Adam Smith's retrogression [36] in the analysis of the process of reproduction is so much the more remarkable because he not only elaborates upon Quesnay's correct analyses, generalising his " avances primitives " and " avances annuelles " for instance and calling them respectively "fixed" and "circulating" capital [37] , but even relapses in spots entirely into physiocratic errors. For instance in order to demonstrate that the farmer produces more value than any other sort of capitalist, he says: "No equal capital puts into motion a greater quantity of productive labour than that of the farmer. Not only his labouring servants, but his labouring cattle are productive labourers." (Fine compliment for the labouring servants!) "In agriculture too nature labours along with man; and though her labour costs no expense , its produce has its value, as well as that of the most expensive workmen . The most important operations of agriculture seem intended not so much to increase, though they do that too, as to direct the fertility of nature towards the production of the plants most profitable to man. A field overgrown with briars and brambles may frequently produce as great a quantity of vegetables as the best cultivated vineyard or corn field. Planting and tillage frequently regulate more than they animate the active fertility of nature; and after all their labour, a great part of the work always remains to be done by her. The labourers and labouring cattle ( sic !), therefore, employed in agriculture, not only occasion, like the workmen in manufactures, the reproduction of a value equal to their own consumption, or to the capital which employs them, together with its owners' profits; but of a much greater value. Over and above the capital of the farmer and all its profits, they regularly occasion the reproduction of the rent of the landlord. This rent may be considered as the produce of those powers of nature the use of which the landlord lends to the farmer. It is greater or smaller according to the supposed extent of those powers, or, in other words, according to the supposed natural or improved fertility of the land. It is the work of nature which remains after deducting or compensating everything which can be regarded as the work of man. It is seldom less than a fourth, and frequently more than a third of the whole produce. No equal quantity of productive labour employed in manufactures can ever occasion so great a reproduction. In them nature does nothing; man does all; and the reproduction must always be in proportion to the strength of the agents that occasion it. The capital employed in agriculture, therefore, not only puts into motion a greater quantity of productive labour than any equal capital employed in manufactures, but in proportion too to the quantity of productive labour which it employs, it adds a much greater value to the annual produce of the land and labour of the country, to the real wealth and revenue of its inhabitants." (Book II, Ch. 5, p. 242.)Adam Smith says in Book II, Ch. 1: "The whole value of the seed, too, is properly a fixed capital." Here, then, capital equals capital-value;it exists in a "fixed" form. "Though it (the seed) goes backwards and forwards between the ground and the granary, it never changes masters, and therefore does not properly circulate. The farmer makes his profit, not by its sale, but by its increase." (P. 186.) The absurdity of the thing lies here in the fact that Smith does not, like Quesnay before him, see the re-appearance of the value of constant capital in a renewed form, and hence fails to see an important element of the process of reproduction, but merely offers one more illustration, and a wrong one at that, of his distinctions between circulating and fixed capital. In Smith's translation of " avances primitives "and " avances annuelles " as "fixed capital" and "circulating capital,"the progress consists in the term "capital," the concept of which is generalised, and becomes independent of the special consideration for the "agricultural"sphere of application of the physiocrats; the retrogression consists in the fact that "fixed" and "circulating" are regarded as the overriding distinction, and are so maintained.
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