Karl Marx

members. The total population of households produces S/V Gross Profit ratio;an output, which is the total labor force. Part of this S/(C+ V) Productivity;labor force is employed either in transporting goods, S'/(C+ V) Rate of Operating Profit;or as operatives in the production of agricultural, C/V "Organic Composition" of Capitalsmining, manufacturing, or construction goods. This employed in production of goods;segment of the labor force produces the totality of the D/(C + V) Expense ratio.physical-goods output of the society; the remainder isemployed in occupations (or unemployment) which These data and ratios, together with meaningfulare aggregately the equivalent of"overheard expense" subdivisions of the categories of data, constitute theof an individual manufacturing firm. The output of general, inclusive basis for National-Income Accountphysicalgoods (including improvements of physical ing. Substituting prices for quantities completes theinfrastructure) produced is apportioned, as a totality, picture. [See Note on National-Income Accounting,to various Social categories of consumption. In that page 56.]fashion, the cycle of production and consumption is That with the finer subdivisions implied, is theclosed in a preliminary fashion. [See diagram in Note outer limit of accounting practice, beyond which limiton National-Income Accounting, page 56.] no accountant should tread. At this point, economicsEach of the two general classes of output of physical takes over. We now identify some among the mostgoods is consumed in part either as direct cost of crucial considerations of economics, to draw moreproduction of physical goods, or as part of aggregate clearly the line of division between accounting and"overhead expense." There are consumer goods con- economics.sumed by households of goods-producing operatives; Economic science begins with the injunction of thethere are consumer goods consumed by households Book Of Genesis. In the language employed for transwhoseemployment (or, unemploymerit) is a form of lation of this passage by Pope John Paul II's encyclical,overhead expense. Capital goods are consumed either Laborem Exercens, man is admonished to "Be fruitfulby production of goods, or in the form of capital and multiply, and fill the earth and subdue it.'2 Sincegoods consumed by activities whose nature is that of the Neapolitan school of'Tomaso Campanella, this hasoverhead expense, been measured as the increase in population densityLet us employ the symbols used in Marx's method made possible by increase of the per capita productiveof national-income accounting, but with significantly powers of labor. This was more rigorously defined bydifferent definitions than Capital specifies. According- Leibniz in his establishment of economics as a science. 3ly: We compare the productive powers of labor, bycomparing the rates of output of labor for varyingv The portion of consumer-goods output con- qualities of heat-powered machines, comparing thesesumed by households of goods-producing op- with raw human muscle labor and muscle labor augeratives,mented by animal power, or water and wind power.We compare such increases in productive power ofC The portion of capital-goods output consumed labor with increases in the potential relative populationby goods-producing industry, in the form of density of the society caused by improvements inphysical improvements in basic economic infra- productive powers of labor.structure, and in transportation. From the point of Leibniz's first establishment ofeconomics as a science, the division between econom-D The combined consumption of consumer goods ics and thermodynamics ceased to exist to all practicalplus capital goods by overhead-expense activi- intents and purposes. The use of the heat-poweredties, including households whose employed machine and application of chemical energy sources tomembers' activities fall under this category (in- the soil, etc., have forced this connection to thecluding unemployed), foreground of our attention. No competent study ofeconomy is possible today without directly measuringLetting T signify total output of goods, we have the putative throughput of usable energy stocks, as inkilowatt hours, for example, both per square kilometerS = T - (C + V), as the gross profit of of inhabited area and per capita. Today, such powerproduction, transmitted through cross-sectional area of any processS' = T - (C+D as society's net operating is often measured in this same way as what we termprofit oftotai production, energy-flux density. We apply this measurement to thesociety as a whole, and also to the cross-sectionalFrom these, we derive the following basic accounting work-area per capita in production.ratios, which may be described as indicated here. Frown this general vantage point of economic sci-CAMPAIGNER / October 1983 31