At the same time as Sismondi, [Thomas] Malthus also waged a partial war against the Ricardian school. Sismondi repeatedly cites Malthus as his chief witness in the second edition of his work and in his polemics. He formulates the commonalities between their respective campaigns as follows in the Revue Encyclopédique:
Mr. Malthus, on the other hand, has maintained in England, as I have tried to do on the continent, that consumption is not the necessary consequence of production, that the needs and desires of man, though they are truly without limits, are only satisfied by consumption insofar as means of exchange go with them. We have affirmed that it is not enough to create these means of exchange, to make them circulate among those who have these desires and wants; that it can even happen frequently that the means of exchange increase in society together with a decrease in the demand for labor, or wages, so that the desires and wants of one part of the population cannot be satisfied and consumption also decreases. Finally, we have claimed that the unmistakable sign of prosperity in a society is not an increasing production of wealth, but an increasing demand for labor, or the offer of more and more wages in compensation for this labor. Messrs. Ricardo and Say, though not denying that an increasing demand for labor is a symptom of prosperity, maintained that it inevitably results from an increase of production. As for Mr. Malthus and myself, we regard these two increases as resulting from independent causes that may at times even be in opposition. According to our view, if the demand for labor has not preceeded and determined production, the market will be flooded, and then new production becomes a cause of ruin, not of enjoyment.165
These statements give the impression that there was a far-reaching agreement, or brotherhood of arms, between Sismondi and Malthus, at least in their opposition to Ricardo and his school. Marx considered Malthus’s Principles of Political Economy, published in 1820, a direct plagiarism of Sismondi’s Nouveaux Principes, which had appeared one year earlier. In relation to the question that is of interest here, however, there is an outright opposition between the two of them in a number of ways.
Sismondi is a critic of capitalist production, and launches powerful attacks on it: he is its accuser. Malthus is an apologist for it. However, his apologies on behalf of capitalist production do not consist in the denial of its contradictions, like McCulloch or Say; on the contrary, he raises these contradictions to the status of a brute natural law and absolutely sanctifies them. Sismondi’s guiding principle is the interests of the workers, and the goal that he strives for, albeit in a general and vague way, is the comprehensive reform of distribution for the benefit of proletarians. By contrast, Malthus is the ideologue of the interests of that layer of parasites on capitalist production that feed on ground rent and state revenues, and the goal that he advocates is the allocation of as large a portion of surplus value as is possible to these “unproductive workers.” Sismondi’s general standpoint is predominantly an ethical one oriented to social reform: he “surpasses” the classical economists by stressing, in opposition to them, that “consumption is the only end of accumulation,” and he makes a plea for accumulation to be curbed. Malthus, on the other hand, bluntly asserts that accumulation is the only goal of production and advocates unrestrained accumulation on the part of the capitalists, which he proposes to augment and guarantee through the unrestrained consumption of the parasites on this accumulation. Finally, Sismondi’s critical starting point was the analysis of the process of reproduction, or the relationship between capital and revenue at the level of society as a whole. Malthus opposes Ricardo on the basis of an absurd theory of value, from which he derives a vulgar theory of surplus value that attempts to explain capitalist profit from the price premium over and above the value of commodities.166
Malthus extensively criticizes the thesis that supply and demand are identical in the chapter devoted to James Mill in his Definitions in Political Economy, published in 1827.167 In his Elements of Political Economy, Mill states the following:
What is it that is necessarily meant, when we say that the supply and the demand are accommodated to one another? It is this: that goods that have been produced by a certain quantity of labor, exchange for goods that have been produced by an equal quantity of labor. Let this proposition be duly attended to, and all the rest is clear. Thus, if a pair of shoes is produced with an equal quantity of labor as a hat, so long as a hat exchanges for a pair of shoes, so long the supply and demand are accommodated to one another. If it should so happen, that shoes fell in value, as compared with hats, which is the same thing as hats rising in value compared with shoes, this would simply imply that more shoes had been brought to market, as compared with hats. Shoes would then be in more than the due abundance. Why? Because in them the produce of a certain quantity of labor would not exchange for the produce of an equal quantity. But for the very same reason hats would be in less than the due abundance, because the produce of a certain quantity of labor in them would exchange for the produce of more than an equal quantity in shoes.168
Malthus marshals two kinds of argument against such vapid tautologies. First, he points out to Mill that the latter’s construction lacks foundations. While the exchange ratio between hats and shoes might indeed remain unaltered, there may nonetheless be too great a quantity of both in relation to demand. This would manifest itself in both being sold at prices below the costs of production (including a corresponding profit). He asks,
But can it be said on this account that the supply of hats is suited to the demand for hats, or the supply of shoes suited to the demand for shoes, when they are both so abundant that neither of them will exchange for what will fulfill the conditions of their continued supply?169
Malthus thus confronts Mill with the possibility of general overproduction: “when they are compared with the costs of production … it is evident that … they may all fall or rise at the same time.”170
Second, Malthus objects to the habit, shared by Mill, Ricardo, and their epigones, of basing their theses on a model of barter—i.e. the direct exchange of products:
The hop planter who takes a hundred bags of hops to Weyhill fair, thinks little more about the supply of hats and shoes than he does about the spots in the sun. What does he think about, then? And what does he want to exchange his hops for? Mr. Mill seems to be of opinion that it would show great ignorance of political economy, to say that what he wants is money; yet, notwithstanding the probable imputation of this great ignorance, I have no hesitation in distinctly asserting, that it really is money that he wants.171
He needs money for the rent that he must pay to the landlord, for the wages that he must pay to his workers, and for the purchases of raw materials and tools that he requires in order to continue planting. Malthus insists on this point at great length; he finds it “remarkable”172 that reputable economists should prefer to resort to the most outlandish and far-fetched examples rather than assume exchange mediated by money.*
For the rest, Malthus is content to outline the mechanism whereby excessive supply itself causes a restriction in production through depressing prices below production costs, and vice versa.
“But this tendency, in the natural course of things, to cure a glut or a scarcity, is no … proof that such evils have never existed.”173
It is clear that Malthus follows exactly the same track as Ricardo, Mill, Say, and McCulloch, despite the fact that he takes an opposite standpoint to them in the question of crises: for him, too, everything can be reduced to the exchange of commodities. The social process of reproduction with its broad categories and interrelations, which so exercised Sismondi, are not considered here in the slightest.
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*This paragraph and its corresponding footnote were left out of Schwarzschild’s translation of The Accumulation of Capital.
What the critiques of Sismondi and Malthus have in common, despite the many ways in which their fundamental conceptions are opposed, can be stated simply as follows:
1) Both of them reject the thesis of a preestablished equilibrium between consumption and production.
2) Both assert the possibility not only of partial crises, but of general ones, too.
This is the only common ground between them, however. Whereas Sismondi seeks the cause of crises in the low level of wages and in capitalists’ restricted capacity for consumption, Malthus conversely transforms low wages into a natural law of population growth, while finding a replacement for the restricted consumption of the capitalists in the consumption by parasites on surplus value such as the landed gentry and the clergy, whose capacity to absorb wealth and luxury knows no confines: the Church with a capacious maw is blest.*
Both Malthus and Sismondi seek a category of consumers that are to buy without selling for the salvation of capitalist accumulation and to rescue it from its dilemma. Sismondi does so, however, in order to locate a market for the surplus in the social product beyond the consumption of workers and capitalists—i.e. for the capitalized part of surplus value; in Malthus’ case, this category of consumers is required for any profit to be made at all. Of course it remains a mystery to all but Malthus himself how the rentiers and the stipendiaries of the state, who must themselves receive their means of purchase primarily from the pockets of the capitalists, are to help the latter secure a profit by buying commodities from them at a premium. On account of such profound discrepancies, the brotherhood of arms between Malthus and Sismondi was of a rather superficial nature. Furthermore, if Malthus made a travesty of Sismondi’s Nouveaux Principes, as Marx says, then it is also true that Sismondi lends Malthus’s criticisms of Ricardo a distinctly Sismondian tenor insofar as he merely highlights what they have in common, and cites Malthus as a key witness. On the other hand, admittedly, Sismondi occasionally succumbs to Malthus’s influence, as for instance when he partly adopts the latter’s theory of profligate state expenditure† as an emergency measure for accumulation, thereby directly running counter to his own point of departure.
Altogether, Malthus neither made an original contribution to the problem of reproduction, nor did he demonstrate a proper grasp of it; in his controversy with the Ricardians, he primarily revolves around the concepts of simple commodity circulation, as the latter do in their debate with Sismondi. At issue in the dispute between Malthus and Ricardo’s school was unproductive consumption by parasites on surplus value—this was an altercation about the distribution of surplus value, rather than a quarrel about the social foundations of capitalist reproduction. Malthus’s edifice collapses as soon as the absurd gaffe in his theory of profit is revealed. Sismondi’s critique remains valid and his problem unsolved even if Ricardo’s theory of value is accepted along with all its consequences.
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*The phrase is from Malthus, signifying that a well-funded church is needed to provide the effective demand required to prevent crises of overproduction.
†In contemporary jargon this might be referred to as “fiscal stimulus” or “deficit spending.”