Sismondi's emphatic warnings against the ruthless ascendancy of capital
in Europe called forth severe opposition on three sides: in England the
school of Ricardo, in France J. B. Say, the commonplace vulgariser of
Adam Smith, and the St. Simonians. While Owen in England, profoundly
aware of the dark aspects of the industrial system and of the crises in
particular, saw eye to eye with Sismondi in many respects, the school of
that other great European, St. Simon, who had stressed the
world-embracing conception of large industrial expansion, the unlimited
unfolding of the productive forces of human labour, felt perturbed by
Sismondi's alarms. Here, however, we are interested in the controversy
between Sismondi and the Ricardians which proved the most fruitful from
the theoretical point of view. In the name of Ricardo, and, it seemed,
with Ricardo's personal approval, MacCulloch anonymously published a
polemical article[176] against Sismondi in the _Edinburgh Review_ in
October 1819, i.e. immediately after the publication of the _Nouveaux
Principes_.
In 1820, Sismondi replied in Rossi's _Annales de Jurisprudence_ with an
essay entitled: 'Does the Power of Consuming Necessarily Increase with
the Power to Produce? An Enquiry.'[177]
In his reply Sismondi[178] himself states that his polemics were
conceived under the impact of the commercial crisis: 'This truth we are
both looking for, is of utmost importance under present conditions. It
may be considered as fundamental for economics. Universal distress is in
evidence in the trade, in industry and, in many countries certainly,
even in agriculture. Such prolonged and extraordinary suffering has
brought misfortune to countless families and insecurity and despondency
to all, until it threatens the very bases of the social order. Two
contrasting explanations have been advanced for the distress that has
caused such a stir. Some say: we have produced too much, and others: we
have not produced enough. "There will be no equilibrium," say the
former, "no peace and no prosperity until we consume the entire
commodity surplus which remains unsold on the market, until we organise
production for the future in accordance with the buyers'
demand."--"There will be a new equilibrium," say the latter, "if only we
double our efforts to accumulate as well as to produce. It is a mistake
to believe that there is a glut on the market; no more than half our
warehouses are full; let us fill the other half, too, and the mutual
exchange of these new riches will revive our trade."'[179]
In this supremely lucid way, Sismondi sets out and underlines the real
crux of the dispute. MacCulloch's whole position in truth stands or
falls with the statement that exchange is actually an interchange of
commodities; every commodity accordingly represents not only supply but
demand. The dialogue then continues as follows:
'Demand and supply are truly correlative and convertible terms. The
supply of one set of commodities constitutes the demand for another.
Thus, there is a demand for a given quantity of agricultural produce,
when a quantity of wrought goods equal thereto in productive cost is
offered in exchange for it; and conversely, there is an effectual demand
for this quantity of wrought goods, when the supply of agricultural
produce which it required the same expense to raise, is presented as its
equivalent.'[180]
The Ricardian's dodge is obvious: he has chosen to ignore the
circulation of money and to pretend that commodities are immediately
bought and paid for by commodities.
From the conditions of highly developed capitalist production, we are
thus suddenly taken to a stage of primitive barter such as we might find
still flourishing at present in Central Africa. There is a distant
element of truth in this trick since money, in a simple circulation of
commodities, plays merely the part of an agent. But of course, it is
just the intervention of an agent which separates the two transactions
of circulation, sale and purchase, and makes them independent of one
another in respect of both time and place. That is why a further
purchase need not follow hard upon a sale for one thing; and secondly,
sale and purchase are by no means bound up with the same people: in
fact, they will involve the same performers only in rare and exceptional
cases. MacCulloch, however, makes just this baseless assumption by
confronting, as buyer and seller, industry on the one hand and
agriculture on the other. The universality of these categories, _qua_
total categories of exchange, obscures the actual splitting up of this
social division of labour which results in innumerable private exchange
transactions where the sale and purchase of two commodities rarely come
to the same thing. MacCulloch's simplified conception of commodity
exchange in general which immediately turns the commodity into money
and pretends that it can be directly exchanged, makes it impossible to
understand the economic significance of money, its historical
appearance.
Sismondi's answer to this is regrettably clumsy. In order to show that
MacCulloch's explanation of commodity exchange has no application for
capitalist production, he takes recourse to the Leipsic Book Fair.[181]
'At the Book Fair of Leipsic, booksellers from all over Germany arrive,
each with four or five publications of his own in some 40 or 50 dozen
copies; these are exchanged for others and every seller takes home 200
dozen books, just as he has brought 200 dozen, with the sole difference,
that he brought four different works and takes home 200. This is the
demand and the production which, according to M. Ricardo's disciple, are
correlative and convertible; one buys the other, one pays for the other,
one is the consequence of the other. But as far as we are concerned, for
the bookseller and for the general public, demand and consumption have
not even begun. For all that it has changed hands at Leipsic, a bad book
will still be just as unsold (a bad mistake of Sismondi's, this!), it
will still clutter up the merchants' shops, either because nobody wants
it, or because everyone has a copy already. The books exchanged at
Leipsic will only sell if the booksellers can find individuals who not
only want them but are also prepared to make sacrifices in order to
withdraw them from circulation. They alone constitute an effective
demand.'[182]
Although this example is rather crude, it shows clearly that Sismondi
was not side-tracked by his opponent's trick, that he knows after all
what he is talking about.
MacCulloch then attempts to turn the examination from abstract commodity
exchange to concrete social conditions: 'Supposing, for the sake
of illustration, that a cultivator advanced food and clothing
for 100 labourers, who raised for him _food_ for 200; while a
master-manufacturer also advanced food and clothing for 100, who
fabricated for him _clothing_ for 200. Then the farmer, besides
replacing the food of his own labourers, would have food for 100 to
dispose of; while the manufacturer, after replacing the clothing of his
own labourers, would have clothing for 100 to bring to market. In this
case, the two articles would be exchanged against each other, the supply
of food constituting the demand for the clothing, and that of the
clothing the demand for the food.'[183]
What are we to admire more in this hypothesis: the absurdity of the
set-up which reverses all actual relations, or the effrontery which
simply takes for granted in the premises all that is later claimed
proved? In order to prove that it is always possible to create an
unlimited demand for all kinds of goods, MacCulloch chooses for his
example two commodities which pertain to the most urgent and elementary
wants of every human being: food and clothing. In order to prove that
commodities may be exchanged at any time, and without regard to the
needs of society, he chooses for his example two products in quantities
which are right from the start in strict conformity with these needs,
and which therefore contain no surplus as far as society is concerned.
And yet he calls this quantity needed by society a surplus--_viz._ as
measured against the producer's personal requirements for his own
product, and is consequently able to demonstrate brilliantly that any
amount of commodity 'surplus' can be exchanged for a corresponding
'surplus' of other commodities. Finally, in order to prove that
different privately produced commodities can yet be exchanged, although
their quantity, production costs and social importance must of course be
different, he chooses for his example commodities whose quantity,
production cost and general social necessity are precisely the same
right from the start. In short, MacCulloch posits a planned, strictly
regulated production without any over-production in order to prove that
no crisis is possible in an unplanned private economy.
The principal joke of canny Mac, however, lies elsewhere. What is at
issue is the problem of accumulation. Sismondi was worried by, and
worried Ricardo and his followers with, the following question: if part
of the surplus value is capitalised, i.e. used to expand production over
and above the income of society, instead of being privately consumed by
the capitalists, where are we to find buyers for the commodity surplus?
What will become of the capitalised surplus value? Who will buy the
commodities in which it is hidden? Thus Sismondi. And the flower of
Ricardo's school, its official representative on the Chair of London
University, the authority for the then English Ministers of the Liberal
Party and for the City of London, the great Mr. MacCulloch replies--by
constructing an example in which no surplus value whatever is produced.
His 'capitalists' slave away in agriculture and industry in the name of
charity, and all the time the entire social product, including the
'surplus', is only enough for the needs of the workers, for the wages,
while the 'farmer' and 'manufacturer' see to production and exchange
without food and clothing.
Sismondi, justly impatient, now exclaims: 'The moment we want to find
out what is to constitute the surplus of production over consumption of
the workers, it will not do to abstract from that surplus which forms
the due profit of labour and the due share of the master.'[184]
MacCulloch's only reaction is to multiply his silly argument by a
thousand. He asks the reader to assume '1,000 farmers', and 'also 1,000
master-manufacturers' all acting as ingenuously as the individuals. The
exchange, then, proceeds as smoothly as can be desired. Finally, he
exactly doubles labour productivity 'in consequence of more skilful
application of labour and of the introduction of machinery--thus that
every one of the 1,000 farmers, by advancing food and clothing for 100
labourers, obtains a return consisting of ordinary food for 200 together
with sugar, grapes and tobacco equal in production cost to that food',
while every manufacturer obtains, by an analogous procedure, in addition
to the previous quantity of clothing for all workers, 'ribbands,
cambrics and lace, equal in productive cost, and therefore in
exchangeable value, to that clothing'.[185] After such complete reversal
of the chronological order, the assumption, that is, of first the
existence of private property with wage labour, and then, at a later
stage, such level of labour productivity as makes exploitation possible
at all, he now assumes labour productivity to progress with equal speed
in all spheres, the surplus product to contain precisely the same amount
of value in all branches of industry, and to be divided among precisely
the same number of people. When these various surplus products are then
exchanged against one another, is it any wonder that the exchange
proceeds smoothly and completely to everybody's satisfaction? It is only
another of his many absurdities that MacCulloch makes the capitalists
who had hitherto lived on air and exercised their profession in their
birthday suits, now live exclusively on sugar, tobacco and wine, and
array themselves only in ribbons, cambrics and lace.
The most ridiculous performance, however, is the _volte-face_ by which
he evades the real problem. The question had been what happens to the
capitalist surplus, that surplus which is used not for the capitalist's
own consumption but for the expansion of production. MacCulloch solves
it on the one hand by ignoring the production of surplus value
altogether, and on the other, by using all surplus value in the
production of luxury goods. What buyers, then, does he advance for this
new luxury production? The capitalists, evidently; the farmers and
manufacturers, since, apart from these, there are only workers in
MacCulloch's model. Thus the entire surplus value is consumed for the
personal satisfaction of the capitalists, that is to say, simple
reproduction takes place. The answer to the problem of the
capitalisation of surplus value is, according to MacCulloch, either to
ignore surplus value altogether, or to assume simple reproduction
instead of accumulation as soon as surplus value comes into being. He
still _pretends_ to speak of expanding reproduction, but again, as
before when he pretended to deal with the 'surplus', he uses a trick,
_viz._ first setting out an impossible species of capitalist production
without any surplus value, and then persuading the reader that the
subsequent _début_ of the surplus value constitutes an expansion of
production.
Sismondi is not quite up to these Scottish acrobatics. He had up to now
succeeded in pinning his Mac down, proving him to be 'obviously absurd'.
But now he himself becomes confused with regard to the crucial point at
issue. On the above rantings of his opponent, he should have declared
coldly: Sir, with all respect for the flexibility of your mind, you are
dodging the issue. I keep on asking, who will buy the surplus product,
if the capitalists use it for the purpose of accumulation, i.e. to
expand production, instead of squandering it altogether? And you reply:
Oh well, they will expand their production of luxury goods, which they
will, of course, eat up themselves. But this is a conjuring trick,
seeing that the capitalists consume the surplus value in so far as they
spend it on their luxuries--they do not accumulate at all. My question
is about the possibility of accumulation, not whether the personal
luxuries of the capitalists are possible. Answer this clearly, if you
can, or else go play with your wine and tobacco, or go to blazes for all
I care.
But Sismondi, instead of putting the screws on the vulgariser, suddenly
begins to moralise with pathos and social conscience. He exclaims:
'Whose demand? Whose satisfaction? The masters or the workers in town or
country? On this new conception [of Mac's] there is a surplus of
products, an advantage from labour--to whom will it accrue?'[186] and
gives his own answer in the following impassioned words: 'But we know
full well, and the history of the commercial world teaches us all too
thoroughly, that it is not the worker who profits from the increase in
products and labour; his pay is not in the least swelled by it. M.
Ricardo himself said formerly that it ought not to be, unless you want
the social wealth to stop growing. On the contrary, sorry experience
teaches us that wages nearly always contract by very reason of this
increase. Where, then, does the accumulation of wealth make itself felt
as a public benefit? Our author assumes 1,000 farmers who profit, while
100,000 workers toil; 1,000 entrepreneurs who wax rich, while 100,000
artisans are kept under their orders. Whatever good may result from the
accumulation of the frivolous enjoyment of luxuries is only felt by a
100th part of the nation. And will this 100th part, called upon to
consume the entire surplus product of the whole working class, be
adequate to a production that may grow without let or hindrance, owing
to progress of machinery and capitals? In the assumption made by the
author, every time the national product is doubled, the master of the
farm or of the factory must increase his consumption a hundredfold; if
the national wealth to-day, thanks to the invention of so many machines,
is a hundred times what it was when it only covered the cost of
production, every employer would to-day have to consume enough products
to support 10,000 workers.'[187]
At this point Sismondi again believes himself to have a firm grasp on
how crises begin to arise: 'We might imagine, if put to it, that a rich
man can consume the goods manufactured by 10,000 workers, this being the
fate of the ribbons, lace and cambrics whose origin the author has shown
us. But a single individual would not know how to consume agricultural
product to the same tune, the wines, sugar and spices which M. Ricardo
[whom Sismondi evidently suspected of having written the article since
he only got to know 'Anonymous' of the _Edinburgh Review_ at a later
date] conjures up in exchange, are too much for the table of one man.
They will not sell, or else the strict proportion between agricultural
and industrial products, apparently the basis of his whole system,
cannot be maintained.'[188]
Sismondi, we see, has thus fallen into MacCulloch's trap. Instead of
waiving an answer to the problem of accumulation which refers to the
production of luxuries, he pursues his opponent into this field without
noticing that the ground under his feet has shifted. Here he finds two
causes for complaint. For one thing, he has moral objections to
MacCulloch's allowing the capitalists instead of the workers to benefit
by the surplus value, and is side-tracked into polemising against
distribution under capitalism. From this digression, he unexpectedly
reverts to the original problem which he now formulates as follows: the
capitalists, then, consume the entire surplus value in luxuries. Let it
be so. But could anyone increase his consumption as rapidly and
indefinitely as the progress of labour productivity makes the surplus
value increase? And in this second instance, Sismondi himself abandons
his own problem. Instead of perceiving that it is the lack of consumers
other than workers and capitalists which accounts for the difficulty in
capitalist accumulation, he discovers a snag in simple reproduction
because the capitalists' capacity to consume has physical limits. Since
the absorptive capacity of the capitalists for luxuries cannot keep up
with labour productivity, that is to say with the increase in surplus
value, there must be crises and over-production. We have encountered
this line of thought once before in the _Nouveaux Principes_--so
Sismondi himself was manifestly not quite clear about the problem at
all times. And that is hardly surprising, since one can really come to
grips with the whole problem of accumulation only when one has fully
grasped the problem of simple reproduction, and we have seen how much
Sismondi was at fault in this respect.
Yet in spite of all this, the first time that Sismondi crossed swords
with the heirs of the classical school, he proved himself by no means
the weaker party. On the contrary, in the end he routed his opponent. If
Sismondi misunderstood the most elementary principles of social
reproduction and ignored constant capital, quite in keeping with Adam
Smith's dogma, he was in this respect no worse at any rate than his
opponent. Constant capital does not exist for MacCulloch either, his
farmers and manufacturers 'advance' merely food and clothing to their
workers, and food and clothing between them make up the aggregate
product of society. If there is, then, nothing to choose between the two
as far as this elementary blunder is concerned, Sismondi towers heads
above Mac because of his intuitive understanding of the contradictions
in the capitalist mode of production. In the end, the Ricardian was at a
loss to answer Sismondi's scepticism concerning the possibility of
realising the surplus value. Sismondi also shows himself more
penetrating in that he throws the Nottingham proletarians' cry of
distress in the teeth of the apostles and apologists of harmony with
their smug complacency, of those who deny 'any surplus of production
over demand, any congestion of the market, any suffering', when he
proves that the introduction of the machine must of necessity create a
'superabundant population', and particularly in the end, when he
underlines the tendency of the capitalist world market in general with
its inherent contradictions. MacCulloch denies outright that general
over-production is possible. He has a specific for every partial
over-production up his sleeve:
'It may be objected, perhaps, that on the principle that the demand for
commodities increases in the same ratio as their supply, there is no
accounting for the gluts and stagnation produced by overtrading. We
answer very easily--A glut is an increase in the supply of a particular
class of commodities, unaccompanied by a corresponding increase in the
supply of those other commodities which should serve as their
equivalents. While our 1,000 farmers and 1,000 master-manufacturers are
exchanging their respective surplus products, and reciprocally affording
a market to each other, if 1,000 new capitalists were to join their
society, employing each 100 labourers in tillage, there would be an
immediate glut in agricultural produce ... because in this case there
would be no contemporaneous increase in the supply of the manufactured
articles which should purchase it. But let one half of the new
capitalists become manufacturers, and equivalents in the form of wrought
goods will be created for the new produce raised by the other half: the
equilibrium will be restored, and the 1,500 farmers and 1,500
master-manufacturers will exchange their respective surplus products
with exactly the same facility with which the 1,000 farmers and 1,000
manufacturers formerly exchanged theirs.'[189]
Sismondi answers this buffoonery which 'very easily' pokes about in a
fog, by pointing to the real changes and revolutions which take place
before his own eyes. 'It was possible to put barbarous countries under
the plough, and political revolutions, changes in the financial system,
and peace, at once brought cargoes to the ports of the old agricultural
countries which almost equalled their entire harvest. The recent Russian
conquest of the vast provinces on the Black Sea, the change in the
system of government in Egypt, and the outlawing of piracy in High
Barbary, have suddenly poured the granaries of Odessa, Alexandria and
Tunis into the Italian ports and have put such an abundance of corn on
the markets that all along the coasts the farmer's trade is fighting a
losing battle. Nor is the remainder of Europe safe from a similar
revolution, caused by the simultaneous ploughing under of immense
expanses of new land on the banks of the Mississippi, which export all
their agricultural produce. Even the influence of New Holland may one
day be the ruin of English industry, if not in the price of foodstuffs,
which are too expensive to transport, at least in respect of wool and
other agricultural products which are easier to transport.'[190]
What would MacCulloch have to advise in view of such an agrarian crisis
in Southern Europe? That half the new farmers should turn manufacturer.
Whereupon Sismondi counters: 'Such counsel cannot seriously apply to
the Tartars of the Crimea or to the fellaheen of Egypt.' And he adds:
'The time is not yet ripe to set up new industries in the regions
oversea or in New Holland.'[191]
Sismondi's acuity recognised that industrialisation of the lands
overseas was only a matter of time. He was equally aware of the fact
that the expansion of the world market would not bring with it the
solution to the difficulty but would only reproduce it in a higher
degree, in yet more potent crises. His prediction for the expansive
tendency of capitalism is that it will reveal an aspect of fiercer and
fiercer competition, of mounting anarchy within production itself.
Indeed, he puts his finger on the fundamental causes of crises in a
passage where he states the trend of capitalist production precisely as
surpassing all limits of the market. At the end of his reply to
MacCulloch he says: 'Time and again it has been proclaimed that the
equilibrium will re-establish itself, that work will start again, but a
single demand each time provides an impetus in excess of the real needs
of trade, and this new activity must soon be followed by a yet more
painful glut.'[192]
To such a profound grasp of the real contradictions in the movements of
capital, the _vulgarus_ on the Chair of London University with his
harmony cant and his country-dance of 1,000 beribboned farmers and 1,000
bibulous manufacturers could find no effective answer.