the working classes as you please, and let it become an ever smaller fraction of the national product that grows with increasing productivity. Then, provided it is not reduced to the present pittance, this share will still protect the workers from undue privations since the amount of products it represents will still be considerably greater than it is to-day. Once this share begins to decline, however, there will be spreading discontent, culminating in a commercial crisis for which the capitalists are not to blame inasmuch as they did no more than their duty in laying down the volume of production according to the given magnitude of these shares.’
That is why the ‘declining wage rate’ is the real cause of crises. It can only be counteracted by legal measures to ensure that the workers’ share represents a stable and unchanging rate of the national product. This grotesque notion takes some understanding if we are to do justice to its economic implications.
CHAPTER XVII
RODBERTUS’ ANALYSIS OF REPRODUCTION
To begin with, what does it mean that a decrease in the workers’ share is bound immediately to engender over-production and commercial crises? Such a view can only make sense provided Rodbertus takes the ‘national product’ to consist of two parts, vide the shares of the workers and of the capitalists, in short of v + s, one share being exchangeable for the other. And that is more or less what he actually seems to say on occasions, e.g. in his first Letter on Social Problems:
‘The poverty of the working classes precludes their income from giving scope to increasing production. The additional amount of products from the entrepreneurs’ point of view lowers the value of the aggregate product so far as to bar production on the former scale, leaving the workers at best to their accustomed straits, though, if it could be made available to the workers, it would not only improve their lot but would further act as a counterweight by increasing the value of what is retained by the capitalists (and so enable the latter to keep their enterprises at the same level).’[257]
The ‘counterweight’ which in the hand of the workers increases the ‘value’ of ‘what is retained’ by the entrepreneurs, can in this context only be the demand. Once again, we have landed happily at the familiar Ort of v. Kirchmann’s where workers and capitalists exchange their incomes for the surplus product, and where the crises arise because variable capital is small and the surplus value large. This peculiar notion has already been dealt with above. There are other occasions, however, when Rodbertus advances a somewhat different conception. The interpretation of his theory in the fourth Letter on Social Problems is that the continual shifts in the relations of demand, evident in the share of the working class and caused by the share of the capitalist class, must result in a chronic disproportion between production and consumption.
‘What if the entrepreneurs endeavour to keep always within the limits of those shares, yet the shares themselves are all the time on the decline for the great majority of the society, the workers, decreasing gradually, unnoticeably, but with relentless force?—What if the share of these classes is continually decreasing to the same extent as their productivity is increasing?’—‘Is it not really the fact that the capitalists of necessity organise production in accordance with the present volume of shares in order to make wealth universal, and that yet they always produce over and above this volume (of previous shares), thereby perpetuating dissatisfaction which culminates in this stagnation of trade?’[258]
On this showing, the explanation of crises should be as follows: the national product consists of a number of ‘common goods’, as v. Kirchmann puts it, for the workers, and of superior goods for the capitalists. The wages represent the quantity of the former, and aggregate surplus value that of the latter. If the capitalists organise their production on this footing, and if at the same time there is progressive productivity, a lack of proportion will immediately ensue. For the share of the workers to-day is no longer that of yesterday, but less. If the demand for ‘common goods’ had involved, say, six-sevenths of the national product yesterday, then to-day it involves only five-sevenths, and the entrepreneurs, having provided for six-sevenths of ‘common goods’, will find to their painful surprise that they over-produced by one-seventh. Now, wiser by this experience, they try to organise to-morrow’s output of ‘common goods’ to a mere five-sevenths of the total value of the national product, but they have a new disappointment coming to them, since the share of the national product falling to wages to-morrow is bound to be only four-sevenths, and so on.
In this ingenious theory there are quite a few points to make us wonder. If our commercial crises are entirely due to the fact that the workers’ ‘wage rate’, the variable capital, represents a constantly diminishing portion of the total value of the national product, then this unfortunate law brings with it the cure for the evil it has caused, since it must be an ever smaller part of the aggregate product for which there is over-production. Although Rodbertus delights in such terms as ‘an overwhelming majority’, ‘the large popular masses’ of consumers, it is not the number of heads that make up the demand, but the value they represent which is relevant. This value, if Rodbertus is to be believed, forms a more and more trifling part of the aggregate product. Crises are thus made to rest on an ever narrowing economic basis, and all that remains to discover is how in spite of it all it can still happen that the crises are universal and increasingly severe besides, as Rodbertus is fully aware. The purchasing power lost by the working classes should be gained by the capitalist class; if v decreases, s must grow larger to make up for it. On this crude scheme, the purchasing power of society as a whole cannot change, as Rodbertus says in so many words: ‘I know very well that what is taken from the workers’ share goes ultimately to swell that of the “rentiers” (rent and surplus value are used as synonyms, R.L.), and that purchasing power remains constant on the whole and in the long run. But as far as the product on the market is concerned, the crisis always sets in before this increase can make itself felt.’[259]
In short, the most it can amount to is that there is ‘too much’ of ‘common goods’ and ‘too little’ of superior goods for the capitalists. Quite unawares, and by devious ways, Rodbertus here falls in with the Say-Ricardian theory he so ardently contested, the theory that over-production on one side always corresponds to under-production on the other. Seeing that the ratio of the two shares is persistently shifting to the advantage of the capitalists, our commercial crises might be expected on the whole to take on increasingly the character of periodical under- instead of over-production! Enough of this exercise in logic. The upshot of it all is that Rodbertus conceives the national product in respect of its value as made up of two parts only, of s and v, thus wholly subscribing to the views and traditions of the classical school he is fighting tooth and nail, and even adding his own flourish that the capitalists consume the entire surplus value. That is why he repeatedly says without mincing his words, as in the fourth Letter on Social Problems:
‘Accordingly, we must abstract from the reasons which cause the division of rent in general into rent proper and capital rent, to find the basic principle underlying the division of rent (surplus value) in general, the principle underlying the division of the labour product into wage and rent.’[260] And, in the third Letter: ‘Ground rent, capital profit and the wage of labour are, let me repeat, revenue. By this means landlords, capitalists and workers must live, must satisfy, that is to say, their immediate human necessities. They must therefore draw their income in the form of goods suitable for this purpose.’[261]
The misrepresentation of capitalist economy has never been formulated more crudely, and there is no doubt that Rodbertus claims the palm of ‘priority’—not so much over Marx as over all popular economists—with full justification. To leave the reader in no doubt about the utter muddle he has made, he goes on, in the same letter, to rank capitalist surplus value as an economic category on the same level as the revenue of the ancient slave-owner:
‘The first state (that of slavery) goes with the most primitive natural economy: that portion of the labour product which is withheld from the income of workers or slaves and forms the master’s or owner’s property, will undividedly accrue to the one man who owns the land, the capital, the worker and the labour product; there is not even a distinction of thought between rent and capital profits.—The second state entails the most complicated money economy: that portion of the labour product, withheld from the income of the now emancipated workers, and accruing to the respective owners of land, and capital, will be further divided among the owners of the raw material and the manufactured product respectively; the one rent of the former state will be split up into ground rent and capital profits, and will have to be differentiated accordingly.’[262]
Rodbertus regards the splitting-up of the surplus value ‘withheld’ from the workers’ ‘income’ as the most striking difference between exploitation by slavery and modern capitalist exploitation. It is not the specific historical form of sharing out newly created value among labour and capital, but the distribution of the surplus value among the various people it benefits, which, irrelevant to the productive process, is yet the decisive fact in the capitalist mode of production. In all other respects, capitalist surplus value remains just the same as the old ‘single rent’ of the slave-owner: a private fund for the exploiter’s own consumption!
Yet Rodbertus again contradicts himself in other places, remembering all of a sudden the constant capital and the necessity for its renewal in the reproductive process. Thus, instead of bisecting the aggregate product into v and s, he posits a triple division: c, v, and s. In his third Letter on Social Problems he argues on the forms of reproduction in a slave-economy:
‘Since the master will see to it that part of the slave labour is employed in maintaining or even improving the fields, herds, agricultural and manufacturing tools, there will be “capital replacement”, to use a modern term, in which part of the national economic product is immediately used for the upkeep of the estate, without any mediation by exchange or even by exchange value.’[263] And, passing on to capitalist reproduction, he continues: ‘Now, in terms of value, one portion of the labour product, is used or set aside for the maintenance of the estate, for “capital replacement”, another, for the workers’ subsistence as their money wage; and the owners of the land, of capital, and of the labour product retain the last as their revenue or rent.’[264]
This, then, is an explicit expression of the triple division into constant capital, variable capital, and surplus value. Again, in this third Letter, he formulates the peculiarity of his ‘new’ theory with equal precision: ‘On this theory, then, and under conditions of adequate labour productivity, the portion of the product which remains for wages after the replacement of capital, will be distributed among workers and owners as wages and rent, on the basis of the ownership in land and capital.’[265]
It does seem now as if Rodbertus’ analysis of the value of the aggregate product represents a distinct advance over the classical school. Even Adam Smith’s ‘dogma’ is openly criticised a little further on, and it is really surprising that Rodbertus’ learned admirers, Messrs. Wagner, Dietzel, Diehl & Co. failed to claim their white-headed boy’s ‘priority’ over Marx on such an important point of economic theory. As a matter of fact, in this respect no less than in the general theory of value, Rodbertus’ priority is of a somewhat dubious character. If he seems on occasion to gain true insight, it immediately turns out to be a misunderstanding, or at best a wrong approach. His criticism of Adam Smith’s dogma affords a supreme example of his failure to cope with the triple division of the national product towards which he had groped his way. He says literally:
‘You know that all economists since Adam Smith already divided the value of the product into wage of labour, rent, and capital profit, that it is therefore not a new idea to ground the incomes of the various classes, and especially the various items of the rent, in a division of the product. But the economists at once go off the track. All of them, not even excepting Ricardo’s school, make the mistake, first, not to recognise that the aggregate product, the finished good, the national product as a whole, is an entity in which workers, landowners, and capitalists all share, but conceiving the division of the unfinished product to be of one kind shared among three partners, and that of the manufactured product as of another kind again, shared between only two partners. For these theories both the unfinished product and the manufactured product constitute as such separate items of revenue. Secondly,—though both Sismondi and Ricardo are free from this particular error—they regard the natural fact that labour cannot produce goods without material help, i.e. without the land, as an economic fact, and take the social fact for a primary datum that capital as understood to-day is required by the division of labour. Thus they set up the fiction of a fundamental economic relationship on which they base also for the shares of the various owners, ground rent springing from the contribution of the land lent by the owner to production, capital profits from the contribution of capital employed by the capitalist to this end, and the wages finally from labour’s contribution, seeing that there are separate owners of land, capital, and labour in the society. Say’s school, elaborating on this mistake with much ingenuity, even invented the concept of productive service of land, capital, and labour in conformity with the shares in the product of their respective owners, so as to explain these shares as the result of productive service.—Thirdly, they are caught up in the ultimate folly of deriving the wage of labour and the items of rent from the value of the product, the value of the product in turn being derived from the wage of labour and the items of rent, so that the one is made to depend on the other and vice versa. This absurdity is quite unmistakable when some of these authors attempt to expound “The Influence of Rent Upon Production Prices” and “The Influence of Production Prices Upon Rent” in two consecutive chapters.’[266]
Yet for all these excellent critical comments—the last, particularly acute, actually does to some extent anticipate Marx’s criticism of this point in Capital, volume ii—Rodbertus calmly falls in with the fundamental blunder of the classical school and its vulgar followers: to ignore altogether that part of the value of the aggregate product which is needed to replace the constant capital of the society. This way it was easier for him to keep up the singular fight against the ‘declining wage rate’.
Under capitalist forms of production, the value of the aggregate social product is divided into three parts: one corresponding to the value of the constant capital, the second to the wage total, i.e. the variable capital, and the third to the aggregate surplus value of the capitalist class. In this composition, the portion corresponding to the variable capital is relatively on the decline, and this for two reasons. To begin with, the relation of c to (v + s) within c + v + s changes all the time in the direction of a relative increase of c and a relative decrease of v+s. This is the simple law for a progressive efficiency of human labour, valid for all societies of economic progress, independently of their historical forms, a formula which only states that living labour is increasingly able to convert more means of production into objects for use in an ever shorter time. And if (v + s) decreases as a whole, so must v, as its part, decrease in relation to the total value of the product. To kick against this, to try and stop the decrease, would be tantamount to contending against the general effects of a growing labour productivity. Further, there is within (v + s) as well a change in the direction of a relative decrease in v and a relative increase in s, that is to say, an ever smaller part of the newly created value is spent on wages and an ever greater part is appropriated as surplus value. This is the specifically capitalist formula of progressive labour productivity which, under capitalist conditions of production, is no less valid than the general law. To use the power of the state to prevent a decrease of v as against s would mean that the fundamental commodity of labour power is debarred from this progress which decreases production costs for all commodities; it would mean the exemption of this one commodity from the economic effects of technical progress. More than that: the ‘declining wage rate’ is only another expression of the rising rate of surplus value which forms the most powerful and effective means of checking a decline of the profit rate, and which therefore represents the prime incentive for capitalist production in general, and for technical progress within this system of production in particular. Doing away with the ‘declining wage rate’ by way of legislation would be as much as to do away with the raison d’être of capitalist society, to deal a crippling blow to its entire system. Let us face the facts: the individual capitalist, just like capitalist society as a whole, has no glimmering that the value of the product is made up from the sum total of labour necessary in the society, and this is actually beyond his grasp. Value, as the capitalist understands it, is the derivative form, reversed by competition as production costs. While in truth the value of the product is broken down into the values of its component fragments c, v and s, the capitalist mind conceives of it as the summation of c, v and s. These, in addition, also appear to him from a distorted perspective and in a secondary form, as (1) the wear and tear of his fixed capital, (2) his advances on circulating capital, including workers’ wages, and (3) the current profits, i.e. the average rate of profit on his entire capital. How, then, is the capitalist to be compelled by a law, say of the kind envisaged by Rodbertus, to maintain a ‘fixed wage rate’ in the face of the aggregate value of the product? It would be quite as brilliant to stipulate by law for exactly one-third, no more, no less, of the total price of the product to be payable for the raw materials employed in the manufacture of any commodity. Obviously, Rodbertus’ supreme notion, of which he was so proud, on which he built as if it were a new Archimedean discovery, which was to be the specific for all the ills of capitalist production, is arrant nonsense from all aspects of the capitalist mode of production. It could only result from the muddle in the theory of value which is brought to a head in Rodbertus’ inimitable phrase: that ‘now, in a capitalist society, the product must have value-in-exchange just as it had to have value-in-use in ancient economy’.[267] People in ancient society had to eat bread and meat in order to live, but we of to-day are already satisfied with knowing the price of bread and of meat. The most obvious inference from Rodbertus’ monomania about a ‘fixed wage rate’ is that he is quite incapable of understanding capitalist accumulation.
Previous quotations have already shown that Rodbertus thinks solely of simple commodity production, quite in keeping with his mistaken doctrine that the purpose of capitalist production is the manufacture of consumer goods for the satisfaction of ‘human wants’. For he always talks of ‘capital replacements’, of the need to enable the capitalists to ‘continue their enterprise on the previous scale’. His principal argument, however, is directly opposed to the accumulation of capital. To fix the rate of the surplus value, to prevent its growth, is tantamount to paralysing the accumulation of capital. Both Sismondi and v. Kirchmann had recognised the problem of balancing production and consumption to be indeed a problem of accumulation, that is to say of enlarged capitalist reproduction. Both traced the disturbances in the equilibrium of reproduction to accumulative tendencies denying the possibility of accumulation, with the only difference that the one recommended a damper on the productive forces as a remedy, while the other favoured their increasing employment to produce luxuries, the entire surplus value to be consumed. In this field, too, Rodbertus follows his own solitary path. The others might try with more or less success to comprehend the fact of capitalist accumulation, but Rodbertus prefers to fight the very concept. ‘Economists since Adam Smith have one after the other echoed the principle, setting it up as a universal and absolute truth, that capital could only come about by saving and accumulating.’[268]
Rodbertus is up in arms against this ‘deluded judgment’. Over sixty pages of print he sets out in detail that (a) it is not saving which is the source of capital but labour, that (b) the economists’ ‘delusion’ about ‘saving’ hails from the extravagant view that capital is itself productive, and that (c) this delusion is ultimately due to another: the error that capital is—capital.
v. Kirchmann for his part understood quite well what is at the bottom of capitalist ‘savings’. He had the pretty argument: ‘Everyone knows that the accumulation of capital is not a mere hoarding of reserves, an amassing of metal and monies to remain idle in the owners’ vaults. Those who want to save do it for the sake of re-employing their savings either personally or through the agency of others as capital, in order to yield them revenue. That is only possible if these capitals are used in new enterprises which can produce so as to provide the required interest. One may build a ship, another a barn, a third may reclaim a desolate swamp, a fourth may order a new spinning frame, while a fifth, in order to enlarge his shoe-making business, would buy more leather and employ more hands—and so on. Only if the capital that has been saved is employed in this way, can it yield interest (meaning profit), and the latter is the ultimate object of all saving.’[269]
That is how v. Kirchmann described somewhat clumsily, but on the whole correctly, what is in fact the capitalisation of surplus value, the process of capitalist accumulation, which constitutes the whole significance of saving, advocated by classical economists ‘since Adam Smith’ with unerring instinct. Declaring war on saving and accumulation was quite in keeping with v. Kirchmann’s premises, considering that he, like Sismondi, saw the immediate cause of the crises in accumulation. Here, too, Rodbertus is more ‘thorough’. Having learned from Ricardo’s theory of value that labour is the source of all value, and consequently of capital, too, he is completely blinded by this elementary piece of knowledge to the entire complexity of capitalist production and capital movements. Since capital is generated by labour, both the accumulation of capital, i.e. ‘saving’, and the capitalisation of the surplus value are nothing but eyewash.
In order to untangle this intricate network of errors by ‘economists since Adam Smith’, he takes, as we might expect, the example of the ‘isolated husbandman’ and proves all that he needs by a long-drawn vivisection of the unhappy creature. Here already he discovers ‘capital’, that is to say, of course, that famous ‘original stick’ with which ‘economists since Adam Smith’ have hooked the fruits of a theory of capital from the tree of knowledge. ‘Would saving be able to produce this stick?’ is his query. And since every normal person will understand that ‘saving’ cannot produce any stick, that Robinson [Crusoe] must have made it of wood, we have already proved that the ‘savings’ theory is quite mistaken. Presently, the ‘isolated husbandman’ hooks a fruit from the tree with the stick, and this fruit is his ‘income’.
‘If capital were the source of income, already this most elementary and primitive event would have to give evidence of this relation. Would it be true to say, then, without doing violence to facts and concepts, that the stick is a source of income or of part of the income consisting in the fruit brought down? can we trace income, wholly or in part, back to the stick as its cause, may we consider it, wholly or in parts, as a product of the stick?’[270]
Surely not. And since the fruit is the product, not of the stick which brought it down, but of the tree which grew it, Rodbertus has already proved that all ‘economists since Adam Smith’ are grossly mistaken if they maintain that income derives from capital. After a clear exposition of all fundamental concepts of economics on the example of Robinson [Crusoe]’s ‘economy’, Rodbertus transfers the knowledge thus acquired first to a fictitious society ‘without ownership in capital or land’, that is to say to a society with a communist mode of possession, and then to a society ‘with ownership in capital and land’, that is to say contemporary society, and, lo and behold—all the laws of Robinson [Crusoe]’s economy apply point for point to these two forms of society as well. Rodbertus contrives here a theory of capital and income which is the very crown of his Utopian imagination. Since he has discovered that Robinson [Crusoe]’s ‘capital’ is the means of production pure and simple, he identifies capital with the means of production in capitalist economy as well. Thus reducing capital, with a wave of his hand, to constant capital, he protests in the name of justice and morality against the fact that the wages, the workers’ means of subsistence, are also considered capital. He contends furiously against the concept of variable capital, seeing in it the cause of every disaster. ‘If only’, he grieves, ‘economists would pay attention to what I say, if only they would examine without prejudice whether they are right or I. This is the focal point of all errors about capital in the ruling system, this is the ultimate source of injustice against the working classes, in theory and practice alike.’[271]
For ‘justice’ demands that the goods constituting the ‘real wages’ of the workers be counted, not as part of capital, but as belonging to the category of income. Though Rodbertus knows very well that the capitalist must regard the wages he has ‘advanced’ as part of his capital, just like the other part laid out on immediate means of production, yet in his opinion this applies only to individual capitals. As soon as it is a question of the social aggregate product, of reproduction as a whole, he declares the capitalist categories of production an illusion, a malicious lie and a ‘wrong’. ‘Capital per se (properly so-called), the items which make up capital, capital from the nation’s point of view, is something quite different from private capital, capital assets, capital property, all that “capital” in the modern use of the term usually stands for.’[272]
An individual capitalist produces by capitalist methods, but society as a whole must produce like Robinson [Crusoe], as a collective owner employing communist methods.
‘It makes no difference from this general and national point of view that greater or smaller parts of the aggregate national product are now owned in all the various phases of production by private persons who must not be numbered among the producers proper, and that the latter always manufacture this national aggregate product as servants—without sharing in the ownership of their own product—of these few owners.’
Certain peculiarities of the relations within the society as a whole no doubt result from this, namely (1) the institution of ‘exchange’ as an intermediary, and (2) the inequality in the distribution of the product.
‘Yet all these consequences do not affect the movements of national production and the shaping of the national product which are always the same, now as ever (under the rule of communism), no more than they alter in any respect, as far as the national point of view is concerned, the contrast between capital and income so far established.’
Sismondi had laboured in the sweat of his brow, as had Smith and many others, to disentangle the concepts of capital and income from the contradictions of capitalist production. Rodbertus has a simpler method and abstracts from the specific forms determined by capitalist production for society as a whole; he simply calls the means of production ‘capital’ and the article of consumption ‘revenue’ and leaves it at that.
‘The essential influence of ownership in land and capital applies only to individuals having traffic with one another. If the nation is taken as a unit, the effects of such ownership upon the individuals completely disappear.’[273]
We see that as soon as Rodbertus comes up against the real problem, the capitalist aggregate product and its movements, he exhibits the Utopian’s characteristic obtuseness in respect of the historical peculiarities of production. Marx’s comment on Proudhon, that ‘speaking of society as a whole, he pretends that this society is no longer capitalist’ therefore fits him like a glove. The case of Rodbertus again exemplifies how every economist before Marx had been at a loss when it came to harmonising the concrete aspects of the labour process with the perspective of capitalist production which regards everything in terms of value, to mediating between the forms of movement performed by individual capitals and the movement of social capital. Such efforts as a rule vacillate from one extreme to another: the shallow approach of Say and MacCulloch, recognising only the conceptions of individual capital, and the Utopian approach of Proudhon and Rodbertus who recognise only those of the process of labour. That is the context in which Marx’s penetration appears in its true light. His diagram of simple reproduction illuminates the entire problem by gathering up all these perspectives in their harmony and their contradictions, and so resolves the hopeless obscurities of innumerable tomes into two rows of figures of striking simplicity.
On the strength of such views on capital and income as these, capitalist appropriation is clearly quite impossible to understand. Indeed, Rodbertus simply brands it as ‘robbery’ and indicts it before the forum of the rights of property it so blatantly violates.
‘This personal freedom of the workers which ought legally to involve ownership in the value of the labour product, leads in practice to their renunciation of the proprietary claims extorted under pressure of ownership in land and capital; but the owners do not admit to this great and universal wrong, almost as though they were instinctively afraid that history might follow its own stern and inexorable logic.’[274]
Rodbertus’ ‘theory in all its details is therefore conclusive proof that those who praise present-day relations of ownership without being able at the same time to ground ownership in anything but labour, completely contradict their own principle. It proves that the property relations of to-day are in fact founded on a universal violation of this principle, that the great individual fortunes being amassed in society nowadays are the result of cumulative robbery mounting up in society with every new-born worker since time immemorial.’[275]
Since surplus value is thus branded as ‘robbery’, an increasing rate of surplus value must appear ‘as a strange error of present-day economic organisation’. Brissot’s crude paradox with its revolutionary ring—‘property is theft’—had been the starting point for Proudhon’s first pamphlet, but Rodbertus’ thesis is quite another matter, arguing that capital is theft perpetrated on property. It need only be set side by side with Marx’s chapter on the transformation of the laws of ownership into the laws of capitalist appropriation—this triumph of historical dialectics in vol. i of Marx’s Capital—in order to show up Rodbertus’ ‘priority’. By ranting against capitalist appropriation under the aspect of the ‘right of property’, Rodbertus closed his mind to capital as the source of surplus value just as effectively as he had previously been prevented by his tirades against ‘saving’ from seeing the surplus value as a source of capital. He is thus in an even worse position than v. Kirchmann, lacking all qualifications for understanding capitalist accumulation.
What it amounts to is that Rodbertus wants unrestricted expansion of production without saving, that is to say without capitalist accumulation! He wants an unlimited growth of the productive forces, and at the same time a rate of surplus value stabilised by an act of law. In short, he shows himself quite unable to grasp the real foundations of capitalist production he wishes to reform, and to understand the most important results of the classical economics he criticises so adversely.
It is no more than to be expected, therefore, that Prof. Diehl should declare Rodbertus a pioneer of economic theory on the strength of his ‘new theory of income’ and of the distinction between the logical and the historical categories of capital (capital properly so-called in contrast to individual capital), that Prof. Adolf Wagner should call him the ‘Ricardo of economic socialism’, proving himself ignorant at once of Ricardo, Rodbertus and socialism alike. Lexis even judges that Rodbertus is at least the equal of ‘his British rival’ in power of abstract thinking, and by far his superior in ‘virtuosity to lay bare the phenomena in their ultimate connections’, in ‘imaginative vitality’, and above all in his ‘ethical approach to economic life’. Rodbertus’ real achievements in economic theory however, other than his critique of Ricardo’s ground rent, his at times quite clear-cut distinction between surplus value and profit, his treatment of the surplus value as a whole in deliberate contrast with its partial manifestations, his critique of Smith’s dogma concerning the analysis of commodities in terms of value, his precise formulation of the periodical character of the crises and his analysis of their manifestations—all these attempts to carry the investigation beyond Smith, Ricardo and Say, promising as such, though doomed to failure because of the confused basic concepts, are rather above the heads of Rodbertus’ official admirers. As Franz Mehring already pointed out, it was Rodbertus’ strange fortune to be lauded to heaven for his alleged prowess in economics by the same people who called him to task for his real merits in politics. This contrast between economic and political achievements, however, does not concern us here: in the realm of economic theory, his admirers built him a grand memorial on the barren field he had dug with the hopeless zeal of the visionary, while the modest beds where he had sown a few fertile seeds, were allowed to be smothered with weeds and forgotten.[276]
It cannot be said that the problem of accumulation had on the whole been much advanced beyond the first controversy by this Prusso-Pomeranian treatment. If in the interim the economic theory of harmony had dropped from the level of Ricardo to that of a Bastiat-Schultze, social criticism had correspondingly declined from Sismondi to Rodbertus. Sismondi’s critique of 1819 had been an historical event, but Rodbertus’ ideas of reform, even on their first appearance, were a miserable regression—still more so on their subsequent reiteration.
In the controversy between Sismondi on the one hand and Say and Ricardo on the other, one party proved that accumulation was impossible because of the crises, and therefore warned against full development of the productive forces. The other party proved that crises were impossible and advocated an unlimited development of accumulation. Though all argued from wrong premises, each was logically consistent.
v. Kirchmann and Rodbertus both started, were bound to start, from the fact of crises. Here the problem of enlarged reproduction of aggregate capital, the problem of accumulation, was completely identified with the problem of crises and side-tracked in an attempt to find a remedy for the crises, although the historical experience of fifty years had shown all too clearly that crises, as witnessed by their periodical recurrence, are a necessary phase in capitalist reproduction. One side now sees the remedy in the complete consumption of the surplus value by the capitalist, that is to say in refraining from accumulation, the other in stabilisation of the rate of surplus value by legislative measures which comes to the same thing, i.e. renouncing accumulation altogether. This special fad of Rodbertus’ sprang from his fervent and explicit belief in an unlimited capitalist expansion of the productive forces and of wealth, without accumulation of capital. At a time when capitalist production was developed to a degree which was soon to enable Marx to make his fundamental analysis, the last attempt of bourgeois economics to cope with the problem of reproduction degenerated into absurd and puerile Utopianism.
SECTION TWO
★
HISTORICAL EXPOSITION OF THE PROBLEM
★
THIRD ROUND
STRUVE-BULGAKOV-TUGAN BARANOVSKI v. VORONTSOV-NIKOLAYON
CHAPTER XVIII
A NEW VERSION OF THE PROBLEM
The third controversy about capitalist accumulation takes place in an historical setting quite different from that of the two earlier ones. The time now is the period from the beginning of the eighties to the middle of the nineties, the scene Russia. In Western Europe, capitalism had already attained maturity. The rose-coloured classical view of Smith and Ricardo in a budding bourgeois economy had long since vanished ... the self-interested optimism of the vulgarian Manchester doctrine of harmony had been silenced by the devastating impact of the world collapse in the seventies, and under the heavy blows of a violent class struggle that blazed up in all capitalist countries after the sixties. Even that harmony patched up with social reformism which had its hey-day after the early eighties, especially in Germany, soon ended in a hangover. The trial of twelve years’ special legislation against the Social Democratic Party had brought about bitter disillusionment, and ultimately destroyed all the veils of harmony, revealing the cruel capitalist contradictions in their naked reality. Since then, optimism had only been possible in the camp of the rising working class and its theorists. This was admittedly not optimism about a natural, or artificially established equilibrium of capitalist economy, or about the eternal duration of capitalism, but rather the conviction that capitalism, by mightily furthering the development of the productive forces, and in virtue of its inherent contradictions, would provide an excellent soil for the historical progress of society towards new economic and social forms. The negative, depressing tendency of the first stage of capitalism, at one time realised by Sismondi alone and still observed by Rodbertus as late as the forties and fifties, is compensated by a tendency towards elation: the hopeful and victorious striving of the workers for ascendancy in their trade-union movement and by political action.
Such was the setting in Western Europe. In the Russia of that time, however, the picture was different indeed. Here, the seventies and eighties represent in every respect a period of transition, a period of internal crises with all its agonies. Big industry only now staged its real entry, fostered by the period of high protective tariffs. In particular, the introduction of a tariff on gold at the Western frontier in 1877 was a special landmark in the absolutist government’s new policy of forcing the growth of capitalism. ‘Primitive accumulation’ of capital flourished splendidly in Russia, encouraged by all kinds of state subsidies, guarantees, premiums and government orders. It earned profits which would already seem legendary to the West. Yet the picture of internal conditions in contemporary Russia was anything but attractive and auspicious. On the plains, the decline and disintegration of rural economy under the pressure of exploitation by the Exchequer and the monetary system caused terrible conditions, periodical famines and peasant risings. In the towns, again, the factory proletariat had not yet been consolidated, either socially or mentally, into a modern working class. For the greater part, it was still closely connected with agriculture, and remained semi-rural, particularly in the large industrial parts of Moscow-Vladimir, the most important centre of the Russian textile industry. Accordingly, primitive forms of exploitation were countered by primitive measures of defence. Not until the early eighties did the spontaneous factory revolts in the Moscow district with their smashing up of machines provide the impetus for the first rudiments of factory legislation in the Czarist Empire.
If the economic aspect of Russian public life showed at every step the harsh discords of a period of transition, there was a corresponding crisis in intellectual life. ‘Populism’, the indigenous brand of Russian socialism, theoretically grounded in the peculiarities of the Russian agrarian constitution, was politically finished with the failure of the terrorist party of ‘Narodnaya Volya’, its extreme revolutionary exponent. The first writings of George Plekhanov, on the other hand, which were to pave the way in Russia for Marxist trains of thought, had only been published in 1883 and 1885, and for about a decade they seemed to have little influence. During the eighties and up to the nineties the mental life of the Russian, and in particular of the socialist intelligentsia with their tendency towards opposition, was dominated by a peculiar mixture of ‘indigenous’ ‘populist’ remnants and random elements of theoretical Marxism. The most remarkable feature of this mixture was scepticism as to the possibility of capitalist development in Russia.
At an early date, the Russian intelligentsia had been preoccupied with the question whether Russia should follow the example of Western Europe and embark on capitalist development. At first, they noticed only the bleak aspects of capitalism in the West, its disintegrating effects upon the traditional patriarchal forms of production and upon the prosperity and assured livelihood for the broad masses of the population. As against that, the Russian rural communal ownership in land, the famous obshchina, seemed to offer a short-cut to the blessed land of socialism, a lead direct to a higher social development of Russia, without the capitalist phase and its attendant misery as experienced in Western Europe. Would it be right to fling away this fortunate and exceptional position, this unique historical opportunity, and forcibly transplant capitalist production to Russia with the help of the state? Would it be right to destroy the system of rural holdings and production, and open the doors wide to proletarisation, to misery and insecurity of existence for the toiling masses?
The Russian intelligentsia was preoccupied with this fundamental problem ever since the Agrarian Reform, and even earlier, since Hertzen, and especially since Chernishevski. This was the wholly unique world view of ‘populism’ in a nutshell. An enormous literature was created in Russia by this intellectual tendency ranging from the avowedly reactionary doctrines of the Slavophiles to the revolutionary theory of the terrorist party. On the one hand, it encouraged the collection of vast material by separate inquiries into the economic forms of Russian life, into ‘national production’ and its singular aspects, into agriculture as practised by the peasant communes, into the domestic industries of the peasants, the artel, and also into the mental life of the peasants, the sects and similar phenomena. On the other hand, a peculiar type of belles lettres sprang up as the artistic reflection of the contradictory social conditions, the struggle between old and new ways which beset the mind at every step with difficult problems. Finally, in the seventies and eighties, a peculiarly stuffy philosophy of history sprang up from the same root and found its champions in Peter Lavrov, Nicolai Mikhailovski, Professor Kareyev and V. Vorontsov. It was the ‘subjective method in sociology’ which declared ‘critical thought’ to be the decisive factor in social development, or which, more precisely, sought to make a down-at-heel intelligentsia the agent of historical progress.
Here we are interested only in one aspect of this wide field with its many ramifications, viz: the struggle of opinions regarding the chances of capitalist development, and even then only in so far as these were based upon general reflections on the social conditions of the capitalist mode of production, since these latter were also to play a big part in the Russian controversial literature of the eighties and nineties.
The point at issue was to begin with Russian capitalism and its prospects, but this, of course, led further afield to the whole problem of capitalist development. The example and the experiences of the West were adduced as vital evidence in this debate.
One fact was of decisive importance for the theoretical content of the discussion that followed: not only was Marx’s analysis of capitalist production as laid down in the first volume of Capital already common property of educated Russia, but the second volume, too, with its analysis of the reproduction of capital as a whole had already been published in 1885. This gave a fundamentally new twist to the discussion. No more did the problem of crises obscure the real crux of the problem: for the first time, the argument centred purely in the reproduction of capital as a whole, in accumulation. Nor was the analysis bogged any longer by an aimless fumbling for the concepts of income and of individual and aggregate capital. Marx’s diagram of social reproduction had provided a firm foothold. Finally, the issue was no longer between laissez-faire and social reform, but between two varieties of socialism. The petty-bourgeois and somewhat muddled ‘populist’ brand of Russian socialists stood for scepticism regarding the possibility of capitalist development, much in the spirit of Sismondi and, in part, of Rodbertus, though they themselves frequently cited Marx as their authority. Optimism, on the other hand, was represented by the Marxist school in Russia. Thus the setting of the stage had been shifted completely.
One of the two champions of the ‘populist’ movement, Vorontsov, known in Russia mainly under the nom de plume V. V., (his initials), was an odd customer. His economics were completely muddled, and as an expert on theory he cannot be taken seriously at all. The other, Nikolayon (Danielson), however, was a man of wide education, and thoroughly conversant with Marxism. He had edited the Russian translation of the first volume of Capital and was a personal friend of Marx and Engels, with both of whom he kept up a lively correspondence (published in the Russian language in 1908). Nevertheless it was Vorontsov who influenced public opinion among the Russian intelligentsia in the eighties, and Marxists in Russia had to fight him above all. As for our problem: the general prospects of capitalist development, a new generation of Russian Marxists, who had learned from the historical experience and knowledge of Western Europe, joined forces with George Plekhanov in opposition to the above-mentioned two representatives of scepticism in the nineties. They were amongst others Professor Kablukov, Professor Manuilov, Professor Issayev, Professor Skvortsov, Vladimir Ilyin, Peter v. Struve, Bulgakov, and Professor Tugan Baranovski. In the further course of our investigation we shall, however, confine ourselves to the last three of these, since every one of them furnished a more or less finished critique of this theory on the point with which we are here concerned. This battle of wits, brilliant in parts, which kept the socialist intelligentsia spellbound in the nineties and was only brought to an end by the walkover of the Marxist school, officially inaugurated the infiltration into Russian thought of Marxism as an economico-historical theory. ‘Legalist’ Marxism at that time publicly took possession of the Universities, the Reviews and the economic book market in Russia—with all the disadvantages of such a position. Ten years later, when the revolutionary risings of the proletariat demonstrated in the streets the darker side of this optimism about capitalist development, none of this Pleïad of Marxist optimists, with but a single exception, was to be found in the camp of the proletariat.
CHAPTER XIX
VORONTSOV AND HIS ‘SURPLUS’
The representatives of Russian ‘populism’ were convinced that capitalism had no future in Russia, and this conviction brought them to the problem of capitalist reproduction. V. V. laid down his theories on this point in a series of articles in the review Patriotic Memoirs and in other periodicals which were collected and published in 1882 under the title The Destiny of Capitalism in Russia. He further dealt with the problem in ‘The Commodity Surplus in the Supply of the Market’,[277] ’Militarism and Capitalism’,[278] Our Trends,[279] and finally in Outlines of Economic Theory.[280] It is not easy to determine Vorontsov’s attitude towards capitalist development in Russia. He sided neither with the purely slavophil theory which deduced the perversity and perniciousness of capitalism for Russia from the ‘peculiarities’ of the Russian economic structure and a specifically Russian ‘national character’, nor with the Marxists who saw in capitalist development an unavoidable historical stage which is needed to clear the way towards social progress for Russian society, too. Vorontsov for his part simply asserts that denunciation and acclamation of capitalism are equally futile because, having no roots in Russia, capitalism is just impossible there and can have no future. The essential conditions of capitalist development are lacking in Russia, and love’s labour’s lost if the state tries to promote it artificially—one might as well spare these efforts together with the heavy sacrifices they entail. But if we look into the matter more closely, Vorontsov’s thesis is not nearly so uncompromising. For if we pay attention to the fact that capitalism does not mean only the accumulation of capital wealth but also that the small producer is reduced to the proletarian level, that the labourer’s livelihood is not assured and that there are periodical crises, then Vorontsov would by no means deny that all these phenomena exist in Russia. On the contrary, he explicitly says in his preface to The Destiny of Capitalism in Russia: ‘Whilst I dispute the possibility of capitalism as a form of production in Russia, I do not intend to commit myself in any way as to its future as a form or degree of exploiting the national resources.’
Vorontsov consequently is of the opinion that capitalism in Russia merely cannot attain the same degree of maturity as in the West, whereas the severance of the immediate producer from the means of production might well be expected under Russian conditions. Vorontsov goes even further: he does not dispute at all that a development of the capitalist mode of production is quite possible in various branches of production, and even allows for capitalist exports from Russia to foreign markets. Indeed he says in his essay on ‘The Commodity Surplus in the Supply of the Market’ that ‘in several branches of industry, capitalist production develops very quickly’[281] [in the Russian meaning of the term, of course—R. L.].
‘It is most probable that Russia, just like any other country, enjoys certain natural advantages which enable her to act as a supplier of certain kinds of commodities on foreign markets. It is extremely possible that capital can profit by this fact and lay hands upon the branches of production concerned—that is to say the (inter)national division of labour will make it easy for our capitalists to gain a foothold in certain branches. This, however, is not the point. We do not speak of a merely incidental participation of capital in the industrial organisation of the country, but ask whether it is likely that the entire production of Russia can be put on a capitalist basis.’[282]
Put in this form, Vorontsov’s scepticism looks quite different from what might have been expected at first. He doubts whether the capitalist mode of production could ever gain possession of the entire production in Russia; but then, capitalism has not so far accomplished this feat in any country of the world, not even in England. Such a brand of scepticism as to the future of capitalism appears at a glance quite international in outlook. And indeed, Vorontsov’s theory here amounts to a quite general reflection on the nature and the essential conditions of capitalism; it is based upon a general theoretical approach to the reproductive process of social capital as a whole. Vorontsov gives the following very clear formulation of the specific relations between the capitalist mode of production and the problem of markets:
‘The (inter)national division of labour, the distribution of all branches of industry among the countries taking part in international commerce, is quite independent of capitalism.
‘The market which thus comes into being, the demand for the products of different countries resulting from such a division of labour among the nations, has intrinsically nothing in common with the market required by the capitalist mode of production.... The products of capitalist industry come on the market for another purpose; the question whether all the needs of the country are satisfied is irrelevant to them, and the entrepreneur does not necessarily receive in their stead another material product which may be consumed. Their main purpose is to realise the surplus value they contain. What, then, is this surplus value that it should interest the capitalist for its own sake? From our point of view, it is the surplus of production over consumption inside the country. Every worker produces more than he himself can consume, and all these surplus items accumulate in a few hands; their owners themselves consume them, exchanging them for the purpose against the most variegated kinds of necessities and luxuries. Yet eat, drink and dance as much as they like—they will not be able to squander the whole of the surplus value: a considerable remnant will be left over, of which they have to dispose somehow even though they cannot exchange it for other products. They must convert it into money, since it would otherwise just go bad. Since there is no one inside the country on whom the capitalists could foist this remnant, it must be exported abroad, and that is why foreign markets are indispensable to countries embarking on the capitalist venture.’[283]
The above is a literal translation, showing all the peculiarities of Vorontsov’s diction, so that the reader may have a taste of this brilliant Russian theorist with whom one can spend moments of sheer delight.
Later, in 1895, Vorontsov summarised the same views in his book Outlines of Economic Theory now claiming our attention. Here he takes a stand against the views of Say and Ricardo, and in particular also against John Stuart Mill who denied the possibility of general over-production. In the course of his argument he discovers something no one had known before: he has laid bare the source of all errors the classical school made about the problem of crises. This mistake lies in a fallacious theory of the costs of production to which bourgeois economists are addicted. No doubt, from the aspect of the costs of production (which according to Vorontsov’s equally unheard-of assumption do not comprise profits), both profit and crises are unthinkable and inexplicable. But we can only appreciate this original thought to the full in the author’s own words:
‘According to the doctrine of bourgeois economists, the value of a product is determined by the labour employed in its manufacture. Yet bourgeois economists, once they have given this determination of value, immediately forget it and base their subsequent explanation of the exchange phenomena upon a different theory which substitutes “costs of production” for labour. Thus two products are mutually exchanged in such quantities that the costs of production are equal on both sides. Such a view of the process of exchange indeed leaves no room for a commodity surplus inside the country. Any product of a worker’s annual labour must, from this point of view, represent a certain quantity of material of which it is made, of tools which have been used in its manufacture, and of the products which served to maintain the workers during the period of production. It [presumably the product—R. L.] appears on the market in order to change its use-form, to reconvert itself into objects, into products for the workers and the value necessary for renewing the tools. As soon as it is split up into its component parts, the process of reassembling, the productive process, will begin, in the course of which all the values listed above will be consumed. In their stead, a new product will come into being which is the connecting link between past and future consumption.’
From this perfectly unique attempt to demonstrate social reproduction as a continuous process in the light of the costs of production, the following conclusion is promptly drawn: Considering thus the aggregate bulk of a country’s products, we shall find no commodity surplus at all over and above the demand of society; an unmarketable surplus is therefore impossible from the point of view of a bourgeois economic theory of value.’
Yet, after having eliminated capitalist profit from the costs of production by an extremely autocratic manhandling of the bourgeois theory of value, Vorontsov immediately presents this deficiency as a great discovery: ‘The above analysis, however, reveals yet another feature in the theory of value prevalent of late: it becomes evident that this theory leaves no room for capitalist profits.’