This is another section in my ongoing project to digitize and serialize The New Economics the signature work of the Bolshevik revolutionary and scientific socialist E.A. Preobrazhensky. Originally published in 1926 by Preobrazhensky during the period of his struggle against the political rise of Stalin. The seminal work has been out of print in English for many decades.
This excerpt describes the difference between a social surplus product as developed in pre-capitalist “natural” economies and the form of Surplus Value which comes to exist in capitalist society once the labor force is predominately proletarianized or divorced from the means of production.
At the end of this section is a description of the exploitation of craft labor.
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The New Economics
The Law of Value in Soviet Economy
Surplus Value, Surplus Product, Wages
Section III chapter 5 (partial), Pages 184-186
Translation by Brian Pearce
Clarendon Press : Oxford 1965
Original in Russian 1926
“Before proceeding to an analysis of the category of surplus value in our society, we think it useful to take a retrospective glance at the history of the development of this category. In so far, as a transformation of the production-relations of capitalist economics into the historically higher form of production-relations of socialism is taking place in our society, in so far as we have to study the dialectical transition of the one type of relations into the other, it is interesting to study the reverse process, the process of dialectical transition from surplus product to surplus value in the initial period of the development of capitalism.
Marx more than once warned against confusing the concept of surplus product with the concept of surplus value. Surplus product is a concept incomparably wider than the concept of surplus value. Surplus product existed long before the development of capitalist production and will continue to exist after the ending of the bourgeois system of society, though no longer as a relation of exploitation. Only at a certain historical stage does surplus product assume the form of surplus value. In natural, slave-owning economy there is no surplus value in Marx’s sense, although there is both exploitation and surplus product, since the slaves create only objects of consumption for their lords, and the aim of exploitation is to extort these objects of consumption. Nor is there surplus value in natural, serf-owning economy, where, for example, labour-service prevails as the means of creating objects of consumption for the large-scale feudal landowners. The situation changes only when the product created by the labour of the exploited classes assumes the form of a commodity and is transformed into value, and thereby surplus product is transformed into surplus value. Then also the aim of exploitation becomes systematic extortion of surplus value. In this case Marx passes from using one term to using the other. Thus, for example, in Volume III of Capital Marx speaks of the transformation of a patriarchal slave system devoted to the production of immediate means of subsistence into one devoted to the production of surplus value’. In Volume I of Capital Marx also speaks not only about the exploitation of the Negroes but also about the transition of the surplus labour of the serf peasant into surplus value. He writes:
The Negro labour in the southern states of the American union preserved something of a patriarchal character so long as production was chiefly directed to immediate local consumption. But in proportion as the export of cotton became of vital interest to these states, the overworking of the Negro, and sometimes the using up of his life in seven years of labour, became a factor in a calculated and calculating system. It was no longer a question of obtaining from him a certain quantity of useful products. It was now a question of production of surplus value itself. So was it also with the Danubian principalities. (My emphasis, E.P.)
What we see here, however, are only undeveloped, transitional forms of surplus value, which are not completely characteristic of a developed capitalist mode of production. The important thing is that there are present all the prerequisites of surplus value except the last, which is characteristic of the development of capitalism the transformation of labour-power into a commodity, ‘freely’ sold by its owner on the labour market. The slave is tied to the slave-owner on the basis of the latter’s right to own him personally, the demand for his labour-power in production proceeds not according to the specific laws of developed capitalist commodity production but on the basis of the excepting from the laws of commodity economy of the purchase, sale and reproduction of his labour-power. The same must be said of the serf peasant, where the possibility of exploitation does not arise ‘freely’ and spontaneously from the monopoly of one class in the means of production, but is based on the juridical dependence of the peasants on the landlords.
Finally, as the last transitional stage to genuinely capitalist surplus value we may cite the work of handicraftsmen in their homes, for a buyer-up [putter-out], when they work up the customer’s raw material, with tools belonging to him, and are in essentials already actual wage-workers, even though they retain the external attributes of independent producers. One more step, and there stands before us the proletarian divorced from the means of production, with at the opposite pole the owner of the means of production, the capitalist, extorting surplus value–on the basis of the working of the law of value in general–in the given case, through the exchange of capital for labour-power as a commodity.
 Capital, Vol. III, part I, p. 316, Stepanov’s translation. [F.L.P.H. English edition,p. 326.]
 Capital, Vol. I, p. 214, Stepanov’s translation. [English translation, Allen and Unwin, p. 219.]
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Below is the expanded passage from Marx quoted by EAP Link to the Marxists Internet Archive
From Capital Volume I, Chapter 10, “The Working Day,” Section 2 Section 2 – The Greed for Surplus-Labour. Manufacturer and Boyard
Capital has not invented surplus-labour. Wherever a part of society possesses the monopoly of the means of production, the labourer, free or not free, must add to the working-time necessary for his own maintenance an extra working-time in order to produce the means of subsistence for the owners of the means of production,  whether this proprietor be the Athenian caloς cagaqoς [well-to-do man], Etruscan theocrat, civis Romanus [Roman citizen], Norman baron, American slave-owner, Wallachian Boyard, modern landlord or capitalist.  It is, however, clear that in any given economic formation of society, where not the exchange-value but the use-value of the product predominates, surplus-labour will be limited by a given set of wants which may be greater or less, and that here no boundless thirst for surplus-labour arises from the nature of the production itself. Hence in antiquity over-work becomes horrible only when the object is to obtain exchange-value in its specific independent money-form; in the production of gold and silver. Compulsory working to death is here the recognised form of over-work. Only read Diodorus Siculus.  Still these are exceptions in antiquity. But as soon as people, whose production still moves within the lower forms of slave-labour, corvée-labour, &c., are drawn into the whirlpool of an international market dominated by the capitalistic mode of production, the sale of their products for export becoming their principal interest, the civilised horrors of over-work are grafted on the barbaric horrors of slavery, serfdom, &c. Hence the negro labour in the Southern States of the American Union preserved something of a patriarchal character, so long as production was chiefly directed to immediate local consumption. But in proportion, as the export of cotton became of vital interest to these states, the over-working of the negro and sometimes the using up of his life in 7 years of labour became a factor in a calculated and calculating system. It was no longer a question of obtaining from him a certain quantity of useful products. It was now a question of production of surplus-labour itself: So was it also with the corvée, e.g., in the Danubian Principalities (now Roumania).
The comparison of the greed for surplus-labour in the Danubian Principalities with the same greed in English factories has a special interest, because surplus-labour in the corvée has an independent and palpable form.