product. It is impossible to find any means of production in which value is embodied, without it being itself the product of some previous labour.
Secondly, speaking in terms of capitalism, it follows further that all capital which has been completely used up in the manufacture of any commodity, can in the end be resolved into a certain quantity of performed labour.
Thirdly, the total value of the commodity, including all capital advances, can readily be resolved in this manner into a certain quantity of labour. What is true for every commodity, must go also for the aggregate of commodities produced by a society in the course of a year; its aggregate value can similarly be resolved into a quantity of performed labour.
Fourthly, all labour performed under capitalist conditions is divided into two parts: paid labour which restores the wages advanced, and unpaid labour which creates profit and rent, or surplus value. All labour carried out under capitalist conditions thus corresponds to our formula v + s.[83]
All the arguments outlined above are perfectly correct and unassailable. Smith handled them in a manner which proves his scientific analysis consistent and undeviating, and his conceptions of value and surplus value a distinct advance on the Physiocrat approach. Only occasionally, in his third thesis, he went astray in his final conclusion, saying that the aggregate value of the annually produced aggregate of commodities can be resolved into the labour of that very year, although he himself had been acute enough to admit elsewhere that the value of the commodities a nation produces in the course of one year necessarily includes the labour of former years as well, that is the labour embodied in the means of production which have been handed down.
But even if the four statements enumerated are perfectly correct in themselves, the conclusion Smith draws from them—that the total value of every commodity, and equally of the annual aggregate of commodities in a society, can be resolved entirely into v + s—is absolutely wrong. He has the right idea that the whole value of a commodity represents nothing but social labour, yet identifies it with a false principle, that all value is nothing but v + s. The formula v + s expresses the function of living labour under capitalism, or rather its double function, first to restore the wages, or the variable capital, and secondly, to create surplus value for the capitalist. Wage labour fulfils this function whilst it is employed by the capitalists, in virtue of the fact that the value of the commodities is realised in cash. The capitalist takes back the variable capital he had advanced in form of wages, and he pockets the surplus value as well. v + s therefore expresses the relation between wage labour and capitalist, a relationship that is terminated in every instance as soon as the process of commodity production is finished. Once the commodity is sold, and the relation v + s is realised for the capitalist in cash, the whole relationship is wiped out and leaves no traces on the commodity. If we examine the commodity and its value, we cannot ascertain whether it has been produced by paid or by unpaid labour, nor in what proportion these have contributed. Only one fact is beyond doubt: the commodity contains a certain quantity of socially necessary labour which is expressed in its exchange. It is completely immaterial for the act of exchange as well as for the use of the commodity whether the labour which produced it could be resolved into v + s or not. In the act of exchange all that matters is that the commodity represents value, and only its concrete qualities, its usefulness, are relevant to the use we make of it. Thus the formula v + s only expresses, as it were, the intimate relationship between capital and labour, the social function of wage labour, and in the actual product this is completely wiped out. It is different with the constant capital which has been advanced and invested in means of production, because every activity of labour requires certain raw materials, tools, and buildings. The capitalist character of this state of affairs is expressed by the fact that these means of production appear as capital, as c, the property of a person other than the labourer, divorced from labour, the property of those who themselves do not work. Secondly, the constant capital c, a mere advance laid out for the purpose of creating surplus value, appears here only as the foundation of v + s. Yet the concept of constant capital involves more than this: it expresses the function of the means of production in the process of human labour, quite independently of all its historical or social forms. Everybody must have raw materials and working tools, the means of production, be it the South Sea Islander for making his family canoe, the communist peasant community in India for the cultivation of their communal land, the Egyptian fellah for tilling his village lands or for building Pharaoh’s pyramids, the Greek slave in the small workshops of Athens, the feudal serf, the master craftsman of the medieval guild, or the modern wage labourer. They all require means of production which, having resulted from human labour, express the link between human labour and natural matter, and constitute the eternal and universal prerequisites of the human process of production. c in the formula c + v + s stands for a certain function of the means of production which is not wiped out in the succession of the labour process. Whereas it is completely immaterial, for both the exchange and the actual use made of a commodity, whether it has been produced by paid or by unpaid labour, by wage labour, slave labour, forced labour or any other kind of labour; on the other hand, it is of decisive importance, as for using it, whether the commodity is itself a means of production or a consumer good. Whether paid or unpaid labour has been employed in the production of a machine, matters to the machinery manufacturer and to his workers, but only to them; for society, when it acquires this machine by an act of exchange, only the quality of this machine as a means of production, only its function in the process of production is of importance. Just as every producing society, since time immemorial, has had to give due regard to the important function of the means of production by arranging, in each period of production, for the manufacture of the means of production requisite for the next period, so capitalist society, too, cannot achieve its annual production of value to accord with the formula v + s—which indicates the exploitation of wage labour—unless there exists, as the result of the preceding period, the quantity of means of production necessary to make up the constant capital. This specific connection of each past period of production with the period following forms the universal and eternal foundation of the social process of reproduction and consists in the fact that in every period parts of the produce are destined to become the means of production for the succeeding period: but this relation remained hidden from Smith’s sight. He was not interested in means of production in respect of their specific function within the process to which they are applied; he was only concerned with them in so far as they are like any other commodity, themselves the product of wage labour that has been employed in a capitalist manner. The specifically capitalist function of wage labour in the productive process completely obscured for him the eternal and universal function of the means of production within the labour process. His narrow bourgeois approach overlooked completely the general relations between man and nature underneath the specific social relations between capital and wage labour. Here, it seems, is the real source of Adam Smith’s strange dogma, that the total value of the annual social product can be resolved into v + s. He overlooked the fact that c as the first link in the formula c + v + s is the essential expression of the general social foundation of exploitation of wage labour by capital.
We conclude that the value of every commodity must be expressed by the formula c + v + s. The question now arises how far this formula applies to the aggregate of commodities within a society. Let us turn to the doubts expressed by Smith on this point, the statement that an individual’s fixed and circulating capital and his revenue do not strictly correspond to the same categories from the point of view of society. (Cf. above, p. 64, no. 3.) What is circulating capital for one person is not capital for another, but revenue, as for instance capital advances for wages. This statement is based upon an error. If the capitalist pays wages to the workers, he does not abandon his variable capital and let it stray into the workers’ hands, to become their income. He only exchanges the value-form of his variable capital against its natural form, labour power. The variable capital remains always in the hand of the capitalist, first as money, and then as labour power, to revert to him later together with the surplus value as the cash proceeds
