The Accumulation of Capital. Rosa Luxemburg
his landlord and his servants in husbandry, yet to them these payments are items of revenue—rent to the one and wages to the other—to the one, the revenue of the land, to the other, the revenue of his industry. The aggregate of all these is defrayed out of the value of the cloth, the whole of which forms the revenue of some one or other, and is entirely absorbed in that way.—Whence it appears that the term net produce applies only to the individual revenue of each separate producer or adventurer in industry, but that the aggregate of individual revenue, the total revenue of the community, is equal to the gross produce of its land, capital and industry, which entirely subverts the system of the economists of the last century, who considered nothing but the net produce of the land as farming revenue, and therefore concluded, that this net produce was all that the community had to consume; instead of closing with the obvious inference, that the whole of what had been created, may also be consumed by mankind.’[67]
Say proves his theory in his own peculiar fashion. Whereas Adam Smith tried to give a proof by referring each private capital unit to its place of production in order to resolve it into a mere product of labour, but conceived of every product of labour in strictly capitalist terms as a sum of paid and unpaid labour, as v + s, and thus came to resolve the total product of society into v + s; Say, of course, is cocksure enough to ‘correct’ these classical errors by inflating them into common vulgarities. His argument is based upon the fact that the entrepreneur at every stage of production pays other people, the representatives of previous stages of production, for the means of production which are capital for him, and that these people in their turn put part of this payment into their own pockets as their income and partly use it to recoup themselves for expenses advanced in order to provide yet another set of people with an income. Say converts Adam Smith’s endless chain of labour processes into an equally unending chain of mutual advances on income and their repayment from the proceeds of sales. The worker appears here as the absolute equal of the entrepreneur. He has his income advanced in the form of wages, paying for it in turn by the labour he performs. Thus the final value of the aggregate social product appears as the sum of a large number of advanced incomes and is spent in the process of exchange on repayment of all these advances. It is characteristic of Say’s superficiality that he illustrates the social connections of capitalist reproduction by the example of watch manufacture—a branch of production which at that time and partly even to-day is pure ‘manufacture’ where every worker is also an entrepreneur on a small scale and the process of production of surplus value is masked by a series of successive acts of exchange typical of simple commodity production.
Thus Say gives an extremely crude expression to the confusion inaugurated by Adam Smith. The aggregate of annual social produce can be completely resolved as regards its value into a sequence of various incomes. Therefore it is completely consumed every year. It remains an enigma how production can be taken up again without capital and means of production, and capitalist reproduction appears to be an insoluble problem.
If we compare the varying approaches to the problem from the time of the Physiocrats to that of Adam Smith, we cannot fail to recognise partial progress as well as partial regression. The main characteristic of the economic conception of the Physiocrats was their assumption that agriculture alone creates a surplus, that is surplus value, and that agricultural labour is the only kind of labour which is productive in the capitalist sense of the term. Consequently we see in the Tableau Économique that the unproductive class of industrial workers creates value only to the extent of the same 2,000 million livres which it consumes as raw materials and foodstuffs. Consequently, too, in the process of exchange, the total of manufactured products is divided into two parts, one of which goes to the tenant class and the other to the landowning class, while the manufacturing class does not consume its own products. Thus in the value of its commodities, the manufacturing class reproduces, strictly speaking, only that circulating capital which has been consumed, and no income is created for the class of entrepreneurs. The only income of society that comes into circulation in excess of all capital advances, is created in agriculture and is consumed by the landowning class in the form of rents, while even the tenant class do no more than replace their capital: to wit, 1,000 million livres interest from the fixed capital and 2,000 million circulating capital, two-thirds being raw materials and foodstuffs, and one-third industrial products. Further it is striking that it is in agriculture alone that Quesnay assumes the existence of fixed capital which he calls avances primitives as distinct from avances annuelles. Industry, as he sees it, apparently works without any fixed capital, only with circulating capital turned over each year, and consequently does not create in its annual output of commodities any element of value for making good the wear and tear of fixed capital (such as premises, tools, and so on).[68]
In contrast with this obvious defect, the English classical school shows a decisive advance above all in proclaiming every kind of labour as productive, thus revealing the creation of surplus value in manufacture as well as in agriculture. We say: the English classical school, because on this point Adam Smith himself occasionally relapses quietly into the Physiocrat point of view. It is only Ricardo who develops the theory of the value of labour as highly and logically as it could advance within the limits of the bourgeois approach. The consequence is that we must assume all capital investment to produce annual surplus value, in the manufacturing part of social production as a whole no less than in agriculture.[69]
On the other hand, the discovery of the productive, value-creating property of every kind of labour, alike in agriculture and in manufacture, suggested to Smith that agricultural labour, too, must produce, apart from the rent for the landowning class, a surplus for the tenant class over and above the total of their capital expenses. Thus, in addition to the replacement of capital, an annual income of the tenant class comes into being.[70]
Lastly, by a systematic elaboration of the concepts of avances primitives and avances annuelles introduced by Quesnay, which he calls fixed and circulating capital, Smith has made clear, among other things, that the manufacturing side of social production requires a fixed as well as a circulating capital. Thus he was well on the way to restoring to order the concepts of capital and revenue of society, and to describing them in precise terms. The following exposition represents the highest level of clarity which he achieved in this respect:
‘Though the whole annual produce of the land and labour of every country is, no doubt, ultimately destined for supplying the consumption of its inhabitants and for procuring a revenue to them, yet when it first comes either from the ground or from the hands of the productive labourer, it naturally divides itself into two parts. One of them, and frequently the largest, is, in the first place, destined for replacing a capital, or for renewing the provisions, materials, and finished work, which had been withdrawn from a capital; the other for constituting a revenue either to the owner of this capital, as the profit of his stock, or to some other person, as the rent of his land.’[71]
‘The gross revenue of all the inhabitants of a great country comprehends the whole annual produce of their land and labour; the neat revenue, what remains free to them after deducting the expense of maintaining, first, their fixed, and secondly, their circulating capital; or what, without encroaching upon their capital, they can place in their stock reserved for immediate consumption, or spend upon their subsistence, conveniencies, and amusements. Their real wealth too is in proportion, not to their gross, but to their neat revenue.’[72]
The concepts of total capital and income appear here in a more comprehensive and stricter form than in the Tableau Économique. The one-sided connection of social income with agriculture is severed and social income becomes a broader concept; and a broader concept of capital in its two forms, fixed and circulating capital, is made the basis of social production as a whole. Instead of the misleading differentiation of production into two departments, agriculture and industry, other categories of real importance are here brought to the fore: the distinction between capital and income and the distinction, further, between fixed and circulating capital.
Now Smith proceeds to a further analysis of the mutual relations of these categories and of how they change in the course of the social process, in production and circulation—in the reproductive process of society. He emphasises here a radical distinction between fixed and circulating capital from the point of view of the society:
‘The