Now, a prevention of loss on the costs of commerce is not a real product or an accession of wealth through commerce. If considered simply as an exchange, whether with or without the cost of transportation." (Pp. 145and 146.) "The costs of commerce are always paid by those who sell the products and who would enjoy the full prices paid for them by the buyers, if there were no intermediate expenses." (P. 163.) The proprietors and producers are "salariants" (payers of wages), the merchants are "salariès"(recipients of wages). (P.164, Quesnay, Dialogues sur le Commerce et sur les Travaux des Artisans. In Daire, Physiocrates, Part I, Paris, 1846.)[12] In the Middle Ages we find book-keeping for agriculture only in the monasteries. But we have seen (Buch I, p. 343[English edition: p. 357, -- Ed .]) that a book-keeper was installed for agriculture as early as the primitive Indian communities. Book-keeping is there made the independent and exclusive function of the communal officer.
This division of labour saves time, effort and expense, but production and book-keeping in the sphere of production remain as much two different things as the cargo of a ship and the bill of lading. In the person of the book-keeper, a part of the labour-power of the community is withdrawn from production, and the costs of his function are not made good by his own labour but by a deduction from the communal product. What is true of the book-keeper of an Indian community is true mutatis mutandis of the book-keeper of the capitalist. (From Manuscript II).
[13] "The money circulating in a country is a certain portion of the capital of the country, absolutely withdrawn from productive purposes, in order to facilitate or increase the productiveness of the remainder. A certain amount of wealth is, therefore, as necessary in order to adopt gold as a circulating medium, as it is to make a machine, in order to facilitate any other production." (Economists, Vol. V, p. 520.)[14] Corbet calculates, in 1841, that the cost of storing wheat for a season of nine months amounts to a loss of 1/2 per cent in quantity, 3 per cent for interest on the price of wheat, 2 percent for warehouse rental, 1 percent for sifting and drayage, 1/2percent for delivery, together 7 percent, or 3s. 6d. on a price of 50s.
per quarter. (Th. Corbet, An Inquiry into the Causes and Modes of Wealth of Individuals, etc., London, 1841.) According to the testimony of Liverpool merchants before the Railway Commission, the (net) costs of grain storage in 1865 amounted to about 2d. per quarter per month, or 9d. or 10d. a ton.
(Royal Commission on Railways, 1867. Evidence, p. 19, No. 331.)[15] Book II. Introduction. [A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. A new edition in four volumes, London, 1843, Vol. II, pp. 249-52. -- Ed .]
[16] Instead of a supply arising only upon and from the conversion of the product into a commodity, and of the consumption-supply into a commodity-supply, as Adam Smith wrongly imagines, this change of form, on the contrary, causes most violent crises in the economy of the producers during the transition from production for one's own needs to commodity production. In India, for instance, "the disposition to hoard largely the grain for which little could be got in years of abundance"was observed until very recent times. (Return. Bengal and Orissa Famine H. of C., 1867, I, pp. 230-31, No. 74.) The sudden increase in the demand for cotton, jute, etc., due to the American Civil War led in many parts of India to a severe restriction of rice culture, a rise in the price of rice, and a sale of the producers' old rice supplies. To this must be added the unexampled export of rice to Australia, Madagascar, etc., after 1864-66.
This accounts for the acute character of Orissa alone (loc. cit., 174, 175, 213, 214, and III: Papers relating to the famine in Behar, pp. 32, 33, where the "drain of old stocks" is emphasised as one of the causes of the famine). (From Manuscript II.)[17] Storch calls this "circulation factice"(fictitious circulation).
[18] Ricardo quotes Say, who considers it one of the blessings of commerce that by means of the costs of transportation it increases the price, or the value, of products. "Commerce," writes Say, "enables us to obtain a commodity in the place where it is to be found, and to convey it to another where it is to be consumed; it therefore gives us the power of increasing the value of the commodity, by the whole difference between its price in the first of these places, and its price in the second."[J.B. Say, Traitè d' èconomie politique, Troisième edition, Paris, 1817, Tome II, p. 433. -- Ed .] Ricardo remarks with reference to this: "True, but how is this additional value given to it?
By adding to the cost of production, first, the expenses of conveyance;secondly, the profit on the advances of capital made by the merchant. The commodity is only more valuable, for the same reason that every other commodity may become more valuable, because more labour is expended on its production and conveyance before it is purchased by the consumer. This must not be mentioned as one of the advantages of commerce." (Ricardo, Principles of Political Economy, 3rd. ed., London, 1821, pp. 309, 310.)[19] Royal Commission on Railways, p.
31, No. 630.