Fruits and exploitation
All the research of critical communism is directed towards establishing the cause and laws of appropriation of the work of others, those of the social relationship by which certain men or groups of men, in successive societies throughout history, work and produce, while other men or groups of men live without work and consume in various ways what they have not produced. This is what research on rent, interest and profit comes down to, which are only moments and historical aspects of this work that men take at the expense of other men, i.e. surplus labour, and which, as has been demonstrated in modern times, ultimately constituted only the parts in which surplus value is divided. All Marxism can therefore be summed up in the theory of surplus value, or, in a more general sense, of surplus labour, a theory that covers not only the capitalist period but all periods, and which therefore also applies to future forms of surplus labour provision for the benefit of “all” human society (communist programme, proletarian revolution programme).
It is clear that it would be an enormity to call oneself a Marxist when one denies the doctrine of surplus value, even if it is only in its application to the capitalist mode of production.
In the summary definition of the research into the causes of surplus labour, it is possible, if the historical method is neglected, to expose oneself to misunderstanding by considering that the whole system would result from a “condemnation of the exploitation of man by man”, as if it were a moral position, which would tax this report as a crime, in any place and at any time, because of its immanent nature, without taking into account its quantitative development and the real historical process.
As we have seen elsewhere, the mistake to be made with the propaganda formula “against exploitation” is to make people believe that communism would or could abolish surplus labour, whereas what it wants, on the contrary, is to organise it in a way that the levying of surplus labour is not done solely for the benefit of an individual or a part of society (a mode which was only known by primitive communist people, in which food was eaten regardless of the quantity, time, measure of individual work provided, and all work was surplus labour given to the tribe, to the extent that surplus labour means unpaid work to the person providing it). Communism will prevent an individual, or a part of society, or even the State, from telling the one who provides the work that you will not be able to feed yourself if you do not provide, when and where you will be ordered, the part of the work paid at the right price (necessary work), because this is the condition for your surplus labour to be crystallised in it.
Thus, before situating the entire explanation of the phenomena of rent, interest and profit in the communist doctrine of surplus value, Marx illustrates it by the attempts that the great schools of economics have made to had these forms elucidated. But this history of theories, which Marx made before building his own theory, and therefore ours, will only be exposed after it; and it will be constantly enamelled with illuminating explanations of our own interpretation of all forms of surplus labour, and moreover, as in other parts of “Capital”, with vigorous passages that illustrate the revolutionary programme and the communist social form.
Harvesting or pillaging?
The oldest concept is that of the value produced by cultivated land, insofar as its first theorists were far from being able to see that it is also used, as we have said, not as a natural “free” force, but always by human labour, which can only provide it if they live, and can only live if they are fed.
The second problem is that of the interest of money; the third, historically, will be that of corporate profit.
Everyone knows that we are talking about money that we “make grow”, and also about the fruits of money capital that is simply lent to another holder to designate the interest that is paid by the latter. And since the fruit of the earth is, for physical reasons, annual, interest has also begun to be considered annual, even though there is nothing to prevent it from being brought back to any time when this miraculous source of income, money, is made available. And indeed, the theory of compound interest is established by imagining that at the end of each year, the interest of the previous year would be added to the capital already accumulated. Bank accountants venture, through the “points” system, to calculate interest for fractions of a year, and even days, but it is only at the end of the year, or sometimes the quarter, that they record it on the assets of the lending client, or on the liabilities of the debtor client.
If we take this idea to the extreme, by imagining that “dormant” money (for the person who lent it, but not for the person who borrowed it) generates at every moment a piece of value, however small it may be, we come to the notion of continuous interest. And then you have to use the famous little formula of integral calculation. It is curious that, while it seems clear to everyone that the final sum obtained by this method is a little higher than with the theory of annual compound interest (or semi-annual as in real estate loans), if we look for what is the value of the capital that gives us an annual income, say 5%, perpetual (as our little maid wanted), we find, in the case of continuous interest, the same capital, imagining its annuity as “deferred”, namely starting one year after investment. But if, on the other hand, we assume that the return begins at the very moment of the loan, then its value is obtained by adding the initial capital and a simple interest annuity. In practice, this means that, for an annual interest rate of 5%, one lira of annual income corresponds to a capital of twenty lira, but with the continuous, or “integral”, formula, it will correspond to a capital of one additional lira.
Is this perhaps why Petty used precisely 21 years in his original explanation of “capitalised ground rent”, the first celebration of the wedding between Mademoiselle Terre and Messire Argent?
Thus, while the rent that the land provides to its owner takes the material form of fruits and foodstuffs that have grown by their vegetative nature, and which are the same as those enjoyed by this individual worker who has a quantity of land corresponding to the strength of its arms, the word frutto (fruit) applied to the pecuniary interest, and in particular to the one that was first known, namely the usurious interest, has a metaphorical flavour, and it seems to have given rise, rather abusively, to the term sfruttamento (exploitation). We say that we are exploiting the land, but it is better to say that we are exploiting a mining deposit. The latter constitutes a species of wealth hoarded by Mother Nature, and there is no need for integral calculation to establish the number of years at the end of which this calculation will be exhausted (a simple division), we are used to doing so for coal or oil from the entire earth’s subsoil…. But the good cultivation of agricultural land is the one that makes it grow, and not the one that exploits it (the sfrutta), i.e. not the one that severely affects it or destroys its future fertility, which, by gradually reducing its income, would take away its “market” value from this land or greatly reduce it.
Our Italian word sfruttamento, which we apply in modern times to the benefit of the entrepreneur extorting from his employees, shows that any theory of surplus labour starts from the solution of the ground rent problem.
However, the English and French word “exploitation”, and the German word Ausbeutung (of a rather parsimonious use in Marx), come from the respective roots plot and beute which have the meaning of prey, loot, and visibly contain the notion that the first who accumulated wealth did not do so from the abundant fruits of a generous land, but by appropriating and plundering the products acquired by the work of others, or in any case entered into the possession of others.
It was the physiocratic economists of this school, born around the time of the great bourgeois revolution, who established the source of wealth in nature, attributing only to the earth the ability to give life to the human species, so men would only be infants suckling the countless udders of this round nurse with endless milk. But then, how can we explain that these infants, far from opening their eyes and eating peacefully while dozing, have to struggle so terribly to make ends meet?
Marx distinguishes between the banal formulation of this principle and the more detailed analysis carried out by the great French physiocrats, such as Turgot and Quesnay, who do not present the land as the only source of value, but rather human labour, or more precisely the work of farmers alone. In this analysis are all the elements of the capital function. The economists who succeeded them, the classical economists of the triumphant industrial bourgeoisie, also rightly attributed the ability to create value to manufacturing and industrial labour, but they developed this idea in order to praise Capital and justify its profit. It is not strange that Marx should take up their initial thesis, but that he should consider with sympathy the physiocratic thesis, insofar as it highlights the “parasitism” of industrial capital.
On the other hand, he does not care about the coarser wording of this school, as it is stated by a German official named Schmalz. Indeed, the latter generalises the physiocratic thesis according to which the worker’s work only adds to the product what has been paid him a wage, not a penny more:
“The average wage in a trade is equal to the average of what a man in this trade consumes during the time of his labour”.
Therefore, since in the work concerning manufactured objects there is absolute equality between what is received and what is given, it follows that it is the earth that sustains nations:
“The ground rent is therefore the nation’s only income, it is nature, it is God who feeds it. Wages and interest are limited to passing from one to the other but the ground rent given by nature. The ground rent is the only resource, and the nation’s wealth is only the ability of the soil to provide this ground rent each year”.
“If we consider only the elements and the reason for their value, all things that have value – it is the exchange value – are only natural products. Although work has changed the form of these things and increased their value, this value is simply the sum of the values of all the natural products that contribute to them, that is, that have been consumed by the worker in any way”.
“Only the work of agriculture and livestock is real and productive, because it creates independent organic bodies. The other work is limited to physically and chemically modifying existing bodies.” Marx, for his part, is content to smile at the ingenuity of this court adviser who addresses his writings to “Your Highness”.
Like Petty, the great English philosopher Locke recognises two forms of surplus value, land rent and interest, but he already clearly admits that the source of these two forms lies in work, work that is not carried out by the individuals who appropriate them insofar as, according to the formula Marx uses, they own the land and capital, in other words the working conditions. This common Marxist expression of working conditions that oppose work and the worker should not be taken as a Hegelian coquetry that would oppose the antithesis to the thesis in order to arrive at a synthesis when the workers have regained the working conditions that were external to them and opposed them. Working conditions should not be understood as the general atmosphere in which we work, for example, the existence or absence of lighting, dispensaries or refectory in the factory, but as the essential data, namely the necessary conditions without which it is impossible to work and therefore the room, raw materials, installations and machines. You can only work if you are allowed to enter the factory, or the field, to handle tools and materials, seeds, fertilisers, raw substances for processing. Unlike the free craftsman, the modern employee is separated from all this by an insurmountable barrier, the working conditions are material and physical elements, and the opposition between them and work is not symbolic, but is expressed by coercion imposed by the State and the law, namely by the existence of public authorities that sanction and defend these prohibitions.
Locke believes that any separation between work and its essential “conditions” is inhuman and therefore to be banned. According to him, “the earth and inferior beings belong to all men”, but he nevertheless bases property on the fact that each man possesses his own person in a certain and exclusive way. Therefore, if man, with his material and personal forces, transforms any product of nature and adds his own work to it, he makes it his property. However, in establishing his “natural law” of property, Locke asserts that it gives itself its own limit: no one can appropriate more than what is sufficient for him to live. According to Locke, this was the situation that prevailed in ancient times, and we must prevent property from being distributed in such a way that some people are excluded. There is therefore a fundamental difference between him and us, since he historically starts from an individually divided property and wants to achieve a kind of egalitarian allotment. But the important thing here is that he admits that it is work that, “99%”, gives value to the products of the land and to the land itself.
Rent and usury
So we are at the point where the nanny and infant theory is already outdated. Locke then solved the interest problem. He considers that money in itself is sterile and unproductive; but, given the unequal distribution of land, money and interest represent the means by which a person who has no land, and therefore could not work, can be “loaned” by another person in exchange for the money he will receive from part of the products. This inequality in the ownership of the means of production puts into the pockets of a third party the gain that should reward the work of a given individual, and Marx points out how important all this is given that
“Locke’s view is all the more important because it was the classical expression of bourgeois society’s ideas of right as against feudal society, and moreover his philosophy served as the basis for all the ideas of the whole of subsequent English political economy. “
At the dawn of capitalism (for England, this is the period from 1650 to 1750), a struggle between money capital and land ownership developed, despite the fact that, in many cases, the landowner himself was practising usury. When the theory of parallelism between the average ground rent and the average interest rate on money loans was established, the masters of the land asked the State to curb usurious interest rather than to introduce improvements in the productive technique of their fields if the interest rate falls (as it has indeed been the case over the centuries), the land, which still gives the same rent, sees its patrimonial value grow. But when industrial and commercial capital succeeds the primitive capital of usurers, it soon allies itself closely with land ownership, and all struggle against the usurious form Marx adds here, each on its own account.
And, (about the explanation of interest), he quotes another remarkable passage from Dudley North:
“the Landed Man letts his Land, so these [those who have stock] lett their stock (we pointed out elsewhere that, in the Neapolitan dialect, ‘u capitalista is only the private creditor, the usurer or, more elegantly, the lender);this latter is call’d Interest, but is only Rent for Stock as the other is for Land, And in several Languages, hiring of Money, and Lands, are Terms of common use; and it is so also in some Countries in England. Thus to be a Landlord (landowner in the bourgeois form), or a Stock-lord (money owner) is the same thing, the Landlord hath the advantage only in this: That his Tenant cannot carry away the Land, as the Tenant of the other may the Stock (in common parlance leave slates); and therefore Land ought to yield less profit than Stock; which is let out at the greater hazard.”
The other great philosopher, Hume, will go further than Locke in economics, because, in addition to ground rent and the interest of money, he takes into account profit, but only commercial, thus getting closer to the mercantilists who see national wealth emerge from trade with foreign countries. But Hume does not discover in the exchange the creation of a new value in him, we already find two fully established theories, that of value and that of the fall in the interest rate, explicitly formulated:
“Every thing in the world is purchased by labour”, and: “And thus… interest is the barometer of the State, and its lowness is a sign almost infallible of the flourishing of a people”.
With Steuart, who wrote in 1805, the analysis came to the third term industrial profit. He manages to analyse the price of a commodity by establishing three factors: the raw materials; the time a worker in a given country uses to process them; the value of the means of subsistence and the amount of expenses that the worker in question must incur for his essential needs; and the costs represented by the purchase of his tools. According to him, industry makes a profit if, since the price of the product is calculated in this way, the industrialist sells at a higher price the industry can only be profitable when there is strong demand.
We are certainly not yet at the Marxist formula of the value of the commodity. Marx notes that Steuart generates profit from competition, while the latter only causes variations around a level of the value of the commodity, which, in itself, contains more than the expenditure on raw materials and wages. That is why Marx will rightly take care of the greatest physiocrats.
The beams of light
It is really an unfortunate position to confuse the Marxist treatment of a given theme from the past, for example the productive technique of a prehistoric race, or the economic or historical thought of a certain author, with a cultural research of a general type such as that which corresponds to the questions asked by a university professor during an examination, so tell me about the civilisation of the ancient Mayas of Central America… or expose Kant’s social thought. For us, filling out a notebook page or a library shelf can never be an end in itself. When one of these paragraphs is dictated by Marx, or is recalled according to the Marxist method, there is not a sentence that does not give rise to a lively confrontation with the burning problems of the modern era, that does not allow the occasion to be seized to dialectically understand the secret of the society around us, to agitate in the most subversive way the agenda of the future society.
Whoever, for example, has not been able to rise to the level of Marxist theory of surplus value, will find a powerful way to do so in Marx’s presentation on that of physiocrats in Chapter VI “The General Characteristics of the Physiocrat System”.
They were indeed the first to achieve the analysis of capital in its modern relations, which is strange, and which does not arouse the curiosity of the ordinary little student or the professional researcher, it is that they do so by depreciating industry and placing agriculture in the foreground; the first fool from the agricultural section of the Stalinist parties would come to conclude that they are therefore defenders of the feudal economy against the capitalist form… “Oh, no wonder!”. (This expression [Oh que nenni!] is a form of sustained negation used by the French and corresponds to the Neapolitan “not in the slightest”; and there is no connection, because there is no capital initial to nenni, with this type mentioned in an article in “Stato Operaio” from July to August 1931, in the pen of Palmiro Togliatti, today’s compère:
“Who accuses the communists of being allies of fascism? These are the Prussian police ministers, these workers’ shooters, and Mr. Pietro Nenni, a fascist from the beginning”).
It would be useful to print this chapter in dailies and have 100 copies eaten by each renegade.
The central point of Marxist analysis about the dynamics of the wage system, regardless of who pays the wage, is to establish the radical difference between the wage, or price of the labour force, and the share of value that the labour force in question has introduced into the commodity produced.
Well, the physiocrat insists that the factory worker who, for example, sank an engine block with a quintal of pig iron, added nothing else to the value of the product but the pay he received. And he convinces himself of this by weighing the block and finding that it does not weigh more than cast iron: almost always, it weighs a little less, because of the “waste” involved in any shaping of the material.
For a physiocrat to recognise the existence of surplus value in the industry, the law of conservation of matter would have to be violated. He should have waited until the last few days when Eisenhower bragged about transforming billions of kilowatt hours and dollars into a few hectograms of heavy hydrogen!
But, provided it is agricultural production, it was the physiocratic school that first described the sorcery of the manufacture of surplus value.
“Their method of exposition is, of course, necessarily governed by their general view of the nature of value, which to them is not (and this is one of our 24-karat formulas that the ordinary reader and scientist read quickly without opening their eyes!) a definite social mode of existence of human activity (labour), but consists of material things — land, nature, and the various modifications of these material things. “.
We, the historical materialists, have explained countless times that we do not evaluate a commodity according to the material it contains – following a chemical, mechanical or even nuclear analysis! – but according to the social relationships that exist between the men who produced it, or better still, who are called upon to reproduce it. But the official economist, even today, still takes the goods in his hand, perhaps offers them right and left, and then in commercial newspapers, then estimates them according to their quantity of material, and sets the price using small, banal formulas based on the intensity of demand and the rarity of supply.
And the text goes on:
“The difference between the value of labour-power and the value created by it — that is, the surplus-value which the purchase of labour-power secures for the user of labour-power — appears most palpably, most incontrovertibly, of all branches of production, in agriculture, the primary branch of production”.
“The sum total of the means of subsistence which the labourer consumes from one year to another, or the mass of material substance which he consumes, is smaller than the sum total of the means of subsistence which he produces.”
Since this is not an obvious phenomenon in the industry, this difference can only be discovered by doing a “general value analysis” and discovering its nature. The physiocrats, on the other hand, noticed it in agriculture, but they denied it in industry: they called productive work agricultural work, productive class the class of agricultural workers, sterile class the class of factory workers.
Subsistence and procreation
Let us stop for a moment on the first and lowest term of the difference this value that is attributed to the worker for the performance of his labour power, and therefore the price of the latter, the wage. Marx says:
“The minimum of wages therefore correctly forms the pivotal point of Physiocratic theory”.
By digressing into the digression, we will avoid the confusion that is usually committed. To prove the existence of surplus value, as well as its growth in mass and rate, it is not necessary that the wage remains at this “minimum” to which it is not bound by any “iron law”, contrary to what Lassalle said. The wage is between this minimum and a maximum which would be the total value added by the worker to the finished product. It can therefore perfectly exceed the minimum; but it cannot fall below it permanently, because otherwise the social system we are analysing could not be perpetuated into the future, due to the exhaustion of the available social labour force.
The minimum value of the wage is therefore the one that ensures the preservation of the worker’s labour power. But it includes not only his nutritional “reproduction” but also his sexual “reproduction”, and here, with the help of a few quotations, we will strengthen our analyses on race and economy, namely that the sexual fact is reduced to an economic fact and also constitutes a necessary element of the “material basis” of any society.
This minimum value:
“is equal to the labour-time required to produce the means of subsistence necessary for the reproduction of labour-power, or to the price of the means of subsistence necessary for the existence of the worker as a worker”.
And in the same chapter, further on:
“the productivity of labour [must be at] such a stage of development that a man’s labour-time [be] more than sufficed to keep him alive, to produce and reproduce his own means of subsistence… labour-power [must be] to create more than its own value, to produce more than the needs dictated by its life process “.
Since all this is considered at the level of society, it is indeed the vital process of the working class and not that of the isolated worker. One of the first authors studied by Marx was already asking the question: how much does it take to maintain the worker and procreate other workers? Adam Smith, quoted much later by Marx, will answer this question perfectly well:
“A man must always live by his work, and his wages must at least be sufficient to maintain him. They must even upon most occasions be somewhat more, otherwise it would be impossible for him to bring up a family, and the race of such workmen could not last beyond the first generation”. Of course, Smith was most concerned that, in this case, it would be the non-working class that, in the general affliction, would also disappear.
Thus, therefore, the “reactionary” hostility of the physiocrats to modern industry does not prevent them from being at the forefront of deciphering the agricultural production process, and from being the first to have given the three correct terms of constant capital value, wage capital, surplus value, which are all three incorporated in the value of the product.
Distribution and production
The merit of the physiocrats (whose exact historical “place” we will later give them in the transition to the bourgeois revolution, a “place” that Marx masterfully establishes in his text) is that they finally located the origin of the accumulation of value in the sphere of production, thus going beyond the previous school, the mercantilist school, which saw national enrichment only in the different kinds of trade.
“In the Mercantile system, surplus-value is only relative — what one wins, the other loses: profit upon alienation or oscillation of wealth between different parties. So that within a country, if we consider the total capital, no creation of surplus-value in fact takes place (i.e. that the nation consumes in the year, for example, what it has produced in the year). It can only arise in the relations between one nation and other nations… the Mercantile system in fact denies the creation of absolute surplus-value — the Physiocrats seek to explain absolute surplus-value: the net product. And since the net product is fixed in their minds as use-value, agriculture [is for them] the sole creator of it“.
In the doctrine of the monetary and mercantilist systems, the only source of relative enrichment is the money that the trader employs, commercial capital, which is invested in circulating commodities and produces a superior product from them. A parthenogenesis of silver, which generates itself.
In the physiocratic doctrine, which is much superior, we have the combination of land and money, we recognise, which is fundamental, that the remuneration of these two factors does not come from exchange but from production (first appearance of the law of equivalence in any exchange), comes from work, even if it is about the specific work that operates within, if you can say so, nature, which produces the fruits of the earth. Insofar as this work is no longer obtained because of the peasant’s personal subjection, but because it has become a commodity and paid for in exchange for money, it now takes on a bourgeois and no longer feudal form, and generates an overwork that is transformed entirely into a land rent. From the landowners’ income are then detached from the sums intended to pay interest to the money lenders, and a kind of remuneration to the managers of the industry, which is not profit, since the manufacturing industry does not generate, for the physiocrats, any surplus value, but which is supposed to pay only the money invested by the latter, since the only change they make in the products concerns only their external form.
Nevertheless, in the sphere of agriculture, the capitalist formula is already fully applied, and there is a particular commodity, labour power, which (only) has this magical capacity when the person who bought it uses it, makes it work, a use value much higher than the price paid, its exchange value, the wage arises from it.
And so, while the peaceful physiocrats believed they were founding a happy household between land and money, they unleashed without realising it a third diabolical element, industrial capital, eager for surplus labour, which will forcefully impose adultery, and absorb enormous amounts of difference from the surplus labour of previously unsuspected masses of workers, leaving only small profits for the land rent and for the benefit of the savers.
“Because agricultural labour is conceived as the only productive labour, the form of surplus-value which distinguishes agricultural labour from industrial labour, rent, is conceived as the only form of surplus-value. Profit on capital in the true sense [beware here we move from criticism to our own enunciation!], of which rent itself is only an offshoot, therefore does not exist for the Physiocrats. Profit is seen by them as only a kind of higher wages paid by the landowners, which the capitalists consume as revenue (and which therefore enters into their costs of production in the same way as the minimum wages of the ordinary workmen); this increases the value of the raw material, because it enters into the consumption costs which the capitalist, [the] industrialist, consumes while he is producing the product, transforming the raw material into a new product”.
This product exactly offsets its various production costs, and therefore there is no accumulation of new values in the industry, and nothing, other than the amount of the ground rent, is added to the total of the “national wealth”.
“Surplus-value in the form of interest on money — another branch of profit — is consequently declared by one section of the Physiocrats, such as Mirabeau the elder, to be usury and contrary to nature. Turgot on the other hand derives his justification of it from the fact that the money capitalist could buy land, that is, rent, and that therefore his money capital must bring him in as much surplus-value as he would receive if he converted it into landed property… Because agricultural labour is the only productive labour… Industrial profit and interest are merely different categories into which rent is divided and, in certain portions, passes from the hands of the landowners into the hands of other classes”.
We have thus arrived at a very clear distinction. At the dawn of capitalist production, it becomes obvious that the Social movement consists of the production of surplus value. For physiocrats, it comes entirely from ground rent, and it is detached from the shares determined for industrialists and bankers.
From Adam Smith,
“…This is the direct opposite… [Smith and later economists] rightly consider (and we are therefore at the formulation of the corresponding Marxist thesis), industrial profit to be the form in which surplus-value is originally appropriated by capital…, and rent as mere offshoots of industrial profit (it should be said, for the sake of clarity of the presentation, commercial profit since both agriculture and industry are made up of companies), which is distributed by the industrial capitalists to various classes, who are co-owners of surplus-value”.
Consequently, to establish the terms of the agrarian question, it must be remembered that in the capitalist era, the rent of the land is a part taken from social surplus labour as remuneration for the monopoly of the land, the part of its owners.
At the beginning of the capitalist cycle, landowners claim to be at the head of society; at the end of this cycle, after being downgraded to a subordinate position, they can even be eliminated, without the capitalist and wage system of production having yet ended its life.
Source: “Il Programma Comunista” Nr. 23, 18 December 1953 – 8 January 1954.