 ||XX-1291a| According to Hobbes science, not operative labour, is the mother of the arts. The product of mental labour science always stands far below its value, because the labour-time needed to reproduce it has no relation at all to the labour-time required for its original production. For example, a schoolboy can learn the binominal theorem in an hour. Labour power: Productive and unproductive labour: ||XXII-1346| Petty, A Treatise of Taxes, and Contributions, London, 1667. Our friend Petty has quite a different population theory from Malthus. According to him a check ought to be put upon the breeding faculties of parsons, and the Celibacy again put upon them. All this belongs to the [sectional] productive and unproductive labour. a) Parsons: b) Merchants and Retailers: c)Lawyers, physicians, officials, etc.: d) Paupers (supernumeraries): Population wealth: On (a) above (Parsons). Petty handles the priests with exquisite irony: Origin of surplus-value and how to compute it. His treatment is somewhat confused, but in all the grappling with ideas striking passages can be found here and there. Petty distinguishes between natural price, political price, true price currant (p. 67). By natural price he means in fact value, and it is only this that concerns us here, since ||1348| the determination of surplus-value depends on the determination of value. In this treatise he in fact determines the value of commodities by the comparative quantity of labour they contain. a) The first question is, what is the value of a commodity, or more particularly, of corn? ) The second point, which has now to be examined, is the value of labour. The value of labour is therefore determined by the necessary means of subsistence. The labourer is impelled to surplus production and surplus-labour only by being forced to use the whole of the labour-power within his capacity in order to get even as much as be just needs to live. However, the cheapness or dearness of his labour is determined by two factors: natural fertility and the standard of expenditure (needs) conditioned by the climate. g) For Petty the surplus exists only in two forms: rent of land or rent of money (usury). The latter he derives from the former. For him, as later for the Physiocrats, the first is the true form of surplus-value (but at the same time he explains that corn is intended to cover all necessaries of life, as in the Lord s Prayer <Our Father> the word Bread doth ). In developing his ideas he presents rent (the surplus-value) not only as the excess drawn by the employer beyond the necessary time of labour, but also as the excess of surplus-labour of the producer himself over his wages and the replacement of his own capital. In fact for Petty, therefore, since the value of corn is determined by the labour-time contained in it, and the rent is equal to the total product minus wages and seed, rent is equal to the surplus-produce in which the surplus-labour is materialised. Rent here includes profit; the latter is not yet separated from rent. In the same ingenious way Petty goes on to ask: The difference in the kind of labour, Petty expressly notes, is here quite immaterial; all that matters is the labour-time. After thus explaining rent which here is equivalent to the total surplus-value, profit included and its expression in money, he then sets out, again in a very brilliant way, to determine the money value of land. After resolving rent into surplus-labour and consequently surplus-value, Petty explains that land is nothing but the capitalised rent, that is to say, a definite number of years rent or the total amount of the rents for a definite number of years. In fact, rent is capitalised or reckoned as the value of land in this way: Let one acre yield an annual rent of 10. If the rate of interest is 5 per cent, then 10 represents the interest on a capital of 200, and, as the interest at 5 per cent replaces the capital in 20 years, the value of the acre would be 200 (2O 10). Capitalisation of rent therefore depends on the rate of interest. If the rate of interest were 10 per cent, it would represent the interest on a capital of 100 or ten years purchase. But as Petty starts from the rent of land as the general form of surplus-value, which includes profit, he cannot take the rate of interest on capital as something given; on the contrary, he has to deduce it from rent as a special form (as Turgot also does-quite consistently from his own standpoint). In what way then is he to determine the number of years the number of years rent which forms the value of land? A man is only interested in buying as many yearly rentals as the years during which lie has to take care of himself and his immediate posterity; that is, as long as an average man, grandfather, father and child, lives, and on the English reckoning this is twenty-one years. Therefore what lies beyond the twenty-one years usus fructus has no value for him. Consequently he pays for the usus fructus for twenty-one years, and this constitutes the value of the land. In his ingenious way he gets himself out of the difficulty; but the important thing here is, firstly, that rent, as the expression of the total agricultural surplus-value, is derived not from the land but from Labour, [and is presented as] the surplus of labour in excess of what is necessary for the subsistence of the labourer; secondly, that the value of land is nothing but the rent purchased in advance for a certain number of years a transmuted form of rent itself, in which for example twenty-one years surplus-value (or labour) appears as the value of the land; in a word, the value of land is nothing but capitalised rent. Such is Petty s deep insight into the matter. From the standpoint of the buyer of rent (i.e., of land) rent thus appears merely as interest on his capital used to buy it; and in this form rent has become completely unrecognisable and appears as interest on capital. After Petty has thus determined the value of land and the value of the annual rental, he is able to derive the rent of money or usury as a secondary form. Here interest is presented as determined by the price of rent, whereas on the contrary the price of rent or the purchase value of land is determined by interest. But this is quite consistent, as rent is presented as the general form of surplus-value and therefore interest on money must be derived from it as a secondary form. Differential rent. Of this too the first notion is to be found in Petty. He derives it not from the different fertility of pieces of land of the same size, but from the different position, [the different] distance from the market of pieces of land of equal fertility, which as we know is one element in differential rent. He says: ||1351| As great need of Money heightens Exchange, so doth great need of Corn raise the price of that likewise, and consequently of the Rent of the Land that bears Corn (here therefore he says explicitly that the price of corn determines rent, it being implicit in the earlier analysis that rent does not determine the value of corn) and lastly of the Land itself; as for example, if the Corn which feedeth London, or an Army, be brought forty miles together,* then the Corn growing within a mile of London, or the quarters of such Army, shall have added unto its natural price, so much as the charge of bringing it thirty nine miles doth amount unto Hence it comes to pass, that Lands intrinsically alike near populous places, such as where the Perimeter of the Area that feeds them is great, will not only yield more Rent for these Reasons, but also more years purchase than in remote places , etc. (p. 29). Petty also mentions the second cause of differential rent the differing fertility of land and therefore the differing productivity of labour on equal areas of land: Petty s exposition of differential rent is therefore better than that of Adam Smith. |XXII-1351|| ||XXII-1397| [Petty,] A Treatise of Taxes, and Contributions, London, 1667. Supplementary points. 1. On the quantity of circulating money which a nation needs, pp. 16-17. His view of total production is shown by the following passage: In his analysis of rent and of its valuation in money, for which he takes as the basis equal labours (quantities), Petty remarks: ||1398| 2. What he was much preoccupied with is the natural Par between Land and Labour : For this reason Petty seeks the natural values of the Fee-Simple of Land , after he has found the monetary expression of rent. Running alongside of each other through his work there are three ways of determining value: a) The magnitude of value, determined by equal labour-time, labour being here considered as the source of value. b) Value as the form of social labour. Hence money is the true form of value, although in other passages he knocks down all the illusions of the Monetary system. He is therefore defining the concept. c) Labour as the source of exchange-value is confused with labour as the source of use-value; which presupposes material provided by nature (land). In fact, he cuts the Par between labour and land by describing the Fee-simple of the latter as capitalised rent therefore not treating land as material provided by nature for concrete labour. 3. With reference to the rate of interest he says: 4. In regard to rent: surplus-value consequent on the greater productivity of labour: ([By increase of labour] he means here the price or wages of labour.) 5. Raising [the value] of money (Chapter XIV). 6. The passage quoted earlier if you allow double, then he works but half so much, etc. must be taken to mean: If the labourer received for six hours the value of six hours, then he would receive double what he now receives the value of six for twelve. He would then work only six, which is a loss to the Publick , etc . Petty, An Essay Concerning the Multiplication of Mankind (1682). Division of labour (pp. 35-36). [Petty, The] Political Anatomy of Ireland (1672) and Verbum Sapienti (London edition 1691). 1. This brings me to the most important Consideration in Political Oeconomies, viz, how to make a Par and Equation between Lands and Labour, so as to express the Value of any thing by either alone (pp. 63-64). In fact, the task in this connection is only to resolve the value of land itself into labour. ||1399| 2. This work was written later than the one examined earlier. This later statement is quite Physiocratic. But what Petty is searching for here in the statistics of Ireland is not the common measure of value, but the measure of value in the sense that money is the measure of value. 3. Quantity of money and wealth of the nation (Verbum Sapienti, p. 13). 4. Capital. 5. Productive power of labour 6. Purpose of men and goal (p. 24). 7. On money, see also the Quantulumcunque (1682). |XXII-1399|| ||XXII-1397| By comparing North s and Locke s writings with Petty s Quantulumcunque (1682), A Treatise of Taxes, and Contributions (1662), [and The Political] Anatomy of Ireland (1672), their indebtedness to Petty can be seen in connection with (1) lowering of interest: (2) raising and abasing of money; (3) North s calling interest the rent of money, etc. North and Locke wrote their works at the same time and on the same occasion: Lowering of Interest and Raising of money. But [they have] opposite views. With Locke it is the want of money that is responsible for the high rate of interest and in general for the fact that things do not fetch their real prices, and the revenues to be paid out of them. North shows the opposite, that it is not want of money but of capital or revenue. We find in his works the first definite concept of stock or capital, or rather of money as a mere form of capital, in so far as it is not means of circulation. In Sir Dudley North s writings we find the first correct conception of interest as opposed to Locke s idea. |XXII-1397|| ||XX-1291a| Taking Locke s general doctrine of labour together with his doctrine of the origin of interest and rent for he considers surplus-value only in these specific forms surplus-value is nothing but another person s labour, surplus-labour, which land and capital the conditions of labour enable their owners to appropriate. And ownership of a greater quantity of conditions of labour than one person can himself put to use with his own labour is, according to Locke, a political invention that contradicts the law of nature on which private property is founded. ||1292a| <For Hobbes too labour is the sole source of all wealth, apart from those gifts of nature which are to be found already in a consumable state. God (nature) either freely giveth, or for labour selleth to mankind (Leviathan) [In: The English Works of Thomas Hobbes , now first collected and edited by Molesworth, Vol. III, London, 1839, p. 232]. But for Hobbes it is the sovereign who distributes property in land at his pleasure.> The relevant passages [in Locke] are as follows: Labour gives things almost all their value <value here is equivalent to use-value, and labour is taken as concrete labour, not as a quantum; but the measuring of exchange-value by labour is in reality based on the fact that the labourer creates use-value>. The remainder of use-value which cannot be resolved into labour is the gift of nature, and hence in its essence common property. What Locke therefore tries to show is not the contradiction that property can nevertheless be acquired by other procedures than labour but how, in spite of the common property in nature, individual property could be created by individual labour. Of the products of the earth useful to the life of man ninety-nine hundredths are wholly to be put on the account of labour (p. 234). One limit to property is therefore the limit of personal labour; the other, that a man should not amass more things than he can use. The latter limit however is extended by exchange of perishable products for money (apart from other exchanges): Thus arises the inequality of individual property, though the limit of personal labour remains. We must now compare with this the following passage from Locke s work on interest, not forgetting that according to him natural law makes personal labour the limit of property: In this passage Locke has in part the polemical interest of showing landed property that its rent is in no way different from usury. Both transfer that Profit, that** was the Reward of one Man s Labour, into another Man s Pocket through the unequal distribution of the conditions of production. Locke s view is all the more important because it was the classical expression of bourgeois society s ideas of right as against feudal society, and moreover his philosophy served as the basis for all the ideas of the whole of subsequent English political economy. |XX-1293a|| ||XXIII-1418| Sir Dudley North: Discourses upon Trade, etc., London, 1691. (Supplementary notebook C). This work, like Locke s economic writings, is in direct connection with and directly based on Petty s works. The work is mainly concerned with commercial capital, and so it is not relevant here, though it shows masterly skill in the field with which it deals. It is particularly remarkable that from the time of the Restoration of Charles II up to the middle of the eighteenth century there were continual complaints from the landlords about the fall in rents (just as the price of wheat continually declined especially from? onwards). Although the industrial capitalist class played a considerable part in the compulsory reduction of the rate of interest (from the time of Culpeper and Sir Josiah Child), the real protogonist of this measure was the landed interest. The value of land and the raising of it were proclaimed to be in the national interest. (Just as on the other hand from about 1760 the rise in rents, in the value of land and in the price of corn and provisions, and the complaints of the manufacturers on this score, form the basis of the economic investigations on this subject). With few exceptions it is the struggle between moneyed interest and landed interest that fills the century from 1650 to 1750, as the nobility, who lived in the grand style, saw with disgust how the usurers had got their hands on them and, with the building up of the modern credit system and the national debt at the end of the seventeenth century, faced them with overwhelming power in the sphere of legislation, etc. Already Petty speaks of the landlords complaints about the fall in rents and their opposition to the improvements (look up the passage). He defends the usurer as against the landlord and puts rent of money and rent of land on the same footing. Locke reduces both to exploitation of labour. He takes the same standpoint as Petty. Both oppose the compulsory regulation of interest. The landed interest had noted that the value of land rose when interest fell. At a given level of rent, its capitalised expression, i.e., the value of land, falls or rises in inverse relation to the rate of interest. The third writer to follow this line of Petty s is Sir Dudley North, in the work referred to above. This is the first form in which capital starts its revolt against landed property, as in fact usury was one of the principal agents in the accumulation of capital i.e., through its co-proprietorship in the landlord s revenues. But industrial and commercial capital go more or less hand in hand with the landlords against this outmoded form of capital. Interest. North seems to have been the first to have a correct conception of interest, for by stock, as will be seen from the passages next quoted, he means not only money, but capital (as indeed even Petty distinguishes between stock and money. Locke considered that interest was determined exclusively by the quantity of money; so did Petty. See the passages in Massie on this.). Price and money. As the price is nothing but the equivalent of the commodity expressed in money, and, when we are dealing with a sale, the commodity realised in money that is, it represents the commodity as exchange-value in order to change it subsequently into a use-value again it is one of the earliest recognitions of the fact that in this transaction we are dealing with gold and silver only as a form of existence of the exchange-value of commodities, as a phase in their metamorphosis, not with gold and silver as such. North puts this very felicitously for his time. Further: Capital is value which produces surplus-value, whereas in the building up of a hoard the crystallised form of exchange-value as such is the aim. One of the earliest discoveries of the classical economists is therefore the antithesis between the formation of a hoard and using money to make profit, that is to say, the presentation of money as capital. <Similarly, John Bellers, Essays about the Poor, Manufactures, Trade, Plantations, and Immorality, etc., London, 1699, says: ||1420| Money as world-money: The quantity of money that can circulate is determined by the exchange of commodities. Conversion of money into bullion, and vice versa (p.18) (Supplementary notebook C, p. 13). Valuation and weighing of money. Oscillatory movement (Supplementary notebook C, p.14). The usurer and landed interest and trade: ||XIII-670a| Whether it were not wrong to suppose land itself to be wealth? And whether the industry of the people is not first to be considered, as that which constitutes wealth, which makes even land and silver to be wealth, neither of which would have any value, but as means and motives to industry? (The Querist, by Dr. George Berkeley, London, 1750, Query 38). |XIII-670a|| ||XX-1293a| Massie s anonymous work An Essay on the Governing Causes of the Natural Rate of Interest appeared in 1750. The second part of Hume s Essays, which contains the [essay] Of Interest published 1752, that is, two years later. Massie therefore has priority. Hume attacks Locke, Massie attacks both Petty and Locke, both of whom still held the view that the level of interest depends on the quantity of money, and that in fact the real object of the loan is money (not capital). Massie laid down more categorically than did Hume, that interest is merely a part of profit. Hume is mainly concerned to show that the value of money makes no difference to the rate of interest, since, given the proportion between interest and money-capital 6 per cent for example, that is, 6, rises or falls in value at the same time as the value of the 100 (and. therefore, of one pound sterling) rises or falls, but the proportion 6 is not affected by this. Let us start with Hume. The rate of interest depends on the demand from borrowers and the supply by lenders, that is, on demand and supply, but after that essentially on the level of profits arising from commerce (l.c., p. 329). High interest and high profit are both the expression of the small advance of commerce and industry, not of the scarcity of gold and silver (l.c., p.329). And low interest of the opposite. ||1294a| In a state, therefore, where there is nothing but a landed interest (or as he says later, landed gentry and peasants ) the borrowers must be numerous, and interest high (p. 330), because wealth which is only for enjoyment is driven by boredom to seek pleasures, while on the other hand production, except for agriculture, is very limited. The opposite is the case, when commerce has developed. The passion for gain entirely [dominates the] merchant. He knows no such pleasure as that of seeing the daily increase of his fortune . (The passion for exchange-value, abstract wealth, weighs with him far more than that for use-values.) <Unproductive labour: [Joseph Massie,] An Essay on the Governing Causes of the Natural Rate of Interest; wherein the Sentiments of Sir William Petty and Mr. Locke, on that Head, are considered, London, 1750. ||XXI-1300| Rich people, instead of employing their Money themselves, [..,] let it out to other People for them to make Profit of, reserving for the Owners a Proportion of the Profits so**** made: But when the Riches of n Country are dispersed into so many Hands, and so equally divided, as not to leave many People enough to maintain two Families, by employing it in Trade, there can be little borrowing; for 20,000 l.***** when it belongs to one Man, may be lent, because the Interest of it will keep a Family, but if it belongs to ten Men, it cannot he lent, because the Interest  will not keep ten Families (pp. 23-24). Why then was interest 4 per cent instead of 8 as it had been earlier in England? Because English merchants at that time get* double the Profits they now make [p. 51]. Why 3 per cent in Holland, 5 and 6 in France, Germany, Portugal, 9 per cent in the West and East Indies, 12 in Turkey? But what is the fall in profit due to? Massie, even more definitely than Hume, presents interest as a mere part of profit; both attribute the fall in interest to the accumulation of capitals (Massie [speaks] especially of competition) and the fall in profits resulting from this. Both [say] equally little about the origin of the Profit of trade itself. |XXI-1301|| ||XXIII-1433| This is the simplest form of the Tableau conomique. 1. Money circulation (assuming payment is made only annually). The money circulation starts out from the spending class, the landlords who have no commodities to sell, who buy without selling. They buy to the amount of 1 milliard from the productive class, to whom they send back the milliard in money received in payment for rent. (This disposes of one-fifth of the agricultural produce.) They buy to the amount of 1 milliard from the sterile class, who in this way get 1 milliard in money. (This disposes of half the product of manufacture.) With the 1 milliard, the sterile class buy means of subsistence from the productive class; so that 1 milliard in money thus flows back to the latter. (This disposes of a second fifth of the agricultural produce.) With the same milliard in money the productive class buy l milliard in manufactured products; this replaces for them one-half of their advances. (This disposes of the second half of the produce of manufacture). The sterile class buy ||1434| raw materials with the same milliard in money. (This disposes of another one-fifth of the agricultural produce.) In this way the  milliards in money have flowed back to the productive class. So what remains is two-fifths of the agricultural produce. One-fifth is consumed in kind, but in what form is the second one-fifth accumulated? That is to be shown later. 2. Even from Quesnay s point of view, according to which the whole sterile class in fact consist only of wage-labourers, the falsity of the assumptions made is evident from the Tableau itself. The original advances (fixed capital) made by the productive class are assumed to be five times the size of the annual advances. In the case of the sterile class this item is not mentioned at all which naturally does not prevent it from existing. Moreover, it is wrong to say that the reproduction is equal to 5 milliards; the Tableau itself shows it to be 7 milliards; 5 in the case of the productive class and 2 in the case of the sterile class. The product of the sterile class is equal to 2 milliards. This product consists of 1 milliard in raw materials (which therefore partly enter into the product, and partly replace the wear and tear of the machinery which has entered into the value of the product) and 1 milliard in means of subsistence, which have been consumed in working them up. They sell this entire product to the landlords and the productive class, in order firstly to replace the advance (in raw materials), secondly to obtain agricultural means of subsistence. Therefore not a farthing s worth of the manufactured products is left for their own consumption, still less for interest or profit. This in fact was noticed by Baudeau (or Le Trosne); he explains it by the sterile class selling their product above its value, so that what they sell for 2 milliards is equivalent to 2 milliards minus x. Their profit, and even what they consume in manufactured goods as necessary means of subsistence, is therefore explained only by the raising of the price of the commodities above their value. And here the Physiocrats necessarily fall back on the Mercantile system s profit upon alienation. This is why free competition between the manufacturers is so very essential, so that they do not take too great advantage of the productive class, the agriculturists. On the other hand this free competition is necessary in order that agricultural produce may be sold at a good price , that is, that it may rise above its native price by sale abroad the assumption being a country which exports wheat, etc. Advances and capital are explicitly stated to be identical. Accumulation of capitals as the principal condition. ||XXII-1399| Buat (Comte du), l ments de la politique, ou Recherche des vrais principes de l conomie sociale, (6 volumes), London, 1773. This feeble and diffuse writer, who takes the outward form of Physiocracy for its essence and glorifies the landed aristocracy and in fact accepts it [Physiocracy] only in so far as it serves this purpose would not have to be mentioned at all, but for the fact that the brutal characteristics of the bourgeois emerge so sharply in his work; quite as sharply, perhaps, as in Ricardo s writings later. His error in restricting the net product to rent makes no difference to this. What Buat says is repeated by Ricardo in relation to the net product in general. The labourers belong to the incidental expenses and exist only in order that the owners of the net product may form society . (See the relevant passages.) The free labourer s lot is conceived as only a changed form of slavery; but this is necessary so that the higher strata may form society . < Arthur Young too sees the net product, surplus-value, as the purpose of production.> ||1400| In this connection we may recall the passage in Ricardo, directed against Adam Smith, for whom that capital is the most productive which employs the greatest number of labourers. On this, compare Buat t. VI, pp. 51-52, 68-70. Also on the labouring class and slavery t. II, pp. 288, 297, 309; t. III, pp. 74, 95-96, 103; t. VI, pp. 43, 51; on the necessity for these labourers to work surplus-time, and on the meaning of the strict n cessaire t. VI, pp. 52-53. The one passage to be quoted here because it deals well with the prattle about the risk that the capitalist always runs: ||XXIII-1449| The Essential Principles of the Wealth of Nations, illustrated, in Opposition to some False Doctrines of Dr. Adam Smith, and others, London, 1797. This man knew of Anderson, for he prints in his appendix an extract from Anderson s Agricultural Report for the County of Aberdeen. This is the only important English work directly supporting the Physiocratic teaching. William Spence, Britain Independent of Commerce, 1807, is a mere caricature. This same fellow in 1814-15 was one of the most fanatic defenders of the landed interest on the basis of Physiocracy which teaches free trade. The fellow is not to be confused with Thomas Spence, the deadly enemy of Private Property in Land. The work [The Essential Principles] contains firstly a very excellent and compressed resum of the Physiocratic doctrine. He is right in tracing the origin of this view to Locke and Vanderlint, and he describes the Physiocrats as those who very systematically, though not correctly, illustrated the doctrine (p. 4). (See also on this p. 6; notebook H, pp. 32-33.) The summary quoted there brings out very nicely how the privation theory which the later apologists, and partly even Smith, made the basis for the formation of capital arose precisely from the Physiocratic view that no surplus-value is created in industry, etc.: Production of surplus-value to be clearly distinguished from its transfer. And this is the great merit of Physiocracy. The Physiocrats put themselves the question: how is surplus-value (for him [the anonymous writer] it is revenue) produced and reproduced? The question how it is reproduced on an enlarged scale, that is, increased, comes up only in the second place. Its category, the secret of its production, ||1450| must first be revealed. Surplus- value and commercial capital. The Physiocrats explain the profit of industry as profit upon alienation (that is, in the Mercantilist way). This Englishman therefore draws the right conclusion that this profit is only a gain when industrial commodities are sold abroad. From the Mercantilist premise he draws the right Mercantilist conclusion. Very good presentation of the reasons for Holland s wealth. Fisheries. (He should also have mentioned stock-raising.) Monopoly of the spices of the East. Carrying trade. Lending money abroad. (Supplementary notebook H, pp. 36-37). There are only four essential classes. Productive class or cultivators. Manufacturers. Defenders. The class of instructors, which he substitutes for the Physiocratic tithe owners or priests, for every civil society must be fed,  clothed, defended and instructed (pp. 50-51). The mistake of the Economists is that they ||1451| The landlords as such are not only not productive, but not even an essential class of society. See his further treatment of this, which is very good, [in] Supplementary notebook H, pp. 38-39 and this polemic against the receivers of land rent from the standpoint of the Physiocrats, as the final conclusion from their doctrine, is very important. [The author] shows that the real tax on land is Turkish (l.c., p. 59). The landlord taxes not only improvements of land, but often the presumption of future improvement (pp. 63-64). Tax on rents (p. 65). The Physiocratic doctrine anciently established in England, Ireland, feudal Europe, Empire of the Mogul (pp. 93-94). The landlord as tax-imposer (p. 118). The limitations of Physiocracy break through in the following (lack of understanding of the division of labour): Let it be assumed that a clockmaker or calico manufacturer cannot sell his clock or calico. [Then he would be in difficult position. That however shows] that a manufacturer only enriches himself by being a seller (it shows only that he produces his product as a commodity and that when he ceases to be a seller, his profits (and what of the profits of the farmer who is not a seller?) are immediately at a stand, because they are not natural profits, but artificial. The cultivator may exist, and thrive, and multiply, without selling any thing (pp. 38-39). (But then he must also be a manufacturer.) [Why does the author speak only of a clockmaker or a calico manufacturer? It can equally well be] assumed that a producer of coal, iron, flax, indigo, etc., cannot sell these products, or even that a producer of corn cannot sell his corn. B ard de l Abbaye, cited above, is very good on this. He [the anonymous author] has to stress production [for] immediate consumption as against the production of commodities very much in contradiction with the Physiocratic view that exchange-value was the principal thing. But that runs right through the work of this fellow. It is the bourgeois view within the pre-bourgeois way of looking at things. [He comes out] against Arthur Young s high price, [which the latter regards] as important for the prosperity of agriculture; but this is at the same time polemics against the Physiocrats (l.c., pp. 65-78 and 118). Surplus-value cannot be derived from the nominal raising of the price on the part of the seller. This is similar to Vanderlint s arguments: [He is] against the farm system, and for long leases, because landownership will otherwise only hinder production and improvements (pp. 118-23). (Irish Right of Tenantry.) |XXIII-1451|| ||V-182| A philosopher produces ideas, a poet poems, a clergyman sermons, a professor compendia and so on. A criminal produces crimes. If we look a little closer at the connection between this latter branch of production and society as a whole, we shall rid ourselves of many prejudices. The criminal produces not only crimes but also criminal law, and with this also the professor who gives lectures on criminal law and in addition to this the inevitable compendium in which this same professor throws his lectures onto the general market as commodities. This brings with it augmentation of national wealth, quite apart from the personal enjoyment which as a competent Witness, Herr Professor Roscher, [tells] us the manuscript of the compendium brings to its originator himself. The criminal moreover produces the whole of the police and of criminal justice, constables, judges, hangmen, juries, etc.; and all these different lines of business, which form equally many categories of the social division of labour, develop different capacities of the human spirit, create new needs and new ways of satisfying them. Torture alone has given rise to the most ingenious mechanical inventions, and employed many honourable craftsmen in the production of its instruments. The criminal produces an impression, partly moral and partly tragic, as the case may be, and in this way renders a service by arousing the moral and aesthetic feelings of the public. He produces not only compendia on Criminal Law, not only penal codes and along with them legislators in this field, but also art, belles-lettres, novels, and even tragedies, as not only M llner s Schuld and Schiller s R uber show, but also [Sophocles ] Oedipus and [Shakespeare s] Richard the Third. The criminal breaks the monotony and everyday security of bourgeois life. In this way he keeps it from stagnation, and gives rise to that uneasy tension and agility without which even the spur of competition would get blunted. Thus he gives a stimulus to the productive forces. While crime takes a part of the superfluous population off the labour market and thus reduces competition among the labourers up to a certain point preventing wages from falling below the minimum the struggle against crime absorbs another part of this population. Thus the criminal comes in as one of those natural counterweights which bring about a correct balance and open up a whole perspective of useful occupations. The effects of the criminal on the development of productive power can be shown in detail. Would locks ever have reached their present degree of excellence had there been no thieves? Would the making of bank-notes have reached its present perfection had there been no ||183| forgers? Would the microscope have found its way into the sphere of ordinary commerce (see Babbage) but for trading frauds? Doesn t practical chemistry owe just as much to adulteration of commodities and the efforts to show it up as to the honest zeal for production? Crime, through its constantly new methods of attack on property, constantly calls into being new methods of defence, and so is as productive as strikes for the invention of machines. And if one leaves the sphere of private crime: would the world-market ever have come into being but for national crime? Indeed, would even the nations have arisen? And hasn t the Tree of Sin been at the same time the Tree of Knowledge ever since the time of Adam? In his Fable of the Bees (1705) Mandeville had already shown that every possible kind of occupation is productive, and had given expression to the line of this whole argument: Only Mandeville was of course infinitely bolder and more honest than the philistine apologists of bourgeois society. |V-183|| ||XXI-1317| We have seen not only how capital produces, but how it itself is produced, and how, as an essentially altered relation, it emerges from the process of production and how it is developed in it. On the one hand capital transforms the mode of production; on the other hand this changed form of the mode of production and a particular stage in the development of the material forces of production are the basis and precondition the premise for its own formation. Since living labour through the exchange between capital and labourer is incorporated in capital, and appears as an activity belonging to capital from the moment that the labour-process begins, all the productive powers of social labour appear as the productive powers of capital, just as the general social form of labour appears in money as the property of a thing. Thus the productive power of social labour and its special forms now appear as productive powers and forms of capital, of materialised labour, of the material conditions of labour which, having assumed this independent form, are personified by the capitalist in relation to living labour. Here we have once more the perversion of the relationship, which we have already, in dealing with money, called fetishism. The capitalist himself only holds power as the personification of capital. (In Italian book-keeping this role of his as a capitalist, as personified capital, is even always contrasted with him as a mere person, in which capacity he appears only as a personal consumer and debtor of his own capital.) The productivity of capital consists in the first instance even if one only considers the formal subsumption of labour under capital in the compulsion to perform surplus-labour, labour beyond the immediate need; a compulsion which the capitalist mode of production shares with earlier modes of production, but which it exercises and carries into effect in a manner more favourable to production. Even from the standpoint of this purely formal relation the general form of capitalist production, which is common both to its less developed stage and to its more developed stage the means of production, the material conditions of labour material of labour, instruments of labour (and means of subsistence) do not appear as subsumed to the labourer, but the labourer appears as subsumed to them. He does not make use of them, but they make use of him. And it is this that makes them capital. Capital employs labour. They are not means for him to produce products whether in the form of direct means of subsistence, or of means of exchange, commodities. But he is a means for them partly to maintain their value, partly to create surplus-value, that is, to increase it, absorb surplus-labour. Already in its simple form this relation is an inversion personification of the thing and materialisation of the person; for what distinguishes this form from all previous forms is that the capitalist does not rule over the labourer through any personal qualities he may have, but only in so far as he is capital ; his domination is only that of materialised labour over living labour, of the labourer s product over the labourer himself. The relation grows still more complicated and apparently more mysterious because, with the development of the specifically capitalist mode of production, it is not only these directly material things <all products of labour; considered as use-values, they are both material conditions of labour and products of labour; considered as exchange-values, they are materialised general labour-time or money> that get up on their hind legs to the labourer and confront him as capital , but [also] the forms of socially developed labour co-operation, manufacture (as a form of division of labour), the factory (as a form of social labour organised on machinery as its material basis) all these appear as forms of the development of capital, and therefore the productive powers of labour built up on these forms of social labour consequently also science and the forces of nature appear as productive powers of capital. In fact, the unity [of labour] in co-operation, the combination [of labour ] through the division of labour, the use for productive purposes in machine industry of the forces of nature and science alongside the products of labour all this confronts the individual labourers themselves as something extraneous and objective, as a mere form of existence of the means of labour that are independent of them and control them, just as the means of labour themselves [confront them,] in their simple visible form as materials, instruments, etc., as functions of capital and consequently of the capitalist. The social forms of their own labour or the forms of their own ||1318| social labour are relations that have been formed quite independently of the individual labourers; the labourers, as subsumed under capital, become elements of these social formations but these social formations do not belong to them. They therefore confront them as forms of capital itself, as combinations belonging to capital, as distinct from their individual labour-power, arising from capital and incorporated in it. And this takes on a form that is all the more real the more on the one hand their labour-power itself becomes so modified by these forms that it is powerless as an independent force, that is to say, outside this capitalist relationship, and that its independent capacity to produce is destroyed. And on the other hand, with the development of machinery the conditions of labour seem to dominate Labour also technologically while at the same time they replace labour, oppress it, and make it superfluous in its independent forms. In this process, in which the social character of their labour confronts them to a certain degree as capitalised (as for example in machinery the visible products of labour appear as dominating labour), the same naturally takes place with the forces of nature and science, the product of general historical development in its abstract quintessence they confront the labourers as powers of capital. They are separate in fact from the skill and knowledge of the individual labourer and although, in their origin, they too are the product of labour wherever they enter into the labour-process they appear as embodied in capital. The capitalist who makes use of a machine need not understand it. (See Ure.) But science realised in the machine appears as capital in relation to the labourers. And in fact all these applications of science, natural forces and products of labour on a large scale, these applications founded on social labour, themselves appear only as means for the exploitation of labour, as means of appropriating surplus-labour, and hence confront labour as powers belonging to capital. Capital naturally uses all these means only to exploit labour; but in order to exploit it, it must apply them in production. And so the development of the social productive powers of labour and the conditions for this development appear as acts of capital, towards which the individual labourer not only maintains a passive attitude, but which take place in opposition to him. Capital itself has a double character, since it consists of commodities: 1. Exchange-value (money); but [it is] self-expanding value, value which because it is value creates value, grows as value, receives an increment. This [growth] resolves itself into the exchange of a given quantity of materialised labour for a greater quantity of living labour, 2. Use-value; and here it shows itself through its specific relations in the labour-process. But precisely here it is no longer merely material of labour and means of labour to which belongs labour, which have absorbed labour, but along with labour [capital includes] also the social combinations [of labour] and the development of the means of labour corresponding to these social combinations. Capitalist production first develops on a large scale tearing them away from the individual independent labourer both the objective and subjective conditions of the labour-process, but it develops them as powers dominating the individual labourer and extraneous to him. Thus capital becomes a very mysterious being. |1318|| ||1320| Capital is therefore productive: (1) as a force compelling surplus-labour, (2) as the absorber and appropriator (personification) of the productive powers of social labour and of the general social productive forces, such as science. The question arises, how or for what reason does labour as opposed to capital appear productive or as productive labour, since the productive powers of labour are transposed into capital, and the same productive power cannot be counted twice, once as the productive power of labour and the second time as the productive power of capital? <Productive power of labour productive power of capital. But labour-power is productive through the difference between its value and the value which it creates.> Only bourgeois narrow-mindedness, which regards the capitalist forms of production as absolute forms hence as eternal, natural forms of production can confuse the question of what is productive labour from the standpoint of capital with the question of what labour is productive in general, or what is productive labour in general; and consequently fancy itself very wise in giving the answer that all labour which produces anything at all, which has any kind of result, is by that very fact productive labour. [Firstly:] Only labour which is directly transformed into capital is productive; that is, only labour which makes variable capital a variable magnitude and consequently [makes the total capital C] equal to C+ . If the variable capital before its exchange with labour is equal to x, so that we have the equation y=x, then the labour which transforms x into x+h, and consequently out of y=x makes y =x+h, is productive labour. This is the first point to be elucidated. [That is,] labour which produces surplus-value or serves capital as agency for the creation of surplus-value, and hence for manifesting itself as capital, as self-expanding value. Secondly:The social and general productive powers of labour are productive powers of capital; but these productive powers relate only to the labour-process, or affect only the use-value. They represent properties inherent in capital as a thing, as its use-value. They do not directly affect exchange-value. Whether a hundred work together, or each one of the hundred works by himself, the value of their product is equal to a hundred days labour, whether represented in a large or small quantity of products; that is to say, the productivity of the labour does not affect the value. ||1321| The varying productivity of labour affects exchange-value only in one way. If the productivity of labour is increased for example in a single branch of labour for instance, if weaving with power-looms instead of hand-looms becomes no longer exceptional, and if the weaving of a yard with the power-loom requires only half the labour-time required with the hand-loom, then twelve hours labour of a hand-loom weaver is no longer represented in a value of twelve hours, but in one of six, since the necessary labour-time has now become six hours. The hand-loom weaver s twelve hours now only [represent ] six hours of social labour-time, although he still works twelve hours as he did before. But this is not what we are dealing with here. As against this, take another branch of production, for example type-setting, in which up to now no machinery is used. Twelve hours in this branch produce just as much value as twelve hours in branches of production in which machinery, etc., is developed to the utmost. Hence labour as producing value always remains the labour of the individual, but expressed in the form of general labour. Consequently productive labour as labour producing value always confronts capital as labour of the individual labour-power, as labour of the isolated labourer, whatever social combinations these labourers may enter into in the process of production. While therefore capital, in relation to the labourer, represents the social productive power of labour, the productive labour of the workmen, in relation to capital, always represents only the labour of the isolated labourer. Thirdly: Whereas the extortion of surplus-labour and the appropriation to itself of the social productive powers of labour seem to be a natural property of capital hence a property springing from its use-value it seems on the contrary to be a natural property of labour to manifest its own social productive powers as productive powers of capital and its own surplus[-product] as surplus-value, as the self-expansion of capital. These three points must now be examined, and from them we must deduce the distinction between productive and unproductive labour. [On (1).] The productivity of capital consists in the fact that it confronts labour as wage-labour, and the productivity of labour consists in the fact that it confronts the means of labour as capital. We have seen that money is transformed into capital that is , a certain exchange-value is transformed into self-expanding exchange-value, into value plus surplus-value through one part of it being converted into commodities which serve labour as means of labour (raw materials, instruments, in short, the material conditions of labour), and another part being used for the purchase of labour-power. However, it is not this first exchange between money and labour-power, or the mere purchase of the latter, which transforms money into capita]. This purchase incorporates in the capital the use of the labour-power for a certain time, or makes a certain quantity of living labour one of the modes of existence of capital, so to speak, the entelechy of the capital itself. In the actual production process the living labour is transformed into capital through the fact that on the one hand it reproduces the wages that is, the value of the variable capital and on the other hand it creates surplus-value; and through this process of transformation the whole sum of money is transformed into capital, although the part of it which varies directly is only the part expended in wages. If the value was previously equal to c+v, now it is equal to c+(v+x), which is the same thing as (c+v)+x; or in other words: the original sum of money or magnitude of value has expanded, has shown itself to be value which at the same time maintains itself and also increases. <This has to be noted: the circumstance that only the variable part of the capital produces its increment in no way alters the fact that through this process the whole original value has expanded, has grown greater by a surplus-value, and that therefore the whole original sum of money has been transformed into capital. For the original value was equal to c+v (constant and variable capital). In the process it becomes c+(v+x); the latter is the reproduced part, which has come into existence through the transformation of the living labour into materialised labour a transformation which is conditioned and initiated through the exchange of v for labour-power, or its transformation into wages. But c+(v+x)=c+v (the original capital)+x. Moreover the transformation of v into v+x, and therefore of (c+v) into (c+v)+x, could only take place through the transformation of a part of the money into c, The one part can only be transformed into variable capital through the other part being transformed into constant capital.> In the actual process of production the labour is in reality transformed into capital, but this transformation is conditioned by the original exchange between money and labour-power. It is through this direct transformation of labour into materialised labour, belonging not to the labourer but to the capitalist, that money is first transformed into capital including that part of it which has received the form of means of production, or conditions of labour. Up to that point, the money whether it exists in its own form or in the form of commodities (products) of a kind that can serve as means of production of new commodities is only an sich* capital. ||1322| Only this definite relation to labour transforms money or commodities into capital, and that labour is productive labour which through this its relation to the conditions of production to which corresponds a definite conduct in the actual process of production transforms money or commodities into capital; that is to say, which maintains and increases the value of materialised labour rendered independent in relation to labour-power. Productive labour is only a concise term for the whole relationship and the form and manner in which labour-power figures in the capitalist production process. The distinction from other kinds of labour is however of the greatest importance, since this distinction expresses precisely the specific form of the labour on which the whole capitalist mode of production and capital itself is based. Productive labour is therefore in the system of capitalist production labour which produces surplus-value for its employer, or which transforms the objective conditions of labour into capital and their owner into a capitalist: that is to say, labour which produces its own product as capital. So when we speak of productive labour, we speak of socially determined labour, labour which implies a quite specific relation between the buyer and the seller of the labour. Now although the money which is in the hands of the buyer of labour-power (or the commodities in his possession: [the supply] of means of production and means of subsistence for the labourer) only becomes capital through this process, is only transformed into capital in this process and therefore these things are not capital before they enter into the process, but are only destined to be capital they are nevertheless an sich capital. They are in their essence capital because of the independent form in which they confront labour-power and labour-power confronts them a relationship which conditions and ensures the exchange with labour-power and the subsequent process of the actual transformation of labour into capital. They have from the outset the specific social character in relation to the labourers which makes them into capital and gives them command over labour. They are therefore pre-conditions confronting labour as capital. Productive labour, therefore, can be so described when it is directly exchanged for money as capital, or, which is only a more concise way of putting it, is exchanged directly for capital, that is, for money which in its essence is capital, which is destined to function as capital, or confronts labour-power as capital. The phrase: labour which is directly exchanged for capital, implies that labour is exchanged for money as capital and actually transforms it into capital. The significance of the direct nature of the exchange will be seen more clearly in a moment. Productive labour is therefore labour which reproduces for the labourer only the previously determined value of his labour-power, but as an activity creating value increases the value of capital; in other words, which confronts the labourer himself with the values it has created in the form of capital. In the exchange between capital and labour, as we saw in examining the production process, two essentially different though interdependent phases have to be distinguished. First: The first exchange between capital and labour is a formal process, in which capital figures as money and labour power as commodity. From a conceptual or legal standpoint the sale of labour-power takes place in this first process, although the labour is paid for only after it has been performed at the end of the day, of the week, etc. This in no way alters this transaction, in which the labour-power is sold. What in this transaction is directly sold is not a commodity in which labour has already realised itself, but the use of the labour-power itself, and therefore in fact the labour itself, since the use of the labour-power is its activity labour. It is therefore not an exchange of labour mediated through an exchange of commodities. When A sells boots to B, both exchange labour, the first, labour realised in boots, the second, labour realised in money. But in this first exchange, on one side materialised labour in its general social form, that is, money, is exchanged for labour which as yet exists only as a power; and what is brought and sold is the use of this power, that is, the labour itself, although the value of the commodity sold is not the value of the labour (a meaningless phrase) but the value of the labour-power. What takes place therefore is a direct exchange between materialised labour and labour power, which in fact resolves itself into living labour; that is, between materialised labour and living labour. The wage the value of the labour-power appears, as explained earlier as the direct purchase price, the price of labour. In this first phase the relation between Labourer and capitalist is that of seller and buyer of a commodity. The capitalist pays the value of the labour-power, that is, the value of the commodity which he buys. At the same time, however, the labour-power is only bought because the labour which it can perform, and undertakes to perform, is more than the labour required for the reproduction of its labour-power; therefore the labour performed by it represents a greater value than the value of the labour-power. ||1323| Secondly: The second phase of the exchange between capital and labour in fact has nothing to do with the first, and strictly speaking is not an exchange at all. In the first phase there is exchange of money for commodity exchange of equivalents and labourer and capitalist confront each other only as owners of commodities. Equivalents are exchanged. (That is to say, it makes no difference to the relation when they are exchanged; and whether the price of the labour is above or below the valve of the labour-power or is equal to it alters nothing in the transaction. It can therefore take place in accordance with the general law of commodity exchange.) In the second phase there is no exchange at all. The owner of money has ceased to be a buyer of commodities and the labourer has ceased to be a seller of commodities. The owner of money now functions as capitalist. He consumes the commodity which he has bought, and the worker supplies it, since the use of his labour-power is his labour itself. Through the earlier transaction the labour itself has become part of materialised wealth. The labourer performs it, but it belongs to capital and is now only a function of the latter. It is performed therefore directly under the control and direction of capital; and the product in which it is materialised is the new form in which the capital appears, or in which rather it actually realises itself as capital. In this process, therefore, labour is directly materialised, is transformed directly into capital, after it has been formally incorporated in capital through the first transaction. And indeed more labour is here transformed into capital than the capital which had earlier been expended on the purchase of labour-power. In this process a part of unpaid labour is appropriated, and only thereby does the money transform itself into capital. But although in this phase no exchange in fact takes place, the result, abstracting from the means that brought it about, is that in the process taking both phases together a certain quantity of materialised labour has exchanged for a greater quantity of living labour. This is expressed in the result of the process by the fact that the labour which has materialised itself in its product is greater in quantity than the labour materialised in the labour-power, and hence greater than the materialised labour paid to the labourer; or in other words by the fact that in the actual process the capitalist gets back not only the part of the capital which he laid out in wages, but a surplus-value which costs him nothing. The direct exchange of labour for capital here signifies: (1) the direct transformation of the Labour into capital, into a material component part of capital in the production process; (2) the exchange of a certain quantity of materialised labour for the same quantity of living labour [plus] a surplus quantity of living labour which is appropriated without exchange. The statement that productive labour is labour which is directly exchanged with capital embraces all these phases, and is only a derivative formula expressing the fact that it is labour which transforms money into capital, which is exchanged with the conditions of production as capital, that therefore in its relationship with these conditions of production labour is not faced by them as simple conditions of production, nor does it face the conditions of production as labour in general that has no specific social character. This statement covers: (1) the relation of money and labour-power to each other as commodities, purchase and sale as between the owner of money and the owner of labour-power; (2) the direct subsumption of labour under capital; (3) the real transformation of labour into capital in the production process, or what is the same thing, the creation of surplus-value for capital. Two kinds of exchange take place between labour and capital. The first expresses merely the purchase of labour-power and therefore in reality of labour and therefore of its product; the second, the direct transformation of living labour into capital, in other words the materialisation of living labour as the realisation of capital. The result of the capitalist production process is neither a mere product (use-value) nor a commodity, that is, a use-value which has a certain exchange-value. Its result, its product, is the creation of surplus-value for capital, and consequently the actual transformation of money or commodity into capital which before the production process they were only in intention, in their essence, in what they were destined to be. In the production process more labour is absorbed than has been bought. This absorption, ||1324| this appropriation of another s unpaid labour, which is consummated in the production process, is the direct aim of the capitalist production process; for what capital as capital (hence the capitalist as capitalist) wants to produce is neither an immediate use-value for individual consumption nor a commodity to be turned first into money and then into a use-value. Its aim is the accumulation of wealth, the self-expansion of value, its increase; that is to say, the maintenance of the old value and the creation of surplus-value. And it achieves this specific product of the capitalist production process only in exchange with labour, which for that reason is called productive labour. Labour which is to produce commodities must be useful labour; it must produce a use-value, it must manifest itself in a use-value. And consequently only labour which manifests itself in commodities, that is, in use-values, is labour for which capital is exchanged. This is a self-evident premise. But it is not this concrete character of labour, its use-value as such that it is for example tailoring labour, cobbling, spinning, weaving, etc. which forms its specific use-value for capital and consequently stamps it as productive labour in the system of capitalist production. What forms its specific use-value for capital is not its specific useful character, any more than it is the particular useful properties of the product in which it is materialised. But what forms its specific use-value for capital is its character as the element which creates exchange-value, abstract labour; and in fact not that it represents some particular quantity of this general labour, but that it represents a greater quantity than is contained in its price, that is to say, in the value of the labour-power. For it [capital], the use-value of labour-power is precisely the excess of the quantity of labour which it performs over the quantity of labour which is materialised in the labour-power itself and hence is required to reproduce it. Naturally, it supplies this quantity of labour in the determinate form inherent in it as labour which has a particular utility, such as spinning labour; weaving labour, etc. But this concrete character, which is what enables it to take the form of a commodity, is not its specific use-value for capital. Its specific use-value for capital consists in its quantity as labour in general, and in the difference, the excess, of the quantity of labour which it performs over the quantity of labour which it costs. A certain sum of money x becomes capital in that it appears in its product as x+h; that is to say, in that the quantity of labour contained in it as product is greater than the quantity of labour which it originally contained. And this is the result of the exchange between money and productive labour; in other words, only that labour is productive which, exchanged with materialised labour, enables the latter to take the form of an increased quantity of materialised labour. The capitalist production process, therefore, is not merely the production of commodities. It is a process which absorbs unpaid labour, which makes raw materials and means of labour the means of production into means for the absorption of unpaid labour. It follows from what has been said that the designation of labour as productive labour has absolutely nothing to do with the determinate content of the labour, its special utility, or the particular use-value in which it manifests itself. The same kind of labour may be productive or unproductive. For example Milton, who wrote Paradise Lost for five pounds, was an unproductive labourer. On the other hand, the writer who turns out stuff for his publisher in factory style, is a productive labourer. Milton produced Paradise Lost for the same reason that a silk worm produces silk. It was an activity of his nature. Later he sold the product for 5. But the literary proletarian of Leipzig, who fabricates books (for example, Compendia of Economics) under the direction of his publisher, is a productive labourer; for his product is from the outset subsumed under capital, and comes into being only for the purpose of increasing that capital. A singer who sells her song for her own account is an unproductive labourer. But the same singer commissioned by an entrepreneur to sing in order to make money for him is a productive labourer; for she produces capital. ||1325| Here different questions must be distinguished. Whether I buy a pair of trousers or whether I buy cloth and get a tailor to come to my house and pay him for this service (that is, his tailoring labour) in converting this cloth into trousers, is a matter of complete indifference to me, if all I am interested in is the trousers. I buy the trousers from the merchant-tailor instead of taking the latter course, because this latter course is more expensive, and the trousers cost less labour and are therefore cheaper when the capitalist tailor produces them than when I get them made by a jobbing tailor. But in both cases I transform the money with which I buy the trousers not into capital but into trousers; and in both cases it is for me only a matter of using the money as mere means of circulation, that is, of transforming it into this particular use-value. Here therefore the money does not function as capital, although in one case it exchanges for a commodity and in the other case it buys labour itself as a commodity. It functions only as money, and more precisely, as means of circulation. On the other hand the jobbing tailor [who works for me at my home] is not a productive labourer, although his labour provides me with the product, the trousers, and him with the price of his labour, the money. It may be that the quantity of labour performed by the jobbing tailor is greater than that contained in the price which he gets from me. And this is even probable, since the price of his labour is determined by the price which the productive tailor gets. This however is all the same so far as I am concerned. Once the price has been fixed, it is a matter of complete indifference to me whether he works eight or ten hours. What I am concerned with is only the use-valve, the trousers; and naturally, whether I buy them one way or the other, I am interested in paying as little as possible for them, but in one case neither less nor more than in the other; in other words, I am interested in paying only the normal price for them. This is an outlay for my consumption; not an increase but a diminution of my money. It is in no way a means to my enrichment, any more than any other way of spending money for my personal consumption is a means to enrichment for me. One of the savants of Paul de Kock may tell me that without buying trousers, just as without buying bread, I cannot live, and therefore also I cannot enrich myself; that the purchase of the trousers is therefore an indirect means, or at least a condition, for my enrichment in the same way as the circulation of my blood or the process of breathing are conditions for my enrichment. But neither the circulation of my blood nor my breathing in themselves make me any the richer; on the contrary, they both presuppose a costly assimilation of food; if that were not necessary, there would be no poor devils about. The mere direct exchange of money for labour therefore does not transform money into capital or labour into productive labour. What then is the special character of this exchange? How is it different from the exchange of money for productive labour? On the one hand, in that the money is spent as money, as the independent form of exchange-value, which is to be transformed into a use-value, into means of subsistence, into an object for personal consumption. The money therefore does not become capital, but on the contrary, it loses its existence as exchange-value in order to be consumed and expended as use-value. On the other hand, the labour only has any interest for me as a use-value, as a service which converts cloth into trousers, as the service which its particular useful character provides for me. In contrast to this, the service which the same tailor employed by a merchant-tailor renders to this capitalist does not consist at all in the fact that he converts cloth into trousers, but that the necessary labour-time materialised in a pair of trousers is say twelve hours, while the wage that the journeyman tailor gets is equivalent to six hours. The service which he renders the capitalist is therefore that he works six hours for nothing. That this takes place in the form of making trousers only conceals the real relationship. As soon as the merchant-tailor can, he therefore tries to transform the trousers again into money, that is, into a form in which the determinate character of tailoring labour has entirely disappeared and in which the service rendered is consequently expressed in the fact that instead of a labour-time of six hours, ||1326| expressed in a certain sum of money, there is now a labour-time of twelve hours, expressed in double that sum of money. I buy the tailoring labour for the service it renders me as tailoring labour, in order to satisfy my need for clothing and consequently to serve one of my needs. The merchant-tailor buys it as a means to making two talers out of one. I buy it because it produces a particular use-value, renders me a particular service. He buys it because it produces more exchange-value than it costs, as a mere means for exchanging less labour for more labour. Where the direct exchange of money for labour takes place without the latter producing capital, where it is therefore not productive labour, it is bought as service, which in general is nothing but a term for the particular use-value which the labour provides, like any other commodity; it is however a specific term for the particular use-value of labour in so far as it does not render service in the form of a thing, but in the form of an activity, which however in no way distinguishes it for example from a machine, for instance a clock. Do ut facias, facio ut facias, facio ut des, do ut des are here forms that can be used quite indifferently to describe the same relation, while in capitalist production the do ut facias expresses a quite specific relation between the material value which is given and the living activity which is appropriated. Because therefore in the purchase of services the specific relation between labour and capital is in no way involved, being either completely obliterated or altogether absent, it is naturally the favourite form used by Say, Bastiat and their consorts to express the relation between capital and labour. The question how the value of these services is regulated and how this value itself is determined by the laws governing wages has nothing to do with the examination of the relation we are considering, and belongs to the chapter on wages. It follows that the mere exchange of money for labour does not make the latter productive labour, and that on the other hand the content of this labour at first makes no difference. The labourer himself can buy labour, that is, commodities, which are provided in the form of services; and the expenditure of his wages on such services is an expenditure which in no way differs from the expenditure of his wages on any other commodities. The service which he buys may be more or less necessary for example, the service of a physician or of a priest, just as he may buy either bread or gin. As buyer that is, as representative of money confronting commodity the labourer is in absolutely the same category as the capitalist where the latter appears only as buyer, that is to say, where there is no more in the transaction than the conversion of money into the form of commodity. How the price of these services is determined, and what relation it has to wages proper, how far it is regulated by the laws of the latter and how far it is not, are questions to be considered in the treatment of wages, and are quite irrelevant for our present inquiry. If thus the mere exchange of money for labour does not transform the latter into productive labour, or, what is the same thing, does not transform the former into capital, so also the content, the concrete character, the particular utility of the labour, seems at first to make no difference as we have just seen, the same labour of the same journeyman tailor is in one case productive, in the other not. Certain services, or the use-values, resulting from certain forms of activity or labour are embodied in commodities; others on the contrary leave no tangible result existing apart from the persons themselves who perform them; in other words, their result is not a vendible commodity. For example, the service a singer renders to me satisfies my aesthetic need; but what I enjoy exists only in an activity inseparable from the singer himself, and as soon as his labour, the singing, is at an end, my enjoyment too is at an end. I enjoy the activity itself its reverberation on my ear. These services themselves, like the commodities which I buy, may be necessary or may only seem necessary for example, the service of a soldier or physician or lawyer; or they may be services which give me pleasure. But this makes no difference to their economic character. If I am healthy and do not need a doctor or am lucky enough not to have to be involved in a lawsuit, then I avoid paying out money for medical or legal services as I do the plague. ||1328| Services may also be forced on me the services of officials, etc. If I buy the service of a teacher not to develop my faculties but to acquire some skill with which I can earn money or if others buy this teacher for me and if I really learn something (which in itself is quite independent of the payment for the service), then these costs of education, just as the costs of my maintenance, belong to the costs of production of my labour-power. But the particular utility of this service alters nothing in the economic relation; it is not a relation in which I transform money into capital, or by which the supplier of this service, the teacher, transforms me into his capitalist, his master. Consequently it also does not affect the economic character of this relation whether the physician cures me, the teacher is successful in teaching me, or the lawyer wins my lawsuit. What is paid for is the performance of the service as such, and by its very nature the result cannot be guaranteed by those rendering the service. A large proportion of services belongs to the costs of consumption of commodities, as in the case of a cook, a maid, etc. It is characteristic of all unproductive labours that they are at my command as in the case of the purchase of all other commodities for consumption only to the same extent as I exploit productive labourers. Of all persons, therefore, the productive labourer has the least command over the services of unproductive labourers. On the other hand, however, my power to employ productive labourers by no means grows in the same proportion as I employ unproductive labourers, but on the contrary diminishes in the same proportion, although [one has ] most to pay for the compulsory services (State, taxes). Productive labourers may themselves in relation to me be unproductive labourers. For example, if I have my house re-papered and the paper-hangers are wage-workers of a master who sells me the job, it is just the same for me as if I had bought a house already papered; as if I had expended money for a commodity for my consumption, But for the master who gets these labourers to hang the paper, they are productive labourers, for they produce surplus-value for him. |1328|| ||1333| How very unproductive, from the standpoint of capitalist production, the labourer is who indeed produces vendible commodities, but only to the amount equivalent to his own labour-power, and therefore produces no surplus-value for capital can be seen from the passages in Ricardo saying that the very existence of such people is a nuisance. This is the theory and practice of capital. ||1336| We have seen: This process of production is not only a process of the production of commodities, but a process of the production of surplus-value, the absorption of surplus-labour and hence a process of production of capital. The first formal act of exchange between money and labour or capital and labour is only potentially the appropriation of someone else s living labour by materialised labour. The actual process of appropriation takes place only in the actual production process, behind which lies as a past stage that first formal transaction in which capitalist and labourer confront each other as mere owners of commodities, as buyer and seller. For which reason all vulgar economists like Bastiat go no further than that first formal transaction, precisely in order by this trick to get rid of the specific capitalist relation. The distinction is shown in a striking way by the exchange of money for unproductive labour. Here money and labour exchange with each other only as commodities. So that instead of this exchange forming capital, it is expenditure of revenue. |1336|| ||1328| What then is the position of independent handicraftsmen or peasants who employ no labourers and therefore do not produce as capitalists? Either, as always in the case of peasants <but for example not in the case of a gardener whom I get to come to my house>, they are producers of commodities, and I buy the commodity from them in which case for example it makes no difference that the handicraftsman produces it to order while the peasant produces his supply according to his means. In this capacity they confront me as sellers of commodities, not as sellers of labour, and this relation therefore has nothing to do with the exchange of capital for labour; therefore also it has nothing to do with the distinction between productive and unproductive labour, which depends entirely on whether the labour is exchanged for money or for money as money as capital. They therefore belong neither to the category of productive nor of unproductive labourers, although they are producers of commodities. But their production does not fall under the capitalist mode of production. It is possible that these producers, working with their own means of production, not only reproduce their labour-power but create surplus-value, while their position enables them to appropriate for themselves their own surplus-labour or a part of it (since a part of it is taken away from them in the form of taxes, etc.). And here we come up against a peculiarity that is characteristic of a society in which one definite mode of production predominates, even though not all productive relations have been subordinated to it. In feudal society, for example (as we can best observe in England because the system of feudalism was introduced here from Normandy ready made and its form was impressed on what was in many respects a different social foundation), relations which were far removed from the nature of feudalism were given a feudal form; for example, simple money relations in which there was no trace of mutual personal service as between lord and vassal, It is for instance a fiction that the small peasant held his land in fief. It is exactly the same in the capitalist mode of production. The independent peasant or handicraftsman is cut up into two persons*. As owner of the means of production he is capitalist; as labourer he is his own wage-labourer. As capitalist he therefore pays himself his wages and draws his profit on his capital; that is to say, he exploits himself as wage-labourer, and pays himself, in the surplus-value, the tribute that labour owes to capital. Perhaps he also pays himself a third portion as landowner (rent), in exactly the same way, as we shall see later, that the industrial capitalist, when he works with his own ||1329| capital, pays himself interest, regarding this as something which he owes to himself not as industrial capitalist but qua capitalist pure and simple. The determinate social character of the means of production in capitalist production expressing a particular production relation has so grown together with, and in the mode of thought of bourgeois society is so inseparable from, the material existence of these means of production as means of production, that the same determinateness (categorical determinateness) is assumed even where the relation is in direct contradiction to it. The means of production become capital only in so far as they have become separated from labourer and confront labour as an independent power. But in the case referred to the producer the labourer is the possessor, the owner, of his means of production. They are therefore not capital, any more than in relation to them he is a wage-labourer. Nevertheless they are looked on as capital, and he himself is split in two, so that he, as capitalist, employs himself as wage-labourer. In fact this way of presenting it, however irrational it may be on first view, is nevertheless so far correct, that in this case the producer in fact creates his own surplus-value <on the assumption that he sells his commodity at its value>, in other words, only his own labour is materialised in the whole product. But that he is able to appropriate for himself the whole product of his own labour, and that the excess of the value of his product over the average price for instance of his day s labour is not appropriated by a third person, a master, he owes not to his labour which does not distinguish him from other labourers but to his ownership of the means of production. It is therefore only through his ownership of these that he takes possession of his own surplus-labour, and thus bears to himself as wage-labourer the relation of being his own capitalist. Separation appears as the normal relation in this society. Where therefore it does not in fact apply, it is presumed and, as has just been shown, so far correctly; for (as distinct for example from conditions in Ancient Rome or Norway or in the north-west of the United States) in this society unity appears as accidental, separation as normal; and consequently separation is maintained as the relation even when one person unites the separate functions. Here emerges in a very striking way the fact that the capitalist as such is only a function of capital, the labourer a function of labour-power. For it is also a law that economic development distributes functions among different persons; and the handicraftsman or peasant who produces with his own means of production will either gradually be transformed into a small capitalist who also exploits the labour of others, or he will suffer the loss of his means of production <in the first instance the latter may happen although he remains their nominal owner, as in the case of mortgages> and be transformed into a wage-labourer. This is the tendency in the form of society in which the capitalist mode of production predominates. In considering the essential relations of capitalist production it can therefore be assumed that the entire world of commodities, all spheres of material production the production of material wealth are (formally or really) subordinated to the capitalist mode of production <for this is what is happening more and more completely; [since it] is the principal goal, and only if it is realised will the productive powers of labour be developed to their highest point>. On this premise which expresses the limit [of the process] and which is therefore constantly coming closer to an exact presentation of reality all labourers engaged in the production of commodities are wage-labourers, and the means of production in all these spheres confront them as capital. It can then be said to be a characteristic of productive labourers, that is, labourers producing capital, that their labour realises itself in commodities, in material wealth. And so productive labour, along with its determining characteristic which takes no account whatever of the content of labour and is entirely independent of that content would be given a second, different and subsidiary definition. Non-material production, even when it is carried on purely for exchange, that is, when it produces commodities, may be of two kinds: 1. It results in commodities, use-values, which have a form different from and independent of producers and consumers; these commodities may therefore exist during an interval between production and consumption and may in this interval circulate as vendible commodities, such as books, paintings, in a word, all artistic products which are distinct from the artistic performance of the artist performing them. Here capitalist production is applicable only to a very restricted extent: as for example when a writer of a joint work say an encyclopaedia exploits a number of others as hacks. ||1330 | In this sphere for the most part a transitional form to capitalist production remains in existence, in which the various scientific or artistic producers, handicraftsmen or experts work for the collective trading capital of the book-trade a relation that has nothing to do with the capitalist mode of production proper and even formally has not yet been brought under its sway. The fact that the exploitation of labour is at its highest precisely in these transitional forms in no way alters the case. 2. The production cannot be separated from the act of producing, as is the case with all performing artists, orators, actors, teachers, physicians, priests, etc. Here too the capitalist mode of production is met with only to a small extent, and from the nature of the case can only be applied in a few spheres. For example, teachers in educational establishments may be mere wage-labourers for the entrepreneur of the establishment; many such educational factories exist in England. Although in relation to the pupils these teachers are not productive labourers, they are productive labourers in relation to their employer. He exchanges his capital for their labour-power, and enriches himself through this process. It is the same with enterprises such as theatres, places of entertainment, etc. In such cases the actor s relation to the public is that of an artist, but in relation to his employer he is a productive labourer. All these manifestations of capitalist production in this sphere are so insignificant compared with the totality of production that they can be left entirely out of account. With the development of the specifically capitalist mode of production, in which many labourers work together in the production of the same commodity, the direct relation which their labour bears to the object produced naturally varies greatly. For example the unskilled labourers in a factory referred to earlier have nothing directly to do with the working up of the raw material. The workmen who function as overseers of those directly engaged in working up the raw material are one step further away; the works engineer has yet another relation and in the main works only with his brain, and so on. But the totality of these labourers, who possess labour-power of different value (although all the employed maintain much the same level) produce the result, which, considered as the result of the labour-process pure and simple, is expressed in a commodity or material product; and all together, as a workshop, they are the living production machine of these products just as, taking the production process as a whole, they exchange their labour for capital and reproduce the capitalists money as capital, that is to say, as value producing surplus-value, as self-expanding value. It is indeed the characteristic feature of the capitalist mode of production that it separates the various kinds of labour from each other, therefore also mental and manual labour or kinds of labour in which one or the other predominates and distributes them among different people. This however does not prevent the material product from being the common product of these persons, or their common product embodied in material wealth; any more than on the other hand it prevents or in any way alters the relation of each one of these persons to capital being that of wage-labourer and in this pre-eminent sense being that of a productive labourer. All these persons are not only directly engaged in the production of material wealth, but they exchange their labour directly for money as capital, and consequently directly reproduce, in addition to their wages, a surplus-value for the capitalist, Their labour consists of paid labour plus unpaid surplus-labour. In addition to extractive industry, agriculture and manufacture, there exists yet a fourth sphere of material production, which also passes through the various stages of handicraft industry, manufacture and mechanical industry; this is the transport industry, transporting either people or commodities. The relation of productive labour that is, of the wage-labourer to capital is here exactly the same as in the other spheres of material production. Moreover, here a material change is effected in the object of labour a spatial change, a change of place. In the case of the transport of people this takes the form only of a service rendered to them by the entrepreneur. But the relation between buyer and seller of this service has nothing to do with the relation of the productive labourer to capital, any more than has the relation between the buyer and seller of yarn. If on the other hand we consider the process in relation to commodities, ||1331| in this case there certainly takes place, in the labour-process, a change in the object of labour, the commodity. Its spatial existence is altered, and along with this goes a change in its use-value, since the location of this use-value is changed. Its exchange-value increases in the same measure as this change in use-value requires labour an amount of labour which is determined partly by the wear and tear of the constant capital, that is, the total materialised labour which enters into the commodity, and partly by the quantity of living labour, as in the process of increasing the value of all other commodities. When the commodity has reached its destination, this change which has taken place in its use-value has vanished, and is now only expressed in its higher exchange-value, in the enhanced price of the commodity. And although in this case the real labour has left no trace behind it in the use-value, it is nevertheless realised in the exchange-value of this material product; and so it is true also of this industry as of other spheres of material production that the labour incorporates itself in the commodity, even though it has left no visible trace in the use-value of the commodity. Here we have been dealing only with productive capital, that is, capital employed in the direct process of production. We come later to capital in the process of circulation. And only after that, in considering the special form assumed by capital as merchant s capital, can the question be answered as to how far the labourers employed by it are productive or unproductive. |XXI-1331|| ||XVIII-1140| The first section Production Process of Capital to be divided in the following way: 1. Introduction. Commodity. Money. 2. Transformation of money into capital. 3. Absolute surplus-value. (a) Labour-process and the process of producing surplus-value. (b) Constant capital and variable capital. (c) Absolute surplus-value. (d) Struggle for the normal working-day. (e) Simultaneous working-days (number of simultaneously employed labourers). Amount of surplus-value and rate of surplus-value (magnitude and height?). 4. Relative surplus-value. (a) Simple co-operation. (b) Division of labour. (c) Machinery. etc. 5. Combination of absolute and relative surplus-value. Relation (proportion) between wage-labour and surplus-value. Formal and real subsumption of labour under capital. Productivity of capital. Productive and unproductive labour. 6. Reconversion of surplus-value into capital. Primitive accumulation. Wakefield s colonial theory. 7. Result of the production process. (Either under 6 or under 7 the change in the form of the law of appropriation can be shown.) 8. Theories of surplus-value. 9. Theories of productive and unproductive labour. |XVIII-1140|| ||XVIII-1139| The third section Capital and Profit to be divided in the following way: 1. Conversion of surplus-value into profit. Rate of profit as distinguished from rate of surplus-value. 2. Conversion of profit into average profit. Formation of the general rate of profit. Transformation of values into prices of production. 3. Adam Smith s and Ricardo s theories on profit and prices of production. 4. Rent (illustration of the difference between value and price of production). 5. History of the so-called Ricardian law of rent. 6. Law of the fall of the rate of profit. Adam Smith, Ricardo, Carey. 7. Theories of profit. (Query: whether Sismondi and Malthus should also be included in the Theories of Surplus-Value.) 8. Division of profit into industrial profit and interest. Merchant s capital. Money-capital. 9. Revenue and its sources. The question of the relation between the processes of production and distribution also to be included here. 10. Reflux movements of money in the process of capitalist production as a whole. 11. Vulgar economy. 12. Conclusion. Capital and wage-labour. |XVIII-1139||. ||XVIII-1109| In the second chapter of Part III, on Capital and Profit , where the formation of the general rate of profit is dealt with, the following must be considered: 1. Different organic composition of capitals, partly conditioned by the difference between variable and constant capital in so far as this arises from the stage of production the absolute quantitative relations between machinery and raw materials on the one hand, and the quantity of labour which sets them in motion. These differences relate to the labour-process. The differences between fixed and circulating capital arising from the circulation process have also to be considered differences which lead to variations in the increase of value, in a given period of time, as between different spheres. 2. Differences in the relative value of the parts of different capitals which do not arise from their organic composition. These arise from the difference of value particularly of the raw materials, even assuming that the raw materials absorb an equal quantity of labour in two different spheres. 3. The result of those differences is diversity of the rates of profit in different spheres of capitalist production. It is true only for capitals of equal composition, etc., that the rate of profit is the same and the quantity of profit is in proportion to the size of the capital employed. 4. For the total capital, however, what has been explained in Chapter I holds good. In capitalist production each capital is assumed to be a unit, an aliquot part of the total capital. Formation of the general rate of profit (competition). 5. Transformation of values into prices of production. Difference between value, cost-price, and production price. 6. To take up also the Ricardian point: the influence of general variations in wages on the general rate of profit and hence on prices of production. |XVIII-1109|| * In the manuscript: are . Ed. * In the manuscript: Am besten sie zum Bauen van Strassen, Br cken, Bergwerken etc. zu verwenden. Ed. * In the manuscript: than upon instead of then about the . Ed. * In the manuscript: thither . Ed. * In the manuscript: puts . Ed. * In the manuscript: which might men . Ed. ** In the manuscript: which . Ed. * In the manuscript: and . Ed. * In the manuscript: deal . Ed. ** In the manuscript this is followed by the word: very . Ed. *** In the manuscript this is followed by the word: very . Ed. * In the manuscript: viz . Ed. ** In the manuscript: to the farther increase of commerce . Ed. *** In the manuscript this is followed by the word: true . Ed. **** In the manuscript: to be . Ed. ***** In the manuscript: 2,000 . Ed. * In the manuscript: got . Ed. ** In the manuscript: by a decrease of foreign trade . Ed. *** In the manuscript: Commerce . Ed. * In the manuscript: am gr ssten, interest am h chsten . Ed. ** In the manuscript: motives . Ed. *** In the manuscript: the . Ed. * Commodity exchange. Ed. * In the manuscript: this . Ed * In the manuscript: the . Ed. ** In the manuscript: sellers not enriched . Ed. * In the manuscript: destroyed . Ed. * In essence. Ed. * In the manuscript: to . Ed. * In small enterprises  the employer is often his own labourer (Storch, [Cours d conomie politique], t. I, Petersburg edition, p. 242).
Economic Manuscripts: Theories of Surplus-Value, Addenda to Part 1