[OPE] Karl Marx on gross product and net product

"Since the purpose of capitalist production (and therefore of productive
labour) is not the existence of the producer but the production of surplus
value, all necessary labour which produces no surplus labour is superfluous
and worthless to capitalist production. The same is true for a nation of
capitalists. All gross product which only reproduces the worker, i.e.
produces no net product (surplus produce), is just as superfluous as that
worker himself [who produces no surplus value]. Or, if certain workers were
necessary for the production of net product at a given stage of the
development of production, they become superfluous at a more advanced stage
of production, which no longer requires them. Or, in other words, only the
number of people profitable to capital is necessary. The same is true for a
nation of capitalists.

"Is not the real interest of a nation similar" to that of a private
capitalist, for whom it would be a matter quite indifferent whether his
capital would "employ 100 or 1,000 men" provided his profits on a capital of
20,000 "were not diminished in all cases below 2,000? Provided its net real
income, its rents and profits be the same, it is of no importance whether
the nation consists of 10 or of 12 millions of inhabitants... If 5 millions
of men could produce as much food and clothing as was necessary for 10
millions, food and clothing for 5 millions would be the net revenue. Would
it be of any advantage to the country, that to produce this same net
revenue, 7 millions of men should be required, that is to say, that 7
millions should be employed to produce food and clothing sufficient for 12
millions? The food and clothing of 5 millions would be still the net
 revenue" [D. Ricardo, De principes de l'économie politique et de l'impôt,
Paris, 1819]

Even the philanthropists can have no objection to bring forward against this
statement by Ricardo. For it is always better that out of 10 million people
only 50% should vegetate as pure production machines for 5 million, than
that out of 12 million 7 million, or 58 1/3%, should do so.

* "Of what use in a modern kingdom would be a whole province thus divided"
[between *self-sustaining little farmers* as in the *first times of ancient
Rome], "however well cultivated, except for the mere purpose of breeding
men, which, singly taken, is a most useless purpose" * (Arthur Young,
Political Arithmetic etc., London, 1774, p. 47).

The circumstance that the purpose of capitalist production is net produce,
which in fact merely takes the form of the surplus produce, in which surplus
value is expressed, implies that capitalist production is essentially the
production of surplus value.

This runs counter to e.g. the antiquated point of view, corresponding to
earlier modes of production in accordance with which the urban authorities,
etc., for example, prohibited the use of inventions in order not to deprive
workers of their subsistence, since the worker as such counted as an end in
himself, and the livelihood he earned in his station counted as his
privilege, which the whole of the old order was concerned to maintain. It
also runs counter to the point of view, still tinged with nationalism, of
the protectionist system (as opposed to free trade, that industries, etc.,
should be protected nationally against foreign competition, etc., as being
the sources for the existence of a large number of human beings. But it also
runs counter to Adam Smith's view that e.g. the investment of capital in
agriculture is "more productive" because the same amount of capital sets
more hands to work. For the developed capitalist mode of production, these
are all outdated, and untrue, false, notions. A large gross product (as far
as the variable part of capital is concerned) in proportion to a small net
product is = a small productive power of labour, and therefore of capital.

[488] There is nevertheless a whole range of confused conceptions
traditionally associated with this distinction between gross and net
product. These derive in part from the Physiocrats (see Book IV[240]) and in
part from Adam Smith, who continues on occasion to confuse capitalist
production with production for the direct producers.

If an individual capitalist sends money abroad, where he gets interest at
10%, whereas at home he might be able to employ a large number of surplus
people, from the capitalist standpoint he deserves an award for good
citizenship, for this virtuous burgher is putting into effect the law that
distributes capital within the world market, as also within the confines of
a given society, according to the rate of profit provided by each particular
sphere of production, and precisely in this way brings the various spheres
of production into equilibrium and proportion. (Whether the money is
delivered e.g. to the Emperor of Russia for wars against Turkey, etc., is
irrelevant.) In acting in this way, the individual capitalist is only
following the immanent law and therefore the morality of capital to produce
as much surplus value as possible."
http://www.marxists.org/archive/marx/works/1864/economic/ch02b.htm#487

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Received on Mon Nov 9 16:52:10 2009