Monday 25 September 2017

Theories of Surplus Value, Part II, Chapter 8 - Part 28

Rodbertus uses the term rent to mean surplus value rather than profit and rent. His statement that the rent – surplus value – is then distributed according to the value of raw products and manufactured products is also wrong. He makes a further statement which is wrong on several counts.

““Of course it follows from this that the size of these portions of rent is not determined by the size of the capital on which the gain is calculated, but by the direct labour, whether it be agricultural or manufacturing + that amount of labour which must be added on account of the wear and tear of tools and machines” (p. 97).” (p 58)

Solely in terms of surplus value, it is the product solely of the direct labour, i.e. the living labour used to process materials. As Marx explains in Capital I, neither wear and tear of fixed capital, nor any other part of the constant capital contributes to the production of surplus value. In a capitalist economy, where competition leads to an average rate of profit, and prices of production, the profit is distributed according to the size of the total capital, and not simply the variable capital.

In order for fixed capital to be produced, or any form of capital accumulation to occur, there must be surplus labour performed. In other words, if there is only sufficient social labour-time available so as to be able to reproduce the existing means of production and consumption, there will never be the possibility of devoting labour-time to the production of fixed capital.

If a farmer requires 100 kilos of grain as seed, and 500 kilos of grain for consumption during the year, and spends all their working time in grain production, then if, at the end of the year, their output amounts to only 600 kilos of grain, they will have to set aside 100 kilos for seed (constant capital), and 500 kilos to cover their next year's consumption/wages (variable capital). Only if they can produce say 700 kilos of grain, so that they could exchange 100 kilos, or spend 1/6 less time on grain production, would they be able to use that surplus to acquire a plough, for example. But, the plough is then the consequence of the surplus labour/value, not vice versa.

“It is rather equally valid for all of them, agriculture, production of machines and manufacture, that their surplus-value is determined only by the amount of labour employed, if the rate of surplus-value is given, and, by the rate of surplus-value, if the amount of labour employed is given.” (p 58)

So, Rodbertus includes the wear and tear of fixed capital as forming a part of the profit, but not the raw material used in production. Having done so, he then relates the profit to the cost of production to obtain a rate of profit. However, he claims that whereas manufacturers have to buy raw material, which, therefore, forms part of the capital laid out, as the cost of production, the agricultural capitalist does not.

““On the other hand, the value of the primary product, or the material value, does figure as capital outlay in the capital upon which the owner has to calculate his gain, the part of the rent falling on the manufactured product. But in agricultural capital this part of capital is missing. Agriculture does not require any material which is the product of a previous production, in fact it actually begins the production, and in agriculture, that part of the property which is analogous with material, would be the land itself, which is however assumed to be without cost” (pp. 97–98).” (p 59)

But, as described previously, the fact that the agricultural producer does not buy this raw material, but replaces it directly out of their own production, does not mean that it is any less a cost of production or outlay of capital. If they did not replace it directly, they could sell that part of their output, and use the value obtained to buy or replace other elements of their capital.

In fact, this portion of output that must be replaced in kind, continually grows for society.

“All production—once we are no longer dealing with mere taking and appropriating—is reproduction and hence requires “the product of a previous production as material”. Everything which is the result of production is at the same time a prerequisite of production. And the more large-scale agriculture develops the more it buys products of “a previous production” and sells its own. In agriculture these expenses feature as commodities in a formal sense—converted into commodities by being reckoned in money—as soon as the farmer becomes at all dependent on the sale of his product; as soon as the prices of various agricultural products (like hay for example) have established themselves, for division of the spheres of production takes place in agriculture as well. Queer things must be happening in the mind of a peasant if he reckons the quarter of wheat which he sells as income, but does not reckon the quarter which he puts into the soil as expenditure.” (p 59)

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