Thus far, reproduction has been considered from the standpoint of the individual capitalist, who is its typical representative or agent, for reproduction is indeed undertaken entirely by individual private capitalist enterprises. This consideration has already revealed sufficient difficulties associated with the problem. However, the complications increase and become extraordinarily convoluted, as soon as attention is turned from the individual capitalist to the ensemble of capitalists.
Even a cursory glance reveals that capitalist reproduction at the level of society as a whole cannot simply be regarded as the mechanically computed aggregate of all the individual private capitalist processes of reproduction. It has been shown, for instance, that one of the fundamental prerequisites for expanded reproduction by the individual capitalist is a corresponding increase in his opportunities to sell his wares on the commodity markets. Now, as far as the individual capitalist is concerned, this increase does not necessarily have to result from an absolute extension of the market as a whole, but it can be achieved through the competitive struggle at the cost of other individual capitalists, such that the losses incurred by another capitalist or capitalists who have been forced from the market can accrue to him as gains. Through this process, the deficit in reproduction imposed upon one capitalist corresponds to the expanded reproduction of the other. One capitalist will be able to undertake expanded reproduction, whereas the other will not even manage simple reproduction, and at the level of capitalist society as a whole, a local adjustment will merely be registered, but there will be no quantitative change in reproduction. Similarly, expanded reproduction can be set in train by one capitalist using the means of production and labor-power that have been set free by the bankruptcy of other capitalists—i.e. by their total or partial suspension of production.
These everyday occurrences demonstrate that the reproduction of total social capital constitutes something other than the reproduction of the individual capitalist raised to some immeasurable order of magnitude, and that reproduction processes of the individual capitalists in fact continually intersect and can cancel each other out to a greater or lesser degree. Before the mechanism and laws of capitalist reproduction can be examined at the level of total social capital, it is necessary to ask what is meant by the reproduction of total social capital; the question must be raised whether it is even possible at all to construe something like total reproduction from the tangled web constituted by the countless movements of individual capitals, shifting from moment to moment in accordance with uncontrollable and incalculable laws, partly running a parallel course, and partly intersecting and cancelling each other out. Is there any such thing as a total social capital, and if so, to what does this concept correspond in reality? This is the first question that the scientific investigation of the laws of reproduction must pose itself. The founder of the Physiocratic school, Quesnay, who approached the problem with classical fearlessness and simplicity at the dawn of economics and of the bourgeois economic order, merely took for granted the existence of total social capital as a real, active entity. His famous Tableau économique,* which was first deciphered by Marx, demonstrates the movement of the reproduction of total social capital in a few figures, which Quesnay notes must be considered under the form of commodity exchange—i.e. simultaneously as circulation process.
Quesnay’s Tableau économique shows in a few broad lines how the annual result of national production, defined in terms of value, is distributed by circulation in such a way that … simple reproduction can take place … The numberless individual acts of circulation are thereby immediately grouped together in their characteristic social movement as a mass circulation between major economic classes of society that are defined by their functions.3
For Quesnay, society consists of three classes: the productive class of agricultural producers; the sterile class, which comprises all activities outside of agriculture (industry, trade, liberal professions); and the class of landowners, including the sovereign and recipients of tithes. The total national product appears as a mass of means of subsistence and raw materials in the hands of the productive class to the value of 5 billion livres. Of this sum, 2 billion represents the annual operating capital of agriculture, 1 billion the annual depreciation of fixed capital, and two billion is the net revenue accruing to the landowners. Apart from this total product, the agricultural producers, who are conceived of here in purely capitalist terms as tenant farmers, have 2 billion livres in cash. Circulation now proceeds such that the class of tenant farmers pays the landowners 2 billion in cash (the result of the previous period of circulation) in rent. With this sum, the class of landowners buys means of subsistence from the tenant farmers for 1 billion and industrial products from the sterile class for the remaining 1 billion. The tenant farmers in turn buy industrial products with the 1 billion that has returned to them, and the sterile class buys agricultural products for the 2 billion they have in hand: raw materials, etc., for 1 billion as replacement for the annual operating capital, and means of subsistence for 1 billion. Thus the money finally returns to its starting point, the class of tenant farmers, the product is divided among all classes, so that consumption is secured for all of them, and at the same time both the productive and the sterile classes have replaced their means of production, and the class of landowners has received its revenue. The preconditions of reproduction are all in place, the conditions of circulation have all been met, and reproduction can begin its regular course.4
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*The Tableau économique (The Economic Table) was first published in France in a private edition in 1758. In 1759 Victor de Riqueti, Marquis de Mirabeau reprinted Quesnay’s revised version of the Tableau in his L’Ami des Homines. In June 1766 Quesnay published an amended version of the Tableau in the Journal de l’agriculture, du commerce et des finances along with his Analyse de la Formule Arithmétique du Table Économique de la Distribution des Dépenses Annuelles d’une Nation Agricole. In the text Luxemburg refers to this 1766 version. Quesnay’s study is considered the first systematic treatment of economic reproduction. For an English translation of the 1758 and 1759 editions of the work, see Tableau économique, edited by Marguerite Kuczynski and Ronald Meek (London: Macmillan, 1972).
It will be shown in the further course of this investigation how deficient and primitive this presentation is, despite the ingenuity of its conception. In any case, the point here is to highlight that Quesnay, at the threshold of economic science, did not entertain the slightest doubt as to the viability of an exposition of total social capital and its reproduction. It is only with Adam Smith that a more profound analysis of the relations of capital is undertaken, blurring the clear and sweeping outlines of the Physiocratic conception. Smith overturned the whole foundation of the scientific exposition of the capitalist process as a whole when he established the erroneous analysis of prices that dominated bourgeois economics for a long time after him. According to Smith’s theory, although the value of commodities represents the amount of labor expended upon them, their price is at the same time only composed of three components: wages, profit on capital, and ground rent. Since this must obviously apply to commodity production as a whole, i.e. to the national product, this amounts to the baffling discovery that the value of capitalist commodity production as a whole specifically represents, and can thus replace, all wages paid and profits of capital along with rents—i.e. total surplus value—but that no portion of the value of the mass of commodities produced corresponds to the constant capital used in their production. According to Smith, v + s is the formula expressing the value of the capitalist total social product. He illustrates his view using the example of corn 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 laboring cattle, and other instruments of husbandry. But it must be considered that the price of any instrument of husbandry, such as a laboring horse, is itself made up of the same three parts: the rent of the land upon which he is reared, the labor of tending and rearing him, and the profits of the farmer who advances both the rent of this land and the wages of this labor. 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 labor, and profit.5
Sending the inquirer from pillar to post in this manner, as Marx puts it,* Smith constantly resolves constant capital into v + s. Admittedly, Smith has occasional doubts and reverts to the opposite point of view from time to time. In the second book, he states the following:
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 labor, 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 that compose the whole annual produce of the land and labor of every country, taken completely. 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 labor, the profits of their stock, or the rent of their land.6
Here Smith breaks off, and immediately proceeds to give the following explanation:
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 net rent.
The gross revenue of all the inhabitants of a great country comprehends the whole annual produce of their land and labor; 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.7
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*See Marx’s Capital, Vol. 1, p. 737.
Smith thus introduces a portion of the value of the total product corresponding to constant capital, only to eliminate it the very next instant by resolving it into wages, profits, and rents. So the matter finally rests, as the following explanation shows:
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.8
Constant capital, which Smith calls fixed capital, is thus placed on the same level as money and does not enter into the total social product (“gross revenue”) at all—it does not even exist as a portion of the value of the total product!
Since where there is nothing, even a king loses his right,* it is evident that only wages (v) and surplus value (s) can be realized from the mutual exchange of the total product with such a composition; constant capital can in no way be replaced, and further continuation of reproduction proves impossible. Smith indeed knew well enough—and it did not occur to him to deny it—that each individual capitalist requires constant capital in addition to a wage fund—i.e. variable capital—in order to run his business. However, constant capital mysteriously disappears without trace from total capitalist production in the above analysis of the price of commodities, such that the problem of the reproduction of total social capital is misconceived from the outset. It is clear that if the most elementary presupposition of the problem—the exposition of total social capital—was fatally flawed, then the whole analysis was bound to fail. Smith’s erroneous theory was taken up by [David] Ricardo, [Jean-Baptiste] Say, Sismondi, and others, all of whom tripped up on this basic difficulty of the exposition of total social capital in their considerations of the problem of reproduction.
There was, at the very inception of scientific analysis, another problem bound up with the one presented above. This new problem can be simply formulated in the following question: what is total social capital? In the case of the individual capitalist, it is clear that his capital consists of the expenditures of his enterprise. Presupposing capitalist production (i.e. wage-labor), the value of the product of his enterprise yields him an excess over and above his expenses (i.e. surplus value), which does not serve to replace his capital, but which constitutes his net revenue that he can consume in its entirety without impinging upon his capital: this is his consumption fund. It is true that the capitalist can “save” some of this net revenue by declining to consume it himself, adding it instead to his capital. However, this is a different matter, a new process: this is the formation of a new capital, which is also replaced by ensuing reproduction along with a surplus. In any case, the capital of an individual always consists of the outlays he must make in order for production by his enterprise to occur, and his revenue is that which he consumes, or can consume, as his consumption fund. If any given capitalist is asked what are the wages that he pays his workers, he will answer that they are obviously part of his operating capital. However, if the question is posed what these wages are for the workers who receive them, then the answer cannot be that they are capital: for the workers, the wages they receive are not capital, but revenue or consumption fund. To take another example: a manufacturer of machinery produces machines in his factory; his product is a certain number of machines annually. However, this annual product, or its value, contains both the capital advanced by the manufacturer as well as the net revenue yielded. A part of the machines manufactured thus represents the revenue of the manufacturer, and it is predetermined to form this revenue in the subsequent process of circulation, through exchange. Whoever buys the machines from the manufacturer, however, obviously does not purchase them as revenue—he does not buy them in order to consume them—but to use them as means of production; for the latter, these machines are capital.
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*This is an old French proverb.
Through these examples the following result is obtained: what is capital for one capitalist is revenue for the other, and vice versa. How can any such thing as total social capital be constructed in these circumstances? Indeed, nearly every economic scientist up to Marx concluded that there is no such thing as a total social capital.9 Smith vacillates and contradicts himself on this question, as does Ricardo. However, a certain Say makes the following categorical statement:
It is in this way that the total value of products is distributed among the members of the community; I say, the total value because such part of the whole value produced, as does not go to one of the consuming producers, is received by the rest. The clothier buys wool of the farmer, pays his workmen in every department, and sells the cloth, the result of their united exertion, at a price that reimburses all his advances, and affords himself a profit. He never reckons as profit, or as the revenue of his own industry, anything more than the net surplus, after deducting all charges and outgoings; but those outgoings are merely an advance of their respective revenues to the previous producers, which are refunded by the gross value of the cloth. The price paid to the farmer for his wool is the compound of the several revenues of the cultivator, the shepherd and the landlord. Although the farmer reckons as net produce only the surplus remaining after payment of his landlord and his servants in husbandry, yet to them these payments are items of revenue—rent to the one and wages to the other—to the one, the revenue of the land, to the other, the revenue of his industry. The aggregate of all these is defrayed out of the value of the cloth, the whole of which forms the revenue of some one or other, and is entirely absorbed in that way.
Whence it appears that the term net produce applies only to the individual revenue of each separate producer or adventurer in industry, but that the aggregate of individual revenue, the total revenue of the community, is equal to the gross produce of its land, capital, and industry, which entirely subverts the system of the economists of the last century, who considered nothing but the net produce of the land as farming revenue, and therefore concluded, that this net produce was all that the community had to consume; instead of closing with the obvious inference, that the whole of what had been created, may also be consumed by mankind.10
Say grounds this theory in his own, characteristic way. Whereas Smith seeks to provide a proof by referring each private capital to its place of production, in order to resolve it into a product of labor, but takes each product of labor in strictly capitalist terms to be a sum of paid and unpaid labor, or v + s, and thus comes to resolve the total social product into v + s, the sure-handed Say naturally rushes to “correct” these classical errors, but so doing, converts them into ordinary vulgarisms. Say’s proof rests upon the fact that, in each phase of production, the entrepreneur pays other people, the representatives of earlier phases of production, for means of production (which form capital for him), and that these people, for their part, pocket this payment as their own revenue, which partly constitutes a reimbursement for the capital advanced by them, thus providing yet another set of people with their revenue. Say converts Smith’s endless chain of labor processes into an equally endless chain of reciprocal advances on revenue and their reimbursement from sales; the worker appears here on an equal footing with the entrepreneur: his revenue is “advanced” in the form of the wage, and he in turn repays it with the labor he performs. Thus the final value of the total social product presents itself as a sum of nothing but “advanced” revenues, and it goes entirely into replacing these through the exchange process. It is symptomatic of Say’s superficiality that he demonstrates the social interconnections of capitalist reproduction through the example of watchmaking—a branch of production that was at the time (and partly remains today) purely based on handicrafts, in which the “workers” also figure as small entrepreneurs and the process of the production of surplus value is masked by the countless successive acts of exchange characteristic of simple commodity production.
In this way, Say gives the coarsest expression to the confusion set in train by Smith: the total mass of products manufactured annually in society as a whole is resolved in terms of its value into nothing but revenue; it is thus also consumed entirely in that same year. Thus it remains a riddle how production is renewed without capital, without means of production; capitalist reproduction appears an insoluble problem.
A comparison of the varying approaches to the problem of reproduction from the Physiocrats to Smith reveals unmistakably that progress was made in some regards, at the same time as there was regression in others. Characteristic of the Physiocrats’ economic system was their assumption that agriculture alone produces a surplus—i.e. surplus value—and that agricultural labor is thus the only labor that is productive in a capitalist sense. Accordingly, the Tableau économique shows that the “sterile” class of manufacturing workers only creates value to the extent that it consumes raw materials and means of subsistence—i.e. to the value of 2 billion. At the same time, one half of all of the manufactured commodities goes in exchange to the class of tenant farmers, and the other half to the class of landowners, while the manufacturing class does not consume its own products at all. Thus the manufacturing class only reproduces the circulating capital used up in the value of its commodities, and a revenue for the class of entrepreneurs is not produced here at all. The only revenue of society over and above all capital expenditures that enters into circulation is produced in agriculture and is consumed by the landowning class in the form of ground rent, while the class of tenant farmers also only replaces its capital: 1 billion in interest from fixed capital and 2 billion in circulating operating capital, which together materially consists in two-thirds raw materials and means of subsistence, and one-third manufactured products. Furthermore, it is striking that it is only in the case of agriculture that Quesnay assumes the existence of fixed capital, which he calls “avances primitives,” in contrast to “avances annuelles.”* According to the latter, manufacturing is undertaken without any fixed capital, and with only annually circulating operating capital, and thus produces no part of the value of its annual mass of commodities that corresponds to the replacement of wear and tear on fixed capital (such as buildings, tools, etc.).11
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*Avances primitives can be variously translated as “original advances,” “original outlays,” “original expenditures,” or “original investment”; similarly, avances annuelles can be rendered as “annual advances,” “annual outlays,” “annual expenditures,” or “annual investment.”
†Although Luxemburg often refers to the “English classical school,” many of the classical political economists, such as Smith and Adam Ferguson, were Scottish.
In contrast with these obvious flaws, the British classical school† makes a decisive advance with the statement that every kind of labor is productive, i.e. with the discovery of the creation of surplus value in manufacturing as well as in agriculture. The British classical school is referred to here, because Smith himself, alongside his clear and decisive statements to this effect, is occasionally content to lapse back into the Physiocratic conception; it is only with Ricardo that the labor theory of value is developed as fully and as coherently as is possible within the confines of the bourgeois conception. The result is that, in terms of total social production, all capital investment is held to produce a surplus, a net revenue—i.e. surplus value—in the manufacturing sector just as much as in agriculture.12 On the other hand, Smith was led by his discovery of the productive, surplus value–creating character of every type of labor, in manufacturing and agriculture alike, to the conclusion that agricultural labor must produce a surplus for the class of tenant farmers over their total capital expenditures beyond the ground rent accruing to the landowning class. This was the origin of the conception of an annual revenue of the class of tenant farmers in addition to the replacement of their capital.13 Through his systematic elaboration under the rubrics of fixed and circulating capital of the concepts of “avances primitives” and “avances annuelles” introduced by Quesnay, Smith clarified, among other things, that the manufacturing sector of social production requires a fixed as well as a circulating capital just as much as agriculture does, and consequently also a corresponding portion of value to replace the wear and tear on this fixed capital. Smith was thus well on the way to restoring order to the concepts of total social capital and revenue, and to developing a precise exposition of them. The following formulation marks the highpoint of clarity that he achieved in this regard:
Though the whole annual produce of the land and labor of every country is, no doubt, ultimately destined for supplying the consumption of its inhabitants and for procuring a revenue to them, yet when it first comes either from the ground or from the hands of the productive laborer, it naturally divides itself into two parts. One of them, and frequently the largest, is, in the first place, destined for replacing a capital, or for renewing the provisions, materials, and finished work, which had been withdrawn from a capital; the other for constituting a revenue either to the owner of this capital, as the profit of his stock, or to some other person; as the rent of his land.14
The gross revenue of all the inhabitants of a great country comprehends the whole annual produce of their land and labor; 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.15
Here the concepts of total social capital and revenue are grasped more generally and rigorously than in the Tableau économique: total social revenue is released from its one-sided association with agriculture, and capital in both its forms, fixed and circulating, is understood more broadly as the foundation of total social production. Instead of the misleading differentiation between the two sectors of production, agriculture and manufacturing, other categories of a functional significance are foregrounded: Smith now differentiates between capital and revenue, and makes the further distinction between fixed and circulating capital. He proceeds from this basis to an analysis of the reciprocal relationship between these categories and of their transformations during the course of their social movement in production and reproduction—i.e. in the reproduction process at the total social level. Here he highlights a radical difference between fixed and circulating capital from the standpoint of society as a whole:
The whole expense of maintaining the fixed capital must evidently be excluded from the neat revenue of the society. Neither the materials necessary for supporting their useful machines and instruments of trade, their profitable buildings, etc., nor the produce of the labor necessary for fashioning those materials into the proper form, can ever make any part of it. The price of that labor may indeed make a part of it, as the workmen so employed may place the whole value of their wages in their stock reserved for immediate consumption. But in other sorts of labor, both the price and the produce go to this stock, the price to that of the workmen, the produce to that of other people whose subsistence, convenience, and amusements are augmented by the labor of those workmen.16
At this juncture, then, Smith strikes upon the important distinction between workers producing means of production, and those producing means of consumption. With regard to the former, he remarks that the component of value that they create as a replacement for their wages is produced in the form of means of production (such as raw materials, machines, etc.)—i.e. that in this instance, the part of the product that is determined as their revenue exists in a natural form that cannot be consumed. As for the latter category of workers, Smith notes that here, conversely, the whole product appears in the form of consumer goods—i.e. both the part of value contained within it that replaces the wages (the revenue) of the workers, and the remaining part (Smith does not state so explicitly, but according to his reasoning, his conclusion should read: “and also the part that represents fixed capital”). It will be seen below how close Smith comes here to the pivotal point of Marx’s own analysis of the problem. However, Smith does not pursue the fundamental question beyond his general conclusion that, in any case, the portion of value that is determined as being for the maintenance and replacement of fixed capital cannot be reckoned as net revenue at the total social level.
The position is different in the case of circulating capital:
But though the whole expenses of maintaining the fixed capital is thus necessarily excluded from the neat revenue of the society, it is not the same case with that of maintaining the circulating capital. Of the four parts of which this latter capital is composed, money, provisions, materials, and finished work, the three last, it has already been observed, are regularly withdrawn from it and placed either in the fixed capital of the society, or in their stock reserved for immediate consumption. Whatever portion of those consumable goods is not employed in maintaining the former, goes all to the latter, and makes a part of the neat revenue of the society, besides what is necessary for maintaining the fixed capital.17
Here it is apparent that Smith simply throws everything in together into the category of circulating capital, apart from the fixed capital already employed—i.e. both means of subsistence, raw materials, and also the whole commodity capital that has not yet been realized (thus partly the same means of subsistence and raw materials once again and partly the commodities that correspond to the replacement of fixed capital according to their natural form). He thus renders the concept of circulating capital ambiguous and blurred. However, in the midst of this confusion, Smith also provides a further important distinction:
The circulating capital of a society is in this respect different from that of an individual. That of an individual is totally excluded from making any part of his neat revenue, which must consist altogether in his profits. But though the circulating capital of every individual makes a part of that of the society to which he belongs, it is not upon that account totally excluded from making a part likewise of their neat revenues.18
Smith elaborates with the following example:
Though the whole goods in a merchant’s shop must by no means be placed in his own stock reserved for immediate consumption, they may in that of other people, who, from a revenue derived from other funds, may regularly replace their value to him, together with its profits, without occasioning any diminution either of his capital or theirs.19
Here Smith has established fundamental categories in relation to the reproduction and movement of total social capital: fixed and circulating capital; private and total social capital; private and total social revenue; means of production and means of consumption—these are all identified here as significant categories, and the ways in which they actually, objectively intersect with one another are partly indicated, even though they are partly submerged by the subjective theoretical contradictions of Smith’s analysis. The concise, rigorous and classically transparent schema of the Physiocrats is dissolved here into a tangled mass of concepts and relations that at first sight appear chaotic. From this chaos, however, the interrelations within the social process of reproduction already begin to emerge. Smith grasps them in a way that is deeper, more modern and more vital than is the case in Quesnay; yet these interrelations remain trapped in the chaos, inchoate like Michelangelo’s slave in the block of unhewn marble.*
The above is one illustration of the problem that Smith provided. He simultaneously approached it from a completely different angle, however: the analysis of value. His theory of the value-creating character of all labor, his strict differentiation of all labor within a capitalist economy into paid labor (replacing the wage) and unpaid labor (creating surplus value) and finally his rigorous division of surplus value into its two main categories of profit and ground rent all represented advances beyond the Physiocrats. Yet these very theoretical advances led Smith to the remarkable assertion that the price of each commodity consists of wages + profit + ground rent, or more concisely, in Marx’s expression, v + s. It followed from this that the total annual production of commodities by society could also be divided without remainder in terms of their total value into these two parts: wages and surplus value. Here the category of capital has suddenly completely disappeared: society produces nothing but revenue, nothing but articles of consumption, which are also completely consumed by society. Reproduction without capital has become an enigma, and the analysis of the problem as a whole has taken a huge step backwards, behind even the Physiocrats.
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*Michelangelo produced six sculptures of slaves for the Basilica of St. Peter between 1513 and 1533. Several of them are unfinished, giving the impression that the figures are trying to free themselves from the marble.
Smith’s successors took up his twofold theory from precisely the wrong angle. While his important first approximations of an exact exposition of the problem in Book 2 [of the Wealth of Nations] remained untouched until Marx, the basically flawed price analysis that he made in Book 1 was held up by most of his successors as a valuable legacy and either accepted without question, as with Ricardo, or rigidified into a flat dogma, as with Say. Where Smith’s doubts are fertile and his contradictions suggestive, Say proceeds with all the arrogance and presumption of a vulgar intellect. Smith’s observation that what is capital for one person might be revenue for another is taken by Say as grounds to declare that any distinction between capital and revenue at the level of society as a whole is absurd. By contrast, the absurd proposition that the total value of annual production is resolved into revenue alone and is consumed is raised by Say to a dogma of absolute validity. Since society consumes its total product each year without remainder, social reproduction is transformed into an annual repetition of the biblical miracle of creation.
The problem of reproduction remained in this state until the time of Karl Marx.