48 SOCIAL SCIENTIST Kula begins by arguing that if capitalist methods of accounting are applied to a feudal estate, absurd results are obtained. For instance, although we know that the Polish lord found his estate, worked with the corvee labour supplied by serfs, to be a very lucrative source of income and sustained a high level of consumption, the use of capitalist accounting categories show that these estates made 'losses'. This illustrates, says Kula, the non-applicability of the categories of wages and profits to feudal estates, which operate with a different economic rationality. He gives the above table (Table 1) relating to the economic activities of the demesnes of three estates in Poland in the 18th century. The data evidently relate only to the monetised portion of transactions, that is, only those material inputs are valued which are purchased and that portion of demesne output is valued which is sold. If we look only at the difference between money receipts from the sale of produce and money costs, the estates make large 'profits' (row 3 of Table 1). But, says Kula/if we calculate the social costs of production of these three estates in accordance with capitalist principles, it is necessary to include at the very least, all the lord's production costs and the value of the peasant labour power.' The 'value of the peasant labour power' is then identified by Kula with the value of corvee. If the corvee labour days put in on the demesne are evaluated (at the market wage, presumably, though this is not clarified by the author) and this imputed value of serf labour treated as a cost (row 12 of Table 1) and deducted, along with the monetised portion of material inputs, from money receipts, then all three estates end up with a 'loss', (row 15) Methodological Problem While the general proposition that the capitalist categories of 'wages' and 'profits' cannot be applied in a feudal economy is a correct one, there is a serious methodological problem with the specific procedure Kula adopts, in the name of 'capitalist accounting', in the concrete example with the accounts of the three estates. He treats surplus labour as part of cost of production. Corvee labour is surplus labour, in its most direct and transparent form since it is separated in its performance both in space and in time, from the necessary labour which the serf puts in on his own plot to obtain his own and the family's subsistence. The corvee labour on the demesne produced a net output (gross output less material costs) which in its entirety constituted the embodiment of surplus labour, and can be termed the surplus product. If the crovee labour days are now evaluated and deducted from demesne net output value (moreover an underestimate of the latter since only the portion sold is considered) it amounts to deducting surplus from surplus. It is hardly surprising if surplus thereby disappears. But this disappearance, the emergence of 'losses', has nothing to do with capitalist accounting principles; rather, it has to do with the methodological mistake of treating surplus labour as cost of production.