Grundrisse: Notebook VI – The Chapter on Capital
‘Any change that can disturb the existing relations between wages and profits must originate in wages.’ (Quincey. loc. cit. (X, 5) p. 205.) This is true only in so far as any variations in the mass of surplus labour must be derived from a variation in the relation between necessary and surplus labour. But this can likewise come about if necessary labour becomes less productive and hence a greater part of the total labour falls to it, or if the total labour becomes more productive, hence necessary labour time is reduced. It is nonsense to say that this productive force of labour arises from wages. The relative reduction of wages is rather its result. But it arises (1) from the appropriation by capital of the growth in the productive forces resulting from division of labour, trade which brings cheaper raw materials, science etc.; (2) but this increase of the productive forces has to be regarded as being initiated by capital in so far as it is realized through the employment of a greater capital etc. Further: profit and wages, although determined by the relation of necessary and surplus labour, do not coincide with it, are only secondary forms of the same. The point, however, is this: the Ricardians presuppose a definite quantity of labour; this determines the price of the product, out of which labour, in wages, and capital, in profits, then draw their dividends; the workers’ dividend = the price of the necessaries of life. Hence in the ‘existing relations between wages and profits’, the rate of profit is at its maximum and that of wages at its minimum. Competition among capitals can change only the relation in which they share the total profit, but cannot alter the relation between total profit and total wages. The general standard of profit is this relation of the total profit to the total wages, and this is not altered through competition. Hence, where does the alteration come from? Certainly not because the profit rate voluntarily declines, and it would have to do so voluntarily since competition does not have this result. Hence it is due to an alteration in wages, whose necessary costs may rise (theory of the progressive deterioration of the soil in agriculture; theory of rent) in consequence of a decrease in the productive force of labour due to natural causes. Carey etc. replies, correctly, to this (but, in the way he explains it, incorrectly again) that the rate of profit falls, as a result not of a decrease but rather of an increase in the productive force.  The solution of the whole matter is simply that the rate of profit is not the same as the absolute surplus value, but is rather the surplus value in relation to the capital employed, and that the growth of productive force is accompanied by the decrease of that part of capital which represents approvisionnement in relation to that part which represents invariable capital; hence, when the relation between total labour and the capital which employs it falls, then the part of labour which appears as surplus labour or surplus value necessarily falls too. This inability to explain one of the most striking phenomena of modern production is the source of Ricardo’s failure to understand his own principle. But the difficulties in which he thereby entangles his disciples may be seen in this quotation among others from Quincey: ‘It is the common paralogism, that if upon the same farm you have always kept 5 men, and in 1800 their produce was 25 qrs, but in 1845 50 qrs, you are apt to view the produce only as variable, and the labour as constant: whereas virtually both have varied. In 1800 each qr must have cost 1/5 part of a man; in 1845 each has cost no more than 1/10 part of a man.’ (loc. cit. 214.) In both cases the absolute labour time was the same, 2 days; but in 1845 the productive force of labour had doubled in comparison with 1800, and therefore the cost of producing necessary labour was less. The labour bestowed upon 1 quarter was less, but the total labour was the same. Mr Quincey should, however, have learned from Ricardo that the productive force of labour does not determine the value of the product – although it determines the surplus value, albeit not in step with the increase of the productive force. These arguments against Ricardo, as well as the desperate sophistries of his disciples (e.g. Mr MacCulloch, who cites surplus labour as the source of the surplus value of old wine compared with new wine).  Nor is value to be determined by the labour which the unit cost, i.e. the price of the single quarter. Rather, the price multiplied by the number constitutes the value. The 50 quarters in 1845 had the same value as the 25 in 1800, because they objectified the same amount of labour. The price of each single quarter, the unit, must have been different, and the total price (expressed in money) may have been different, for very different reasons. (What Quincey says about the machine holds for the worker: ‘A machine, as soon as its secret is known, will not sell for the labour produced, but for the labour producing … it will no longer be viewed as a cause equal to certain effects, but as an effect certainly reproducible by a known cause at a known cost.’ (84.) De Quincey says about Malthus: ‘Malthus in his Political Economy refuses to see, nay he positively denies, that if two men produce a variable result of ten and five, then in one case each unit of the result has cost double the labour which it has cost in the other. On the contrary, because there are always two men, Mr Malthus obstinately insists that the cost in labour is constant.’ (loc. cit. 215, note.) In fact: the cost in labour is constant, because, by presupposition, just as much labour is contained in ten as in five. But the cost of labour is not constant, because in the first case, where the productive force of labour [is] double, the time belonging to necessary labour [is] in a certain proportion less. We shall go into Malthus’s view immediately after this. Here, before we go further in the development of the circulation time of capital and its relation to labour time, it is proper first to examine Ricardo’s whole doctrine about this matter, in order to establish the difference between our own conception and his more sharply. (The quotations from Ricardo in Notebook VIII.) 
First presupposition with him, ‘competition without restriction’, and unhampered increase of products through industry. (19. R. 5.)  This means in other words nothing other than that the laws of capital are completely realized only within unlimited competition and industrial production. Capital develops adequately on the latter productive basis and in the former relation of production; i.e. its immanent laws enter completely into reality. Since this is so, it would have to be shown how this unlimited competition and industrial production are conditions of the realization of capital, conditions which it must itself little by little produce (instead of the hypothesis appearing here as merely that of the theoretician, who places free competition and the productive mode of capital’s existence externally and arbitrarily into the relation of capital to itself as capital, not as developments of capital itself, but as imaginary presuppositions of capital for the sake of purity.) This by the way the only place in Ricardo where a faint notion of the historic nature of the laws of bourgeois economy. With this presupposition, the relative value of commodities (this word meaningless, since absolute value is nonsense) is determined by the different quantity which can be produced in the same labour time, or by the quantity of labour relatively realized in different commodities. (p. 4.) (Notebook, 19.) (Henceforth the first number for the page in the notebook; the second for the page in Ricardo.)  Now, how one gets from value as equivalent determined by labour to the non-equivalent, i.e. to the value which posits surplus value through exchange, i.e. how one gets from value to capital, from one aspect to its apparent opposite, this does not interest Ricardo. The only question for him: how the value relation between the commodities can remain the same and can and must be determined by relative quantities of labour, although the owners of accumulated labour … do not exchange labour equivalents in living labour, i.e. despite the relation of capital and labour. It is then a very simple arithmetical proof that commodity A and commodity B can exchange in relation to the labour realized in them, although the producers of A or B distribute product A, or the product B exchanged for it, in different ways among themselves. But since all distribution here proceeds on the basis of exchange, it appears in fact altogether impossible to explain why one of the exchange values – living labour – is exchanged according to the amount of labour time realized in it, while the other exchange value – accumulated labour, capital – is not exchanged according to the standard of the labour time realized in it. Bray e.g. therefore believes that he is the first to draw the true conclusion from Ricardo with his equal exchange between living and dead labour.  That from the standpoint of exchange alone, the worker’s pay would have to = the value of the product, i.e. the amount of labour in objective form which the worker obtains in pay, = the amount of labour in subjective form which he expends in labour, is so necessary a conclusion that A. Smith falls into it.  Ricardo, by contrast, avoids this fallacy, but how? ‘The value of labour, and the quantity of commodities which a specific quantity of labour can buy, are not identical.’ Why not? ‘Because the worker’s product or an equivalent of this product is not = to the worker’s pay.’ I.e. the identity does not exist, because a difference exists. ‘Therefore’ (because this is not the case) ‘it is not the value of labour which is the measure of value, but the quantity of labour bestowed on the commodity.’ (19, 3.)  Value of labour is not identical with wages of labour. Because they are different. Therefore they are not identical. This is a strange logic. There is basically no reason for this other than that it is not so in practice. But it ought to be so, according to the theory. For the exchange of values [is] determined by the labour time realized in them. Hence equivalents are exchanged. Thus a specific quantity of labour time in living form would have to exchange for the same quantity of labour time in accumulated form. What would have to be demonstrated is precisely that the law of exchange turns into its precise opposite. Not even a faint suspicion that it does so is expressed here. Or the suspicion would have to lie in the frequently repeated admonition against mixing them up; that the distinction between past and living labour cannot do the job either is readily admitted: ‘The comparative quantity of commodities which a given quantity of labour will produce determines their past and present value’ (19, 9) where living labour thus even determines the value of past labour retroactively. Why then is capital not also exchanged for living labour in proportion to the labour realized in the capital? Why is it that a quantity of living labour is not itself = the quantity of labour in which it has objectified itself? ‘Labour is by nature of different quality, and it is difficult to compare different hours of labour in different branches of business. But this scale is very soon established in practice.’ (19, 13.) ‘For short periods, at least from year to year, the variation in this inequality is insignificant, and is therefore left out of account.’ (19, I 5.) This is nothing. If Ricardo had applied his own principle, the amounts of (simple) labour to which the different labour capacities are reducible, then the matter would have been simple. Generally, he is concerned straight away with the hours of labour. What the capitalist acquires through exchange is labour capacity: this is the exchange value which he pays for. Living labour is the use value which this exchange value has for him, and out of this use value springs the surplus value and the suspension of exchange as such. Because Ricardo allows exchange with living labour – and thus falls straight into the production process – it remains an insoluble antinomy in his system that a certain quantity of living labour does not = the commodity which it creates, in which it objectifies itself, although the value of the commodity = to the amount of labour contained in it. The value of the commodity ‘includes also the labour of bringing the commodity to market’. (19, 18.) We shall see that circulation time, in so far as it appears as determining value with Ricardo, is only the labour required to bring the commodities to market. ‘The principle of value-determination by the relative amounts of labour contained in the commodity is considerably modified by the employment of machinery and other fixed and durable capital. A rise or fall in wages differently affects two capitals of which one is almost entirely circulating, the other almost entirely fixed; likewise the unequal duration of the fixed capital employed. Namely, there is added the profit on fixed capital (interest), as well as the compensation for the greater length of time which must elapse before the more valuable of the two commodities can be brought to market.’ (19, 29, 30.) The latter moment concerns only the duration of the production process, i.e. labour time directly employed, at least in Ricardo’s example of the farmer and the baker. (If one farmer’s wheat becomes ready for the market later than another’s, then this so-called compensation already presupposes interest; thus already something derivative, not an original aspect.)
‘Profit and wages are only portions in which the two classes, of capitalists and workers, partake in the original commodity, i.e. also in that exchanged for it.’ (p. 31.) The very great extent to which the production of the original commodity, its origin, is itself determined by these portions, the extent to which, therefore, it precedes these portions as basic determinant, proves that the original commodity [would] not be produced at all, if it did not contain surplus labour for capital. ‘Commodities on which the same quantity of labour has been bestowed vary in relative value if they cannot be brought to market in the same amount of time. With a greater fixed capital, too, the higher value of a commodity is due to the greater length of time which must elapse before it can be brought to market … The difference arises in both cases from the profits being accumulated as capital, and is only a compensation for the time during which profits were withheld.’ (34, 35.) This means absolutely nothing other than that capital lying fallow is reckoned in and up as if it were not lying fallow, but were being exchanged with surplus labour time. This has nothing to do with the determination of value. It belongs with price. (In the case of fixed capital it [enters] into the determination of value only as another method of paying for the objectified labour, abstracted from the profit.)
‘There is another principle of labour which nothing points out to the economic inquirer in old countries, but of which every colonial capitalist has been made conscious in his own person. By far the greater part of the operations of industry, and especially those of which the produce is great in proportion to the capital and labour employed, require a considerable time for [their] completion. As to most of them, it is not worth while to make a commencement without the certainty of being able to carry them on for several years. A large portion of the capital employed in them is fixed, inconvertible, durable. If anything happens to stop the operation, all this capital is lost. If the harvest cannot be gathered, the whole outlay in making it grow has been thrown away … This shows that constancy is a no less important principle than combination of labour. The importance of the principle of constancy is not seen here, because rarely indeed does it happen, that the labour which carries on a business, is stopped against the will of the capitalists … But in the colonies just the opposite. Here capitalists are so much afraid of it that they avoid its occurrence as much as they can, by avoiding, as much as possible, operations which require much time for their completion.’ (Wakefield, 169, XIV, 71.)  ‘There are numerous operations of so simple a kind as not to admit a division into parts, which cannot be performed without the cooperation of many pairs of hands. For example, the lifting of a large tree on to a wain, keeping down weeds in a large field of growing crops, shearing a large flock of sheep at the same time, gathering a harvest of corn at the time when it is ripe enough and not too ripe, moving any great weight; everything, in short, which cannot be done unless a good many pairs of hands help together in the same undivided employment, and at the same time.’ (168 loc. cit.) ‘Combination and constancy of labour are provided for in old countries, without an effort or thought on the part of the capitalist, merely by the abundance of labourers for hire. The scarcity of labourers for hire is the universal complaint of colonies.’(170 loc. cit.) ‘Only the cheapest land in a colony is that whose price affects the labour market. The price of this land, as of all bare land, and of everything else which it costs nothing to produce, depends of course on the relation between the demand and supply.’ (p. 332.) … ‘In order that the price of waste land should accomplish its objects’ (namely of making the worker into a non-landowner), ‘it must be sufficient for the purpose. Hitherto the price has been everywhere insufficient.’ (338 loc. cit.) This ‘sufficient’ price: ‘In founding a colony the price might be so low as to render the quantity of land appropriated by settlers practically unlimited: it might be high enough to occasion a proportion between land and people similar to that of old countries, in which case, if this very high price did not prevent emigration, the cheapest land in the colony might be as dear, and the superabundance of labourers as deplorable as in England: or it might be a just medium between the two, occasioning neither superabundance of people nor superabundance of land, but so limiting the quantity of land as to give the cheapest land a market value that would have the effect of compelling labourers to work some considerable time for wages before they could become landowners.’ (339 loc. cit.) (Notebook XIV, 71.) (These excerpts here quoted from Wakefield’s Art of Colonization belong with the ones given above about the necessary separation of the worker from the conditions of property.)
(The calculation of profit as distinct from the calculation of the real surplus value which capital posits in the exchange with living labour, made clear e.g. in the following example. It is a statement in the first Report of the Factory Commissioners. (Malthus’s Princip. of Polit. Economy, 1836, 2nd ed. (Notebook X, p. 42).)
|Capital sunk in building and machinery||£10,000|
|£500||interest on £10,000 fixed capital|
|150||Rents, taxes, rates|
|650||Sinking fund of 6 1/2% for wear|
|and tear of the fixed capital|
|£1,100||Contingencies, carriage, coal, oil|
|2,600||Wages and salaries|
|10,000||for about 400,000 lb. raw cotton at 6d.|
|16,000||for 363,000 lb. twist spun. Value £16,000|
The capital laid out in labour is 2,600; the surplus value = 1,650 (850 interest + 150 rents etc., makes 1,000 + 650 profit).
But 2,000:1,650 = 100:63 6/13. Thus the rate of surplus value is 63 6/13%. According to the profit calculation it would have to be 850 interest, 150 rents and 650 profit, or 1,650:15,350; nearly 10.1%.
In the above example, the floating capital turns over 167/70 times per year; the fixed capital turns over once in 15 5/13 years; once in 200/13 year.
Profit: 650 or about 4.2.  The wages of the operatives 1/6. The profit is indicated here as 4.2; say it were only 4%. This 4% figured on an outlay of 15,350. But then we also have 5% interest on £10,000 and 5% on 7,000; £850 = 5% of 17,000. From the actual annual advances made, we must deduct (1) the part of the fixed capital which does not figure in the sinking fund; (2) that which is figured as interest. (It is possible that capitalist A does not pocket the interest, but capitalist B. In any case they are revenue, not capital; surplus value.) From the £15,350 outlays thus deduct 850; leaves: £14,500. Of the £2,600 for wages and salaries there were £183 1/3 in the form of salary, since 1/6 of 14,500 is not 2,600 but 2,416 2/3, and 14,500 divided by this is 6.
Thus, he sells the 14,500 at 16,000 or a profit of 1,500; makes 10 2/3%; but let us ignore these 2/3 and say 10%; 1/6 of 100 is 16 2/3. Thus, out of 100, he would give: 83 1/3 for advances, 16 2/3 wages and 10 profit. In detail:
|£ St.:||83 1/3||16 2/3||100||110||10|
10 of 16 2/3 or of 50/3 is exactly 60%. Thus, in order that, in the capitalist’s calculation, an annual profit of 10% (it was slightly more) be made on a capital of £17,000, wherein labour makes up only 1/6 of the annual advances of 14,500, the worker (or capital, as you like) has to create a surplus value of 60%. Or, of the total labour time 40% are for necessary and 60 for surplus labour; they relate as 4:6 or = 2:3 or 1:3/2. If, however, the advances on capital had been 50, the advances on wages also 50, then only 20% surplus value would have to be created in order that the capitalist should have 10%; 50 50 10 = 110. But 10 to 50 = 20:100 or 20%. If necessary labour in the second case posited as much surplus labour as in the first, then the capitalist’s profit would amount to £30; on the other hand if the rate of real value-creation, the positing of surplus labour, in the first case, were only as great as in the second, then the profit would amount to only £3 1/3, and if the capitalist had to pay 5% interest to another capitalist, then he would have to carry an actual loss. This much arises simply from the formula, (1) that, in order to determine the size of the real surplus value, one must calculate the profit on the advance made for wages; the percentage which expresses the proportion between the so-called profit and wages; (2) the relatively smaller percentage made up by the proportion between the outlay in living labour and the total outlay presupposes a greater outlay in fixed capital, machinery etc.; greater division of labour. Thus, although the percentage of labour is smaller than in the capital working with more labour, the mass of labour really set in motion must be significantly greater; i.e. a greater capital generally has to be worked with. The proportional part of labour out of the total advance is smaller; but the absolute sum of labour set in motion is larger for the individual capital; i.e. it must itself be larger. (3) If it is a case not of larger machinery etc., but of an instrument which does not set more labour into motion and itself represents no greater fixed capital (e.g. manual lithography) but merely replaces labour, then the profit of the capital working with the machine is absolutely smaller than that of the capital working with living labour. (But the latter can make a percentage profit higher than the former, and thus throw him out of the market.) (etc.) The examination of how far the rate of profit can decrease as capital grows, while the gross profit nevertheless increases, belongs to the doctrine of profit (competition).
In his Principles of Political Economy, 2nd ed., 1836, Malthus has an inkling that profit, i.e. not profit, but real surplus value, has to be calculated not in respect of capital advanced, but of living labour advanced, whose value is expressed objectively in wages; but this leads him into playing games which become absurd if they are to serve as a basis for any determination of value, or for reasoning about the relation of labour to the determination of value.
For example, if I take the total value of the finished product, then I can compare every part of the product advanced with the part of the outlay corresponding to it; and the percentage of profit in relation to the whole product is naturally the same percentage for any fractional part of the product. Say e.g. that 100 thalers brought 110; thus 10% the whole product; 75%, say, for the invariable part of capital, 25 for labour, i.e. 3/4 for the former, 1/4 for living labour. Now if I take 1/4 of the total product, i.e. of 110, then I obtain 27 2/4 or 27 1/2. On an outlay of 25 for labour, the capitalist would have a gain of 2 1/2, i.e. 10%. Likewise Malthus could have said that if I take 3/4 of the total product, i.e. 75, then these 3/4 are represented in the total product by 82 1/2; then 7 1/2 out of 75 is exactly 10%. This obviously means nothing other than that if I gain 10% on 100 then the gain on every part of 100 amounts to as much as, when added together, will be 10% on the total sum. If I have gained 10 on 100, then on 2 × 50 I have gained 5 each time etc. The fact that, if I gain 10 on 100, I gain 2 1/2 on 1/4 of 100 and 7 1/2 on 3/4 takes us not a single step further. If I have gained 10 on 100, how much have I then won on 1/4 of 100 or on 3/4? Malthus’s insight can be reduced to this childishness. The advance for labour amounted to 1/4 of the 100, and the gain on it amounted to 10%. 10% of 25 is 2 1/2. Or the capitalist, if he has gained 10 on 100, has gained 1/10 on every part of his capital, i.e. 10%. This gives the parts of the capital no qualitative character whatever, and it therefore holds for fixed capital etc. just as well as for the part advanced in labour. Moreover, this only expresses the illusion that each part of the capital is involved to an equal degree in the newly created value. Nor has the 1/4 of the capital advanced for wages created the surplus value; rather, the unpaid living labour has done so. However, from the relation of the total value – here the 10 thalers – to wages we can see what percentage of labour was not paid, or, how much surplus labour there was. In the above relation, the necessary labour is objectified in 25 thalers, the surplus labour in 10; thus they relate as 25:10 = 100:40; 40% of the labour was surplus labour, or, what is the same, 40% of the value it produced was surplus value. It is quite true that the capitalist can make this reckoning: if I make 10 on 100, then, on wages, = 25, I have made 2 1/2. It is impossible to see what use this calculation is. But what Malthus wants to do with it will be seen shortly when we go into his determination of value. However, it is clear from the following that he indeed believes that his simple arithmetical example contains a real determination:
‘Suppose the capital be expended only for wages, £100 expended in immediate labour. The returns at the end of the year 110, 120, or 130; it is evident that in each case the profits will be determinated by the proportion of the value of the whole produce which is required to pay the labour employed. If the value of the produce in the market = 110, the proportion required to pay the labourers = 10/11 of the value of the produce, or the profits = 10%.’ (Here Mr Malthus does nothing more than to express the original advance, £100, as a relation to the total product. 100 is 10/11 of 110. Whether I say I gain 10 on 100, i.e. 1/10 of 100, or I say 1/11 of the 110 are gain, it is the same.) ‘If the value of the product is 120, the proportion for labour = 10/12 and the gain 20%; if 130, the proportion required to pay the labour = 10/13 and the gain = 30%.’ (Instead of saying: I gain 10 on 100, I can also say that 10/11 of the 110 were the advances; or, 20 on the 100, the advances amount only to 10/12 of 120 etc. The character of these advances, whether in labour or otherwise, has absolutely nothing to do with this other arithmetic form of expressing the matter. If a capital of 100 has brought in 110, then either I can start with the capital and say I gained 10 on it, or I can start with the product, with 110, and say that I advanced only 10/11 on it beforehand. The relation is, of course, the same.) ‘Now assume that the capitalist’s advances do not consist entirely of labour. The capitalist expects an equal benefit on all parts of the capital he advances’ (that means simply that he distributes the benefit he has made, and whose origin may be quite obscure to him, among all parts of his outlays equally, entirely abstracting away their qualitative difference). ‘Suppose 1/4 of the advances, for labour’ (direct), ‘3/4 consisting of accumulated labour and profits, with any additions which may arise of rents, taxes and other outgoings. Then strictly true that the profits of the capitalist will vary with the varying value of this 1/4 of the produce compared with the quantity of labour employed.’ (Not quantity with Mr Malthus, but rather compared with the salary paid.) (Thus strictly true that his profits will vary with the varying value of the 3/4 of his profits compared with the advances in accumulated labour, i.e. the gain relates to the total capital advanced (10:100) as every part of the total product (110) does to the part of the advance corresponding to it.) ‘For example,’ Malthus continues, ‘a farmer employs £2,000 in cultivation, of which 1,500 in seed, keep of horses, wear and tear of his fixed capital, etc., and £500 on immediate labour, and the returns at the end are 2,400. His profit 400, on 2,000 = 20%. And it is immediately obvious that if we took 1/4 of the value of the produce, namely £600, and compared it with the amount paid in the wages of the immediate labour, the result would show exactly the same rate of profits.’ (loc. cit. 267, 268. Notebook X, 41, 42.) (It is equally obvious that if we took 3/4 of the value of the produce, namely 1,800, and compared it with the amount paid in the advances on accumulated labour, namely with 1,500, the result would show exactly the same rate of profits. 1,800:1,500 = 18:15 = 6:5. And 6 is 1/5 more than 5, hence 20%.) (Malthus here has two different arithmetic formulae in mind and gets them mixed up: firstly, if I make 10 on 100, then on every part of the 100 my gain is not 10 but 10%: i.e. 5 on 50, 2 1/2 on 25 etc.; to gain 10 on 100 means to gain 1/10 on each part of the 100, and consequently the profit has to show up also as 1/10 profit on wages, and if the profit is distributed evenly among all parts of the capital, then I can say that the rate of profit on the total capital varies with the rate of profit on each of its parts, including e.g. the part advanced as wages; secondly if I gained 10% on 100, then the total product 110. Now, if wages formed 1/4 of the advances = 25, then they form only a 4 2/5 part of 110; i.e. they form a fraction that is smaller by 2/5, and it will form an ever smaller part of the total product in proportion as the latter has risen in comparison with the original. This is again only another way of calculating. 10 is 1/10 of 100 but only 1/11 of 110. I can therefore say that as the total product grows larger, each of the fractional parts of the original capital forms a relatively smaller part of it. Tautology.)
In his work The Measure of Value Stated and Illustrated, London, 1823 (Notebook IX), Malthus asserts that the ‘value of labour’ is ‘constant’ and is hence the true Measure of Value generally. ‘Any given quantity of labour must be of the same value as the wages which command it, or for which it actually exchanges.’ (p. 5, loc. cit.) (IX, 29.) He is speaking here, of course, about wage labour. The truth is rather: any given quantity of labour is = the same quantity of labour expressed in a product; or, each product is only a specific quantity of labour, objectified in the value of the product, which is measured with respect to other products by this quantity. Wages, however, express the value of living labour capacity, but in no way the value of living labour, which is expressed, rather, in wages + profit. Wages are the price of necessary labour. If the worker had to work 6 hours in order to live, and if he produced for himself as mere worker, then he would daily receive the commodity of 6 hours of labour, say 6d. Now the capitalist makes him work 12 hours, and pays him 6d. He pays him 1/2d. per hour, i.e. a given quantity of 12 hours of labour has the value of 12d., and 12d. is indeed the value for which the product exchanges, when it gets sold. On the other hand, the capitalist commands with this value, if he could re-invest it in mere labour, 24 hours. The wages command, therefore, a much greater quantity of labour than they consist of, and a given quantity of living labour actually exchanges for a much smaller one of accumulated labour. The only thing that is sure is that the price of labour, wages, must always express the quantity of labour which the labourers want in order to keep soul and body together. The wages of any quantity of labour must be equal to the quantity of labour which the labourer must expend upon his own reproduction. In the above instance a man would set to work two men for 12 hours each – together 24 hours – with the quantity of labour afforded by one man. In the case above, the product would be exchanged for another product with a value of 12d., or for 12 hours of labour, and this would be the source of its profit of 6d. (its surplus value for the capitalist). The value of products is determined by the labour contained in them, not by that part of the labour in them which the employer pays for. The value of the product is constituted by labour done, including that not paid for; but wages only express paid labour, never all labour done. The measure of this payment itself depends on the productivity of labour, for the latter determines the amount of necessary labour time. And since these wages constitute the value of labour (labour itself posited as commodity), this value is constantly variable, and is the opposite of constant. The amount of labour which the worker works is very different from the amount of labour that is worked up into his labour capacity, or which is required to reproduce his labour capacity. But he does not sell as commodity the use made of him, he sells himself not as cause but as effect. Let us listen how Mr Malthus exerts himself to get the matter clear:
‘The conditions of the supply of commodities do not require that they should retain always the same relative values, but that each should retain its proper natural value, or the means of obtaining those objects which will continue to the producer the same power of production AND accumulation … profits are calculated upon the advances necessary to production … the specific advances of capitalists do not consist of cloth, but of labour; AND as no other object whatever can represent a given quantity of labour, it is clear that it is the quantity of labour which a commodity will command, and not the quantity of any other commodity, which can represent the condition of its supply, or its natural value.’ (17, 18.) (IX, 29.) Already, from the fact that the capitalist’s advances consist of labour, Malthus could have seen that the matter has not become clear. Posit that the necessary labour time is 6 hours; also A, B, two men each of whom works for himself but who exchange with one another. Let A work 6 hours, B 12 hours. Now if A wants to eat up the 6 extra hours worked by B, if he wants to consume the product of B’s 6 surplus hours, there is nothing he can give him other than 6 hours of living labour, say the next day. B now has a product of 6 hours of labour more than A. Now posit that under these circumstances he begins to fancy himself a capitalist and stops working altogether. Then on the third day, the only thing he could give in exchange for A’s 6 hours is his own accumulated product of 6 hours, and, as soon as this exchange was accomplished, he would have to begin working again himself, or starve. But if he continues to work 12 hours for A, and A continues to work 6 hours for himself and 6 for B, then they exchange exactly 12 hours with one another. The natural value of the commodity, says Malthus, consists in its giving back to its possessor through exchange the same power of production AND accumulation. His commodity consists of 2 quantities of labour, one quantity of accumulated labour + one quantity of immediate labour. Thus if he exchanges his commodity for another which contains exactly the same total quantity of labour, then his power of production and accumulation has remained at least the same, equal. But it grew, because a part of the immediate labour has cost him nothing, while he sells it nevertheless. Yet Malthus comes to the conclusion that the quantity of labour of which the product consists is paid labour only, hence = to the sum of the wages, or, that wages are the measuring rod of the value of the commodity. If every amount of labour contained in the commodity were paid for, then Mr Malthus’s doctrine would be correct, but it would be equally true that his capitalist would have no ‘advances of labour’ to make, and his ‘powers of accumulation would become totally forfeited’. Where is the profit to come from, if no unpaid labour is performed? Well, thinks Mr Malthus, [from] the wages for accumulated labour. But since labour done has ceased to work, it also ceases to draw wages. True, the product in which it exists could now be again exchanged for living labour, but posit that this product = 6 hours of labour; then the worker would give 6 hours of living labour and would receive the advances, the capitalist’s 6 hours of done labour, in return; so that the capitalist would not have budged a single step forward. Living labour would very soon be in possession of his dead labour. The reason Malthus gives, however, is that because ‘no other object whatsoever can represent a given quantity of labour’, the natural value of a commodity consists of ‘the quantity of labour which a commodity will command, and not the quantity of any other commodity’. That means a given quantity of labour can be represented only by a quantity of living (immediate) labour. Not ‘no other object whatsoever’ but rather ‘every object whatsoever’ can represent a given quantity of labour, namely every object in which the same quantity of labour is contained. But Malthus wants the quantity of labour contained in the commodity to be measured by, to be equal to, not the quantity of living labour which it can set in motion, but the quantity of paid labour which it sets in motion. Posit that the commodity contains 24 hours of labour; he thinks, then, that the capitalist can buy 2 working days with it; and if the capitalist paid all of this labour, or if the quantity of labour done = the quantity of paid living labour, then he could buy only 24 hours of living labour with his 24 hours of done labour, and his ‘powers of accumulation’ would have gone to the wall. But the capitalist does not pay the worker the labour time, the amount of labour, but rather pays him only the necessary labour, while forcing him to work the rest free of charge. Thus, with the 24 hours of done labour he may perhaps set 48 hours of living labour into motion. Thus he in fact pays 1 hour of done labour for 2 hours of living labour, and thus gains 100% on the exchange. The value of his commodity now = 48 hours, but is in no way equal to the wages exchanged for them, nor equal to the wages for which it then in turn exchanges. If he continues in the same way, his 48 hours of done labour will buy 96 hours of living labour.
Posit that no capitalists exist at all, but that the independent and mutually exchanging workers worked more than necessary to live, because they want to accumulate too, etc. Call that part of the work which the worker does in order to live, wages; and the surplus time he works in order to accumulate, profit. Then the value of his commodity would be = to the total amount of labour contained in it, = to the total sum of living labour time; but in no way = to the wages he paid himself, or equal to the part of the commodity which he would have to reproduce in order to live. Because the value of a commodity = a specific quantity of labour, Malthus says it is = to the quantity of necessary labour (i.e. wages) contained in it, and not = to the total sum of labour contained in it; its totality is = to a fraction of it. But the worker’s ‘powers of accumulation’ evidently would arise only because he has worked more than necessary to pay himself his wages. If a specific quantity of living labour time were = to the time required for the worker to live, then a specific quantity of living labour would be = to the wages which he produces, or the wages would be exactly equal to the living labour which they set in motion. If such were the case, capital would of course be impossible. If the worker, in the whole of his working time, can produce not a farthing more than his wages, then with the best of wills he cannot squeeze out a farthing for the capitalist. Property is the offspring of the productivity of labour. ‘If one can produce only for one, everyone a worker; there can be no property. If one man’s labour can maintain 5, there will be 4 idle men for 1 employed in production.’ (Ravenstone.)  We saw above how Malthus’s fantasizing profundity expressed itself in a purely childish kind of calculation. What lay behind this, by the way, was the doctrine that the value of labour was constant and that wages constituted price. Because the rate of profit on a total capital can be expressed as the same rate on the fraction of the capital made up by wages, he asserts that this fractional part constitutes and determines the price. Exactly the same profundity as here. If commodity A = an amount of x commodity, he thinks that this can mean nothing else than that it = x living labour, for only labour can represent labour. From this he concludes that commodity A = the amount of wage labour which it can command, and that therefore the value of labour is constant, because always = to the commodity by which it is set in motion. The nub of it is simply that the amount of living labour and the amount of wage labour are identical for him, and that he believes that every fractional part of wage labour is really paid for. But x living labour can be (and, as wage labour, always is) = x − y necessary labour (wages) + y surplus labour. x dead labour can therefore set in motion x − y necessary labour (wages) + y surplus labour time; i.e. it always sets in motion as many additional hours of living labour time as there are hours of surplus labour time over and above necessary labour time contained within x hours of labour.
Wage labour always consists of paid and unpaid labour.
The value of labour is constant, thus means nothing other than that all labour time is necessary, i.e. wage-producing labour time. There is no surplus labour time but – nevertheless – there are ‘powers of accumulation’ and capital. Since wages are always equal to a given quantity of labour, namely the quantity of living labour which they set in motion, and since this is the same quantity of labour contained in the wages, therefore the value of labour is constant, for it is always = to the quantity of objectified labour. The rise and fall in the price of commodities, not of the value of labour. If a worker gets 8s. silver per week or 16, this comes about only because the price of shillings has risen or fallen, but the value of labour has remained the same. In both cases he obtains a week of done labour for a week of living labour. Mr M. proves this as follows:
‘If labour alone, without capital, were employed in procuring the fruits of the earth, the greater facility of procuring one sort of them compared with another would not, it is acknowledged, alter the value of labour, or the exchangeable value of the whole produce obtained by a given quantity of exertion.’ 
This means nothing but that each of the commodities, regardless of their quantity, would be determined by the labour contained in it, despite the fact that, depending on the degree of its productivity, it would express itself in one case in more, in another in fewer, use values. ‘We should, without hesitation, allow that the difference was in the cheapness or dearness of the produce, not of the labour.’  We would say labour is more productive in one branch than in the other, or, alternatively, the product costs more or less labour. We could not speak of cheapness or dearness of labour, since no wage labour existed, and hence an hour of immediate labour would always command an hour of objectified labour, which would naturally not prevent one hour from being more productive than another. But still, to the extent that we distinguish the part of labour necessary for subsistence from the part that is surplus labour – and if any hours of the day are at all worked as surplus time, then it is the same as if every fractional part of labour time consisted of a part necessary and a part surplus labour – done by the immediate labourers, it could still not be said that the value of labour, i.e. wages (the part of the product exchanged for necessary labour, or the part of the total labour which is employed for the necessary product), are constant. The fractional part of labour time which reproduces wages would vary with productivity; thus, with the productivity of labour, the value of labour, i.e. wages, would constantly vary. Wages would be measured both before and after by a definite use value, and since the latter constantly varies in its exchange value depending on the productivity of labour, wages would change, or [in other words] the value of labour. Value of labour presupposes in principle that living labour is not equal to its product, or, what is the same, that it is sold not as an acting cause, but as itself a produced effect. ‘The value of labour is constant’ means nothing further than that it is constantly measured by the quantity of labour contained in it. A product may contain more or less labour. Therefore sometimes a greater, sometimes a lesser portion of product A may exchange for product B. But the quantity of living labour which the product buys can never be greater or smaller than the done labour which it represents, for a given quantity of labour is always a given quantity of labour, whether it exists in the form of objectified or in the form of living labour. Thus if more or less of a product is given for a specific quantity of living labour, i.e. if wages rise and fall, then this comes about not because the value of labour rose or fell, for the value of a specific quantity of labour is always equal to the same specific quantity of labour, but rather because the products have cost more or less labour, because a greater or lesser quantity of the products thus represents the same quantity of labour. Thus the value of labour remains constant. Only the value of the products changes, i.e. the productivity of labour changes, not its values. This is the pith of the theory of Malthus, if you can call such a shallow fallacy a theory. First of all, a product which has cost only half a working day may suffice for me to live and work a whole day. Whether or not the product possesses this quality depends not on its value, i.e. the labour time bestowed on it, but rather on its use value, and the exchange which takes place in this regard between living labour and the product of labour is not an exchange between both as use values, but rather their relation lies on the one side in the use value of the product, on the other side in the conditions of the existence of living labour capacity. Now, if objectified labour were exchanged for living labour, then according to the laws of exchange value the product which = half a day of work could only buy half a day of living labour, even though the worker could live from it for a whole day of work; and if his entire working day were to be bought, then he would have to obtain a whole working day in the product, with which, according to the assumption, he could live for two working days. But on the basis of capital, living labour and done labour do not exchange with one another as exchange values, as identical quantities: the same quantity of labour in objectified form as value being equivalent to the same quantity of labour in living form. Rather, what is exchanged is a product, and labour capacity, which is itself a product. Labour capacity is not = to the living labour which it can do, = to the quantity of labour which it can get done – this is its use value. It is equal to the quantity of labour by means of which it must itself be produced and can be reproduced. The product is thus in fact exchanged not for living labour, but for objectified labour, labour objectified in labour capacity. Living labour itself is a use value possessed by the exchange value [, labour capacity,] which the possessor of the product [, the capitalist,] has acquired in trade, and whether he has acquired less or more of this living labour than he has spent in the form of the product [, wages,] for labour capacity depends on the amount of living labour paid to the worker in the product. If an amount of labour were exchanged for an amount of labour, regardless of whether it were living or objectified, then of course every amount of labour would be equal to itself and its value equal to its amount. The product of half a working day thus could buy only half a working day. But then in fact no wages would exist, and no value of labour. Labour would have no value distinct from that of its product or the equivalent of its product, no specific value, and it is precisely the latter which constitutes the value of labour, wages.
From the fact, therefore, that a specific quantity of labour = a specific quantity of labour, or also that a specific quantity = itself, from the great discovery that a specific quantity is a specific quantity, Mr Malthus concludes that wages are constant, that the value of labour is constant, namely = to the same amount of labour objectified. This would be correct if living labour and stored-up labour were exchanged for one another as exchange values. But then there would exist neither value of labour, nor wages, nor capital, nor wage labour, nor Malthus’s inquiries. All of these are based on the fact that living labour appears as a use value and living labour capacity as an exchange value opposite the labour stored up in capital. Malthus calmly proceeds: ‘The same holds if capital and profits enter into the computation of value and the demand for labour varies.’  Here we have the whole profundity. As soon as capital and profits are introduced, living labour capacity begins to be bought, and therefore a smaller portion of stored-up labour is exchanged for a larger portion of living labour. It is a general characteristic of this profundity that the entry of capital, which posits wage labour and which for the first time transforms labour into wage labour and labour capacity into a commodity, introduces no change whatever, either into the realization of labour or into the realization of stored-up labour. Capital, a specific form of the relation of labour to its product and to its value, is, according to Malthus, ‘entering’ without changing anything. It is just as if he allowed of no change in the constitution of the Roman Republic other than the introduction, the ‘entering of emperors’. He continues: ‘If an increased reward of the labourers takes place without an increase in the produce, this is possible only with a fall of profits … To obtain any given portion of the produce the same quantity of labour is necessary as before, but profit being diminished, the value of the produce is decreased; while this diminution of profits in reference to the value of wages is just counterbalanced by the increased quantity of labour necessary to procure the increased produce awarded to the labourer, leaving the value of labour the same as before.’ (p. 33, 34 loc. cit. Notebook IX, 29.) According to the presupposition, the product contains the same quantity of labour. But its value is supposed to have diminished because profits have fallen. However, if the labour time contained in the product has remained the same, how can profits fall? If wages rise while total labour time remains the same – not for momentary causes such as e.g. that competition has become favourable for the workers – then this means nothing other than that the productivity of labour has fallen, that a greater amount of time is necessary to reproduce labour capacity; that, therefore, a larger part of the living labour set in motion by capital falls to necessary labour and a smaller part to surplus labour. Let us leave these trivia for later. Only the following final quotation now for the sake of completeness: ‘Inversely in the opposite case. A smaller quantity of the produce would be awarded to the labourer and profits would rise. A given quantity of produce, which had been obtained by the same quantity of labour as before, would rise in value on account of the rise of profits; while this rise of profits, in reference to the wages of the labourer, would be balanced by the smaller quantity of labour necessary to obtain the diminished produce awarded to the labourer.’ (M. p. 35) (loc. cit. IX, 29.) What he says on this occasion about money prices in different countries, proceeding from his principles, to be looked at later. <For example, commodity A can buy one working day; it pays only a half (the necessary half), but it exchanges for the whole. The amount of the total labour purchased by the commodity is then equal to necessary + surplus time. Thus if I know the price of necessary labour = x, then the price of the whole labour = 2x, and I could in this way appraise the newly created commodity in terms of wages, and thus establish the prices of all commodities in wages. But this would indeed be anything but a constant value. Through the confusion that in civilized countries an average time must indeed be worked for wages, say 12 hours, regardless of the wages and regardless of how many of these 12 hours are necessary or surplus labour time, Mr Carey as well – who reduces the amount of labour to working days (and indeed they can be reduced to living work days) – is led to make the assertion that, because the same capital costs constantly less labour time to reproduce, a machine of £100 will, for example, cost after a time only £50 owing to the growth of the productive forces, and hence will be the result of half as much labour time, working days or hours, whichever you like. From this Mr Carey concludes that the worker can buy, can obtain this machine, with half as many working days as before.  He commits the little mistake of regarding the growth of surplus labour time as if it had been gained for the worker, whereas the whole matter comes down to just the opposite, namely that the worker spends less of his whole working day working for himself, and more for capital, hence that the objective power of capital grows rapidly over against him, in a specific relation with the increase of the productive forces. Mr Carey lets the worker buy or borrow the machine; in short, he transforms him into a capitalist. And he is supposed to achieve this increased power over capital precisely because the reproduction of a specific quantity of capital costs less necessary labour, i.e. less paid labour, thus wages fall in relation to profit. In America, as long as the worker there still appropriates a part of his surplus labour for himself, he may accumulate enough to become e.g. a farmer etc. (although that too is already coming to a halt now). In places where wage labour in America can still get somewhere rapidly, this happens through the reproduction of earlier modes of production and property on the foundation of capital (e.g. the independent peasantry). In short, he regards the working days as working days belonging to the worker, and instead of concluding that he has to produce more capital in order to be employed for the same labour time, he concludes that he has to work less in order to buy the capital (to appropriate the conditions of production for himself).  If he produced 20 machines and can now produce 40 owing to increased productivity, then indeed the single machine becomes cheaper, but, because a smaller part of the working day is necessary in order to produce a given quantity of it, it does not follow that the product of the working day rose for the worker, but rather the reverse, that less living labour is employed for the production of a given quantity of machinery. By the way, Mr Carey, whose aim is harmony, himself finds that if the rate of profit declines, then the gross profit rises, because an ever larger capital is required in proportion to employed living labour, and it therefore becomes ever more impossible for the worker to appropriate the necessary sum of capital, the minimum of capital required for the productive employment of labour at the new stage of production. A fractional part of the capital requires less labour time for its reproduction, but a larger mass of capital is required in order to realize the lesser labour time. The growth of the productive forces expresses itself in a continuous decline of the part of capital consisting of labour compared with that laid out in advances, machinery etc. Carey’s entire bad joke, which was of course grist to Bastiat’s mill, rests on his transformation of the labour time or working days necessary for production into labour time belonging to the worker, whereas this time belongs in fact to capital, and an ever smaller portion of it remains for the worker in proportion to the growth in the productive force of labour. The less living labour time a given capital has to buy – or, the greater the total sum of the capital and the less the living labour employed by it relative to its size – the greater, according to Mr Carey, the chance for the worker to become owner of capital, because capital is reproduced by less living labour. The greater the capital and the smaller the number of workers it employs, relatively, the greater the chance these workers have of becoming capitalists, for has not capital now been reproduced with fewer working days? Cannot it therefore also be bought, gained with fewer working days? Take a capital of £100, employing 50 on advances, 50 on labour, and making 50% profit, for the decline of the rate of profit is Carey’s chief hobby horse and belongs with his theory. Let each £ in wages be equal to 1 working day = 1 worker. Now take another capital of £16,000, which uses 14,500 in advances, 1,500 in wages (let this also = 1,500 workers) and makes only 20% profit. In the first case the product = 150; in the second (for convenient calculation’s sake let the fixed capital turn over in one year) = 19,200 (3,200 profit). Here we have the most advantageous case for Mr Carey. The rate of profit has declined from 50% to 20, i.e. by 3/5 or by 60%. In the one case, a product of 50 is the result of 50 living work days. In the other case, a product of 3,200 by 1,500 workers. In the first case the result of 1 working day a product of 1; in the second the result of 1 working day a product of 2 2/15. In the second case less than half the labour time is necessary to produce a value of 1 as in the first. Now, does this mean that in the second case half the worker’s day produces 1/15 for himself, while the other produces only 1 in twice the time, i.e. that he is on the high road to becoming a capitalist? He would first have to acquire a capital of £16,000, and buy alien labour instead of working himself, before this decrease in necessary labour time would aid him in the least. All it has done this way is created an infinite gap between his labour and the conditions of its employment, and decreased the rate of necessary labour, thus, in proportion to the first relation, thrown more than 6 times as many workers into the street. These workers thrown into the street are now supposed to console themselves with the thought that if they had the conditions to work independently, or rather to work as capitalists, then they themselves would have to hire fewer workers. In the first case the entire capital necessary is £100, and there is more of a chance here for the individual worker in an exceptional case to save up enough, and, with a special combination of luck, himself become a capitalist at the same level as capitalist A. The labour time which the worker works is the same with A and B, although the total sum of working days needed by the capitalists is essentially different. For every 6 workers needed by the first capitalist, the second needs not quite 1. The remainder therefore have to work just as much and more surplus time. That capital needs fewer living work days at the stage of production to which it has risen along with the forces of production is the same thing, according to Carey, as that the worker needs fewer working days to appropriate capital for himself; probably with the working days of the un-‘occupied’ workers.> Because the capitalist needs fewer workers to realize his immense capital, the worker employed by him can, with less labour, make the greater capital his own. Such is the logic of Mr Carey, the harmonizer.
In connection with Ricardo’s theory, Wakefield says (Notebook VII, p. 74) loc. cit. p. 231 note:
‘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 as present labour … But the 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.’ 
<Bailey: Money and its Vicissitudes in Value etc., London, 1837 (Notebook V, p. 26 seq.), has remarks about dormant capital which can be set in motion through faster circulation (according to him, through a greater volume of currency; he should have said money) and tries to demonstrate that if capital were always fully employed in a country, then no increase of demand could bring about an increase of supply. The concept of dormant capital belongs within circulation, since capital which is not in circulation is asleep. The relevant quotations are: ‘Much capital and productive skill may exist in an inert state. Those economists are wrong who believe that the number of labourers and the quantity of capital are certain definitive powers who ought inevitably to produce a determinate result in any country where they exist.’ (p. 54.) ‘Far from the amount of commodities which the existing producers and the existing capital bring to market, being fixed and determined, it is subject to a wide range of variation.’ (p. 55.) Thus ‘not essential to an increase of production that new capital or new labourers should arise’ (e.g. in a country where there is a want of precious metals) … ‘Some commodities or, what is the same, the power to produce them, may be in excess at one place, other commodities at another place likewise, and the holder of each wishing to exchange their articles for those held by the other, but kept in a state of non-intercourse for want of a common medium of exchange, and in a state of inaction because they have no motive for production.’ (55, 56.) In the circulation of capital, money appears doubly, as the transformation of capital into money as well as realization of the price of the commodity; but here this positing of prices is not a formality. The transformation of the product into money is here the retransformation of capital into value as such, independently existing value; capital as money or money as realized capital. Secondly, in the role of mere medium of circulation; this is where it serves merely to retransform capital into the conditions of production. In this second moment, a definite amount of money has to be present at once in the form of wages, as medium of circulation, means of payment. Now the fact that money plays this double role in the circulation of capital makes it appear in all crises as if money were lacking as medium of circulation, whereas capital lacks value and hence cannot monetize itself. The mass of circulating money may even increase at the same time. A particular section must be made for the new aspects of money when posited as moment of the circulation of capital, partly as the medium of its circulation, partly as capital’s realized value, as itself capital; when we speak of interest etc.> <Bailey continues: ‘The labour made active by no means depends on a country’s available capital alone. It depends on whether food, tools and raw materials are distributed slowly or rapidly to those parts where it is wanted; whether it circulates with difficulty or not, whether it exists for long intervals in inert masses, and so as a result does not furnish sufficient employment to the population.’ (56, 57.) (Gallatin’s example, loc. cit. 68, of the western counties of Pennsylvania.)  ‘Political economists are inclined to regard a given quantity of capital and a given number of workers as production instruments of a uniform power or operating with a certain uniform intensity … The producer who employs a certain capital may have his products on hand a long time or a short, and while he waits for the occasion to exchange them, his power of producing is stopped or retarded, so that in a given period, such as one year e.g., he may produce only half of what he would, had a prompt demand been present. This remark is equally appropriate to the labourer who is his instrument. The adjustment of the various occupations of men in society to each other must, at least imperfectly, be effected. But there is a wide distance between the stages in which it is realized – every expedient that facilitates traffic is a step towards this adjustment. The more unimpeded and easy the interchange of commodities becomes, the shorter will be those unproductive intervals, in which men, eager for work, seem separated by an impassable barrier from the capital … which, although close at hand, is condemned to barren inertness.’ (p. 59–60.) ‘General principle, that a new demand will be met by fresh exertions; by the active employment of capital and labour before dormant, and not by the diversion of productive power from other objects. The latter possible only if the employment of capital and labour in a country were capable of no further growth. The exportation of the goods perhaps does not directly set new labour in motion, but it does then absorb commodities on hand as dead stock, and sets at liberty capital tied up in an unproductive state.’ (p. 65.) ‘Those who assert that an influx of money cannot promote the production of other commodities, since these commodities are the sole agents of production, prove that production cannot be enlarged at all, for it is required for such an enlargement that food, raw materials, and tools should be previously augmented, which in fact is maintaining that no increase of production can take place without a previous increase’ (but is this not the economic theory of accumulation?) ‘or in other words, that an increase is impossible.’ (p. 70.) ‘Now it is admittedly argued that if the buyer goes to market with an increased quantity of money and if he does not raise the prices of the commodities he finds there, then he gives no additional encouragement to production: if he raises the prices, however, then if prices are proportionally enhanced, the purchasers have no greater power of demand than before.’ (73.) ‘It is to be denied as a general principle that a purchaser cannot give additional encouragement to production, unless his demand raise prices … Apart from the circumstance that the preparation of a larger quantity admits of a more effective division of labour and the employment of superior machinery, there is in this matter that sort of latitude, arising from a quantity of labour and capital lying unemployed, and ready to furnish additional commodities at the same rate. Thus does it happen that a considerable increase of demand often takes place without raising prices.’(73.)>
<John Wade: History of the Middle and Working Classes etc., 3rd ed., Lond., 1835 (Notebook p. 20) says: ‘Labour is the agency by which capital is made productive of wages, profit, or revenue.’ (p. 161.) ‘Capital is stored up industry, provided to develop itself in new and equivalent forms; it is collective force.’ (p. 162.) ‘Capital is only another name for civilization.’ (164.) Like all productive powers of labour, i.e. those which determine the degree of its intensity and hence of its extensive realization, the association of the workers – the cooperation and division of labour as fundamental conditions of the productivity of labour – appears as the productive power of capital. The collective power of labour, its character as social labour, is therefore the collective power of capital. Likewise science. Likewise the division of labour, as it appears as division of the occupations and of exchange corresponding to them. All social powers of production are productive powers of capital, and it appears as itself their subject. The association of the workers, as it appears in the factory, is therefore not posited by them but by capital. Their combination is not their being, but the being [Dasein] of capital. Vis-à-vis the individual worker, the combination appears accidental. He relates to his own combination and cooperation with other workers as alien, as modes of capital’s effectiveness. Unless it appears in an inadequate form – e.g. small, self-employed capital – capital already, at a certain greater or lesser stage, presupposes concentration both in objective form, i.e. as concentration in one hand, which here still coincides with accumulation, of the necessaries of life, of raw material and instruments, or, in a word, of money as the general form of wealth; and on the other side, in subjective form, the accumulation of labour powers and their concentration at a single point under the command of the capitalist. There cannot be one capitalist for every worker, but rather there has to be a certain quantity of workers per capitalist, not like one or two journeymen per master. Productive capital, or the mode of production corresponding to capital, can be present in only two forms: manufacture and large-scale industry. In the former, the division of labour is predominant; in the second, the combination of labour powers (with a regular mode of work) and the employment of scientific power, where the combination and, so to speak, the communal spirit of labour is transferred to the machine etc. In the first situation the mass of (accumulated) workers must be large in relation to the amount of capital; in the second the fixed capital must be large in relation to the number of the many cooperating workers. But the concentration of many, and their distribution among the machinery as so many cogs (why it is different in agriculture does not belong here), is, however, already presupposed here. Case II therefore does not need to be specially examined here, but only case I. The development proper to manufacture is the division of labour. But this presupposes the (preliminary) gathering-together of many workers under a single command, just as the process through which money becomes capital presupposes the previous liberation of a certain amount of necessaries of life, raw materials and instruments of labour. The division of labour is therefore also to be abstracted away here as a later moment. Certain branches of industry, e.g. mining, already presuppose cooperation from the beginning. Thus, so long as capital does not exist, this labour takes place as forced labour (serf or slave labour) under an overseer. Likewise road building etc. In order to take over these works, capital does not create but rather takes over the accumulation and concentration of workers. Nor is this in question. The simplest form, a form independent of the division of labour, is that capital employs different hand weavers, spinners etc. who live independently and are dispersed over the land. (This form still exists alongside industry.) Here, then, the mode of production is not yet determined by capital, but rather found on hand by it. The point of unity of all these scattered workers lies only in their mutual relation with capital, which accumulates the product of their production in its hands and, likewise, the surplus values which they created above and beyond their own revenue. The coordination of their work exists only in itself, in so far as each of them works for capital – hence possesses a centre in it – without working together. Their unification by capital is thus merely formal, and concerns only the product of labour, not labour itself. Instead of exchanging with many, they exchange only with the one capitalist. This is therefore a concentration of exchanges by capital. Capital engages in exchange not as an individual, but as representing the consumption and the needs of many. It no longer exchanges as individual exchanger, but rather, in the act of exchange, represents society. Collective exchange and concentrative exchange on the part of capital with the scattered working weavers etc., whose products are collected, united through this exchange, and whose labours are thereby also united, although they proceed independently of one another. The unification of their labours appears as a particular act, alongside which the independent fragmentation of their labours continues. This is the first condition necessary for money to be exchanged as capital for free labour. The second is the suspension of the independent fragmentation of these many workers., so that the individual capital no longer appears towards them merely as social collective power in the act of exchange, uniting many exchanges, but rather gathers them in one spot under its command, into one manufactory, and no longer leaves them in the mode of production found already in existence, establishing its power on that basis, but rather creates a mode of production corresponding to itself, as its basis. It posits the concentration of the workers in production, a unification which will occur initially only in a common location, under overseers, regimentation, greater discipline, regularity and the POSITED dependence in production itself on capital. Certain faux frais de production are thereby saved from the outset. (On this whole process compare Gaskell, where special regard is had to the development of large industry in England.)  Now capital appears as the collective force of the workers, their social force, as well as that which ties them together, and hence as the unity which creates this force. Afterwards as before, and at every stage of the development of capital, this all continues to be mediated through the many exchanging with it as the one, so that exchange itself is concentrated in it; the social character of exchange; it exchanges socially with the workers, but they individually with it. With craft production, the main concern is the quality of the product and the particular skill of the individual worker; the master, as master, is supposed to have achieved mastery in this skill. His position as master rests not only on his ownership of the conditions of production, but also on his own skill in the particular work. With the production of capital, and from the very outset, the point is not this half-artistic relation to labour – which corresponds generally with the development of the use value of labour, the development of particular abilities of direct manual work, the formation of the human hand etc. The point from the outset is mass, because the point is exchange value and surplus value. The principle of developed capital is precisely to make special skill superfluous, and to make manual work, directly physical labour, generally superfluous both as skill and as muscular exertion; to transfer skill, rather, into the dead forces of nature. Now, with the presupposition of the rise of manufacture as the rise of the mode of production of capital (slaves are combined in themselves, because under a single master), it is presupposed that the productive force of labour, still to be brought to life by capital, does not yet exist. It is a presupposition, therefore, that necessary labour still takes up a great portion of the entire available labour time in manufacture, hence that surplus labour per individual worker is still relatively small. Now, this is compensated on one side, and the progress of manufactures is correspondingly accelerated, by the fact that the rate of profit is higher, hence that capital accumulates more rapidly in relation to its already existing amount, than it does in big industry. If out of 100 thalers 50 go for labour and surplus time = 1/5, then the value created = 110 or 10%. If out of 100 only 20 went for labour and surplus time = 1/4, then the value created = 105 or 5%. On the other side, manufacture obtains this higher profit rate only through the employment of many workers at once. The greater surplus time can be gained only by collecting together the surplus time of many workers in relation to capital. Absolute, not relative surplus time predominates in manufacture. This is even more the case originally where the scattered, independent workers still realize a part of their own surplus labour for themselves. For capital to exist as capital, to be able to live off profit, as well as to accumulate, its gain must = the sum of the surplus time of many simultaneous living work days. In agriculture, the soil itself with its chemical etc. action is already a machine which makes direct labour more productive, and hence gives a surplus earlier, because work is done here at an earlier stage with a machine, namely a natural one. This the only correct basis of the doctrine of the Physiocrats, which in this respect considers agriculture in comparison with a still quite undeveloped system of manufacture. If the capitalist employed one worker in order to live from that one’s surplus time, then he would obviously gain doubly if he himself also worked, with his own funds, for then he would gain, in addition to the surplus time, the wage paid the worker. He would lose in the process. I.e. he would not yet be in the situation of working as a capitalist, or the worker would only be his helper, and thus he would not stand in relation to him as capital.
Thus, in order that money may become transformed into capital, it is necessary not only that it should be able to set surplus labour in motion, but also that there should be a certain quantity of surplus labour, the surplus labour of a given mass of necessary labour, i.e. of many workers at once, so that their combined sum is sufficient for it not only to lead an existence as capital, i.e. to represent wealth in consumption in contrast to the worker’s life, but also to set aside surplus labour for accumulation. From the outset, capital does not produce for use value, for immediate subsistence. Surplus labour must therefore be large enough from the beginning to allow a part of it to be re-employed as capital. Thus, whenever the stage is reached where a certain mass of social wealth is already concentrated in one hand, which is objectively capable of appearing as capital, first as the exchange with many workers, later as production by many workers in combination, and is capable of setting a certain quantity of living labour capacities to work simultaneously, then, at that point, production by capital begins, which thus from the outset appears as the collective force, the social force, the suspension of individual isolation, first that of exchange with the workers, then that of the workers themselves. The workers’ individual isolation still implies their relative independence. Hence their regroupment around the individual capital as the exclusive base of their subsistence implies full dependence on capital, complete dissolution of the ties between the workers and the conditions of production. The result will be the same – or it is the same in another form – when the point of departure is the particular form of exchange which is presupposed for capital to exchange as capital, where money must already represent many exchangers or possess a buying power surpassing that of the individual and his individual surplus, one which, while belonging to an individual, is already more than individual, and belongs to him as a social function, in his capacity as representative, within exchange, of the social wealth – and it arises on the other side from the conditions of free labour. The detachment of the individual from the production conditions of labour = the regroupment of many around one capital. *>
* Merchant capital also from the outset the concentration of many exchanges in one hand. It already represents a mass of exchangers both as M and as C.
‘This continual progression of knowledge and of experience,’ says Babbage, ‘is our great power.’  This progression, this social progress belongs [to] and is exploited by capital. All earlier forms of property condemn the greater part of humanity, the slaves, to be pure instruments of labour. Historical development, political development, art, science etc. take place in higher circles over their heads. But only capital has subjugated historical progress to the service of wealth.
<Before accumulation by capital, there is presupposed an accumulation which constitutes capital, which is a part of its conceptual determination; we can hardly call it concentration yet, because this takes place in distinction to many capitals; but if one still speaks only of capital generally, then concentration still coincides with accumulation or with the concept of capital. I.e. it does not yet form a particular aspect. However, capital does indeed exist from the outset as One or Unity as opposed to the workers as Many. And it thus appears as the concentration of workers as distinct from that of work, as a unity falling outside them. In this respect, concentration is contained in the concept of capital – the concentration of many living labour capacities for one purpose; a concentration which does not in any way need to have been established in production, or penetrated production, at the origin. Centralizing effect of capital on labour capacities, or positing of itself as the independent and external unity of these many available existences.>
<Rossi says in his Cours d’économie politique  (Notebook, p. 26): ‘Social progress cannot consist in the dissolution of all association, but in the replacement of the forced and oppressive associations of times past by voluntary and equitable associations. The highest degree of isolation is the condition of the savage; the highest degree of forced, oppressive association is barbarism. Apart from these extremes, history shows us a great diversity of varieties and shadings. Perfection is found in voluntary associations, which by their union multiply the forces, without taking away the energy, the morality and the responsibility of individual authority.’ (p. 354.) Under capital, the association of workers is not compelled through direct physical force, forced labour, statute labour, slave labour; it is compelled by the fact that the conditions of production are alien property and are themselves present as objective association, which is the same as accumulation and concentration of the conditions of production.>
<The way of conceiving capital in its physical attribute only, as instrument of production, while entirely ignoring the economic form which makes the instrument of production into capital, entangles the economists in all manner of difficulties. Thus Rossi asks, loc. cit. (Notebook, 27): ‘Is the raw material truly an instrument of production? Is it not rather the object on which the productive instruments must act?’ (p. 367.) Thus capital is entirely identical for him here with the instrument of production in the technological sense, according to which every savage is a capitalist. (Which Mr Torrens in fact asserts in the case of the savage who throws a stone at a bird.)  Incidentally, even from the standpoint of the purely physical abstraction – i.e. of abstraction from the economic category itself – Rossi’s remark is one-sided and shows only that he has not understood his teachers in England. Accumulated labour used as instrument for new production; or produce pure and simple applied to production; the raw material is employed for production, i.e. submitted to transformation, just as well as the instrument, which is also a product. The finished result of production in turn becomes a moment of the production process. The statement means nothing more than that. Within the production process it may figure as raw material or as instrument. But it is an instrument of production not in so far as it serves as an instrument within the direct production process, but rather in so far as it is a means of the renewal of the production process itself – one of its presuppositions. More important and more to the point is the question whether the approvisionnement forms a part of capital, i.e. wages, and here the entire confusion of the economists is revealed. ‘It is said that the worker’s payment is capital, because the capitalist advances it him. If all workers’ families had enough to live for a year, there would be no wages. The worker could say to the capitalist: you advance the capital for our common project, and I contribute the labour; the product will be divided among us in such-and-such proportions. As soon as it is realized, each will take his share.’ (p. 369.) ‘Then there would be no advance to the workers. They would nevertheless consume even if the work stood still. What they would consume would belong to the consumption fund, and not at all to capital. Therefore: the advances to the workers are not necessary. Hence wages is not a constituent element of production. It is an accident, a form of our state of society. Capital, labour, land, by contrast, are necessary in order to produce. Secondly: the word wages is used in a double sense: one says that wages are a capital, but what do wages represent? Labour. He who says wages says labour and vice versa. Thus if the wages advanced are a component of capital, then there would be only two instruments of production to speak of: capital and land.’ (p. 370.) And further: ‘Basically the worker consumes not the capitalist’s possessions but his own; what is given to him as reward of labour is his proportional share of the product.’ (p. 370.) ‘The capitalist’s contract with the worker is not among the phenomena of production … The entrepreneur lends himself to this agreement, since it may facilitate production. But this agreement is nothing but a second operation, an operation of a quite different nature, grafted onto a productive operation. In another organization of labour it may disappear. Even today there are kinds of production where it has no place. The part of the fund which the entrepreneur devotes to the payment of wages does not make up a part of capital … It is a separate operation, which undoubtedly may speed the course of production, but which cannot be termed a direct instrument of production.’ (370.) ‘To conceive labour power, while abstracting from the workers’ means of subsistence during production, is to conceive a being existing only in the mind. He who says labour, who says labour power, thereby says worker and means of subsistence, labourer and wages … the same element reappears under the name of capital; as if the same thing could be simultaneously part of two different instruments of production.’ (370, 371.) Now here there is a great deal of confusion, legitimate because Rossi takes the economists at their word and equates the instrument of production as such with capital. First of all he is quite right that wage labour is not an absolute form of labour, but he forgets in the process that capital is not an absolute form of the means and materials of labour either, and that these two forms are two different moments of one and the same form, and hence rise and fall together; that it is nonsensical, therefore, for him to speak of capitalists without wage labourers. [Note] his example of the workers’ families who can live for a year without the capitalists, hence are owners of their conditions of production, who perform their necessary labour without the permission of Mr Capitalist. The capitalist whom Rossi has approaching the workers with his proposal thus is no other than a producer of instruments of production – the solicitation means nothing more than a division of labour mediated through exchange with the outside. The two then divide up the common product among themselves even without any agreement – through simple exchange. The exchange is the act of division. A further agreement is not necessary. What these worker families would then exchange would be surplus labour, absolute or relative, made possible for them by the instrument – either new secondary labour in addition to their old labour, from which they could live year after year before the appearance of the c[apitalist], or through the application of the instrument in their old branch of work. Here Mr Rossi makes the worker the owner and vendor of his surplus labour, and has thereby happily extinguished the last trace which might brand him a wage labourer, but has also thereby wiped out the last trace which makes the instrument of production into capital. It is true that the worker ‘basically does not consume the capitalist’s possessions, but his own’, but not exactly as Mr Rossi means, because it is only a proportional part of the product, but rather because it is a proportional part of his product, and because, if the semblance of exchange is stripped away, the payment consists of the fact that he works a part of the day for himself and another part for the capitalist, but only so long as he obtains permission to work at all, as his work permits this division. The act of exchange itself, as we have seen, is not a moment of the direct production process, but rather one of its conditions. Within the total production process of capital, which includes the different moments of its exchanges, its circulation, this exchange is, however, posited as a moment of the total process. But, says Rossi: wages appear twice in the account: once as capital, the other time as labour; thus the wage represents two distinct instruments of production. If the wage represents the instrument of production which is labour, then it cannot represent the instrument of production which is capital. Here another muddle, arising because Rossi takes the orthodox economic distinctions seriously. Wages figure only once in production, as a fund destined to be transformed into wages, as virtual wages. As soon as they have become real wages, they are paid out, and then only figure in consumption as the worker’s revenue. But what is exchanged for wages is labour capacity, and this does not figure in production at all, but only in the use made of it – labour. Labour appears as the instrument of the production of value because it is not paid for, hence not represented by wages. As the activity which creates use values, it likewise has nothing to do with itself as paid labour. In the hand of the worker, the wage is no longer a wage, but a consumption fund. It is wages only in the hand of the capitalist, i.e. the part of capital destined to be exchanged for labour capacity. It has reproduced a saleable labour capacity for the capitalist, so that in this regard even the worker’s consumption takes place in the service of the capitalist. He does not pay for labour itself at all, only for labour capacity. This he can do, however, only if this capacity is set to work. If the wage appears twice, it is not because it represents two different instruments of production, but because it appears the first time from the viewpoint of production, the second time from the viewpoint of distribution. This specific form of distribution, however, is not an arbitrary arrangement which could be different; it is, rather, posited by the form of production itself, is only one of its own moments considered from another angle. The value of the machine certainly forms a part of the capital laid out in it; but the machine does not produce, as value, although it brings the manufacturer income. The wage does not represent labour as an instrument of production, any more than value represents the machine as instrument of production. It represents only labour capacity, and, since the latter’s value exists separately from it as capital, a part of the capital. In so far as the capitalist appropriates alien labour and buys new alien labour with it, the wage – i.e. the representative of labour – does, if Mr Rossi wishes to put it this way, appear doubly, (1) as the property of capital, (2) as representative of labour. What actually worries Rossi is that the wage appears as the representative of two instruments of production, of capital and of labour; he forgets that labour as a productive force is incorporated in capital, and that, as labour in esse, not in posse,  it is in no way an instrument of production distinct from capital, but is, rather, that without which capital would not be an instrument of production. As for the distinction between wages as forming a part of capital and at the same time the worker’s revenue, we will come to that in the section on profit, interest, with which we shall conclude this first chapter on capital.>
<In connection with the above-mentioned work, The Measure of Value etc., Malthus returns to the theme again in his Definitions in Political Economy etc., London, 1827. He remarks in the latter: ‘No writer that I have met with, anterior to Mr Ricardo, ever used the term wages or real wages, as implying proportions. Profits, indeed, imply proportions; and the rate of profits had always justly been estimated by a percentage upon the value of the advances. But wages had uniformly been considered as rising and falling, not according to any proportion which they might bear to the whole produce obtained by a certain quantity of labour, but by the greater or smaller quantity of any particular produce received by the labourer, or by the greater or smaller power which such produce would carry of commanding the necessaries and conveniences of life.’ (M. 29, 30.) (Notebook X, p. 49.) The only value produced by capital in a given production is that added by the new amount of labour. This value, however, consists of necessary labour, which reproduces wages – the advances made by capital in the form of wages – and of surplus labour, hence surplus value above and beyond the necessary. The advances made in the form of material and machine are merely transposed from one form into another. The instrument passes into the product just as much as does the raw material, and its wearing-out is at the same time the product’s formation. If raw material and instrument cost nothing, as in some extractive industries where they are still almost = 0 (the raw material always, in every extractive industry, metal and coal mining, fishing, hunting, lumbering in virgin forests etc.), then they also add absolutely nothing to the value of the production. Their value is the result of previous production, not of the immediate production in which they serve as instrument and material. Surplus value can therefore be estimated only in proportion to necessary labour. Profits is only a secondary, derivative and transformed form of the surplus value, the bourgeois form, in which the traces of its origin are extinguished. Ricardo himself never grasped this, because he (1) always speaks only of the division of an available, ready amount, not of the original positing of this difference; (2) because this understanding would have forced him to see that there is a relation between capital and labour which is entirely different from that of exchange; and he was not allowed the insight that the bourgeois system of equivalents turns into appropriation without equivalent and is based on that; (3) his statement about proportionate profits and wages means only that [if] a certain total value is divided into two portions, any quantity at all is divided in two, then the magnitude of the two parts is necessarily in inverse relation.  And then his school justly reduced the matter to this triviality. His aim in asserting the proportionality of wages and profits was not to get to the bottom of the creation of surplus value – for since he begins with the presupposition that a given value is to be divided between wages and profit, between labour and capital, he thereby presupposes this division as self-evident – but rather, firstly, it was to counter the common determination of prices by asserting the correct one, of value, in that he showed that the limit of value is itself not affected by its distribution, different division among profits and wages; secondly: to explain not the merely transitory, but rather the continuing decline in the rate of profit, which was inexplicable to him on the presupposition that a fixed portion of value goes to labour; thirdly: in explaining the decline of profit by the rise of wages, and the latter in turn by the rise in value of agricultural products, i.e. the rising difficulty of their production, thereby at the same time to explain ground rent as not being in conflict with his determination of value. This at the same time furnished a polemical weapon for industrial capital, against the exploitation of the progress of industry by landed property. But at the same time, driven by simple logic, he had thereby proclaimed the contradictory nature of profit, of labour and of capital, despite his efforts to convince the worker afterwards that this contradictory character of profit and wages does not influence his real income, and that a proportional (not absolute) rise of wages is harmful to him, because it hinders accumulation, and the development of industry then benefits only the lazy landowner. Still, the contradictory form had been proclaimed, and Carey, who does not understand Ricardo, could therefore abuse him as the father of the communists etc., where he is again right in a sense he himself does not understand.  But the other economists, who, like Malthus, want to have absolutely nothing to do with the proportional (and hence contradictory) nature of wages, desire on the one hand to hush up the contradiction; on the other hand they cling to the notion that the worker simply exchanges a specific use value, his labour capacity, for capital, and hence gives up the productive force, the power of labour to create new value, and that he has nothing to do with the product, and hence the exchange between capitalists and workers, wages, is concerned, like every simple exchange where economic equivalents are presupposed, only with quantity, the quantity of use value. As correct as this is in one regard, it also introduces the apparent form of barter, of exchange, so that when competition permits the worker to bargain and to argue with the capitalists, he measures his demands against the capitalists’ profit and demands a certain share of the surplus value created by him; so that the proportion itself becomes a real moment of economic life itself. Further, in the struggle between the two classes – which necessarily arises with the development of the working class – the measurement of the distance between them, which, precisely, is expressed by wages itself as a proportion, becomes decisively important. The semblance of exchange vanishes in the course [Prozess] of the mode of production founded on capital. This course itself and its repetition posit what is the case in itself, namely that the worker receives as wages from the capitalist what is only a part of his own labour. This then also enters into the consciousness of the workers as well as of the capitalists. The question for Ricardo is actually only what proportion of the total value do necessary wages form in the course of development? It always remains only the necessary wage; hence its proportional nature does not interest the worker, who always obtains the same minimum, but only the capitalist, whose deductions from the total income vary, without the workers obtaining a greater amount of use values. But the fact that Ricardo formulated the contradictory nature of profit and wages, even if for quite different purposes, already shows by itself that the mode of production founded on capital had, by his time, taken on a form more and more adequate to its nature. In the cited Definitions (Notebook IX, p. 49, 50), Malthus remarks in regard to Ricardo’s theory of value: ‘Ricardo’s assertion, that as the value of wages rises, profits proportionally fall and vice versa, is true only on the presupposition that commodities in which the same amount of labour is contained, are always of the same value, and this is true in 1 case out of 500, and necessarily so, because with the progress of civilization and improvement, the quantity of fixed capital employed steadily grows, and makes more various and unequal the times of the returns of the circulating capital.’ (loc. cit. 31, 32.) (This concerns prices, not value.) Malthus remarks in connection with his own discovery of the true standard of value: ‘Firstly: I had nowhere seen it stated, that the ordinary quantity of labour which a commodity will command must represent and measure the quantity of labour worked up in it, with the addition of profits … By representing the labour worked up in a commodity, with the addition of profits, labour represents the natural and necessary conditions of its supply, or the elementary costs of its production … Secondly: I had nowhere seen it stated that, however the fertility of the soil might vary, the elementary costs of producing the wages of a given quantity of labour must always necessarily be the same.’ (196, 197.) Means only: wages always equal to the labour time necessary for their production, which varies with the productivity of labour. The quantity of commodities remains the same. ‘If one regards value as the general power of purchase of a commodity, then this relates to the purchase of all commodities, of the general mass of commodities. But this is quite unmanageable. … Now, if any one [should] object, it cannot for a moment be denied that labour best represents an average of the general mass of productions.’ (205.) ‘A large class of commodities, like raw produce, rise with the progress of society, compared with labour, while the manufactured articles fall. Thus not far from truth to say that the average mass of commodities which a given quantity of labour will command in the same country, during the course of some century, may not very essentially vary.’ (206.) ‘Value must always be value in exchange for labour.’ (224, note, loc. cit.) In other words, the doctrine is: the value of a commodity, the labour worked up in it, is represented by the living work days which it commands, for which it may be exchanged, and hence by wages. Living work days contain both time and surplus time. Let us do for Malthus the biggest favour we can do for him. Let us namely assume that the relation of surplus labour to necessary labour, hence the relation of wages to profit, always remains constant. To begin with, the fact that Mr Malthus speaks of the labour worked up in the commodity with the addition of profits already demonstrates his confusion, since these profits can form nothing other than a part of the labour worked up. What he has in mind with this is profits above and beyond labour worked up, which are supposed to come out of fixed capital etc. This can only affect the distribution of the total profit among the different shareholders, but not its total quantity, for if everyone obtained for his commodity the labour worked up in it + profits, then where would these latter come from, Mr Malthus? If one person obtains the labour worked up in his commodity + profit, then the other has to obtain labour worked up − profit, profit here regarded as the excess quantity of real surplus value. This is therefore null and void. Now posit that the labour worked up = 3 working days, and, if the proportion of surplus labour time is as 1:2, then these have been obtained in payment for 1 1/2 working days. The workers indeed worked 3 days, but each of them was paid only half a day. Or, the commodity which they obtain for their 3 days of labour had only 1 1/2 days worked up in it. Thus, all other relations being the same, the capitalist would obtain 6 working days for the 3 working days worked up in his commodity. (The matter is correct only because surplus labour time is posited as = to necessary labour time, hence in the second case only the first is repeated.) (Relative surplus value obviously restricted not only by the relation cited earlier, but also by the degree to which the product enters into the worker’s consumption. If the capitalist could obtain twice the number of cashmere shawls, owing to an increase in the productive forces, and if he sold them at their value, then he would have created no relative surplus value because the workers do not consume such shawls, and thus the time necessary for the reproduction of their labour capacity would remain the same as before. But this not so in practice, because in such cases the price rises above the value. At this point in the theory it does not concern us yet because capital is here regarded in itself, not in a particular branch.) That means, he will pay the wages of 3 days and get 6 days of work; with each 1/2 day he buys a day; hence with 6/2 days, = 3 days, 6 days. To assert, then, that the working days a commodity commands, or the wages it pays, express its value is to understand absolutely nothing of the nature of capital and wage labour. It is the pith of all value-creation and of capital-creation that objectified working days command a greater number of living ones. It would have been correct if Malthus had said that the living labour time a commodity commands expresses the measure of its realization, the measure of the surplus labour it posits. But this would only be the tautology that it posits more labour to the extent that it posits more, or it would be the expression of the opposite of what Malthus wants, that surplus value arises because the living labour time a commodity commands never represents the labour worked up in it. (Now we have finally done with Malthus.)>