d) Samuel Bailey

[α) Superficial Relativism on the Part of the Author of “Observations on certain Verbal Disputes” and on the Part of Bailey in Treating the Category of Value.  The Problem of the Equivalent.  Rejection of the Labour Theory of Value as the Foundation of Political Economy]

A Critical Dissertation on the Nature, Measures, and Causes of Value; chiefly in Reference to the Writings of Mr. Ricardo and his Followers.  By the Author of Essays on the Formation and Publication of Opinions (Samuel Bailey), London, 1825.

This is the main work directed against Ricardo.  (Also aimed against Malthus.)  It seeks to overturn the foundation of the doctrine—value.  It is definitely worthless except for the definition of the “measure of value”, or rather, of money in this function.  Compare also the same author’s: A Letter to a Political Economist; occasioned by an Article in the Westminster Review on the Subject of Value etc., London, 1826.

Since, as has been mentioned,[n] this work basically agrees with Observations on certain Verbal Disputes in Political Economy, it is here necessary to add the relevant passages from these Observations.

The author of the Observations accuses Ricardo of having transformed value from a relative attribute of commodities in their relationship to one another, into something absolute.

The only thing that Ricardo can be accused of in this context is that, in elaborating the concept of value, he does not clearly distinguish between the various aspects, between the exchange-value of the commodity, as it manifests itself, appears in the process of commodity exchange, and the existence of the commodity as value as distinct from its existence as an object, product, use-value.

||815| It is said in the Observations:

“If the absolute quantity of labour, which produces the greater part of commodities, or all except one, is increased, would you say that the value of that one is unaltered?  In what sense?  since it will exchange for less of every commodity besides.  If, indeed, it is meant to be asserted that the meaning of increase or diminution of value is increase or diminution in the quantity of labour that produced the commodity spoken of, the conclusions I have just been objecting to might be true enough.  But to say, as Mr. Ricardo does, that the comparative quantities of labour that produce two commodities are the cause of the rate at which these two commodities will exchange with each other, i.e., of the exchangeable value of each, understood in relation to the other, is very different from saying that the exchangeable value of either means the quantity of labour which produced it, understood without any reference to the other, or to the existence of any other” (Observations etc., p. 13).

“Mr. Ricardo tells us indeed […] that ‘the inquiry to which he wishes to draw the reader’s attention relates to the effect of the variations in the relative value of commodities, and not in their absolute value’; as if be there considered that there is such a thing as exchangeable value which is not relative” (op. cit., pp. 9-10).

“That Mr. Ricardo has departed from his original use of the term value, and has made of it something absolute, instead of relative, is still more evident in his chapter entitled ‘Value and Riches, their distinctive Properties’.  The question there discussed, has been discussed also by others, and is purely verbal and useless…” (op. cit., pp. 15-16).

Before dealing with this author, we shall add the following about Ricardo.  In his chapter on “Value and Riches”, he argues that social wealth does not depend on the value of the commodities produced, although this latter point is decisive for every individual producer.  It should have been all the more clear to him that a mode of production whose exclusive aim is surplus-value, in other words, which is based on the relative poverty of the mass of the producers, cannot possibly be the absolute form of the production of wealth, as he constantly asserts.

Now to the Observations of the “verbal” wiseacre.

If all commodities except one increase in value because they cost more labour-time than they did before, smaller amounts of these commodities will be exchanged for the single commodity whose labour-time remains unchanged.  Its exchange-value, insofar as it is realised in other commodities—that is, its exchange-value expressed in the use-values of all other commodities—has been reduced.  “Would you then say that the value of that one is unaltered?” This is merely a formulation of the point at issue, and it calls neither for a positive nor for a negative reply.  The same result would occur if the labour-time required for the production of the one commodity were reduced and that of all the others remained unchanged.  A given quantity of this particular commodity would exchange for a reduced quantity of all the other commodities.  The same phenomenon occurs in both cases although from directly opposite causes.  Conversely, if the labour-time required for the production of commodity A remained unchanged, while that of all others were reduced, then it would exchange for larger amounts of all the other commodities.  The same would happen for the opposite reason, if the labour-time required for the production of commodity A increased and that required for all other commodities remained unchanged.  Thus, sometimes commodity A exchanges for smaller quantities of all the other commodities, and this for either of two different and opposite reasons.  At other times it exchanges for larger quantities of all the other commodities, again for two different and opposite reasons.  But it should be noted that it is assumed that it always exchanges at its value, consequently for an equivalent.  It always realises its value in the quantity of use-values of the other commodities for which it exchanges, no matter how much the quantity of these use-values varies.

From this it obviously follows: that the rate at which commodities exchange for one another as use-values, although it is an expression of their value, their realised value, is not their value itself, since the same proportion of value can be represented by quite different quantities of use-values.  Value as an aspect of the commodity is not expressed in its own use-value, or in its existence as use-value.  Value manifests itself when commodities are expressed in other use-values, that is, it manifests itself in the rate at which these other use-values are exchanged for them.  If one ounce of gold equals a ton of iron, that is, if a small quantity of gold exchanges for a large quantity of iron, is therefore the value of the gold expressed in iron greater than the value of the iron expressed in gold?  That commodities exchange for one another in proportion to the labour embodied in them, means that they are equal, alike, insofar as they constitute the same quantity of labour.  Consequently it means likewise that every commodity, considered in itself, is something different from its own use-value, ||816| from its own existence as use-value.

The value of the same commodity can, without changing, be expressed in infinitely different quantities of use-values, always according to whether I express it in the use-value of this or of that commodity.  This does not alter the value, although it does alter the way it is expressed.  In the same way, all the various quantities of different use-values in which the value of commodity A can be expressed, are equivalents and are related to one another not only as values, but as equal values, so that when these very unequal quantities of use-value replace one another, the value remains completely unchanged, as if it had not found expression in quite different use-values.

When commodities are exchanged in the proportion in which they represent equal amounts of labour-time, then it is their aspect as materialised labour-time, as embodied labour-time, which manifests their substance, the identical element they contain.  As such, they are qualitatively the same, and differ only quantitatively, according to whether they represent smaller or larger quantities of the same substance, i.e., labour-time.  They are values as expressions of the same element; and they are equal values, equivalents, insofar as they represent an equal amount of labour-time.  They can only be compared as magnitudes, because they are already homogeneous magnitudes, qualitatively identical.

It is as manifestations of this substance that these different things constitute values and are related to one another as values; their different magnitudes of value, their immanent measure of value are thus also given.  And only because of this can the value of a commodity be represented, expressed, in the use-values of other commodities as its equivalents.  Hence the individual commodity as value, as the embodiment of this substance, is different from itself as use-value, as an object, quite apart from the expression of its value in other commodities.  As the embodiment of labour-time, it is value in general, as the embodiment of a definite quantity of labour-time, it is a definite magnitude of value.

It is therefore typical of our wiseacre when he says: If we mean that, we do not mean that and vice versa.  Our “meaning” has nothing at all to do with the essential character of the thing we consider.  If we speak of the value in exchange of a thing, we mean in the first instance of course the relative quantities of all other commodities that can be exchanged for the first commodity.  But, on further consideration, we shall find that for the proportion, in which one thing exchanges for an infinite mass of other things which have nothing in common with it—and even if there are natural or other similarities between those things, they are not considered in the exchange—for the proportion to be a fixed proportion, all those various heterogeneous things must be considered as proportionate representations, expressions of the same common unity, [of] an element quite different from their natural existence or appearance.  We shall furthermore find, that if our views have any sense, the value of a commodity is something which not only distinguishes it from or relates it to other commodities, but is a quality differentiating it from its own existence as a thing, a value in use.[o]

“The rise of value of article A, only meant value estimated in articles B, C, etc., i.e., value in exchange for articles B, C, etc.” ([Observations, London, 1821,] p. 16).

To estimate the value of A, a book for instance, in B, coals, and C, wine, A, B and C must be as value something different from their existence as books, coals or wine.  To estimate the value of A in B, A must have a value independent of the estimation of that value in B, and both must be equal to a third thing expressed in both of them.

It is quite wrong to say that the value of a commodity is thereby transformed from something relative into something absolute.  On the contrary, as a use-value, the commodity appears as something independent.  On the other hand, as value it appears as something merely contingent, something merely determined by its relation to socially necessary, equal, simple labour-time.  It is to such an extent relative that when the labour-time required for its reproduction changes, its value changes, although the labour-time really contained in the commodity has remained unaltered.

||817| How deeply our wiseacre has sunk into fetishism and how he transforms what is relative into something positive, is demonstrated most strikingly in the following passage:

“Value is a property of things, riches of men.  Value, in this sense, necessarily implies exchange, riches do not” (loc. cit., p. 16).

Riches here are use-values.  These, as far as men are concerned, are, of course, riches, but it is through its own properties, its own qualities, that a thing is a use-value and therefore an element of wealth for men.  Take away from grapes the qualities that make them grapes, and their use-value as grapes disappears for men and they cease to be an element of wealth for men.  Riches which are identical with use-values are properties of things that are made use of by men and which express a relation to their wants.  But “value” is supposed to be a “property of things”.

As values, commodities are social magnitudes, that is to say, something absolutely different from their “properties” as “things”.  As values, they constitute only relations of men in their productive activity.  Value indeed “implies exchanges”, but exchanges are exchanges of things between men, exchanges which in no way affect the things as such.  A thing retains the same “properties” whether it be owned by A or by B.  In actual fact, the concept “value” presupposes “exchanges” of the products.  Where labour is communal, the relations of men in their social production do not manifest themselves as “values” of “things”.  Exchange of products as commodities is a method of exchanging labour, [it demonstrates] the dependence of the labour of each upon the labour of the others [and corresponds to] a certain mode of social labour or social production.

In the first part of my book, I mentioned that it is characteristic of labour based on private exchange that the social character of labour “manifests” itself in a perverted form—as the “property” of things; that a social relation appears as a relation between things (between products, values in use, commodities).  This appearance is accepted as something real by our fetish-worshipper, and he actually believes that the exchange-value of things is determined by their properties as things, and is altogether a natural property of things.  No scientist to date has yet discovered what natural qualities make definite proportions of snuff tobacco and paintings “equivalents” for one another.

Thus he, the wiseacre, transforms value into something absolute, “a property of things”, instead of seeing in it only something relative, the relation of things to social labour, social labour based on private exchange, in which things are defined not as independent entities, but as mere expressions of social production.

But to say that “value” is not an absolute, is not conceived as an entity, is quite different from saying that commodities must impart to their exchange-value a separate expression which is different from and independent of their use-value and of their existence as real products, in other words, that commodity circulation is bound to evolve money.  Commodities express their exchange-value in money, first of all in the price, in which they all present themselves as materialised forms of the same labour, as only quantitatively different expressions of the same substance.  The fact that the exchange-value of the commodity assumes an independent existence in money is itself the result of the process of exchange, the development of the contradiction of use-value and exchange-value embodied in the commodity, and of another no less important contradiction embodied in it, namely, that the definite, particular labour of the private individual must manifest itself as its opposite, as equal, necessary, general labour and, in this form, social labour.  The representation of the commodity as money implies not only that the different magnitudes of commodity values are measured by expressing the va1ues in the use-value of one exclusive commodity, but at the same time that they are all expressed in a form in which they exist as the embodiment of social labour and are therefore exchangeable for every other commodity, that they are translatable at will into any use-value desired.  Their representation as money—in the price—therefore appears first only as something nominal, a representation which is realised only through actual sale.  Ricardo’s mistake is that he is concerned only with the magnitude of value.  Consequently his attention is concentrated on ||818| the relative quantities of labour which the different commodities represent, or which the commodities as values embody.  But the labour embodied in them must be represented as social labour, as alienated individual labour.  In the price this representation is nominal; it becomes reality only in the sale.  This transformation of the labour of private individuals contained in the commodities into uniform social labour, consequently into labour which can be expressed in all use-values and can be exchanged for them, this qualitative aspect of the matter which is contained in the representation of exchange-value as money, is not elaborated by Ricardo.  This circumstance—the necessity of presenting the labour contained in commodities as uniform social labour, i.e., as money—is overlooked by Ricardo.

For its part, the development of capital already presupposes the full development of the exchange-value of commodities and consequently its independent existence as money.  The point of departure in the process of the production and circulation of capital, is the independent form of value which maintains itself, increases, measures the increase against the original amount, whatever changes the commodities in which it manifests itself may undergo, and quite irrespective of whether it presents itself in the most varied use-values and moves from commodity to commodity.  The relation between the value antecedent to production and the value which results from it—capital as antecedent value is capital in contrast to profit—constitutes the all-embracing and decisive factor in the whole process of capitalist production.  It is not only an independent expression of value as in money, but dynamic value, value which maintains itself in a process in which use-values pass through the most varied forms.  Thus in capital the independent existence of value is raised to a higher power than in money.

From this we can judge the wisdom of our “verbal” wiseacre, who treats the independent existence of exchange-value as a figure of speech, a manner of talking, a scholastic invention.

“Value, or valeur in French, is not only used absolutely instead of relatively as a quality of things, but is even used by some […] as […] a measurable commodity, ‘Possessing a value’, ‘transferring a portion of value’” (a very important factor with regard to fixed capital), “‘the sum, or totality of values’ (valeurs), etc.  I do not know what this means” (op. cit., p. 57).

The fact that the value which has become independent acquires only a relative expression in money, because money itself is a commodity, and hence has a changeable value, makes no difference but is a shortcoming which arises from the nature of the commodity and the necessity of expressing its exchange-value, as distinct from its use-value.  Our author has made it abundantly clear that he does “not know” this.  This is shown by the kind of criticism which would like to talk out of existence the difficulties innate in the contradictory functions of things themselves, by declaring them to be the result of reflexions or of conflicting definitions.

“‘The relative value of two things’ […] is open to two meanings: the rate at which two things exchange or would exchange with each other, or the comparative portions of a third for which each exchanges or would exchange” (op. cit., p. 53).

To begin with, this is a fine definition, If 3 lbs. of coffee exchange for 1 lb. of tea today or would do so tomorrow, it does not at all mean that equivalents have been exchanged for each other.  According to this, a commodity could always be exchanged only at its value, for its value would constitute any quantity of some other commodity for which it had been accidentally exchanged.  This, however, is not what people generally mean, when they say that 3 lbs. of coffee have been exchanged for their equivalent in tea.  They assume that after, as before, the exchange, a commodity of the same value is in the hands of either of the exchangers.  The rate at which two commodities exchange does not determine their value, but their value determines the rate at which they exchange.  If value were nothing more than the quantity of commodities for which commodity A is accidentally exchanged, how is it possible to express the value of A in terms of commodity B, or C, etc.?  Because ||819| then, since there is no immanent measure common to the two commodities, the value of A could not be expressed in terms of B before it had been exchanged against B.

Relative value means first of all magnitude of value in contradistinction to the quality of having value at all.  For this reason, the latter is not something absolute.  It means, secondly, the value of one commodity expressed in the use-value of another commodity.  This is only a relative expression of its value, namely, in relation to the commodity in which it is expressed.  The value of a pound of coffee is only relatively expressed in tea; to express it absolutely—even in a relative way, that is to say, not in regard to labour-time, but to other commodities—it ought to be expressed in an infinite series of equations with all other commodities.  This would be an absolute expression of its relative value; its absolute expression would be its expression in terms of labour-time and this absolute expression would express it as something relative, but in the absolute relation, by which it is value.

***

Let us now turn to Bailey.

His book has only one positive merit—that he was the first to give a more accurate definition of the measure of value, that is, in fact, of one of the functions of money, or money in a particular, determinate form.  In order to measure the value of commodities—to establish an external measure of value—it is not necessary that the value of the commodity in terms of which the other commodities are measured, should be invariable.  (It must on the contrary be variable, as I have shown in the first part, because the measure of value is, and must be, a commodity since otherwise it would have no immanent measure in common with other commodities.)  If, for example, the value of money changes, it changes to an equal degree in relation to all other commodities.  Their relative values are therefore expressed in it just as correctly as if the value of money had remained unchanged.

The problem of finding an “invariable measure of value” is thereby eliminated.  But this problem itself (the interest in comparing the value of commodities in different historical periods, is, indeed, not an economic interest as such, [but] an academic interest) arose out of a misunderstanding and conceals a much more profound and important question.  “Invariable measure of value” signifies primarily a measure of value which is itself of invariable value, and consequently, since value itself is a predicate of the commodity, a commodity of invariable value.  For example, if gold and silver or corn, or labour, were such commodities, then it would be possible to establish, by comparison with them, the rate at which other commodities are exchanged for them, that is, to measure exactly the variations in the values of these other commodities by their prices in gold, silver, or corn, or their relation to wages.  Stated in this way, the problem therefore presupposes from the outset that in the “measure of value” we are dealing simply with the commodity in which the values of all other commodities are expressed, whether it be the commodity by which they are really represented—i.e., money, the commodity which functions as money—or a commodity which, because its value remains invariable, would function as the money in terms of which the theoretician makes his calculations.  It thus becomes evident that in this context it is in any case a question only of a kind of money which as the measure of value—either theoretically or practically—would itself not be subject to changes in value.

But for commodities to express their exchange-value independently in money, in a third commodity, the exclusive commodity, the values of commodities must already be presupposed.  Now the point is merely to compare them quantitatively.  A homogeneity which makes them the same—makes them values—which as values makes them qualitatively equal, is already presupposed in order that their value and their differences in value can be represented in this way.  For example, if all commodities express their value in gold, then this expression in gold, their gold price, their equation with gold, is an equation on the basis of which it is possible to elucidate and compute their value relation to one another, for they are now expressed as different quantities of gold and in this way the commodities are represented in their prices, ||820| as comparable magnitudes of the same common denominator.

But in order to be represented in this way, the commodities must already be identical as values.  Otherwise it would be impossible to solve the problem of expressing the value of each commodity in gold, if commodity and gold or any two commodities as values were not representations of the same substance, capable of being expressed in one another.  In other words, this presupposition is already implicit in the problem itself.  Commodities are already presumed as values, as values distinct from their use-values, before the question of representing this value in a special commodity can arise.  In order that two quantities of different use-values can be equated as equivalents, it is already presumed that they are equal to a third, that they are qualitatively equal and only constitute different quantitative expressions of this qualitative equality.

The problem of an “invariable measure of value” was simply a spurious name for the quest for the concept, the nature, of value itself, the definition of which could not be another value, and consequently could not be subject to variations as value.  This was labour-time, social labour, as it presents itself specifically in commodity production.  A quantity of labour has no value, is not a commodity, but is that which transforms commodities into values, it is their common substance; as manifestations of it commodities are qualitatively equal and only quantitatively different.  They [appear] as expressions of definite quantities of social labour-time.

Let us assume that gold has an invariable value.  If the value of all commodities were then expressed in gold one could measure variations in the values of commodities by their gold prices.  But in order to express the value of commodities in gold, commodities and gold must be identical as values.  Gold and commodities can only be considered to be identical as definite quantitative expressions of this value, as definite magnitudes of value.  The invariable value of gold and the variable value of the other commodities would not prevent them, as value, from being the same, [Consisting of] the same substance.  Before the invariable value of gold can help us to make a step forward, the value of commodities must first be expressed, assessed, in gold—that is, gold and commodities must be represented as equivalents, as expressions of the same substance.

{In order that the commodities may be measured according to the quantity of labour embodied in them—and the measure of the quantity of labour is time—the different kinds of labour contained in the different commodities must be reduced to uniform, simple labour, average labour, ordinary, unskilled labour.  Only then can the amount of labour embodied in them be measured according to a common measure, according to time.  The labour must be qualitatively equal so that its differences become merely quantitative, merely differences of magnitude.  This reduction to simple, average labour is not, however, the only determinant of the quality of this labour to which as a unity the values of the commodities are reduced.  That the quantity of labour embodied in a commodity is the quantity socially necessary for its production—the labour-time being thus necessary labour-time—is a definition which concerns only the magnitude of value.  But the labour which constitutes the substance of value is not only uniform, simple, average labour; it is the labour of a private individual represented in a definite product.  However, the product as value must be the embodiment of social labour and, as such, be directly convertible from one use-value into all others. (The particular use-value in which labour is directly represented is irrelevant so that it can be converted from one form into another.)  Thus the labour of individuals has to be directly represented as its opposite, social labour; this transformed labour is, as its immediate opposite, abstract, general labour, which is therefore represented in a general equivalent, only by its alienation does individual labour manifest itself as its opposite.  The commodity, however, must have this general expression before it is alienated.  This necessity to express individual labour as general labour is equivalent to the necessity of expressing a commodity as money.  The commodity receives this expression insofar as the money serves as a measure and expresses the value of the commodity in its price.  It is only through sale, through its real transformation into money, that the commodity acquires its adequate expression as exchange-value.  The first transformation is merely a theoretical process, the second is a real one.

||821| Thus, in considering the existence of the commodity as money, it is not only necessary to emphasise that in money commodities acquire a definite measure of their value—since all commodities express their value in the use-value of the same commodity—but that they all become manifestations of social, abstract, general labour; and as such they all possess the same form, they all appear as the direct incarnation of social labour and as such they all act as social labour, that is to say, they can be directly exchanged for all other commodities in proportion to the size of their value; whereas in the hands of the people whose commodities have been transformed into money, they exist not as exchange-value in the form of a particular use-value, but as use-value (gold, for example) which merely represents exchange-value.  A commodity may be sold either below or above its value.  This is purely a matter of the magnitude of its value.  But whenever a commodity is sold, transformed into money, its exchange-value acquires an independent existence, separate from its use-value.  The commodity now exists only as a certain quantity of social labour-time, and it proves that it is such by being directly exchangeable for any commodity whatsoever and convertible (in proportion to its magnitude) into any use-value whatsoever.  This point must not be overlooked in relation to money any more than the formal transformation undergone by the labour a commodity contains as its element of value.  But an examination of money—of that absolute exchangeability which the commodity possesses as money, of its absolute effectiveness as exchange-value which has nothing to do with the magnitude of value—shows that it is not quantitatively, but qualitatively determined and that as a result of the very process through which the commodity itself passes, its exchange-value becomes independent, and is really represented as a separate aspect alongside its use-value as it is already nominally in its price.

This shows, therefore, that the “verbal observer” understands as little of the value and the nature of money as Bailey, since both regard the independent existence of value as a scholastic invention of economists.  This independent existence becomes even more evident in capital, which, in one of its aspects, can be called value in process—and since value only exists independently in money, it can accordingly be called money in process, as it goes through a series of processes in which it preserves itself, departs from itself, and returns to itself increased in volume.  It goes without saying that the paradox of reality is also reflected in paradoxes of speech which are at variance with common sense and with what vulgarians mean and believe they are talking of.  The contradictions which arise from the fact that on the basis of commodity production the labour of the individual presents itself as general social labour, and the relations of people as relations between things and as things—these contradictions are innate in the subject-matter, not in its verbal expressions.}

Ricardo often gives the impression, and sometimes indeed writes, as if the quantity of labour is the solution to the false, or falsely conceived problem of an “invariable measure of value” in the same way as corn, money, wages, etc., were previously considered and advanced as panaceas of this kind, In Ricardo’s work this false impression arises because for him the decisive task is the definition of the magnitude of value.  Because of this he does not understand the specific form in which labour is an element of value, and fails in particular to grasp that the labour of the individual must present itself as abstract general labour and, in this form, as social labour.  Therefore he has not understood that the development of money is connected with the nature of value and with the determination of this value by labour-time.

Bailey’s book has rendered a good service insofar as the objections he raises help to clear up the confusion between “measure of value” expressed in money as a commodity along with other commodities, and the immanent measure and substance of value.  But if he had analysed money as a “measure of value”, not only as a quantitative measure but as a qualitative transformation of commodities, he would have arrived at a correct analysis of value.  Instead of this, he contents himself with a mere superficial consideration of the external “measure of value”—which already presupposes value—and remains rooted in a purely frivolous approach to the question.

||822| There are, however, occasional passages in Ricardo in which he directly emphasises that the quantity of labour embodied in a commodity constitutes the immanent measure of the magnitude of its value, of the differences in the amount of its value, only because labour is the factor the different commodities have in common, which constitutes their uniformity, their substance, the intrinsic foundation of their value.  The thing however he failed to investigate is the specific form in which labour plays that role.

“In making labour the foundation of the value of commodities, and the comparative quantity of labour which is necessary to their production, the rule which determines the respective quantities of goods which shall be given in exchange for each other, we must not be supposed to deny the accidental and temporary deviations of the actual or market price of commodities from this, their primary and natural price” ([David Ricardo, The Principles of Political Economy, and Taxation,] third ed., 1821, p. 80).

Destutt de Tracy says that “To measure … is to find how many times they” (the things measured) “contain […] unities of the same description.  A franc is not a measure of value for any thing, but for a quantity of the same metal of which francs are made, unless francs, and the thing to be measured, can be referred to some other measure which is common to both.  This, I think, they can be, for they are both the result of labour; and, therefore” (because labour is their effective cause) “labour is a common measure, by which their real as well as their relative value may be estimated” (op. cit., pp. 333-34).

All commodities can be reduced to labour as their common element.  What Ricardo does not investigate is the specific form in which labour manifests itself as the common element of commodities.  That is why he does not understand money.  That is why in his work the transformation of commodities into money appears to be something merely formal, which does not penetrate deeply into the very essence of capitalist production.  He says however: only because labour is the common factor of commodities, only because they are all mere manifestations of the same common element, of labour, is labour their measure.  It is their measure only because it forms their substance as values.  Ricardo does not sufficiently differentiate between labour insofar as it is represented in use-values or in exchange-value.  Labour as the foundation of value is not any particular labour, with particular qualities.  Ricardo continuously confuses the labour which is represented in use-value and that which is represented in exchange-value.  It is true that the latter species of labour is only the former species expressed in an abstract form.

By real value, Ricardo, in the passage cited above, understands the commodity as the embodiment of a definite amount of labour-time.  By relative value, he understands the labour-time the commodity contains expressed in the use-values of other commodities.

Now to Bailey.

Bailey clings to the form in which the exchange-value of the commodity—as commodity—appears, manifests itself.  It manifests itself in a general form when it is expressed in the use-value of a third commodity, in which all other commodities likewise express their value—a commodity which serves as money—that is, in the money price of the commodity.  It manifests itself in a particular form when the exchange-value of any particular commodity is expressed in the use-value of any other, that is, as the corn price, cotton price, etc.  In actual fact, the exchange-value of the commodity always appears, manifests itself with regard to other commodities, only in the quantitative relationship in which they exchange.  The individual commodity as such cannot express general labour-time, or it can only express it in its equation with the commodity which constitutes money, in its money price.  But then the value of commodity A is always expressed in a certain quantity of the use-value of the commodity which functions as money.

This is how matters appear directly.  And Bailey clings to this.  The most superficial form of exchange-value, that is the quantitative relationship in which commodities exchange with one another, constitutes, according to Bailey, their value.  The advance from the surface to the core of the problem is not permitted.  He even forgets the simple consideration that if y yards of linen equal x lbs. of straw, this [implies] a parity between two unequal things—linen and straw—making them equal magnitudes.  This existence of theirs as things that are equal must surely be different ||823| from their existence as straw and linen.  It is not as straw and linen that they are equated, but as equivalents.  The one side of the equation must, therefore, express the same value as the other.  The value of straw and linen must, therefore, be neither straw nor linen, but something common to both and different from both commodities considered as straw and linen.  What is it?  He does not answer this question.  Instead, he wanders off into all the categories of political economy in order to repeat the same monotonous litany over and over again, namely, that value is the exchange relation of commodities and consequently is not anything different from this relation.

“If the value of an object is its power of purchasing, there must be something to purchase.  Value denotes consequently nothing positive or intrinsic, but merely the relation in which two objects stand to each other as exchangeable commodities” ([Samuel Bailey, A Critical Dissertation an the Nature, Measures, and Causes of Value, London, 1825,] pp. 4-5).

His entire wisdom is, in fact, contained in this passage.  “If value is nothing but power of purchasing” (a very fine definition since “purchasing” presupposes not only value, but the representation of value as “money”), “it denotes”, etc.  However let us first clear away from Bailey’s proposition the absurdities which have been smuggled in.  “Purchasing” means transforming money into commodities.  Money already presupposes value and the development of value.  Consequently, out with the expression “purchasing” first of all.  Otherwise we are explaining value by value.  Instead of purchasing we must say “exchanging against other objects”.  It is quite superfluous to say that “there must be something to purchase”.  If the “object” was to be consumed by its producers as a use-value, if it was not merely a means of appropriating other objects, not a “commodity”, then obviously there could be no question of value.

First, it is a matter of objects.  But then the relation “in which two objects stand to each other” is transformed into “the relation in which two objects stand to each other as exchangeable commodities”.  After all, the objects stand only in relation of exchange or as exchangeable objects to each other.  That is why they are “commodities”, which is something different from “objects”.  On the other hand, the “relation of exchangeable commodities” is either nonsense, since “not exchangeable objects” are not commodities, or Mr. Bailey has beaten himself.  The objects are not to be exchanged in any arbitrary proportion, but are to be exchanged as commodities, that is, they are to stand to one another as exchangeable commodities, that is, as objects each of which has a value, and which are to be exchanged with one another in proportion to their equivalence.  Bailey thereby admits that the rate at which they are exchanged, that is, the power of each of the commodities to purchase the other, is determined by its value, but this value however is not determined by this power, which is merely a corollary.

If we strip the passage of everything that is wrong, nonsensical or smuggled in, then it will read like this.

But wait: we must dispose of yet another snare and piece of nonsense.  We have two sorts of expression.  An object’s “power” of exchanging, etc. (since the term “purchasing” is unjustified and makes no sense without the concept of money), and the “relation in which” an object exchanges with others.  If “power” is to be regarded as something different from “relation”, then one ought not to say that “power of exchanging” is “merely the relation”, etc.  If it is meant to be the same thing, then it is confusing to describe the same thing with two different expressions which have nothing in common with each other.  The relation of a thing to another is a relation of the two things and cannot be said to belong to either.  Power of a thing, on the contrary, is something intrinsic to the thing, although this, its intrinsic quality, may only ||824| manifest itself in its relation to other things.  For instance, power of attraction is a power of the thing itself although that power is “latent” so long as there are no things to attract.  Here an attempt is made to represent the value of the “object” as something intrinsic to it, and yet as something merely existing as a “relation”.  That is why Bailey uses first the word “power” and then the word “relation”.

Accurately expressed it would read as follows:

“If the value of an object is the relation in which it exchanges with other objects, value denotes, consequently” (viz., in consequence of the “if”), “nothing but the relation in which two objects stand to each other as exchangeable objects.”

Nobody will contest this tautology.  What follows from it, by the way, is that the “value” of an object “denotes nothing”.  For example, 1 lb. of coffee=4 lbs. of cotton.  What then is the value of 1 lb. of coffee?  4 lbs. of cotton.  And of 4 lbs. of cotton?  1 lb. of coffee, Since the value of 1 lb. of coffee is 4 lbs. of cotton, and, on the other hand, the value of 4 lbs. of cotton is 1 lb. of coffee, then it is clear that the value of 1 lb. of coffee is 1 lb. of coffee (since 4 lbs. of cotton=1 lb. of coffee), a=b, b=a, hence a=a.  What arises from this explanation is, therefore, that the value of a use-value is equal to a [certain] quantity of the same use-value.  Consequently, the value of 1 lb. of coffee is nothing else than 1 lb. of coffee.  If 1 lb. of coffee=4 lbs. of cotton, then it is clear that 1 lb. of coffee > 3 lbs. of cotton and 1 lb. of coffee < 5 lbs. of cotton.  To say that 1 lb. of coffee > 3 lbs. of cotton and < 5 lbs. of cotton, expresses a relation between coffee and cotton just as well as saying that 1 lb. of coffee=4 lbs. of cotton.  The symbol = does not express any more of a relation than does the symbol > or the symbol <, but simply a different relation.  Why is it then precisely the relation represented by the sign of equality, by =, which expresses the value of the coffee in cotton and that of the cotton in coffee?  Or is this sign of equality the result of the fact that these two amounts exchange for one another at all?  Does this sign = merely express the fact of exchange?  It cannot be denied that if coffee exchanges for cotton in any proportion whatever, they are exchanged for one another, and if the mere fact of their exchange constitutes the relation between the commodities, then the value of the coffee is equally well expressed in cotton whether it exchanges for 2, 3, 4 or 5 lbs. of cotton.  But what is then the word “relation” supposed to mean?  Coffee in itself has no “intrinsic positive” quality which determines the rate at which it exchanges for cotton.  It is not a relation which is determined by any kind of determinant intrinsic to coffee and separate from real exchange.  What is then the purpose of the word “relation”?  What is the relation?  The quantity of cotton against which a quantity of coffee is exchanged.  Then one could not speak of a relation in which it exchanges but only of a relation in which it is or has been exchanged.  For if the relation were determined before the exchange, then the exchange would be determined by “the relation” and not the relation by the exchange.  We must therefore drop the relation as signifying something which stands over and above the coffee and the cotton and is distinct from them.

[Thus the passage from Bailey cited above takes the following form:]

“If the value of an object is the quantity of another object exchanged with it, value denotes, consequently, nothing but the quantity of the other object exchanged with it.”

As a commodity, a commodity can only express its value in other commodities, since general labour-time does not exist for it as a commodity.  [Bailey believes that] if the value of one commodity is expressed in another commodity, the value of one commodity is nothing apart from this equation with another commodity.  Bailey flaunts this piece of wisdom tirelessly—and all the more tiresomely.  As he conceives it, it is a tautology, for he says [in essence]: If the value of any commodity is nothing but its exchange relation with another commodity, it is nothing apart from this relation.

He reveals his philosophical profundity in the following passage:

“As we cannot speak of the distance of any object without implying some other object, between which and the former this relation exists, so we cannot speak of the value of a commodity but in reference to another commodity ||825| compared with it.  A thing cannot be valuable in itself without reference to another thing” (Is social labour, to which the value of a commodity is related, not another thing?)  “any more than a thing can be distant in itself without reference to another thing” (loc. cit., p. 5).

If[p] a thing is distant from another, the distance is in fact a relation between the one thing and the other; but at the same time, the distance is something different from this relation between the two things.  It is a dimension of space, it is a certain length which may as well express the distance of two other things besides those compared.  But this is not all.  If we speak of the distance as a relation between two things, we presuppose something “intrinsic”, some “property” of the things themselves, which enables them to be distant from each other.  What is the distance between the syllable A and a table?  The question would be nonsensical.  In speaking of the distance of two things, we speak of their difference in space.  Thus we suppose both of them to be contained in space, to be points of space.  Thus we equalise them as being both existences of space, and only after having them equalised sub specie spatii[q] we distinguish them as different points of space.  To belong to space is their unity.*

But what is this unity of objects exchanged against each other?  This exchange is not a relation which exists between them as natural things.  It is likewise not a relation which they bear as natural things to human needs, for it is not the degree of their utility that determines the quantities in which they exchange.  What is therefore their identity, which enables them to be exchanged in certain proportions for one another?  As what do they become exchangeable?

In fact, in all this Bailey merely follows the author of the Verbal Observations.

“… it” (value) “cannot alter as to one of the objects compared, without altering as to the other…” (loc. cit., p. 5).

This again simply means that the expression of the value of one commodity in another commodity can only change as such an expression.  And the expression as such presupposes not one but two commodities.

Mr. Bailey is of the opinion that if one were to consider only two commodities—in exchange with one another—one would automatically discover the mere relativity of value, in his sense.  The fool.  As if it were not just as necessary to say, in connection with [two] commodities which exchange with one another—two products which are related to one another as commodities—in what they are identical, as it would be in the case of a thousand.  For that matter, if only two products existed, the products would never become commodities, and consequently the exchange-value of commodities would never evolve either.  The necessity for the labour in product I to manifest itself as social labour would not arise.  Because the product is not produced as an immediate object of consumption for the producers, but only as a bearer of value, as a claim, so to speak, to a certain quantity of all materialised social labour, all products as values are compelled to assume a form of existence distinct from their existence as use-values, And it is this development of the labour embodied in them as social labour, it is the development of their value, which determines the formation of money, the necessity for commodities to represent themselves in respect of one another as money—which means merely as independent forms of existence of exchange-value—and they can only do this by setting apart one commodity from the mass of commodities, and all of them measuring their values in the use-value of this excluded commodity, thereby directly transforming the labour embodied in this exclusive commodity into general, social labour.

Mr. Bailey, with his queer way of thinking which only grasps the surface appearance of things, concludes on the contrary: Only because, besides commodities, money exists, and we are so used to regarding the value of commodities not in their relation to one another but as a relation to a third, as ||826| a third relation distinct from the direct relation, is the concept of value evolved—and consequently value is transformed from the merely quantitative relation in which commodities are exchanged for one another into something independent of this relation (and this, he thinks, transforms the value of commodities into something absolute, into a scholastic entity existing in isolation from the commodities).  According to Bailey, it is not the determination of the product as value which leads to the establishment of money and which expresses itself in money, but it is the existence of money which leads to the fiction of the concept of value.  Historically it is quite correct that the search for value is at first based on money, the visible expression of commodities as value, and that consequently the search for the definition of value is (wrongly) represented as a search for a commodity of “invariable value”, or for a commodity which is an “invariable measure of value”.  Since Mr. Bailey now demonstrates that money as an external measure of value—and expression of value—has fulfilled its purpose, even though it has a variable value, he thinks he has done away with the question of the concept of value—which is not affected by the variability of the magnitudes of value of commodities—and that in fact it is no longer necessary to attribute any meaning at all to value.  Because the representation of the value of a commodity in money—in a third, exclusive commodity—does not exclude variation in the value of this third commodity, because the problem of an “invariable measure of value” disappears, the problem of the determination of value itself disappears.  Bailey carries on this insipid rigmarole for hundreds of pages, with great self-satisfaction.

The following passages, in which he constantly repeats the same thing, are, in part, illicitly copied from the “Verbal Disputes”.

Supposing that only two commodities existed, both exchangeable in proportion to the amount of labour [they contained], “If […] A should, at a subsequent period, require double the quantity of labour for its production, while B continued to require only the same, A would become of double value to B…  But although B continued to be produced by the same labour, it would not continue of the same value, for it would exchange for only half the quantity of A, the only commodity, by the supposition, with which it could be compared” (loc. cit., p. 6).

“It is from this circumstance of constant reference to other commodities” (instead of regarding value merely as a relation between two commodities) “or to money, when we are speaking of the relation between any two commodities, that the notion of value, as something intrinsic and absolute, has arisen” (op. cit., p. 8).

“What I assert is, that if all commodities were produced under exactly the same circumstances, as for instance, by labour alone, any commodity, which always required the same quantity of labour, could not be invariable in value” <that is, invariable when its value is expressed in other commodities—a tautology> “while every other commodity underwent alteration” (op. cit., pp. 20-21).

Value is nothing intrinsic and absolute… (op. cit., p. 23).[r]

“It is impossible to designate, or express the value of a commodity, except by a quantity of some other commodity” (op. cit., p. 26).

(As impossible as it is to “designate” or “express” a thought except by a quantity of syllables.  Hence Bailey concludes that a thought is—syllables.)

“Instead of regarding value as a relation between two objects, they” (Ricardo and his followers) “seem to consider it as a positive result produced by a definite quantity of labour” (op. cit., p. 30).

“Because the values of A and B, according to their doctrine, are to each other as the quantities of producing labour, or … are determined by the quantities of producing labour, they appear to have concluded, that the value of A alone, without reference to any thing else, is as the quantity of its producing labour.  There is no meaning certainly in this last proposition…” (op. cit., pp. 31-32).

They speak of “value as a sort of general and independent property” (op. cit., p. 35).

“The value of a commodity must be its value in something” (loc. cit.).

We can see why it is so important for Bailey to limit value to two commodities, to understand it as the relation between two commodities, But a difficulty now arises:

“The value of a commodity denoting its relation of exchange to some other commodity”

(what is in this context the purpose of the “relation ||827| of exchange”?  Why not its “exchange”? But at the same time exchange is intended to express a definite relation, not merely the fact of exchange, Hence value is equal to relation in exchange)

“… we may speak of it as money-value, corn-value, cloth-value, according to the commodity with which it is compared; and hence there are a thousand different kinds of value, as many kinds of value as there are commodities in existence, and all are equally real and equally nominal” (op. cit., p.39).

Here we have it.  Value equals price.  There is no difference between them.  And there is no “intrinsic” difference between money price and any other expression of price, although it is the money price and not the cloth price, etc., which expresses the nominal value, the general value of the commodity.

But although the commodity has a thousand different kinds of value, or a thousand different prices, as many kinds of value as there are commodities in existence, all these thousand expressions always express the same value.  The best proof of this is that all these different expressions are equivalents which not only can replace one another in this expression, but do replace one another in exchange itself.  This relation of the commodity, with the price of which we are concerned, is expressed in a thousand different “relations in exchange” to all the different commodities and yet always expresses the same relation.  Thus this relation, which remains the same, is distinct from its thousand different expressions, or value is different from price, and the prices are only expressions of value: money price is its general expression, other prices are particular expressions.  It is not even this simple conclusion that Bailey arrives at.  In this context Ricardo is not a fictionist but Bailey is a fetishist in that he conceives value, though not as a property of the individual object (considered in isolation), but as a relation of objects to one another, while it is only a representation in objects, an objective expression, of a relation between men, a social relation, the relationship of men to their reciprocal productive activity.

[β) Confusion with Regard to Profit and the Value of Labour]

[Bailey says the following about the value of labour.]

“Hence Mr. Ricardo, ingeniously enough, avoids a difficulty, which, on a first view, threatens to encumber his doctrine, that value depends on the quantity of labour employed in production.  If this principle is rigidly adhered to, it follows, that the value of labour depends on the quantity of labour employed in producing it—which is evidently absurd.  By a dexterous turn, therefore, Mr. Ricardo makes the value of labour depend on the quantity of labour required to produce wages, or, to give him the benefit of his own language, he maintains, that the value of labour is to be estimated by the quantity of labour required to produce wages, by which he means, the quantity of labour required to produce the money or commodities given to the labourer.  This is similar to saying, that the value of cloth is to be estimated, not by the quantity of labour bestowed on its production, but by the quantity of labour bestowed on the production of the silver for which the cloth is exchanged” (op. cit., pp. 50-51).

This is a justified criticism of Ricardo’s mistake of making capital exchange directly with labour instead of with labour-power.  It is the same objection which we have already come across in another form.[s] Nothing else.  Bailey’s comparison cannot be applied to labour-power.  It is not cloth, but an organic product such as mutton, that he ought to compare with living lab our-power.  Apart from the labour involved in tending live-stock and that required for the production of their food, the labour required for their production is not to be understood as meaning the labour which they themselves perform in the act of consumption, the act of eating, drinking, in short, the appropriation of those products or means of subsistence.  It is just the same with labour-power.  [What does] the labour required for its production consist of?  Apart from the labour involved in developing a person’s labour—power, his education, his apprenticeship—and this hardly arises in relation to unskilled labour—its reproduction costs no labour apart from that involved in the reproduction of the means of subsistence which the labourer consumes.  The appropriation of these means of subsistence is not “labour”.  ||828| Any more than the labour contained in the cloth, in addition to the labour of the weaver and the labour which is contained in the wool, the dye-stuff, etc., comprises the chemical or physical action of the wool in absorbing the dye-stuff, etc., an action which corresponds to the appropriation of the means of subsistence by the worker or the cattle.

Bailey then seeks to invalidate Ricardo’s law that the value of labour and profit stand in inverse proportion to one another.  He seeks, moreover, to invalidate that part of it which is correct.  Like Ricardo, he identifies surplus-value with profit.  He does not mention the one possible exception to this law, namely, when the working-day is lengthened and workers and capitalists share equally in that prolongation, but even then, since the value of the working power will be consumed more quickly—in fewer years—the surplus-value rises at the expense of the working-man’s life, and his working power depreciates in comparison with the surplus-value it yields to the capitalist.

Bailey’s reasoning is most superficial.  Its starting-point is his conception of value.  The value of the commodity is the expression of its value in a certain quantity of other values in use (the use-value of other commodities).  The value of labour is thus equal to the quantity of other commodities (use-values) for which it is exchanged.  (The real problem, how it is possible to express the value in exchange of A in the value in use of B—does not even occur to him.)  So long, therefore, as the worker receives the same quantity of commodities, the value of labour remains unchanged, because, as before, it is expressed in the same quantity of other useful things.  Profit, on the other hand, expresses a relation to capital, or else to the total product.  The portion received by the worker can, however, remain the same although the proportion received by the capitalist rises if the productivity of labour increases.  It is not clear why, in dealing with capital, we suddenly come to a proportion and of what use this proportion is supposed to be to the capitalist, since the value of what he receives is determined not by the proportion, but by its “expression in other commodities”.

The point he makes here has, in fact, already been mentioned by Malthus.[t] Wages are equal to a quantity of use-values.  Profit, on the other hand, is (but Bailey must avoid saying so) a relation of value.  If I measure wages according to use-value and profit according to exchange-value, it is quite evident that neither an inverse nor any other kind of relation exists between them, because I should then be comparing incommensurable magnitudes, things which have nothing in common.

But what Bailey says here about the value of labour applies—according to his principle—to the value of every other commodity as well.  It is nothing but a certain quantity of other things exchanged against it.  If I receive 20 lbs. of twist for £1, then [according to this theory] the value of the £1 always remains the same, and will therefore be always paid, although the labour required to produce 1 lb. of twist can on one occasion be double that required on another.  The most ordinary merchant does not believe that he is getting the same value for his £1 when he receives 1 quarter of wheat for it in a period of famine and the same amount in a period of glut.  But the concept of value ends here.  And there remains only the unexplained and inexplicable fact that a quantity of A is exchanged against a quantity of B in an arbitrary proportion.  And whatever that proportion may be it is an equivalent.  Even Bailey’s formula, the value of A expressed in B, thus becomes quite meaningless.  If the value of A is expressed in B, the same value is supposed to be expressed, at one time in A, and at another time in B, so that, when it is expressed in B, the value of A remains the same as it was before.  But according to Bailey there is no value of A that could be expressed in B, because neither A nor B have a value apart from that expression.  The value of A expressed in B must be something quite different from the value of A in C, as different as B and C are.  It is not the same value, identical in both expressions, but there are two relations of A which have nothing in common with each other, and of which it would be nonsense to say that they are equivalent expressions.[u]

||829| “… a rise or fall of labour implies an increase or decrease in the quantity of the commodity given in exchange for it” (op. cit., p. 62).

Nonsense!  [From Bailey’s standpoint] there can be no rise or fall in the value of labour, nor in the value of any other thing.  For one A I get today 3 Bs, tomorrow 6 Bs and the day after tomorrow 2 Bs.  But [according to Bailey] in all these cases the value of A is nothing but the quantity of B for which it has been exchanged.  It was 3 Bs, it is now 6 Bs.  How can its value be said to have risen or fallen?  The A expressed in 3 Bs had a different value from that expressed in 6 Bs or 2 Bs.  But then it is not the identical A which at the identical time has been exchanged for 3 or 2 or 6 Bs.  The identical A at the identical time has always been expressed in the same quantity of B.  It is only with regard to different moments of time that it could be said the value of A had changed.  But it is only with “contemporaneous” commodities that A can be exchanged, and it is only the fact (not even the mere possibility of exchange) of exchange with other commodities which makes [according to Bailey] A a value.  It is only the actual “relation in exchange” which constitutes its value; and the actual “relation in exchange” can of course only take place for the same A at the identical time.  Bailey therefore declares the comparison of commodity values at different periods to be nonsense.  But at the same time he should also have declared the rise or fall of value—which is impossible if there is no comparison between the value of a commodity at one time and its value at another time—to be nonsense and consequently, also, the “rise or fall in the value of labour”.

“Labour is an exchangeable thing, or one which commands other things in exchange; but the term profits denotes only a share or proportion of commodities, not an article which can be exchanged against other articles.  When we ask whether wages have risen, we mean, whether a definite portion of labour exchanges for a greater quantity of other things than before” (loc. cit., pp. 62-63).

(Thus when corn becomes dearer, the value of labour falls because less corn is exchanged for it.  On the other hand, if cloth becomes cheaper at the same time, the value of labour rises simultaneously, because more cloth can be exchanged for it.  Thus the value of labour both rises and falls at the same time and the two expressions of its value—in corn and in cloth—are not identical, not equivalent, because its increased value cannot be equal to its reduced value.)

“… but when we ask whether profits have risen, we … mean … whether the gain of the capitalist bears a higher ratio to the capital employed…” (loc. cit., p. 63).

“… the value of labour does not entirely depend on the proportion of the whole produce which is given to the labourers in exchange for their labour, but also on the productiveness of […] labour” (loc. cit., pp. 63-64).

“The proposition, that when labour rises profits must fall, is true only when its rise is not owing to an increase in its productive powers” (loc. cit., p. 64).

“… if this productive power be augmented, that is, if the same labour produce more commodities in the same time, labour may rise in value without a fall, nay even with a rise of profits” (loc. cit., p. 66).

(Accordingly it can also be said of every other commodity that a rise in its value does not imply a fall in the value of the other commodity with which it exchanges, nay, may even imply a rise in value on the other side.  For instance, supposing the same labour which produced 1 quarter of corn, now produces 3 quarters.  The 3 quarters cost £1, as the one quarter did before.  If 2 quarters are now exchanged for £1, the value of money has risen, because it is expressed in 2 quarters instead of one.  Thus the purchaser of corn gets a greater value for his money.  But the seller who sells for £1 what has cost him only ²/₃ [of £1] gains ¹/₃.  And thus the value of his corn has risen at the same time that the money price of corn has fallen.)

||830| “Whatever the produce of the labour of six men might be, whether 100 or 200 or 300 quarters of corn, yet so long as the proportion of the capitalist was one-fourth of the produce, that fourth part estimated in labour would be invariably the same.”

(And so would the ³/₄ of the produce accruing to the labourer, if estimated in labour.)

“Were the produce 100 quarters, then, as 75 quarters would be given to 6 men, the 25 accruing to the capitalist would command the labour of 2 men;”

(and that given to the labourers would command the labour of 6 men)

“if the produce were 300 quarters, the 6 men would obtain 225 quarters, and the 75 falling to the capitalist would still command 2 men and no more.”

(Likewise the 225 quarters falling to the 6 men would still command 6 men and no more.)  (Why does the almighty Bailey then forbid Ricardo to estimate the portion of the men, as well as that of the capitalist, in labour, and compare their mutual value as expressed in labour?)

“Thus a rise in the proportion which went to the capitalist would be the same as an increase of the value of profits estimated in labour,”

(How can he speak of the value of profits and an increase in their value, if “profit … does not denote an article which can be exchanged against other articles” (see above) and, consequently, denotes no “value”?  And, on the other hand, is a rise in the proportion which went to the capitalist possible without a fall in the proportion that goes to the labourer?)

“or, in other words, an increase in their power of commanding labour” (op. cit., p. 69).

(And is this increase in the power of the capitalist to appropriate the labour of others not exactly identical with the decrease in the power of the labourer to appropriate his own labour?)

“Should it be objected to the doctrine of profits and the value of labour rising at the same time, that as the commodity produced is the only source whence the capita list and the labourer can obtain their remuneration, it necessarily follows that what one gains the other loses, the reply is obvious.  So long as the product continues the same, this is undeniably true; but it is equally undeniable, that if the product be doubled the portion of both may be increased, although the proportion of one is lessened and that of the other augmented” (loc. cit., p. 70).

(This is just what Ricardo says.  The proportion of both cannot increase, and if the portion of both increases, it cannot increase in the same proportion, as otherwise portion and proportion would be identical.  The proportion of the one cannot increase without that of the other decreasing.  However, that Mr. Bailey calls the portion of the labourer “value” of “wages”, and the proportion [of the capitalist] value of “profits”, in other words, that the same commodity has two values for him, one in the hands of the labourer, and the other in the hands of the capitalist, is nonsense of his own.)

“So long as the product continues the same, this is undeniably true; but it is equally undeniable, that if the product be doubled the portion of both may be increased, although the proportion of one is lessened and that of the other augmented.  Now it is an increase in the portion of the product assigned to the labourer which constitutes a rise in the value of his labour…”

(because here we understand by value a certain quantity of articles)

“… but it is an increase in the proportion assigned to the capitalist which constitutes a rise in […] profits,”

(because here we understand by value the same articles not estimated by their quantity, but by the labour worked up in them)

“whence”

(that is, because of the absurd use of two measures, in the one case articles, in the other case the value of the same articles)

“it clearly follows, that there is nothing inconsistent in the supposition of a simultaneous rise in both” (loc. cit., p. 70).

This absurd argument against Ricardo is quite ||831| futile since he merely declares that the value of the two portions must rise and fall in inverse proportion to one another.  It merely amounts to a repetition by Bailey of his proposition that value is the quantity of articles exchanged for an article.  In dealing with profit he was bound to find himself in an embarrassing position.  For here, the value of capital is compared with the value of the product.  Here he seeks refuge in taking value to mean the value of an article estimated in labour (in the Malthusian manner).

“Value is a relation between contemporary commodities, because such only admit of being exchanged for each other; and if we compare the value of a commodity at one time with its value at another, it is only a comparison of the relation in which it stood at these different times to some other commodity” (op. cit., p. 72).

Consequently, as has been stated, value can neither rise nor fall, for this always involves comparing the value of a commodity at one time with its value at another.  A commodity cannot be sold below its value any more than above it, for its value is what it is sold for.  Value and market price are identical.  In fact one cannot speak either of “contemporary” commodities, or of present values, but only of past ones.  What is the value of 1 quarter of wheat?  The £1 for which it was sold yesterday.  For its value is only what one gets in exchange for it, and as long as it is not exchanged, its “relation to money” is only imaginary.  But as soon as the exchange has been transacted, we have £1 instead of the quarter of wheat and we can no longer speak of the value of the quarter of wheat.  In comparing values at different periods, Bailey has in mind merely academic researches into the different values of commodities, for example in the eighteenth and the sixteenth centuries.  There the difficulty arises from the fact that the same monetary expression of value—owing to the vicissitudes of the value of money itself—denotes different values [at different times].  The difficulty here lies in reducing the money price to value.  But what a fool he is!  Is it not a fact that, in the process of circulation or the process of reproduction of capital, the value of one period is constantly compared with that of another period, an operation upon which production itself is based?

Mr. Bailey does not understand at all what the expressions—to determine the value of commodities by labour-time or by the value of labour—mean.  He simply does not understand the difference.

“… I beg not to be understood as contending, either that the values of commodities are to each other as the quantities of labour necessary for their production, or that the values of commodities are to each other as the values of the labour: all that I intend to insist upon is, that if the former is true, the latter cannot be false…” (op. cit., p. 92).

The determination of the value of commodities by the value of another commodity (and insofar as they are determined by the “value of labour”, they are determined by another commodity; for value of labour presupposes labour as a commodity) and its determination by a third entity, which has neither value nor is itself a commodity, but is the substance of value, and that which turns products into commodities, are for Bailey identical.  In the first case, it is a question of a measure of the value of commodities, that is, in fact, of money, of a commodity in which the other commodities express their value.  In order that this can happen, the values of the commodities must already be presupposed.  The commodity which measures as well as that to be measured must have a third element in common.  In the second case, this identity itself is first established; later it is expressed in the price, either money price or any other price.

Bailey identifies the “invariable measure of value” with the search for an immanent measure of value, that is, the concept of value itself.  So long as the two are confused it is even a reasonable instinct which leads to the search for an “invariable measure of value”.  Variability is precisely the characteristic of value.  The term “invariable” expresses the fact that the immanent measure of value must not itself be a commodity, a value, but rather something which constitutes value and which is therefore also the immanent measure of value.  Bailey demonstrates ||832| that commodity values can find a monetary expression and that, if the value relation of commodities is given, all commodities can express their value in one commodity, although the value of this commodity may change.  But it nevertheless always remains the same for the other commodities at a given time, since it changes simultaneously in relation to all of them.  From this he concludes that no value relation between commodities is necessary nor is there any need to look for one.  Because he finds it reflected in the monetary expression, he does not need to “understand” how this expression becomes possible, how it is determined, and what in fact it expresses.

These remarks, in general, apply to Bailey as they do to Malthus, since he believes that one is concerned with the same question, on the same plane, whether one makes quantity of labour or value of labour the measure of value.  In the latter case, one presupposes the values whose measure is being sought, that is to say, their external measure, their representation as value.  In the first case one investigates the genesis and immanent nature of value itself.  In the second, the development of the commodity into money or the form which exchange-value acquires in the process of the exchange of commodities.  In the first, we are concerned with value, independent of this representation, or rather antecedent to this representation.  Bailey has this in common with the other fools: to determine the value of commodities means to find their monetary expression, an external measure of their value.  They say, however, impelled by an instinctive thought, that this measure then must have invariable value, and must itself therefore stand outside the category of value, whereas Bailey says that one does not need to understand it, since one does in fact find the expression of value in practice, and this expression itself has and can have variable value without prejudice to its function.

In particular, he himself has informed us that 100, 200 or 300 quarters can be the product of the labour of 6 men, that is, of the same quantity of labour, whereas “value of labour” only means for him the portion of the 100, 200 or 300 quarters which the 6 men receive.  This could be 50, 60 or 70 quarters per man.  The quantity of labour and the value of the same quantity of labour are therefore, according to Bailey himself, very different expressions.  And how can it be the same if the value is expressed first in one thing and then in something essentially different?  If the same labour which formerly produced 3 quarters of corn now produces 1 quarter, while the same labour which formerly produced 20 yards of cloth (or 3 quarters of corn) still produces 20 yards, then, reckoned according to labour-time, 1 quarter of corn is now equal to 20 yards of cloth, or 20 yards of cloth to 1 quarter of corn, and 3 quarters of corn equal 60 yards of cloth instead of 20.  Thus the values of the quarter of corn and the yard of linen have been altered relatively.  But they have by no means been altered according to the value of labour, for 1 quarter of corn and 20 yards of cloth remain the same use-values as before.  And it is possible that 1 quarter of corn does not command a larger quantity of labour than before.

If we take a single commodity, then Bailey’s assertion makes no sense whatever.  If the labour-time required for the production of shoes decreases and now only one-tenth of the labour-time formerly required is necessary, then the value of shoes drops to one-tenth of the former value; and this also holds true when the shoes are compared with, or expressed in, other commodities, provided the labour required for their production has remained the same or has not decreased at the same rate.  Nevertheless, the value of labour—for example the daily wage in shoemaking as well as in all other industries—may have remained the same; or it may even have increased.  Less labour is contained in the individual shoe, hence also less paid labour.  But when one speaks of the value of labour, one does not mean that for one hour’s labour, i.e., for a smaller quantity of labour, less is paid than for a greater quantity.  Bailey’s proposition could have meaning only in relation to the total product of capital.  Suppose 200 pairs of shoes are the product of the same capital (and the same labour) which formerly produced 100 pairs.  In this case, the value of the 200 pairs is the same as [previously] that of 100 pairs.  And it could be said that the 200 pairs of shoes are to 1,000 yards of linen (say the product of £200 of capital) as the value of the labour set in motion by the two amounts of capital.  In what sense?  In the sense in which it would also apply ||833| to the relation of the individual shoe to the single yard of linen?

The value of labour is the part of the labour-time contained in a commodity which the worker himself appropriates; it is the part of the product in which the labour-time which belongs to the worker himself is embodied.  If the entire value of a commodity is reduced to paid and unpaid labour-time—and if the rate of unpaid to paid labour is the same, that is, if surplus-value constitutes the same proportion of total value in all commodities—then it is clear that if the ratio of one commodity to another is proportional to the total quantity of labour they contain, they must also represent equal proportionate parts of these total quantities of labour, and their ratio must therefore also be as that of the paid labour-time in one commodity to the paid labour-time in the other.

C [commodity]: C’=TLT (total labour-time [embodied in C]) to TLT’ (total labour-time [embodied in C’]).  TLT/x= the paid labour-time in C, and TLT’/x= the paid labour-time in C’, since it is presupposed that the paid labour-time in both commodities constitutes the same proportional part of the total labour-time.

C:C’=TLT : TLT’

TLT : TLT’ = TLT/x:TLT’/x

therefore C : C’=TLT/x : TLT’/x

or the commodities are to one another as the quantities of paid labour-time contained in them, that is, as the values of the labour contained in them.

The value of labour is then, however, not determined in the way Bailey would like, but by the labour-time [contained in the commodity].

Further, disregarding the conversion of values into prices of production and considering only the values themselves, capitals consist of different proportions of variable and constant capital.  Hence, as far as values are concerned, the surplus-values are not equal, or the paid labour does not form the same proportion of the total labour advanced.

In general, wages—or values of labour—would here be indices of the values of commodities, not as values, not insofar as wages rise or fall, but insofar as the quantity of paid labour—represented by wages—contained in a commodity would be an index of the total quantity of the labour contained in the corresponding commodities.

In a word, the point is that, if the values of commodities are to one another as LT to LT’ (the amounts of labour-time contained in them), then their ratio is likewise as LT/x to LT’/x, i.e., the amounts of paid labour-time embodied in them, if the proportion of the paid labour-time to the unpaid is the same in all commodities, that is, if the paid labour-time is always equal to the total labour-time, whatever this may be, divided by x.  But the “if” does not correspond to the real state of affairs.  Supposing that the workers in different industries work the same amount of surplus labour-time, the relation of paid to actually employed labour-time is nevertheless different in different industries, because the ratio of immediate labour employed to accumulated labour employed is different.  [Let us take two capitals consisting] for example, the one of 50v [variable] and 50c [constant] and the other of 10v and 90c.  In both cases, let the unpaid labour amount to one-tenth.  [The value of] the first commodity would accordingly be 105, [of] the second 101.  The paid labour-time would be equal to one-half of the labour advanced in the first case, and only to one-tenth in the second.

||834|Bailey says:

“… if commodities are to each other as the quantities, they must also be to each other as the va1ues of the producing labour; for the contrary would necessarily imply, that the two commodities A and B might be equal in value, although the value of the labour employed in one was greater or less than the value of the labour employed in the other; or that A and B might be unequal in value, if the labour employed in each was equal in value.  But this difference in the value of two commodities, which were produced by labour of equal value, would be inconsistent with the acknowledged equality of profits, which Mr. Ricardo maintains in common with other writers” (op. cit., pp. 79-80).

In this last phrase, Bailey stumbles unconsciously on a real objection to Ricardo, who directly identifies profit with surplus-value and values with cost-prices.  Correctly stated, it is-if the commodities are sold at their value, they yield unequal profits, for then profit is equal to the surplus-value embodied in them.  And this is correct.  But this objection does not refer to the theory of value, but to a blunder of Ricardo’s in applying this theory.

How little Bailey himself, in the above passage, can have correctly understood the problem, is shown in the following statement:

Ricardo on the other hand maintains “that labour may rise and fall in value without affecting the value of the commodity.  This is obviously a very different proposition from the other, and depends in fact on the falsity of the other, or on the contrary proposition” (loc. cit., p. 81).

The fool himself previously asserted that the result of the same labour may be 100, 200 or 300 quarters [of corn].  This determines the relation of a quarter to other commodities irrespective of the changing value of labour, that is, irrespective of how much of the 100, 200 or 300 quarters falls to the labourer himself.  The fool would have shown some consistency if he had said: the values of labour may rise or fall, nevertheless the values of commodities are as the values of labour, because—according to a false assumption—the rise or fall of wages is general, and the value of wages always forms the same proportionate part of the total quantity of labour employed.

[γ) Confusion of Value and Price.  Bailey’s Subjective Standpoint]

[Bailey says:]

“…the capability of expressing the values of commodities has nothing to do with the constancy of their values…”

<Indeed not!  but it has much to do with first finding the value, before expressing it; finding in what way the values in use, so different from each other, fall under the common category and denomination of value, so that the value of one commodity may be expressed in the other>

“… either to each other or to the medium employed; neither has the capability of comparing these expressions of value anything to do with it.”

<If the values of different commodities are expressed in the same third commodity, however variable its value may be, it is of course very easy to compare these expressions, which already have a common denomination.>

“Whether A is worth 4 B or 6 B”

<the difficulty consists in equating A with a portion of B; and this is only possible if there exists a common element for A and B, or if A and B are different representations of the same element.  If all commodities are to be expressed in gold, or money, the difficulty remains the same.  There must be an element common to gold and to each of the other commodities>

“… and whether C is worth 8 B or 12 B, are circumstances which make no difference in the power of expressing the value of A and C in B, and certainly no difference in the power of comparing the value of A and C when expressed” (op. cit., pp. 104-05).

But how [is it possible] to express A in B or C?  In order to express “ them” in each other, or, what amounts to the same thing, to treat them as equivalent expressions of the same unity, A, B, C must all be considered as something different from what they are as things, as products, as values in use.  A=4 B.  Then the value of A is expressed in 4 B, and the value of 4 B in A, so that both sides express the same.  They are equivalents.  They are both equal expressions of value.  It would be the same if they were unequal ones or A greater than 4 B, A smaller than 4 B.  In all these cases they are, insofar ||835| as they are values, only different or equal in quantity, but they are always quantities of the same quality.  The difficulty is to find this quality.

“The requisite condition in the process is, that the commodities to be measured should be reduced to a common denomination”

<for example, in order to compare a triangle with any of the other polygons it is only necessary to transform the latter into triangles, to express them in triangles.  But to do this the triangle and the polygon are in fact supposed to be something identical, different figures of the same thing—space>

“… which may be done at all times with equal facility; or rather it is ready done to our hands, since it is the prices of commodities which are recorded, or their relations in value to money” (op. cit., p. 112).

“Estimating value is the same thing as expressing it…” (op. cit., p. 152).

We have the fellow here.  We find the values measured, expressed in the prices.  We can therefore [asserts Bailey] content ourselves with not knowing what value is.  He confuses the development of the measure of value into money and further the development of money as the standard of price with the discovery of the concept of value itself in its development as the immanent measure of commodities in exchange.  He is right in thinking that this money need not be a commodity of invariable value; from this he concludes that no separate determination of value independent of the commodity itself is necessary.

As soon as the value of commodities, as the element they have in common, is given, the measurement of their relative value and the expression of this value coincide.  But we can never arrive at the expression so long as we do not find the common factor, which is different from the immediate existence of the commodities.

This is shown by the very example he gives, the distance between A and B.[v] When one speaks of their distance one already presupposes that they are points (or lines) in space.  Having been reduced to points, and points of the same line, their distance may be expressed in inches, or feet, etc.  The element the two commodities A and B have in common is, at first sight, their exchangeability.  They are “exchangeable” objects.  As “exchangeable” objects they are magnitudes of the same denomination.  But this “their” existence as “exchangeable” objects must be different from their existence as values in use.  What is it?

Money is already a representation of value, and presupposes it.  As the standard of price money, for its part, already presupposes the (hypothetical) transformation of the commodity into money.  If the values of all commodities are represented in money prices, then one can compare them, they are in fact already compared.  But for the value to be represented as price, the value of commodities must have been expressed previously as money.  Money is merely the form in which the value of commodities appears in the process of circulation.  But how can one express x cotton in y money?  This question resolves itself into this—how is it at all possible to express one commodity in another, or how to present commodities as equivalents?  Only the elaboration of value, independent of the representation of one commodity in another, provides the answer.

It is a “…  mistake …  that the relation of value can exist between commodities at different periods, which is in the nature of the case impossible; and if no relation exists there can be no measurement of it” (op. cit., p. 113).

We have already had the same nonsense before.[w] “The relation of value between commodities at different periods” already exists when money acts as means of payment.  The whole circulation process is a perpetual comparison of values of commodities at different periods.

“… if […] it” (money) “is not a good medium of comparison between commodities at different periods [it asserts] its incapability of performing a function in a case where there is no function for it to perform”[x] (op. cit., p. 118).

Money has this function to perform as means of payment and as treasure.

All this is simply copied from the “verbal observer” and in fact the secret of the whole nonsense oozes out in the following phrase which has also convinced me that the Verbal Observations,[y] which were very carefully concealed by Bailey, were used by him in the manner of a plagiarist.

||836| “Riches are the attribute of men, value is the attribute of commodities.  A man or a community is rich; a pearl or a diamond is valuable” (op. cit., p. 165).

A pearl or a diamond is valuable as a pearl or a diamond, that is, by their qualities, as values in use for men, that is, as riches.  But there is nothing in a pearl or a diamond by which a relation of exchange between them is given, etc.

Bailey now becomes a profound philosopher:

Difference between labour as cause and measure, and in general between cause and measure of value (op. cit., p. 170 et seq.).[z]

There is, in actual fact, a very significant difference (which Bailey does not notice) between “measure” (in the sense of money) and “cause of value”.  The “cause” of value transforms use-values into value.  The external measure of value already presupposes the existence of value.  For example, gold can only measure the value of cotton if gold and cotton—as values—possess a common factor which is different from both.  The “cause” of value is the substance of value and hence also its immanent measure.

“Whatever circumstances … act with assignable influence, whether mediately or immediately, on the mind in the interchange of commodities, may be considered as causes of value” (op. cit., pp. 182-83).

This in fact means nothing more than: the cause of the value of a commodity or of the fact that two commodities are equivalent are the circumstances which cause the seller, or perhaps both the buyer and the seller, to consider something to be the value or the equivalent of a commodity.  The “circumstances” which determine the value of a commodity are by no means further elucidated by being described as circumstances which influence the “mind” of those engaging in exchange, as circumstances which, as such, likewise exist (or perhaps they do not, or perhaps they are incorrectly conceived) in the consciousness of those engaging in exchange.

These same circumstances (independent of the mind, but influencing it), which compel the producers to sell their products as commodities—circumstances which differentiate one form of social production from another—provide their products with an exchange-value which (also in their mind) is independent of their use-value.  Their “mind”, their consciousness, may be completely ignorant of, unaware of the existence of, what in fact determines the value of their products or their products as values.  They are placed in relationships which determine their thinking but they may not know it.  Anyone can use money as money without necessarily understanding what money is.  Economic categories are reflected in the mind in a very distorted fashion.  He [Bailey] transfers the problem into the sphere of consciousness, because his theory has got stuck.

Instead of explaining what he himself understands by “value” (or “cause of value”) Bailey tells us that it is something which buyers and sellers imagine in the act of exchange.

In fact, however, the following considerations are the basis of the would-be philosophical proposition.

1) The market price is determined by various circumstances which express themselves in the relation of demand and supply and which, as such, influence “the mind” of the operators on the market.  This is a very important discovery!

2)  In connection with the conversion of commodity values into cost-prices, “various circumstances” are taken into account which as “reasons for compensation” influence the mind or are reflected in the mind.  All these reasons for compensation, however, affect only the mind of the capitalist as capitalist and stem from the nature of capitalist production itself, and not from the subjective notions of buyers and sellers.  In their mind they exist rather as self-evident “eternal truths”.

Like his predecessors, Bailey catches hold of Ricardo’s confusion of values and cost-prices in order to prove that value is not determined by labour, because cost-prices are deviations from values.  Although this is quite correct in relation to Ricardo’s identification [of values with cost-prices], it is incorrect as far as the question itself is concerned.

In this context, Bailey quotes first from Ricardo himself about the change in the relative values of ||837| commodities in consequence of a rise in the value of labour.  He quotes further the “effect of time” (different times of production though the labour-time remains unchanged), the same case which aroused scruples in Mill.[aa] He does not notice the real general contradiction—the very existence of an average rate of profit, despite the different composition of capital [in different industries], its different times of circulation, etc.  He simply repeats the particular forms in which the contradiction appears, and which Ricardo himself—and his followers—had already noticed.  Here he merely echoes what has been previously said but does not advance criticism a step forward.

He emphasises further that the costs of production are the main cause of “value”, and therefore the main element in value.  However, he stresses correctly—as was done [by other writers] after Ricardo—that the concept of production costs itself varies.  He himself in the last analysis expresses his agreement with Torrens that value is determined by the capital advanced, which is correct in relation to cost-prices but meaningless if it is not evolved on the basis of value itself, that is, if the value of a commodity is to be derived from a more developed relationship, the value of capital, and not the other way round.

His last objection is this: The value of commodities cannot be measured by labour-time if the labour-time in one trade is not the same as in the others, so that the commodity in which, for example, 12 hours of an engineer’s labour is embodied has perhaps twice the value of the commodity in which 12 hours of the labour of an agricultural labourer is embodied.  What this amounts to is the following: A simple working-day, for example, is not a measure of value if there are other working-days which, compared with days of simple labour, have the effect of composite working-days.  Ricardo showed that this fact does not prevent the measurement of commodities by labour-time if the relation between unskilled and skilled labour is given.  He has indeed not described how this relation develops and is determined.  This belongs to the definition of wages, and, in the last analysis, can be reduced to the different values of labour power itself, that is, its varying production costs (determined by labour-time).

The passages in which Bailey expresses what has been summarised above are:

“It is not, indeed, disputed, that the main circumstance, which  determines the quantities in which  articles of this class” (that is, where no monopoly exists and where it is possible to increase output by expanding industry)

“are exchanged, is the cost of production; but our best economists do not exactly agree on the meaning to be attached to this term; some contending that the quantity of labour expended on the production of an article constitutes its cost; others, that the capital employed upon it is entitled to that appellation” (op. cit., p. 200).

“What the labourer produces without capital, costs him his labour; what the capitalist produces costs him his capital” (p. 201).

(This is the factor which determines Torrens’s views.  The labour which the capitalist employs, costs him nothing apart from the capital he lays out in wages.)

“ … the mass of commodities are determined in value by the capital expended upon them”  (p. 206).

[Bailey raises the following objections] to the determination of the value of commodities simply by the quantity of labour contained in them:

“Now this cannot be true if we can find any instances of the following nature: 1) Cases in which two commodities have been produced by an equal quantity of labour, and yet sell for different quantities of money.  2) Cases in which two commodities, once equal in value, have become unequal in value, without any change in the quantity of labour respectively employed in each” (p. 209).

“It is no answer” (with regard to cases of the first kind) “to say, with Mr. Ricardo, that ‘the estimation in which different qualities of labour are held, comes soon to be adjusted in the market with sufficient precision for all practical purposes’; or with Mr. Mill, that ‘in estimating equal quantities of labour, an allowance would, of course, be included for different degrees of hardness and skill’.  Instances of this kind entirely destroy the integrity of the rule” (p. 210).

“There are only two possible methods of comparing one quantity of labour with another; one is to compare them by the time expended, the other by the results produced” (the latter is done in the piece-rate system).  “The former is applicable to all kinds of labour; the latter can be used only in comparing labour bestowed on similar articles.  If therefore, in estimating two different sorts of work, the time spent will not determine the proportion between the ||839| quantities of labour, it must remain undetermined and undeterminable” (p. 215).

With reference to 2: “Take any two commodities of equal value, A and B, one produced by fixed capital and the other by labour, without the intervention of machinery; and suppose, that without any change whatever in the fixed capital or the quantity of labour, there should happen to be a rise in the value of labour; according to Mr. Ricardo’s own showing, A and B would be instantly altered in their relation to each other; that is, they would become unequal in value” (pp. 215-16).

“To these cases we may add the effect of time on value.  If a commodity take more time than another for its production, although no more capital and labour, its value will be greater.  The influence of this cause is admitted by Mr. Ricardo, but Mr. Mill contends…” and so on (loc. cit. [p. 217]).

Finally Mr. Bailey remarks, and this is the only new contribution he makes in this respect:

“… although we have arranged commodities under three divisions,”[bb]  <this, i.e., the three divisions, is again taken from the author of the Verbal Observations> (these three divisions depend on the existence of absolute monopoly, limited monopoly, as is the case with corn, or completely free competition) “yet they are all, not only promiscuously exchanged for each other, but blended in production.  A commodity, therefore, may owe part of its value to monopoly, and part to those causes which determine the value of unmonopolised products.  An article, for instance, may be manufactured amidst the freest competition out of a raw material, which a complete monopoly enables its producer to sell at six times the actual cost” (p. 223).

“In this case it is obvious, that although the value of the article might be correctly said to be determined by the quantity of capital expended upon it by the manufacturer, yet no analysis could possibly resolve the value of the capital into quantity of labour” (pp. 223-24).

This remark is correct.  But monopoly does not concern us here, where we are dealing with two things only, value and cost-price.  It is clear that the conversion of value into cost-price works in two ways.  First, the profit which is added to the capital advanced may be either above or below the surplus-value which is contained in the commodity itself, that is, it may represent more or less unpaid labour than the commodity itself contains.  This applies to the variable part of capital and its reproduction in the commodity.  But apart from this, the cost-price of constant capital—or of the commodities which enter into the value of the newly produced commodity as raw materials, auxiliary materials and machinery [or] labour conditions—may likewise be either above or below its value.  Thus the commodity comprises a portion of the price which differs from value, and this portion is independent of the quantity of labour newly added, or of the labour whereby these conditions of production with given cost-prices are transformed into a new product.  It is clear that what applies to the difference between the cost-price and the value of the commodity as such—as a result of the production process—likewise applies to the commodity insofar as, in the form of constant capital, it becomes an ingredient, a pre-condition, of the production process.  Variable capital, whatever difference between value and cost-price it may contain, is replaced by a certain quantity of labour which forms a constituent part of the value of the new commodity, irrespective of whether its price expresses its value correctly or stands above or below the value.  On the other hand, the difference between cost-price and value, insofar as it enters into the price of the new commodity independently of its own production process, is incorporated into the value of the new commodity as an antecedent element.

The difference between the cost-price and the value of the commodity is thus brought about in two ways: by the difference between the cost-price and the values of commodities which constitute the pre-conditions of the process of production of the new commodity; by the difference between the surplus-value which is really added to the conditions of production and the profit which is calculated [on the capital advanced].  But every commodity which enters into another commodity as constant capital, itself emerges as the result, the product, of another production process.  And so the commodity appears alternately as a pre-condition for the production of other commodities and as the result of a process in which the existence of other commodities is the pre-condition for its own production.  In agriculture (cattle-breeding), the same commodity appears at one point of time as a product and at another as a condition of production.

This important deviation of cost-prices from values brought about by capitalist production does not alter the fact that cost-prices continue to be determined by values.

4.  McCulloch

[a) Vulgarisation and Complete Decline of the Ricardian System under the Guise of Its Logical Completion.  Cynical Apologia for Capitalist Production.  Unprincipled Eclecticism]

||840| McCulloch, the vulgariser of Ricardian political economy and simultaneously the most pitiful embodiment of its decline.

He vulgarises not only Ricardo but also James Mill.

He is moreover a vulgar economist in everything and an apologist for the existing state of affairs.  His only fear, driven to ridiculous extremes, is the tendency of profit to fall; he is perfectly contented with the position of the workers, and in general, with all the contradictions of bourgeois economy which weigh heavily upon the working class.  Here everything is green.  He even knows that

“the introduction of machines into any employment necessarily occasions an equal or greater demand for the disengaged labourers in some other employment” [J. R. McCulloch, The Principles of Political Economy, Edinburgh, 1825, pp. 181-82; quoted by Cazenove in Outlines of Political Economy, London, 1832, pp. 119-20].

In this question he deviates from Ricardo, and in his later writings, he also becomes very mealy-mouthed about the landowners.  But his whole tender anxiety is reserved for the poor capitalists, in view of the tendency of the rate of profit to fall.

Mr. McCulloch, unlike other exponents of science, seems to look not for characteristic differences, but only “for resemblances; and proceeding upon this principle, he is led to confound material with immaterial objects; productive with unproductive labour; capital with revenue; the food of the labourer with the labourer himself; production with consumption; and labour with profits”[cc] (T. R. Malthus, Definitions in Political Economy, London, 1827, pp. 69-70).

“Mr. McCulloch, in his Principles of Political Economy, divides value into real and exchangeable;[dd] the former, he says, (page 225)[ee] is dependent on the quantity of labour required for the production of any commodity,[ff] and the latter on the quantity of labour, or of any other commodity, for which it will exchange; and these two values are, he says, (page 215), identical, in the ordinary state of things, that is, when the supply of commodities in the market is exactly proportioned to the effectual demand for them.  Now, if they be identical, the two quantities of labour which he refers to must be identical also; but, at page 221, he tells us that they are not, for that the one includes profits, while the other excludes them” ( [John Cazenove,] Out- lines of Political Economy, London, 1832, p. 25).

McCulloch says [in a note] on page 221 of his Principles of Political Economy:

“In point of fact, it” (the commodity) “will always exchange for more”<labour than has been required for its production> “and it is this excess that constitutes profits.”

This is a brilliant example of the methods used by this arch-humbug of a Scotsman.

The arguments of Malthus, Bailey, etc., compel him to differentiate between real value and exchangeable or relative value.  But he does so, basically, in the way he finds the difference dealt with by Ricardo.  Real value means the commodity examined with regard to the labour required for its production; relative value implies the consideration of the proportions of different commodities which can be produced in the same amount of time, which are consequently equivalents, and the value of one of which can therefore be expressed in the quantity of use-value of the other which costs the same amount of labour-time.  The relative value of commodities, in this Ricardian sense, is only another expression for their real value and means nothing more than that the commodities exchange with one another in proportion to the labour-time embodied in them, in other words, that the labour-time embodied in both is equal.  If, therefore, the market price of a commodity is equal to its exchange-value (as is the case when supply and demand are in equilibrium), then the commodity bought contains as much labour as that which is sold.  It merely realises its exchange-value, or it is only sold at its exchange-value when one receives the same amount of labour in exchange for it as one hands over.

McCulloch relates all this, correctly repeating what has already been said.  But he goes too far here since the Malthusian definition of exchange-value—the quantity of wage-labour which a commodity commands—already sticks in his throat.  He therefore defines relative value as the “quantity of labour, or of any other commodity, for which it” (a commodity) “will exchange”.  Ricardo, in dealing with relative value, always speaks only of commodities and does not include labour, since in the exchange of commodities a profit is only realised because in the exchange between commodity and labour unequal quantities of labour are exchanged.  By putting the main emphasis right at the beginning of his book on the fact that the determination of the value ||841| of a commodity by the labour-time embodied in it differs immensely from the determination of this value by the quantity of labour which it can buy, Ricardo, on the one hand, establishes the difference between the quantity of labour contained in a commodity and the quantity of labour which it commands.  On the other hand, he excludes the exchange of commodity and labour from the relative value of a commodity.  For if a commodity is exchanged for a commodity, equal quantities of labour are exchanged; but if a commodity is exchanged for labour, unequal quantities of labour are exchanged, and capitalist production rests on the inequality of this exchange.  Ricardo does not explain how this exception fits in with the concept of value.  This is the reason for the arguments amongst his followers.  But his instinct is sound when he makes the exception.  (In actual fact, there is no exception; it exists only in his formulation.)  Thus McCulloch goes farther than Ricardo and is apparently more consistent than he.

There is no flaw in his system; it is all of a piece.  Whether a commodity is exchanged for a commodity or for labour, this ratio of exchange is the relative value of the commodity.  And if the commodities exchanged are sold at their value (i.e., if demand and supply coincide), this relative value is always the expression of the real value.  That is, there are equal quantities of labour at both poles of the exchange.  Thus “in the ordinary state of things” a commodity only exchanges for a quantity of wage-labour equal to the quantity of labour contained in it.  The workman receives in wages just as much materialised labour as he gives back to capital in the form of immediate labour.  With this the source of surplus-value disappears and the whole Ricardian theory collapses.

Thus Mr. McCulloch first destroys it under the appearance of making it more consistent.

And what next?  He then flits shamelessly from Ricardo to Malthus, according to whom the value of a commodity is determined by the quantity of labour which it buys and which must always be greater than that which the commodity itself contains.  The only difference is that in Malthus this is plainly stated to be what it is, opposition to Ricardo, and Mr. McCulloch adopts this opposite viewpoint after he has adopted the Ricardian formula with an apparent consistency (that is, with the consistency of incogitancy) which destroys the whole sense of the Ricardian theory.  McCulloch therefore does not understand the essential kernel of Ricardo’s teaching—how profit is realised because commodities exchange at their value—and abandons it.  Since exchangeable value—which “in the ordinary state of […] the market” is, according to McCulloch, equal to the real value but “in point of fact” is always greater, since profit is based on this surplus (a fine contradiction and a fine discourse based on a “point of fact”)—is “the quantity of labour, or of any other commodity”, for which the commodity is exchanged, hence what applies to “labour” applies to “any other commodity”.  This means that the commodity is not only exchanged for a greater amount of immediate labour than it itself contains, but for more materialised labour in the other commodities than it itself contains; in other words, profit is “profit upon expropriation” and with this we are back again amongst the Mercantilists.  Malthus draws this conclusion.  With McCulloch this conclusion follows naturally but with the pretence that this constitutes an elaboration of the Ricardian system.

And this total decline of the Ricardian system into twaddle—a decline which prides itself on being its most consistent exposition—has been accepted by the mob, especially by the mob on the Continent (with Herr Roscher naturally amongst them), as the conclusion of the Ricardian system carried too far, to its extreme limit; they thus believe Mr. McCulloch that the Ricardian mode of “coughing and spitting”, which he uses to conceal his helpless, thoughtless and unprincipled eclecticism, is in fact a scientific attempt to set forth Ricardo’s system consistently.

McCulloch is simply a man who wanted to turn Ricardian economics to his own advantage—an aim in which he succeeded in a most remarkable degree.  In the same way Say used Smith, but Say at least made a contribution by bringing Smith’s theories into a certain formal order and, apart from misconceptions, he occasionally also ventured to advance theoretical objections.  Since McCulloch first obtained a professorial chair in London on account of Ricardian economics, in the beginning he had to come forward as a Ricardian and especially to participate in the struggle against the landlords.  As soon as he had obtained a foothold and climbed to a position on Ricardo’s shoulders, ||842| his main effort was directed to expounding political economy, especially Ricardian economics, within the framework of Whiggism and to eliminate all conclusions which were distasteful to the Whigs.  His last works on money, taxes, etc., are mere pleas on behalf of the Whig Cabinet of the day.  In this way the man secured lucrative jobs.  His statistical writings are merely catch-penny efforts.  The incogitant decline and vulgarisation of the theory likewise reveal the fellow himself as a vulgarian, a matter to which we shall have to return before we have done with that speculating Scotsman.

In 1828 McCulloch published Smith’s Wealth of Nations, and the fourth volume of this edition contains his own “notes” and “dissertations” in which, to pad out the volume, he reprints in part some mediocre essays which he had published previously, e.g., on “entail”, and which have absolutely nothing to do with the matter, and in part, his lectures on the history of political economy repeated almost verbatim; he himself says that he “largely draws upon them”; in part, however, he tries in his own way to assimilate the new ideas advanced in the interim by Mill and by Ricardo’s opponents.

In his Principles of Political Economy, Mr. McCulloch presents us with nothing more than a copy of his “notes” and “dissertations” which he had already copied from his earlier “scattered manuscripts”.  But things turned out slightly worse in the Principles, for inconsistencies are of less importance in notes than in an allegedly methodical treatment.  Thus the passages quoted above, though they are, in part, taken verbatim from the “notes”, look rather less inconsistent in these “notes” than they do in the Principles.  <In addition the Principles contain plagiarisms of Mill amplified by absurd illustrations, and reprints of articles on corn trade, etc., which he has repeatedly published, maybe verbatim, under twenty different titles in different periodicals, often even in the same periodical at different periods.>

In the above-mentioned Volume IV of his edition of Adam Smith (London, 1828), Mac says (he repeats the same thing word for word in his Principles of Political Economy but without making the distinctions which he still felt to be necessary in the “notes”):

“… it is necessary to distinguish between the exchangeable value, and the real or cost value of commodities or products.  By the first, or the exchange able value of a   commodity or product, is meant its power or capacity of exchanging either for other commodities or for labour; and by the second, or its real or cost value, is meant the quantity of labour which it required for its production or appropriation, or rather the quantity which would be required for the production or appropriation of a similar commodity at the time when the investigation is made” ([J. R. McCulloch in: Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. IV, London, 1828,] pp. 85-86 [Note II]).

“A commodity produced by a certain quantity of labour will” <when the supply of commodities is equal to the effectual demand> “uniformly exchange for, or buy any other commodity produced by the same quantity of labour.  It will never, however, exchange for, or buy exactly the same quantity of labour that produced it; but though it will not do this, it will always exchange for, or buy the same quantity of labour as any other commodity produced under the same circumstances, or by means of the same quantity of labour, as itself” (op. cit., pp. 96-97).

“In point of fact” (this phrase is repeated literally in the Principles, since, in point of fact, this “in point of fact” constitutes the whole of his deduction), “it” (the commodity) “will always exchange for more” (viz., for more labour than that by which it was produced) “and it is this excess that constitutes profits.  No capitalist could have any motive” (as if the “motive” of the buyer was the point in question when dealing with the exchange of commodities and the investigation of their value) “to exchange the produce of a given quantity of labour already performed ||843| for the produce of the same quantity of labour to be performed.  This would be to lend” (“to exchange” would be “to lend”) “without receiving any interest on the loan” (loc. cit., p. 96 [note to Note II]).

Let us start at the end.

If the capitalist did not get back more labour than the amount he advances in wages, he would “lend” without receiving a “profit”.  What has to be explained is how profit is possible if commodities (labour or other commodities) are exchanged at their value.  And the answer is that no profit would be possible if equivalents were exchanged.  It is assumed, first of all, that capitalist and worker “exchange”.  And then, in order to explain profit, it is assumed that they do “not” exchange, but that one of the parties lends (i.e., gives commodities) and the other borrows, that is, pays only after he has received the commodities. In other words, in order to explain profit, it is said that the capitalist secures “no interest” if he makes no profit.  This is [putting] the thing wrongly.  The commodities in which the capitalist pays wages and the commodities which he gets back as a result of the labour, are different use-values.  He does not therefore receive back what he advanced, any more than he does when he exchanges one commodity for another.  Whether he buys another commodity, or whether he buys the specific [commodity] labour which produces the other commodity for him, amounts to the same.  For the use-value he advances he receives back another use-value, as happens in all exchanges of commodities.  If, on the other hand, one pays attention only to the value of the commodity, then it is no longer a contradiction to exchange “a given quantity of labour already performed” for “the same quantity of labour to be performed” (although the capitalist in fact pays only after the labour has been performed), nor is it a contradiction to exchange a quantity of labour performed for the same quantity of labour performed.  This latter is an insipid tautology.  The first part of the passage implies that “the labour to be performed” will be embodied in a use-value different from that in which the labour performed is embodied.  In this case there is thus a difference [between the objects to be exchanged] and, consequently, a motive for exchange arising out of the relationship itself, but this is not so in the other case, since A only exchanges for A insofar as in this exchange it is a matter of the quantity of labour.  This is why Mr. Mac has recourse to the motive.  The motive of the capitalist is to receive back a greater “quantity of labour” than he advances.  Profit is here explained by the fact that the capitalist has the motive to make “profit”.  But the same thing can be said about the sale of goods by the merchant and about every sale of commodities not for consumption but for gain.  The seller has no motive to exchange a quantity of performed labour for the same quantity of performed labour.  His motive is to get in return more performed labour than he gives away.  Hence he must get more performed labour in the form of money or commodities than he gives away in the form of a commodity or of money.  He must, therefore, buy cheaper than he sells, and sell dearer than he has bought.  Profit upon alienation is thus explained, not by the fact that it corresponds to the law of value, but by declaring that buyers and sellers have no “motive” for buying and selling in accordance with the law of value.  This is Mac’s first “sublime” discovery, it fits beautifully into the Ricardian system, which seeks to show how the law of value asserts itself despite the “motives” of seller and buyer.

||844| For the rest, Mac’s presentation in the “notes” differs from the one in the Principles only in the following:

In the Principles he makes a distinction between “real value” and “relative value” and says that both are equal “under ordinary circumstances” but “in point of fact” they cannot be equal if there is to be a profit.  He therefore says merely that the “fact” contradicts the “principle”.

In the “notes” he distinguishes three sorts of value: “real value”, the “relative value” of a commodity in its exchange with other commodities, and the relative value of a commodity exchanged with labour.  The “relative value” of a commodity in its exchange with another commodity is its real value expressed in another commodity, or in an “equivalent”.  On the other hand, its relative value in exchange with labour is its real value expressed in another real value that is greater than itself.  That means, its value is the exchange with a greater value, with a non-equivalent.  If it were exchanged for an equivalent in labour, then there would be no profit.  The value of a commodity in its exchange with labour is a greater value.

Problem: The Ricardian definition of value conflicts with the exchange of commodities with labour.

Mac’s solution: In the exchange of a commodity with labour the law of value does not exist, but its contrary.  Otherwise profit could not be explained.  Profit for him, the Ricardian, is to be explained by the law of value.

Solution: The law of value (in this case) is profit.  “In point of fact” Mac only reiterates what the opponents of the Ricardian theory say, namely, that there would be no profit if the law of value applied to exchange between capital and labour.  Consequently, they say, the Ricardian theory of value is invalid.  He [McCulloch] says that in this case, which he must explain by the Ricardian law, the law does not exist and that in this case “value” “means” something else.

From this it is obvious how little he understands of the Ricardian law.  Otherwise he would have had to say that profit arising in exchange between commodities which are exchanged in proportion to the labour-time [embodied in them], is due to the fact that “unpaid” labour is contained in the commodities.  In other words, the unequal exchange between capital and labour explains the exchange of commodities at their value and the profit which is realised in the course of this exchange.  Instead of this he says: Commodities which contain the same amount of labour-time command the same amount of surplus labour, which is not contained in them.  He believes that in this way he has reconciled Ricardo’s propositions with those of Malthus, by establishing an identity between the determination of the value of commodities by labour-time and the determination of the value of commodities by their command over labour.  But what does it mean when he says that commodities which contain the same amount of labour-time command the same amount of surplus labour in addition to the labour contained in them?  It means nothing more than that a commodity in which a definite amount of labour-time is embodied commands a definite quantity of surplus labour [that is, more labour] than it itself contains.  That this applies not only to commodity A, in which x hours of labour-time are embodied, but also to commodity B, in which x hours of labour-time are likewise embodied, follows by definition from the Malthusian formula itself.

The contradiction is therefore solved by Mac in this way: If the Ricardian theory of value were really a valid one, then profit, and consequently capital and capitalist production, would be impossible.  This is exactly what Ricardo’s opponents assert.  And this is what Mac answers them, how he refutes them.  And in so doing, he does not notice the beauty of an explanation of exchangeable value in [exchange with] labour which amounts to saying that value is exchange for something which has no value.

[b) Distortion of the Concept of Labour Through Its Extension to Processes of Nature.  Confusion of Exchange-Value and Use-Value]

||845| After Mr. Mac has thus abandoned the basis of Ricardian political economy, he proceeds even further and destroys the basis of this basis.

The first difficulty in the Ricardian system was [to present] the exchange of capital and labour so that it corresponded to the “law of value”.

The second difficulty was that capitals of equal magnitude, no matter what their organic composition, yield equal profits or the general rate of profit.  This is indeed the unrecognised problem of how values are converted into cost-prices.

The difficulty arose because capitals of equal magnitude, but of unequal composition—it is immaterial whether the unequal composition is due to the capitals containing unequal proportions of constant and variable capital, or of fixed and circulating capital, or to the unequal period of circulation of the capitals—set in motion unequal quantities of immediate labour, and therefore unequal quantities of unpaid labour; consequently they cannot appropriate equal quantities of surplus-value or surplus product in the process of production.  Hence they cannot yield equal profit if profit is nothing but the surplus-value calculated on the value of the whole capital advanced.  If, how-ever, the surplus-value were something different from (unpaid) labour, then labour could after all not be the “foundation and measure” of the value of commodities.

The difficulties arising in this context were discovered by Ricardo himself (although not in their general form) and set forth by him as exceptions to the law of value.  Malthus used these exceptions to throw the whole law overboard on the grounds that the exceptions constituted the rule.  Torrens, who also criticised Ricardo, indicated the problem at any rate when he said that capitals of equal size set unequal quantities of labour in motion, and nevertheless produce commodities of equal “values”, hence value cannot be determined by labour.  Ditto Bailey, etc.  Mill for his part accepted the exceptions noted by Ricardo as exceptions, and he had no scruples about them except with regard to one single form.  One particular cause of the equalisation of the profits of the capitalists he found incompatible with the law.  It was the following.  Certain commodities remain in the process of production (for example, wine in the cellar) without any labour being applied to them; there is a period during which they are subject to certain natural processes (for example, prolonged breaks in labour occur in agriculture and in tanning before certain new chemicals are applied—these cases are not mentioned by Mill).  These periods are nevertheless considered as profit-yielding.  The period of time during which the commodity is not being worked on by labour [is regarded] as labour-time (the same thing in general applies where a longer period of circulation time is involved).  Mill “lied” his way—so to speak—out of the difficulty by saying that one can consider the time in which the wine, for example, is in the cellar as a period when it is soaking up labour, although according to the assumption this is, in point of fact, not the case.  Otherwise one would have to say that “time” creates profit and [according to Mill] time as such is “sound and fury”.  McCulloch uses this balderdash of Mill as a starting-point, or rather he reproduces it in his customary affected, plagiarist manner in a general form in which the latent nonsense becomes apparent and the last vestiges of the Ricardian system, as of all economic thinking whatsoever, are happily discarded.

On closer consideration, all the difficulties mentioned above resolve themselves into the following difficulty.

That part of capital which enters into the production process in the form of commodities, i.e., as raw materials or tools, does not add more value to the product than it possessed before production.  For it only has value insofar as it is embodied labour and the labour contained in it is in no way altered by its entry into the production process.  It is to such an extent independent of the production process into which it enters and dependent on the socially determined labour required for its own production that its own value changes when more labour or less labour than it itself contains is required for its reproduction.  As value, this part of capital therefore enters unchanged into the production process and emerges from it unchanged.  Insofar as it really enters into the production process and is changed, this change affects only its use-value, i.e., it undergoes a change as use-value.  And all operations undergone by the raw material or carried out by the instrument of labour are merely processes to which they are submitted as specific kinds of raw material, etc., and particular tools (spindles, etc.), processes which affect their use-value, but which, as processes, have nothing to do with their exchange-value.  Exchange-value is maintained in this ||846| change.  That is all.

It is different with that part of capital which is exchanged against labour-power.  The use-value of labour-power is labour, the element which produces exchange-value.  Since the labour provided by labour-power in industrial consumption is greater than the labour which is required for the reproduction of the labour-power, i.e., it provides more than an equivalent of the wages the worker receives, the value which the capitalist receives from the worker in exchange is greater than the price he pays for this labour.  It follows from this that, if equal rates of exploitation are assumed, of two capitals of equal size, that which sets less living labour in motion—whether this is due to the fact that the proportion of variable capital is less from the start, or to the fact that it has a [longer] period of circulation or period of production during which it is not exchanged against labour, does not come into contact with it, does not absorb it—will produce less surplus-value, and, in general, commodities of less value.  How then can the values created be equal and the surplus-values proportional to the capital advanced?  Ricardo was unable to answer this question because, put in this way, it is absurd since, in fact, neither equal values nor [equal] surplus-values are produced.  Ricardo, however, did not understand the genesis of the general rate of profit nor, consequently, the transformation of values into cost-prices which differ specifically from them.

Mac, however, eliminates the difficulty by basing himself on Mill’s insipid “evasion”.  One gets round the inconvenience by talking out of existence by means of a phrase the characteristic difference out of which it arose.  This is the characteristic difference: The use-value of labour-power is labour; it consequently produces exchange-value.  The use-value of the other commodities is use-value as distinct from exchange-value, therefore no change which this use-value undergoes can change the predetermined exchange-value.  McCulloch gets round the difficulty by calling the use-values of commodities—exchange-value, and the operations in which they are involved as use-values, the services they render as use-values in production—labour.  For after all, in ordinary life we speak of labouring animals, working machines, and even say poetically that the iron works in the furnace, or works under the blows of the hammer.  It even screams.  And nothing is easier than to prove that every “operation” is labour, for labour is—an operation.  In the same way one can prove that everything material experiences sensation, for everything which experiences sensation is—material.

“… labour may properly be defined to be any sort of action or operation, whether performed by man, the lower animals, machinery, or natural agents, that tends to bring about any[gg] desirable result” (op. cit., p. 75, Note I).

And this does not by any means apply [solely] to instruments of labour.  It is in the nature of things that this applies equally to raw materials.  Wool undergoes a physical action or operation when it is dyed.  In general, nothing can be acted upon physically, mechanically, chemically, etc., in order “to bring about any desirable result” without the thing itself reacting.  It cannot therefore be worked upon without itself working.  Thus all commodities which enter into the production process bring about an increase in value not only by retaining their own value, but by creating new value, because they “work” and are not merely materialised labour.  In this way, all the difficulties are naturally eliminated.  In reality, this is merely a paraphrase, a new name for Say’s “productive services of capital”, “productive services of land”, etc., which Ricardo attacked continuously and against which Mac—strange to say—himself polemises in the same “dissertation” or “note” where he pompously presents his discovery, borrowed from Mill and embellished still further.  In criticising Say, McCulloch makes lavish use of recollected passages from Ricardo and remembers that these “productive services” are in fact only the attributes displayed by things as use-values in the production process.  But naturally, all this is changed when he calls these “productive services” by the sacramental name of “labour”.

||847| After Mac has happily transformed commodities into workers, it goes without saying that these workers also draw wages and that, in addition to the value they possess as “accumulated labour”, they must be paid wages for their “operations” or “action”.  These wages of the commodities are pocketed by the capitalists per procurationem; they are “wages of accumulated labour”—alias profit.  And this [according to McCulloch] is proof that equal profit on equal capitals, whether they set large or small amounts of labour in motion, follows directly from the determination of value by labour-time.

The most extraordinary thing about all this, as we have already noted, is the way Mac, at the very moment when he is basing himself on Mill and appropriating Say, hurls Ricardian phrases against Say.  How literally he copies Say—except that where Say speaks of action, he [McCulloch] calls this action labour—can best be seen from the following passages from Ricardo where the latter is criticising Say.

“M. Say … imputes to him” (Adam Smith) “as an error, that ‘he attributes to the labour of man alone, the power of producing value.  A more correct analysis shows us that value is owing to the action of labour, or rather the industry of man, combined with the action of those agents which nature supplies, and with that of capital.  His ignorance of this principle prevented him from establishing the true theory of the influence of machinery in the production of riches.’ In contradiction to the opinion of Adam Smith, M. Say … speaks of the value which is given to commodities by natural agents…  But those natural agents, though they add greatly to value in use, never add exchangeable value, of which M. Say is speaking…” (David Ricardo, Principles of Political Economy, and Taxation, third ed., London, 1821, pp. 334-36).

“… machines and natural agents might very greatly add to the riches of a country,” but they do “not … add any thing to the value of those riches” (loc. cit., p. 335 [note]).

Like all economists worth naming, [including] Adam Smith (although in a fit of humour he once called the ox a productive labourer), Ricardo emphasises that labour as human activity, even more, as socially determined human activity, is the sole source of value.  It is precisely through the consistency with which he treats the value of commodities as merely “representing” socially determined labour, that Ricardo differs from the other economists.  All these economists understand more or less clearly, but Ricardo more clearly than the others, that the exchange-value of things is a mere expression, a specific social form, of the productive activity of men, something entirely different from things and their use as things, whether in industrial or in non-industrial consumption.  For them, value is, in fact, simply an objectively expressed relation of the productive activity of men, of the different types of labour to one another.  When he argues against Say, Ricardo explicitly quotes the words of Destutt de Tracy, as expressing his own views.

“As it is certain that our physical and moral faculties are alone our original riches, the employment of those faculties” (the faculties of men), “labour of some kind” (that is, labour as the realisation of the faculties of men), “is our only original treasure, and that it is always from this employment, that all those things are created which we call riches…  It is certain too, that all those things only represent the labour which has created them, and if they have a value, or even two distinct values, they can only derive them from that of the labour from which they emanate” ( [Destutt do Tracy, Elémens d’idéologie, IV-e et V-e parties.  “Traité de la volonté et de ses effets”, Paris, 1826, pp. 35-36; quoted by Ricardo in his Principles of Political Economy, and Taxation, third ed., London, 1821,] p. 334).

Thus commodities, things in general, have value only because they represent human ||848| labour, not insofar as they are things in themselves, but insofar as they are incarnations of social labour.

And yet some persons have had the temerity to say that the miserable Mac has taken Ricardo to extremes, he who, in his incogitant efforts to “utilise” the Ricardian theory eclectically along with those opposed to it, identifies its basic principle and that of all political economy—labour itself as human activity and as socially determined human activity—with the physical action, etc., which commodities possess as use-values, as things.  He who abandons the very concept of labour itself!

Rendered insolent by Mill’s “evasion”, he plagiarises Say while arguing against him with Ricardian phrases and copies precisely those phrases of Say which Ricardo in Chapter 20 of his book, entitled “Value and Riches”, attacks as being fundamentally opposed to his own ideas and those of Smith.  (Roscher naturally repeats that Mac has carried Ricardo to extremes.)  Mac, however, is sillier than Say, who does not call the “action” of fire, machinery, etc., labour.  And more inconsistent.

While Say attributes the creation of “value” to wind, fire, etc., Mac considers that only those use-values, things, which can be monopolised create value, as if it were possible to utilise the wind, or steam, or water as motive power without the possession of windmills, steam-driven machinery or water-wheels!  As if those who own, monopolise, the things, whose possession alone enables them to employ the natural agents, did not also monopolise the natural agents.  I can have as much air, water, etc., as I like.  But I possess them as productive agents only if I have the commodities, the things, by the use of which these agents will operate as such.  Thus Mac is even lower than Say.

This vulgarisation of Ricardo represents the most complete and most frivolous decline of Ricardo’s theory.

“In so far, however, as that result” (i.e., the result produced by the action or operation of any thing) “is effected by the labour or operation of natural agents, that can neither be monopolised nor appropriated by a greater or smaller number of individuals to the exclusion of others, it has no value.  What is done by these agents is done gratuitously” (J. R. McCulloch [in: Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. IV, London, 1828], p. 75 [Note I]).

As if what is done by cotton, wool, iron or machinery, were not also done “gratuitously”.  The machine costs money, but the operation of the machine is not paid for.  No use-value of any kind of commodity costs anything after its exchange-value has been paid.

“The man who sells oil makes no charge for its natural qualities.  In estimating its cost he puts down the value of the labour employed in its pursuit, and such is its value” (H. C. Carey, Principles of Political Economy…  Part I, Philadelphia, 1837, p. 47).

In arguing against Say, Ricardo emphasises precisely that the action of the machine, for example, costs just as little as that of wind and water.

“… the services which … natural agents and machinery perform for us … are serviceable to us … by adding to value in use; but as they perform their work gratuitously … the assistance which they afford us, adds nothing to value in exchange” (David Ricardo, [Principles of Political Economy, and Taxation, third ed., London, 1821,] pp. 336-37).

Thus Mac has not understood the most elementary propositions of Ricardo.  But the sly dog thinks: if the use-value of cotton, machinery, etc., costs nothing, is not paid for apart from its exchange-value, then, on the other hand, this use-value is sold by those who use cotton, machinery, etc.  They sell what costs them nothing.

||849| The brutal thoughtlessness of this fellow is evident, for after accepting Say’s “principle”, he sets forth rent with great emphasis, plagiarising extensively from Ricardo.

Land is a

“natural agent” that can be “monopolised or appropriated by a greater or smaller number of individuals to the exclusion of others” [J. R. McCulloch, loc. cit., p. 75, Note I],

and its natural, vegetative action or “labour”, its productive power, consequently has value, and rent is thus ascribed to the “productive power” of land, as is done by the Physiocrats.  This is an outstanding example of Mac’s way of vulgarising Ricardo.  On the one hand, he copies Ricardo’s arguments, which only make sense if they are based on the Ricardian assumptions, and on the other hand, he takes from others the direct negation of these assumptions (with the reservation that he uses his “nomenclature” or makes some small changes in the propositions).  He should have said: “Rent is the wages of land” pocketed by the landowner.

“If a capitalist expends the same sum in paying the wages of labourers, and maintaining horses, or in hiring a machine, and if the men, the horses, and the machine can all perform the same piece of work, its value will obviously be the same by whichever of them it may have been performed” (op. cit., p. 77 [Note I]).

In other words: the value of the product depends on the value of the capital laid out.  This is the problem to be solved.  The formulation of the problem is, according to Mac, “obviously” the solution of it.  But since the machine, for example, performs a greater piece of work than the men displaced by it, it is even more “obvious” that the product of the machine will not fall but rise in value compared with the value of the product of the men who “perform the same work”.  Since the machine can produce 10,000 units of work where a man can only produce one, and every unit has the same value, the product of the machine should be 10,000 times as dear as that “of man”.

Moreover, in his anxiety to distinguish himself from Say by stating that value is produced not by the action of natural agents but only by the action of monopolised agents, or agents produced by labour, Mac gets into difficulties and falls back on Ricardian phrases.  For example, the labour of the wind produces the desired effect on the ship (produces a change in it).

“… but the value of that change is not increased by, and is in no degree dependent on, the operation or labour of the natural agents concerned, but on the amount of capital, or the produce of previous labour, that cooperated in the production of the effect; just as the cost of grinding corn does not depend on the action of the wind or water that turns the mill, but on the amount of capital wasted in the operation” (op. cit., p. 79 [Note I]).

Here, all of a sudden, grinding is viewed as adding value to the corn insofar only as capital—“the produce of previous labour”—is “wasted” in the act of grinding.  That is, it is not due to the millstone “working”, but to the fact that along with the “waste” of the millstone, the value contained in it, the labour embodied in it, is also “wasted”.

After these pretty arguments, Mac sums up the wisdom (borrowed from Mill and Say) in which he brings the concept of value into harmony with all kinds of contradictory phenomena, in the following way:

“… the word labour means … in all discussions respecting value … either the immediate labour of man, or the labour of the capital produced by man, or both” (op. cit., p. 84 [note to Note II]).

Hence labour ||850| is to be understood as meaning the labour of man, then his accumulated labour, and finally, the practical application, that is, the physical, etc., properties of use-values evolved in (industrial) consumption.  Apart from these properties, use-value means nothing at all.  Use-value operates only in consumption.  Consequently, by the exchange-value of the products of labour, we [are to] understand the use-value of these products, for this use-value consists only in its action, or, as Mac calls it, “labour”, in consumption, regardless of whether this is industrial consumption or not.  However, the types of  “operation”, “action”, or “labour” of use-values, as well as their physical measures, are as varied as the use-values themselves.  But what is the unity, the measure by means of which we compare them?  This is established by the general word “labour” which is substituted for these quite different applications of use-values, after labour itself has been reduced to the words “operation” or “action”.

Thus, with the identification of use-value and exchange-value ends this vulgarisation of Ricardo, which we must therefore consider as the last and most sordid expression of the decline of the Ricardian school as such.

“The profits of capital are only another name for the wages of accumulated labour” (J. R. McCulloch, The Principles of Political Economy, London, 1825, p. 291),

that is, for the wages paid to commodities for the services they render as use-values in production.

In addition, these wages of accumulated labour have their own mysterious connotation as far as Mr. McCulloch is concerned.  We have already mentioned that, apart from his plagiarism of Ricardo, Mill, Malthus and Say, which constitutes the real basis of his writings, he himself continually reprints and sells his “accumulated labour” under various titles, always “largely drawing” upon writings for which he has been paid before.  This method of drawing “the wages of accumulated labour” was discussed at great length as early as 1826 in a special work, and what has not McCulloch done since then—from 1826 to 1862—with regard to drawing wages for accumulated labour!  (This miserable phrase has also been adopted by Roscher in his role of Thucydides.)

The book referred to is called: Some illustrations of Mr. McCulloch’s Principles of Political Economy, Edinburgh, 1826, by Mordecai Mullion.  It traces how our chevalier d’industrie made a name for himself.  Nine-tenths of his work is copied from Adam Smith, Ricardo and others, the remaining tenth being culled repeatedly from his own accumulated labour which he repeats most shamelessly and contemptibly.  Mullion shows, for example, not only that McCulloch sold the same articles to The Edinburgh Review and The Scotsman and the Encyclopaedia Britannica as his own “dissertations” and as new works, but also that he published the same articles word for word and with only a few transpositions and under new titles in different issues of The Edinburgh Review over the years.

In this respect Mullion says the following about “this most incredible cobbler”, “this most Economical of all Economists”:

“Mr. McCulloch’s articles are as unlike as may be to the heavenly bodies […] but, in one respect, they resemble such luminaries—they have stated times of return” ([Mordecai Mullion,] (op. cit., p. 21).

No wonder he believes in “the wages of accumulated labour.”

Mr. McCulloch’s fame illustrates the power of fraudulent baseness.

||850a| In order to perceive how McCulloch exploits some of Ricardo’s propositions to give himself airs, see, inter alia, The Edinburgh Review for March 1824, where this friend of the wages of accumulated labour gives vent to a veritable jeremiad about the fall in the rate of profit.  (This claptrap is called “Considerations on the Accumulation of Capital”.)

“The author … expresses the fears in him by the decline in profit as follows:”

‘…the condition of’ (England) ‘however prosperous in appearance, is had and unsound at bottom; […] the plague of poverty is secretly creeping on the mass of her citizens; […] the foundations of her power and greatness have been shaken… ’

‘… where […] the rate of interest is low, as in [Holland and] England, […] the profits of stock are also low […], those are countries […] that […] are approaching the termination of their career.’

“These observations must surprise everybody acquainted with England’s splendid situation” ([McCulloch, Discours sur l’économie, traduit par] Prévost, p. 197[hh]).

There was no need for Mr. Mac to distress himself over the fact that “land” gets better “wages” than “iron, bricks, etc.” The cause must be that it “labours” harder.  |XIV-850a||

***

||XV-925| <Even a blind sow sometimes finds an acorn and so does McCulloch in the following passages.  But even this, as he presents it, is only an inconsistency, since he does not distinguish surplus-value from profit.  Secondly, it is again one of his thoughtless, eclectic acts of plagiarism.  According to fellows like Torrens, for whom value is determined by capital—and the same applies to Bailey—profit is proportionate to the capital advanced.  Unlike Ricardo, they do not consider that profit and surplus-value are identical concepts, but only because they have no need whatsoever to explain profit on the basis of value, since they regard the visible form of surplus-value—profit as the relation of surplus-value to the capital advanced—as the original form and, in fact, they merely trans-late the apparent form into words.

The passages in Mac’s work, who is (1) a Ricardian and (2) plagiarises Ricardo’s opponents—without attempting to reconcile [the conflicting ideas]—read:

Ricardo’s law [that a rise in profits can be brought about in no other way than by a fall in wages, and a fall in profits only by a rise in wages] is only true “in those cases in which the productiveness of industry […] remains constant”[ii] (J. R. McCulloch, The Principles of Political Economy, London, 1825, p. 373), that is, the productiveness of the industry which produces constant capital.

“… profits depend on the proportion which they bear to the capital by which they are produced, and not on the proportion […] to wages”[jj] (loc.cit., pp. 373-74).  If the productivity of industry in general is doubled and the additional product thus obtained is divided between capitalists and workers, then the proportion of the share of the capitalists to that of the workers remains unchanged, although the rate of profit calculated on the capital advanced has risen.[kk]

Even in this case, as Mac also notes, one can say that wages have fallen relatively as compared with the product, because profits have risen.  (But in this case it is the rise in profits which Is the cause of the fall in wages.)  This calculation, however, rests on the incorrect method of calculating wages as a share in the product, and, as we saw previously, Mr. John Stuart Mill seeks to generalise the Ricardian law in this sophistical manner.> |XV-925||

5.  Wakefield [Some Objections to Ricardo’s Theory Regarding the “Value of Labour” and Rent]

||XIV-850a| Wakefield’s real contribution to the understanding of capital has already been dealt with in the previous section on the Conversion of Surplus-Value into Capital.  Here we shall only deal with what is directly relevant to the “topic”.

“Treating labour as a commodity, and capital, the produce of labour, as another, then, if the value of these two commodities were regulated by equal quantities of labour, a given amount of labour would, under all circumstances, exchange for that quantity of capital which had been produced by the same amount of labour; antecedent labour […] would always exchange for the same amount of present labour […] the[ll] value of labour in relation to other commodities, in so far, at least, as wages depend upon share, is determined, not by equal quantities of labour, but by the proportion between supply and demand” (Wakefield’s edition of Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. I, London, 1835, pp. 230-31, note).

Thus, according to Wakefield, profit would be inexplicable if wages corresponded to the value of labour.

In Vol. II of his edition of Adam Smith’s work Wakefield remarks:

“Surplus produce […] always constitutes rent: still rent may be paid, which does not consist of surplus produce” (p. 216).

“If” (as in Ireland) “the bulk of a people be brought to live upon potatoes, and in hovels and rags, and to pay, for permission so to live, all that they can produce beyond hovels, rags, and potatoes, then, in proportion as they put up with less, the owner of the land on which they live, obtains mole, even though the return to capital or labour should remain unaltered.  What the miserable tenants give up, the landlord gathers.  […] A[mm] fall in the standard of living amongst the cultivators of the earth is another cause of surplus produce… When wages fall, the effect upon surplus produce is the same as a fall in the standard of living: the whole produce remaining the same, the surplus part is greater; the producers have less, and the landlord more” (pp.220-21).

In this case, profit is called rent, just as it is called interest when, for example, as in India, the worker (although nominally independent) works with advances he receives from the capitalist and has to hand over all the surplus produce to the capitalist.

6.  Stirling [Vulgarised Explanation of Profit by the Interrelation of Supply and Demand]

Patrick lames Stirling, The Philosophy of Trade etc., Edinburgh, 1846.

“… the quantity of every commodity […] must be so regulated that the supply of each commodity shall bear a less proportion to the demand for it than the supply of labour bears to the demand for labour.  The difference between the price or value of the commodity, and the price or value of the labour worked up in it […] constitutes the […] profits”[nn] (op. cit., pp. 72-73).

||851|The same author informs us:

When the values of commodities are exchanged with one another according to their production costs, “the value of these commodities may be said to be at par” (p. 18).[oo]

Thus if demand and supply of labour correspond with one another, then labour would be sold at its value (whatever Stirling may understand by value).  And if demand and supply of the commodities in which the labour is worked up do correspond, then the commodities would be sold at their production costs, by which Stirling understands the value of labour.  The price of the commodity would then be equal to the value of the labour worked up in it.  And the price of labour would be on a par with its own value.  The price of the commodity would therefore be equal to the price of the labour worked up in it.  Consequently there would be no profit or surplus.

Stirling explains profit, or the surplus, in this way.

The supply of labour in relation to the demand for it must be greater than the supply of commodities in which the labour is worked up is in relation to the demand for them.  The matter must be so arranged that the commodity is sold at a higher price than that paid for the labour contained in it.

This is what Mr. Stirling calls explaining the phenomenon of the surplus, whereas it is, in fact, nothing but a paraphrase of what is supposed to be explained.  If we go into it further, then there are only three possibilities.  [1] The price of labour is on a par with value, that is, the demand for and supply of labour balance, the price of labour is equal to the value of labour.  In these circumstances, the commodities must be sold above their value, or things must be arranged in such a way that the supply is below the demand.  This is pure “profit upon alienation”, except that the condition is stated under which it is possible.  [2] Or the demand for labour is greater than the supply and the price [of labour] is higher than its value.  In these circumstances, the capitalist has paid the worker more than the value of the commodity, and the buyer must then pay the capitalist a twofold surplus—first to replace the amount he [the capitalist] has already paid to the worker and then his profit.  [3] Or the price of labour is below its value and the supply of labour above the demand for it.  The surplus would then arise from the fact that labour is paid below its value and is sold [embodied in commodities] at its value or, at least, above its price.

If one strips this of all nonsense, then Stirling’s surplus is [here] due to the fact that labour is bought by the capitalist below its value and is sold again above its price in the form of commodities.

The other cases, divested of their ridiculous form—according to which the producer has to “arrange” matters in such a way that he is able to sell his commodity above its value, or above “the par of value”—mean nothing but that the market price of a commodity rises above its value, if the demand for it is greater than the supply.  This is certainly not a new discovery and explains one sort of “surplus” which never caused Ricardo or anyone else the slightest difficulty.  |XIV-851||

7.  John Stuart Mill  [Unsuccessful Attempts to Deduce the Ricardian Theory of the Inverse Proportionality Between the Rate of Profit and the Level of Wages Directly from the Law of Value]