Friday, 28 September 2012

Capital 1, Chapter 12 - Part 2

Marx then describes the process by which this raising of productivity occurs, and why capitalist competition drives this process. He does so by looking at the way each capitalist has a motivation for raising their own productivity in order to make higher than average profits. This is because of the difference between Value and Exchange Value.

Suppose 1 hour's labour = £10.

In a working day of 12 hours, £120 of new value is created. If, in this 12 hours, 120 items are produced, each will have £1 of new value added to it. Suppose the constant capital used up, in each article, is also £1. Then the price of each article is £2.

If a capitalist can raise his productivity, compared to his competitors, he can make extra profits.

Suppose a capitalist raises his productivity so that, in 12 hours, he can produce 240 rather than 120 items. The constant capital in each will still be £1, but the labour in each will now be only 50p. So, the individual value of his products is just £1.50.

However, it is not the individual value of these commodities which determine their market price, but their social value, the average socially necessary labour-time required for their production. If this capitalist is only one of a large number producing these commodities, his lower cost of production will not change the average SNLT.

So, the market price will remain £2, whereas his individual value is £1.50, giving him an extra 50p per unit profit over his rivals. But, in practice, in order to get rid of the additional supply, he may have to cut his prices below this, say to £1.75, making just an extra 25p profit, but will in the process increase his market share.

This augmentation of surplus-value is pocketed by him, whether his commodities belong or not to the class of necessary means of subsistence that participate in determining the general value of labour-power. Hence, independently of this latter circumstance, there is a motive for each individual capitalist to cheapen his commodities, by increasing the productiveness of labour.” (p 301)

Even in the case described, however, the additional surplus value arises because the amount of necessary labour-time is reduced.

Suppose out of the 12 hour day, 10 hours were required for necessary labour. In that case, wages amount to £100, and Surplus Value is £20. But, now, the capitalist produces 240 items not 120. He sells each at £1.75 bringing in £420. Of this £240 represents Constant Capital, and £100 represents wages (Variable Capital) leaving a profit now of £80.

Previously, the ratio of surplus value to necessary value = surplus labour to necessary labour was 20:100 = 1:5, now it is 80:100 = 4:5.

The other way of looking at this, says Marx, is to view the labour employed in this firm as intensified labour, like complex labour, so that in every hour, it creates more value than 1 hour of abstract, simple labour. Unlike with complex labour, however, which would involve the capitalist paying for it at its higher value, this capitalist continues to pay for it at its original value. We do see this in practice in a slightly different form. If we look at the same type of labour employed at different size of firms, for example, we see workers employed at very large firms, which enjoy the economies of scale, being paid higher wages, and receiving better conditions, than the same workers employed by small firms. In the same way, workers in advanced economies, where productivity is high, generally have higher wages than workers in less developed economies where it is low.

Hence, the capitalist who applies the improved method of production, appropriates to surplus-labour a greater portion of the working day, than the other capitalists in the same trade. He does individually, what the whole body of capitalists engaged in producing relative surplus-value, do collectively. On the other hand, however, this extra surplus-value vanishes, so soon as the new method of production has become general, and has consequently caused the difference between the individual value of the cheapened commodity and its social value to vanish. The law of the determination of value by labour-time, a law which brings under its sway the individual capitalist who applies the new method of production, by compelling him to sell his goods under their social value, this same law, acting as a coercive law of competition, forces his competitors to adopt the new method. The general rate of surplus-value is, therefore, ultimately affected by the whole process, only when the increase in the productiveness of labour, has seized upon those branches of production that are connected with, and has cheapened those commodities that form part of, the necessary means of subsistence, and are therefore elements of the value of labour-power.” (p 302-3)

The value of commodities is in inverse ratio to the productiveness of labour. And so, too, is the value of labour-power, because it depends on the values of commodities. Relative surplus-value is, on the contrary, directly proportional to that productiveness. It rises with rising and falls with falling productiveness. The value of money being assumed to be constant, an average social working day of 12 hours always produces the same new value, six shillings, no matter how this sum may be apportioned between surplus-value and wages. But if, in consequence of increased productiveness, the value of the necessaries of life fall, and the value of a day’s labour-power be thereby reduced from five shillings to three, the surplus-value increases from one shilling to three.” (p 303)

Hence there is immanent in capital an inclination and constant tendency, to heighten the productiveness of labour, in order to cheapen commodities, and by such cheapening to cheapen the labourer himself.” (p 303)

The capitalist is only interested in the surplus value of the commodities they produce, not their Exchange Value. In realising the surplus value, they also recover the value of the constant and variable capital advanced in the production. This solves the question then of why capital seeks to reduce the Exchange Value of commodities, because Relative Surplus Value increases with the productivity of labour, whilst that same process reduces the Exchange Value of commodities.

The shortening of the working day is, therefore, by no means what is aimed at, in capitalist production, when labour is economised by increasing its productiveness. It is only the shortening of the labour-time, necessary for the production of a definite quantity of commodities, that is aimed at. The fact that the workman, when the productiveness of his labour has been increased, produces, say 10 times as many commodities as before, and thus spends one-tenth as much labour-time on each, by no means prevents him from continuing to work 12 hours as before, nor from producing in those 12 hours 1,200 articles instead of 120. Nay, more, his working day may be prolonged at the same time, so as to make him produce, say 1,400 articles in 14 hours. In the treatises, therefore, of economists of the stamp of MacCulloch, Ure, Senior, and tutti quanti [the like], we may read upon one page, that the labourer owes a debt of gratitude to capital for developing his productiveness, because the necessary labour-time is thereby shortened, and on the next page, that he must prove his gratitude by working in future for 15 hours instead of 10. The object of all development of the productiveness of labour, within the limits of capitalist production, is to shorten that part of the working day, during which the workman must labour for his own benefit, and by that very shortening, to lengthen the other part of the day, during which he is at liberty to work gratis for the capitalist.” (p 304)

Once again, we see the same thing today, in relation to the raising of the retirement age. It is now 170 years since the working day was reduced to 10 hours. Yet, today, many workers still work an 8 hour day, and the Liberal-Tories, like the Blairites before them, object to the modest proposal of the EU to introduce a maximum 48 hour week!!! But, in that 170 years, the productivity of labour has risen by astronomical amounts. Each worker, today, produces, in each hour, many hundreds, if not thousands, times as many use values as they did in 1850. yet, despite that, and despite the fact, on that basis, that workers should be able to benefit by working fewer hours per day, fewer days per week, fewer weeks per year, and fewer years in their life, capital insists on making workers work both longer hours, and more years out of their life, to provide itself with more profits.

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