The first grave doubts as to the divine character of the capitalist
order came to bourgeois economists under the immediate impact of the
first crises of 1815 and 1818-19 in England. Even then it had still been
external circumstances which led up to these crises, and they appeared
to be ephemeral. Napoleon's blockade of the Continent which for a time
had cut off England from her European markets and had favoured a
considerable development of home industries in some of the continental
countries, was partly responsible; for the rest the material exhaustion
of the Continent, owing to the long period of war, made for a smaller
demand for English products than had been expected when the blockade was
lifted. Still, these early crises were enough to reveal to the
contemporary world the sinister aspects of this best of all social
orders. Glutted markets, shops filled with goods nobody could buy,
frequent bankruptcies--and on the other hand the glaring poverty of the
toiling masses--for the first time all this starkly met the eyes of
theorists who had preached the gospel of the beautiful harmonies of
bourgeois _laissez-faire_ and had sung its praises in all keys. All
contemporary trade reports, periodicals and travellers' notes told of
the losses sustained by English merchants. In Italy, Germany, Russia,
and Brazil, the English disposed of their commodity stocks at a loss of
anything between 25 per cent and 33 1/3 per cent. People at the Cape of
Good Hope in 1818 complained that all the shops were flooded with
European goods offered at lower prices than in Europe and still
unmarketable. From Calcutta there came similar complaints. From New
Holland whole cargoes returned to England. In the United States, a
contemporary traveller reports, 'there was no town nor hamlet from one
end to the other of this immense and prosperous continent where the
amount of commodities displayed for sale did not considerably exceed
the means of the purchasers, although the vendors tried to attract
custom by long-term credits, all sorts of facilities for payment,
payment by instalments and acceptance of payment in kind'.
At the same time, England was hearing the desperate outcry of her
workers. The _Edinburgh Review_ of 1820[147] quotes an address by the
Nottingham frame-work knitters which contained the following statements:
'After working from 14 to 16 hours a day, we only earn from 4_s._ to
7_s._ a week, to maintain our wives and families upon; and we farther
state, that although we have substituted bread and water, or potatoes
and salt, for that more wholesome food an Englishman's table used to
abound with, we have repeatedly retired, after a heavy day's labour, and
have been under the necessity of putting our children supperless to bed,
to stifle the cries of hunger. We can most solemnly declare, that for
the last eighteen months we have scarcely known what it was to be free
from the pangs of hunger.'[148]
Then Owen in England, and Sismondi in France, almost simultaneously
raised their voices in a weighty indictment of capitalist society. Owen,
as a hard-headed Englishman and citizen of the leading industrial state,
constituted himself spokesman for a generous social reform, whereas the
petty-bourgeois Swiss rather lost himself in sweeping denunciations of
the imperfections of the existing social order and of classical
economics. And yet, by so doing, Sismondi gave bourgeois economics a
much harder nut to crack than Owen, whose fertile practical activities
were directly applied to the proletariat.
Sismondi explained in some detail that the impetus for his social
criticism came from England, and especially her first crisis. In the
second edition of his _Nouveaux Principes d'Économie Politique Ou De La
Richesse Dans Ses Rapports Avec La Population_,[149] eight years after
the publication of the first edition in 1819, he writes as follows:
'It was in England that I performed the task of preparing the new
edition. England has given birth to the most celebrated Political
Economists: the science is cultivated even at this time with increased
ardour.... Universal competition or the effort always to produce more
and always cheaper, has long been the system in England, a system which
I have attacked as dangerous. This system has used production by
manufacture to advance with gigantic steps, but it has from time to time
precipitated the manufacturers into frightful distress. It was in
presence of these convulsions of wealth that I thought I ought to place
myself, to review my reasonings and compare them with facts.--The study
of England has confirmed me in my "New Principles". In this astonishing
country, which seems to be subject to a great experiment for the
instruction of the rest of the world, I have seen production increasing,
whilst enjoyments were diminishing. The mass of the nation here, no less
than philosophers, seems to forget that the increase of wealth is not
the end in political economy, but its instrument in procuring the
happiness of all. I sought for this happiness in every class, and I
could nowhere find it. The high English aristocracy has indeed arrived
to a degree of wealth and luxury which surpasses all that can be seen in
other nations; nevertheless it does not itself enjoy the opulence which
it seems to have acquired at the expense of the other classes; security
is wanting and in every family most of the individuals experience
privation rather than abundance.... Below this titled and not titled
aristocracy, I see commerce occupy a distinguished rank; its enterprises
embrace the whole world, its agents brave the ices of the poles, and
the heats of the equator, whilst every one of its leading men, meeting
on Exchange, can dispose of thousands. At the same time, in the streets
of London, and in those of the other great towns of England, the shops
display goods sufficient for the consumption of the world.--But have
riches secured to the English merchant the kind of happiness which they
ought to secure him? No: in no country are failures so frequent, nowhere
are those colossal fortunes, sufficient in themselves to supply a public
loan to uphold an Empire, or a republic, overthrown with as much
rapidity. All complain that business is scarce, difficult, not
remunerative. Twice, within an interval of a few years, a terrible
crisis has ruined part of the bankers, and spread desolation among all
the English manufacturers. At the same time another crisis has ruined
the farmers, and been felt in its rebound by retail dealers. On the
other hand, commerce, in spite of its immense extent, has ceased to call
for young men who have their fortunes to make; every place is occupied,
in the superior ranks of society no less than in the inferior; the
greater number offer their labour in vain, without being able to obtain
remuneration.--Has, then, this national opulence, whose material
progress strikes every eye, nevertheless tended to the advantage of the
poor? Not so. The people of England are destitute of comfort now, and of
security for the future. There are no longer yeomen, they have been
obliged to become day labourers. In the towns there are scarcely any
longer artisans, or independent heads of a small business, but only
manufacturers. The operative, to employ a word which the system has
created, does not know what it is to have a station; he only gains
wages, and as these wages cannot suffice for all seasons, he is almost
every year reduced to ask alms from the poor-rates.--This opulent nation
has found it more economical to sell all the gold and silver which she
possessed, to do without coin, and to depend entirely on a paper
circulation; she has thus voluntarily deprived herself of the most
valuable of all the advantages of coin: stability of value. The holders
of the notes of the provincial banks run the risk every day of being
ruined by frequent and, as it were, epidemic failures of the bankers;
and the whole state is exposed to a convulsion in the fortune of every
individual, if an invasion or a revolution should shake the credit of
the national bank. The English nation has found it more economical to
give up those modes of cultivation which require much hand-labour, and
she has dismissed half the cultivators who lived in the fields. She has
found it more economical to supersede workmen by steam-engines; she has
dismissed ... the operatives in towns, and weavers giving place to
power-looms, are now sinking under famine; she has found it more
economical to reduce all working people to the lowest possible wages on
which they can subsist, and these working people being no longer
anything but a rabble, have not feared plunging into still deeper misery
by the addition of an increasing family. She has found it more
economical to feed the Irish with potatoes, and clothe them in rags; and
now every packet brings legions of Irish, who, working for less than the
English, drive them from every employment. What is the fruit of this
immense accumulation of wealth? Have they had any other effect than to
make every class partake of care, privation and the danger of complete
ruin? Has not England, by forgetting men for things, sacrificed the end
to the means?'[150]
This mirror, held up to capitalist society almost a century before the
time of writing, is clear and comprehensive enough in all conscience.
Sismondi put his finger on every one of the sore spots of bourgeois
economics: the ruin of small enterprise; the drift from the country; the
proletarisation of the middle classes; the impoverishment of the
workers; the displacement of the worker by the machine; unemployment;
the dangers of the credit system; social antagonisms; the insecurity of
existence; crises and anarchy. His harsh, emphatic scepticism struck a
specially shrill discord with the complacent optimism, the idle worship
of harmony as preached by vulgar economics which, in the person of
MacCulloch in England and of Say in France, was becoming the fashion in
both countries. It is easy to imagine what a deep and painful impression
remarks like the following were bound to make:
'There can only be luxury if it is bought with another's labour; only
those will work hard and untiringly who have to do so in order to get
not the frills but the very necessities of life.'[151]
'Although the invention of the machine which increases man's capacity,
is a blessing for mankind, it is made into a scourge for the poor by the
unjust distribution we make of its benefits.'[152]
'The gain of an employer of labour is sometimes nothing if not
despoiling the worker he employs; he does not benefit because his
enterprise produces much more than it costs, but because he does not pay
all the costs, because he does not accord the labourer a remuneration
equal to his work. Such an industry is a social evil, for it reduces
those who perform the work to utmost poverty, assuring to those who
direct it but the ordinary profits on capital.'[153]
'Amongst those who share in the national income, one group acquires new
rights each year by new labours, the other have previously acquired
permanent rights by reason of a primary effort which makes a year's
labour more advantageous.'[154]
'Nothing can prevent that every new discovery in applied mechanics
should diminish the working population by that much. To this danger it
is constantly exposed, and society provides no remedy for it.'[155]
'A time will come, no doubt, when our descendants will condemn us as
barbarians because we have left the working classes without security,
just as we already condemn, as they also will, as barbarian the nations
who reduced those same classes to slavery.'[156]
Sismondi's criticism thus goes right to the root of the matter; for him
there can be no compromise or evasion which might try to gloss over the
dark aspects of capitalist enrichment he exposed, as merely temporary
shortcomings of a transition period. He concludes his investigation with
the following rejoinder to Say:
'For seven years I have indicated this malady of the social organism,
and for seven years it has continuously increased. I cannot regard such
prolonged suffering as the mere frictions which always accompany a
change. Going back to the origin of income, I believe to have shown the
ills we experience to be the consequence of a flaw in our organisation,
to have shown that they are not likely to come to an end.'[157]
The disproportion between capitalist production and the distribution of
incomes determined by the former appears to him the source of all evil.
This is the point from which he comes to the problem of accumulation
with which we are now concerned.
The main thread of his criticism against classical economics is this:
capitalist production is encouraged to expand indefinitely without any
regard to consumption; consumption, however, is determined by income.
'All the modern economists, in fact, have allowed that the fortune of
the public, being only the aggregation of private fortunes, has its
origin, is augmented, distributed and destroyed by the same means as the
fortune of each individual. They all know perfectly well, that in a
private fortune, the most important fact to consider is the income, and
that by the income must be regulated consumption or expenditure, or the
capital will be destroyed. But as, in the fortune of the public, the
capital of one becomes the income of another, they have been perplexed
to decide what was capital, and what income, and they have therefore
found it more simple to leave the latter entirely out of their
calculations. By neglecting a quality so essential to be determined, Say
and Ricardo have arrived at the conclusion, that consumption is an
unlimited power, or at least having no limits but those of production,
whilst it is in fact limited by income.... They announced that whatever
abundance might be produced, it would always find consumers, and they
have encouraged the producers to cause that glut in the markets, which
at this time occasions the distress of the civilised world; whereas they
should have forewarned the producers that they could only reckon on
those consumers who possessed income.'[158]
Sismondi thus grounds his views in a theory of income. What is income,
and what is capital? He pays the greatest attention to this distinction
which he calls 'the most abstract and difficult question of political
economics'. The fourth chapter of his second book is devoted to this
problem. As usual, Sismondi starts his investigation with Robinson
Crusoe. For such a one, the distinction between capital and income was
still 'confused'; it becomes 'essential' only in society. Yet in
society, too, this distinction is very difficult, largely on account of
the already familiar myth of bourgeois economics, according to which
'the capital of one becomes the income of another', and _vice versa_.
Adam Smith was responsible for this confusion which was then elevated to
an axiom by Say in justification of mental inertia and superficiality.
It was loyally accepted by Sismondi.
'The nature of capital and of income are always confused by the mind; we
see that what is income for one becomes capital for another, and the
same object, in passing from hand to hand, successively acquires
different denominations; the value which becomes detached from an object
that has been consumed, appears as a metaphysical quantity which one
expends and the other exchanges, which for one perishes together with
the object itself and which for the other renews itself and lasts for
the time of circulation.'[159]
After this promising introduction, Sismondi dives right into the
difficult problem and declares: all wealth is a product of labour;
income is part of wealth, and must therefore have the same origin.
However, it is 'customary' to recognise three kinds of income, called
rent, profit and wage respectively, which spring from the three sources
of 'land, accumulated capital and labour'. As to the first thesis, he is
obviously on the wrong tack. As the wealth of a society, i.e. as the
aggregate of useful objects, of use-values, wealth is not merely a
product of labour but also of nature who both supplies raw materials and
provides the means to support human labour. Income, on the other hand,
is a concept of value. It indicates the amount to which an individual or
individuals can dispose over part of the wealth of society or of the
aggregate social product. In view of Sismondi's insistence that social
income is part of social wealth, we might assume him to understand by
social income the actual annual fund for consumption. The remaining part
of wealth that has not been consumed, then, is the capital of society.
Thus we obtain at least a vague outline of the required distinction
between capital and income on a social basis. At the very next moment,
however, Sismondi accepts the 'customary' distinction between three
kinds of income, only one of which derives exclusively from 'accumulated
capital' while in the other two 'land' or 'labour' are conjoined with
capital. The concept of capital thus at once becomes hazy again.
However, let us see what Sismondi has to say about the origin of these
three kinds of income which betray a rift in the foundations of society.
He is right to take a certain development of labour productivity as his
point of departure.
'By reason of the advances both in industry and science, by which man
has subjugated the forces of nature, every worker can produce more, far
more, in a day than he needs to consume.'[160]
Sismondi thus rightly stresses the fact that the productivity of labour
is an indispensable condition for the historical foundation of
exploitation. Yet he goes on to explain the actual origin of
exploitation in a way typical of bourgeois economics: 'But even though
his labour produces wealth, this wealth, if he is called upon to enjoy
it, will make him less and less fit for work. Besides, wealth hardly
ever remains in the possession of the man who must live by the work of
his hands.'[160]
Thus he makes exploitation and class antagonism the necessary spur to
production, quite in accord with the followers of Ricardo and Malthus.
But now he comes to the real cause of exploitation, the divorce of
labour power from the means of production.
'The worker cannot, as a rule, keep the land as his own; land, however,
has a productive capacity which human labour but directs to the uses of
man. The master of the land on which labour is performed, reserves a
share in the fruits of labour to which his land has contributed, as his
remuneration for the benefits afforded by this productive
capacity.'[161]
This is called rent. And further: 'In our state of civilisation, the
worker can no longer call his own an adequate fund of objects for his
consumption, enough to live while he performs the labours he has
undertaken--until he has found a buyer. He no longer owns the raw
materials, often coming from far away, on which he must exercise his
industry. Even less does he possess that complicated and costly
machinery which facilitates his work and makes it infinitely more
productive. The rich man who possesses his consumption goods, his raw
materials and his machines, need not work himself, for by supplying the
worker with all these, he becomes in a sense the master of his work. As
reward for the advantages he has put at the worker's disposal, he takes
outright the greater part of the fruits of his labour.'[162]
This is called capital profits. What remains of wealth, after the cream
has been taken off twice, by landlord and capitalist, is the wage of
labour, the income of the worker. And Sismondi adds: 'He can consume it
without reproduction.'[163]
Thus, Sismondi makes the fact of non-reproduction the criterion of
income as distinct from capital for wages as well as for rent. In this,
however, he is only right with regard to rent and the consumed part of
capital profits; as for the part of the social product which is consumed
in form of wages, it certainly does reproduce itself; it becomes the
labour power of the wage labourer, for him a commodity by whose sale he
lives, which he can bring to market again and again; for society it
becomes the material form of variable capital which must reappear time
and again in the aggregate reproduction of a year, if there is to be no
loss.
So far so good. Hitherto we have only learned two facts: the
productivity of labour permits of the exploitation of the workers by
those who do not work themselves, and exploitation becomes the actual
foundation of the distribution of income owing to the divorce of the
worker from his means of production. But we still do not know what is
capital and what income, and Sismondi proceeds to clarify this point,
starting as usual with Robinson Crusoe:
'In the eyes of the individual all wealth was nothing but a provision
prepared beforehand for the time of need. Even so, he already
distinguished two elements in this provision ... one part which he
budgets to have at hand for immediate or almost immediate use, and the
other which he will not need until it is to afford him new production.
Thus one part of his corn must feed him until the next harvest, another
part, reserved for sowing, is to bear fruit the following year. The
formation of society and the introduction of exchange, permit to
increase this seed, this fertile part of accumulated wealth, almost
indefinitely, and this is what is called capital.'[164]
Balderdash would be a better name for all this. In using the analogy of
seed, Sismondi here identifies means of production and capital, and this
is wrong for two reasons. First, means of production are capital not
intrinsically, but only under quite definite historical conditions;
secondly, the concept of capital covers more than just the means of
production. In capitalist society--with all the conditions Sismondi
ignores--the means of production are only a part of capital, i.e. they
are constant capital.
Sismondi here lost his thread plainly because he tried to establish a
connection between the capital concept and the material aspects of
social reproduction. Earlier, so long as he was concerned with the
individual capitalist, he listed means of subsistence for the workers
together with means of production as component parts of capital--again a
mistake in view of the material aspects of the reproduction of
individual capitals. Yet as soon as he tries to focus the material
foundations of social reproduction and sets out to make the correct
distinction between consumer goods and means of production, the concept
of capital dissolves in his hands.
However, Sismondi well knows that the means of production are not the
sole requisites for production and exploitation; indeed, he has the
proper instinct that the core of the relation of exploitation is the
very fact of exchange with living labour. Having just reduced capital to
constant capital, he now immediately reduces it exclusively to variable
capital:
'When the farmer has put in reserve all the corn he expects to need till
the next harvest, he will find a good use for the surplus corn: he will
feed what he has left over to other people who are going to work for
him, till his land, spin and weave his hemp and wool, etc.... By this
procedure, the farmer converts a part of his income into capital, and in
fact, this is the way in which new capital is always formed.... The corn
he has reaped over and above what he must eat while he is working, and
over and above what he will have to sow in order to maintain the same
level of exploitation, is wealth which he can give away, squander and
consume in idleness without becoming any poorer; it was income, but as
soon as he uses it to feed producers, as soon as he exchanges it for
labour, or for the fruits to come from the work of his labourers, his
weavers, his miners, it is a permanent value that multiplies and will no
longer perish; it is capital.'[165]
Here there is some grain mixed up with quite a lot of chaff. Constant
capital seems still required to maintain production on the old scale,
although it is strangely reduced to circulating capital, and although
the reproduction of fixed capital is completely ignored. Circulating
capital apparently is also superfluous for the expansion of
reproduction, for accumulation: the whole capitalised part of the
surplus value is converted into wages for new workers who evidently
labour in mid-air, without material means of production. The same view
is expressed even more clearly elsewhere:
'When the rich man cuts down his income in order to add to his capital,
he is thus conferring a benefit on the poor, because he himself shares
out the annual product; and whatever he calls income, he will keep for
his own consumption; whatever he calls capital, he gives to the poor man
to constitute an income for him.'[166]
Yet at the same time Sismondi gives due weight to the 'secret of
profit-making' and the origin of capital. Surplus value arises from the
exchange of capital for labour, from variable capital, and capital
arises from the accumulation of surplus value.
With all this, however, we have not made much progress towards a
distinction between capital and income. Sismondi now attempts to
represent the various elements of production and income in terms of the
appropriate parts of the aggregate social product.
'The employer of labour, as also the labourer, does not use all his
productive wealth for the sowing; he devotes part of it to buildings,
mills and tools which render the work easier and more productive, just
as a share of the labourer's wealth had been devoted to the permanent
work of making the soil more fertile. Thus we see how the different
kinds of wealth successively come into being and become distinct. One
part of the wealth accumulated by society is devoted by every one who
possesses it to render labour more profitable by slow consumption, and
make the blind forces of nature execute the work of man; this part is
called _fixed capital_ and comprises reclaiming, irrigation, factories,
the tools of trade, and mechanical contrivances of every description. A
second part of wealth is destined for immediate consumption, to
reproduce itself in the work it gets done, to change its form, though
not its value, without cease. This part is called _circulating capital_
and it comprises seed, raw materials for manufacture, and wages.
Finally, a third part of wealth becomes distinguishable from the
second: it is the value by which the finished job exceeds the advances
which had to be made: this part is called _income_ on capitals and is
destined to be consumed without reproduction.'[167]
After this laborious attempt to achieve a division of the aggregate
social production according to incommensurable categories, fixed
capital, circulating capital, and surplus value, Sismondi soon shows
unmistakable signs that he means constant capital when he speaks of
fixed capital, and variable capital when he speaks of circulating
capital. For 'all that is created', is destined for human consumption,
though fixed capital is consumed 'mediately' while the circulating
capital 'passes into the consumption fund of the worker whose wage it
forms'.[168] Thus we are a little nearer to the division of the social
product into constant capital (means of production), variable capital
(provisions for the workers) and surplus value (provisions for the
capitalists). But so far Sismondi's explanations are not particularly
illuminating on the subject which he himself describes as 'fundamental'.
In this welter of confusion, at any rate, we cannot see any progress
beyond Adam Smith's 'massive thought'.
Sismondi feels this himself and would clarify the problem 'by the
simplest of all methods', sighing that 'this movement of wealth is so
abstract and requires such great power of concentration to grasp it
properly'.[168] Thus again we put on blinkers with a focus on Robinson
[Crusoe], who in the meantime has changed to the extent that he has
produced a family and is now a pioneer of colonial policy:
'A solitary farmer in a distant colony on the border of the desert has
reaped 100 sacks of corn this year; there is no market where to bring
them; this corn, in any case, must be consumed within the year, else it
will be of no value to the farmer; yet the farmer and his family eat
only 30 sacks of it; this will be his expenditure, constituting the
exchange of his income; it is not reproduced for anybody whatever. Then
he will call for workers, he will make them clear woods, and drain
swamps in his neighbourhood and put part of the desert under the plough.
These workers will eat another 30 sacks of corn: this will be their
expenditure; they will be in a position to afford this expenditure at
the price of their revenue, that is to say their labour; for the farmer
it will be an exchange: he will have converted his 30 sacks into fixed
capital. In the end, he is left with 40 sacks. He will sow them that
year, instead of the 20 he had sown the previous year; this constitutes
his circulating capital which he will have doubled. Thus the 100 sacks
will have been consumed, but of these 100 sacks 70 are a real investment
for him, which will reappear with great increase, some of them at the
very next harvest, and the others in all subsequent harvests.--The very
isolation of the farmer we have just assumed gives us a better feeling
for the limitations of such an operation. If he has only found consumers
for 60 of the 100 sacks harvested in that year, who is going to eat the
200 sacks produced the following year by the increase in his sowing? His
family, you might say, which will increase. No doubt; but human
generations do not multiply as quickly as subsistence. If our farmer had
hands available to repeat this assumed process each year, his corn
harvest will be doubled every year, and his family could at the most be
doubled once in 25 years.'[169]
Though the example is naïve, the vital question stands out clearly in
the end: where are the buyers for the surplus value that has been
capitalised? The accumulation of capital can indefinitely increase the
production of the society. But what about the consumption of society?
This is determined by the various kinds of income. Sismondi explains
this important subject in chapter v of book ii, 'The Distribution of the
National Income Among the Various Classes of Citizens', in a resumed
effort to describe the components of the social product.
'Under this aspect, the national income is composed of two parts and no
more; the one consists in annual production ... the profit arising from
wealth. The second is the capacity for work which springs from life.
This time we understand by wealth both territorial possessions and
capital, and by profit the net income accruing to the owners as well as
the profit of the capitalist.'[170]
Thus all the means of production are separated from the national income
as 'wealth', and this income is divided into surplus value and labour
power, or better, its equivalent, the variable capital. This, then,
though still far too vague, is our division into constant capital,
variable capital and surplus value. But 'national income', it soon
transpires, means for Sismondi the annual aggregate product of society:
'Similarly, annual production, or the result of all the nation's work in
the course of a year, is composed of two parts: one we have just
discussed--the profit resulting from wealth; the other is the capacity
for work, which is assumed to equal the part of wealth for which it is
exchanged, or the subsistence of the workers.'[171]
The aggregate social product is thus resolved, in terms of value, into
two parts: variable capital and surplus value--constant capital has
disappeared. We have arrived at Smith's dogma that the commodity price
is resolved into _v + s_ (or is composed of _v + s_)--in other words,
the aggregate product consists solely of consumer goods for workers and
capitalists.
Sismondi then goes on to the problem of realising the aggregate product.
On the one hand, the sum total of incomes in a society consists of
wages, capital profits and rents, and is thus represented by _v + s_; on
the other hand, the aggregate social product, in terms of value, is
equally resolved into _v + s_ 'so that national income and annual
production balance each other (and appear as equal quantities)', i.e. so
that they must be equal in value.
'Annual production is consumed altogether during the year, but in part
by the workers who, by exchanging their labour for it, convert it into
capital and reproduce it; in part by the capitalists who, exchanging
their income for it, annihilate it. The whole of the annual income is
destined to be exchanged for the whole of annual production.'[172]
This is the basis on which, in the sixth chapter of book ii, 'On
Reciprocal Determination of Production and Consumption', Sismondi
finally sets up the following precise law of reproduction: 'It is the
income of the past year which must pay for the production of the present
year.'[173]
If this is true, how can there be any accumulation of capital? If the
aggregate product must be completely consumed by the workers and
capitalists, we obviously remain within the bounds of simple
reproduction, and there can be no solution to the problem of
accumulation. Sismondi's theory in fact amounts to a denial of the
possibility of accumulation. The aggregate social demand being the bulk
of wages given to the workers and the previous consumption of the
capitalists, who will be left to buy the surplus product if reproduction
expands? On this count, Sismondi argues that accumulation is objectively
impossible, as follows:
'What happens after all is always that we exchange the whole of
production for the whole production of the previous year. Besides, if
production gradually increases, the exchange, at the same time as it
improves future conditions, must entail a small loss every year.'[174]
In other words, when the aggregate product is realised, accumulation is
bound each year to create a surplus that cannot be sold. Sismondi,
however, is afraid of drawing this final conclusion, and prefers a
'middle course', necessitating a somewhat obscure subterfuge: 'If this
loss is not heavy, and evenly distributed, everyone will bear with it
without complaining about his income. This is what constitutes the
national economy, and the series of such small sacrifices increases
capital and common wealth.'[174]
If, on the other hand, there is ruthless accumulation, this surplus
residue becomes a public calamity, and the result is a crisis. Thus a
petty-bourgeois subterfuge becomes the solution of Sismondi: putting the
dampers on accumulation. He constantly polemises against the classical
school which advocates unrestricted development of the productive forces
and expansion of production; and his whole work is a warning against the
fatal consequences of giving full rein to the desire to accumulate.
Sismondi's exposition proves that he was unable to grasp the
reproductive process as a whole. Quite apart from his unsuccessful
attempt to distinguish between the categories of capital and income from
the point of view of society, his theory of reproduction suffers from
the fundamental error he took over from Adam Smith: the idea that
personal consumption absorbs the entire annual product, without leaving
any part of the value for the renewal of society's constant capital, and
also, that accumulation consists merely of the transformation of
capitalised surplus value into variable capital. Yet, if later critics
of Sismondi, e.g. the Russian Marxist Ilyin,[175] think that pointing
out this fundamental error in the analysis of the aggregate product can
justify a cavalier dismissal of Sismondi's entire theory of accumulation
as inadequate, as 'nonsense', they merely demonstrate their own
obtuseness in respect of Sismondi's real concern, his ultimate problem.
The analysis of Marx at a later date, showing up the crude mistakes of
Adam Smith for the first time, is the best proof that the problem of
accumulation is far from solved just by attending to the equivalent of
the constant capital in the aggregate product. This is proved even more
strikingly in the actual development of Sismondi's theory: his views
involved him in bitter controversy with the exponents and popularisers
of the classical school, with Ricardo, Say and MacCulloch. The two
parties to the conflict represent diametrically opposed points of view:
Sismondi stands for the sheer impossibility, the others for the
unrestricted possibility, of accumulation. Sismondi and his opponents
alike disregard constant capital in their exposition of reproduction,
and it was Say in particular who presumed to perpetuate Adam Smith's
confused concept of the aggregate product as _v + s_ as an unassailable
dogma.
The knowledge we owe to Marx that the aggregate product must, apart from
consumer goods for the workers and capitalists (_v + s_), also contain
means of production to renew what has been used, that accumulation
accordingly consists not merely in the enlargement of variable but also
of constant capital, is not enough, as amply demonstrated by this
entertaining turn of events, to solve the problem of accumulation. Later
we shall see how this stress on the share of constant capital in the
reproductive process gave rise to new fallacies in the theory of
accumulation. At present it will suffice to put on record that the
deference to Smith's error about the reproduction of aggregate capital
is not a weakness unique to Sismondi's position but is rather the common
ground on which the first controversy about the problem of accumulation
was fought out. Scientific research, not only in this sphere, proceeds
in devious ways; it often tackles the upper storeys of the edifice, as
it were, without making sure of the foundations; and so this conflict
only resulted in that bourgeois economics took on the further
complicated problem of accumulation without even having assimilated the
elementary problem of simple reproduction. At all events, Sismondi, in
his critique of accumulation, had indubitably given bourgeois economics
a hard nut to crack--seeing that in spite of his transparently feeble
and awkward deductions, Sismondi's opponents were still unable to get
the better of him.