Quesnay demonstrated the phases of the reproduction of aggregate capital with a few figures, at the same time taking into account that it must also be considered from the aspect of commodity exchange, that is as a process of circulation.[60]
Society as Quesnay sees it consists of three classes: the productive class of agriculturists; the sterile class containing all those who are active outside the sphere of agriculture—industry, commerce, and the liberal professions; and lastly the class of landowners, including the Sovereign and the collectors of tithes. The national aggregate product materialises in the hands of the productive class as an aggregate of provisions and raw materials to the value of some 5,000 million livres. Of this sum, 2,000 millions represent the annual working capital of agriculture, 1,000 millions represent the annual wear and tear of fixed capital, and 2,000 millions are the net revenue accruing to the landowners. Apart from this total produce, the agriculturists, here conceived quite in capitalist terms as tenant farmers, have 2,000 million livres cash in hand. Circulation now takes place in such a way that the tenant class pay the landowners 2,000 millions cash as rent (as the cost of the previous period of production). For this money the landowning class buy provisions from the tenants for 1,000 millions and industrial products from the sterile class for the remaining 1,000 millions. The tenants in their turn buy industrial products for the 1,000 millions handed back to them, whereupon the sterile class buy agricultural products for the 2,000 millions they have in hand: for 1,000 millions raw materials etc., to replace their annual working capital, and provisions for the remaining 1,000 millions. Thus the money has in the end returned to its starting point, the tenant class; the product is distributed among all classes so that consumption is ensured for everyone; at the same time the means of production of the sterile as well as of the productive class have been renewed and the landowning class has received its revenue. The prerequisites of reproduction are all present, the conditions of circulation have all been fulfilled, and reproduction can start again on its regular course.[61]
We shall see later in the course of our investigation that this exposition, though showing flashes of genius, remains deficient and primitive. In any case, we must stress here that Quesnay, on the threshold of scientific economics, had not the slightest doubt as to the possibility of demonstrating total social capital and its reproduction. Adam Smith, on the other hand, while giving a more profound analysis of the relations of capital, laid out what seems like a maze when compared with the clear and sweeping outlines of the Physiocrat conception. By his wrong analysis of prices, Smith upset the whole foundation of the scientific demonstration of the capitalist process as a whole. This wrong analysis of prices ruled bourgeois economics for a long time; it is the theory which maintains that, although the value of a commodity represents the amount of labour spent in its production, yet the price consists of three elements only: the wage of labour, the profit of capital, and the rent.
As this obviously must also apply to the aggregate of commodities, the national product, we are faced with the startling discovery that, although the value of the aggregate of commodities manufactured by capitalist methods represents all paid wages together with the profits of capital and the rents, that is the aggregate surplus value, and consequently can replace these, there is no component of value which corresponds to the constant capital used in production. According to Smith, v + s is the formula expressing the value of the capitalist product as a whole. Demonstrating his view with the example of corn, Smith says as follows:
‘These three parts (wages, profit, and rent) seem either immediately or ultimately to make up the whole price of corn. A fourth part, it may perhaps be thought, is necessary for replacing the stock of the farmer, or for compensating the wear and tear of his labouring cattle, and other instruments of husbandry. But it must be considered that the price of any instrument of husbandry, such as a labouring horse, is itself made up of the same three parts: the rent of the land upon which he is reared, the labour of tending and rearing him, and the profits of the farmer who advances both the rent of this land and the wages of this labour. Though the price of the corn, therefore, may pay the price as well as the maintenance of the horse, the whole price still resolves itself either immediately or ultimately into the same three parts of rent, of labour and profit.’[62]
Sending us in this manner ‘from pillar to post’, as Marx has put it, Smith again and again resolved constant capital into v + s. However, he had occasional doubts and from time to time relapsed into the contrary opinion. He says in the second book:
‘It has been shown in the first Book, that the price of the greater part of commodities resolves itself into three parts, of which one pays the wages of the labour, another the profits of the stock, and a third the rent of the land which had been employed in producing and bringing them to market.... Since this is the case ... with regard to every particular commodity, taken separately; it must be so with regard to all the commodities which compose the whole annual produce of the land and labour of every country, taken complexly. The whole price or exchangeable value of that annual produce must resolve itself into the same three parts, and be parcelled out among the different inhabitants of the country, either as the wages of their labour, the profits of their stock, or the rent of their land.’[63]
Here Smith hesitates and immediately below explains: ‘But though the whole value of the annual produce of the land and labour of every country is thus divided among and constitutes a revenue to its different inhabitants, yet as in the rent of a private estate we distinguish between the gross rent and the neat rent, so may we likewise in the revenue of all the inhabitants of a great country.
‘The gross rent of a private estate comprehends whatever is paid by the farmer; the neat rent, what remains free to the landlord after deducting the expense of management, of repairs, and all other necessary charges; or what, without hurting his estate, he can afford to place in his stock reserved for immediate consumption, or to spend upon his table, equipage, the ornaments of his house and furniture, his private enjoyments and amusements. His real wealth is in proportion, not to his gross, but to his neat rent.
‘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, conveniences, and amusements. Their real wealth too is in proportion, not to their gross, but to their neat revenue.’[64]
Here Smith introduces a portion of value which corresponds to constant capital, only to eliminate it the very next moment by resolving it into wages, profits, and rents. And in the end, the matter rests with this explanation:
‘As the machines and instruments of trade, etc. which compose the fixed capital either of an individual or of a society, make no part either of the gross or the neat revenue of either, so money, by means of which the whole revenue of the society is regularly distributed among all its different members, makes itself no part of that revenue.’[65]
Constant capital, the fixed capital of Adam Smith, is thus put on the same level as money and does not enter into the total produce of society, its gross revenue. It does not exist within this total product as an element of value.
You cannot get blood out of a stone, and so circulation, the mutual exchange of the total product constituted in this manner, can only lead to realisation of the wages (v) and of the surplus value (s). However, as it cannot by any means replace the constant capital, continued reproduction evidently must become impossible. Smith indeed knew quite well, and did not dream of denying, that every individual capitalist requires constant capital in addition to his wages fund, his variable capital, in order to run his enterprise. Yet the above analysis of commodity prices, when it comes to take note of capitalist production as a whole, allows constant capital to disappear without a trace in a puzzling way. Thus the problem of the reproduction of capital is completely muddled up. It is plain that if the most elementary premise of the problem, the demonstration of social capital
