Capital is
divided into Constant and Variable Capital as analysed in previous
chapters. The proportions between them vary in different types of
production. For example, modern car production uses a lot of
Constant Capital in the form of buildings, robots, assembly areas,
materials and so on, and relatively little in the way of Variable
Capital. Apple and other high tech producers use relatively little
in the way of Constant Capital, but use relatively large amounts of
Variable Capital – lots of developers, analysts, programmers,
designers etc – and because these types of labour are highly
complex, each hour of their labour-time is equivalent to many hours
of simple labour. Put another way, each average worker employed by
Apple and other such high tech, high value company is equivalent to
many simple labourers.
In addition,
even in the same branch of production, the proportion between
Constant and Variable Capital varies because technical change occurs,
which means that what were once labour intensive types of production
become capital intensive instead. At one time, economies employed
around 80% of people in agriculture. In Britain today, just 0.7% of
the population is employed in Agriculture. Yet, agricultural
production is much higher in Britain today than it was prior to the
Industrial Revolution. Similarly, in the 19th Century,
most of these agricultural workers moved to become employed in
manufacturing. That was a process, which the Malthusians argued must
end in disaster. Of course, it did not, because agricultural
production increased astronomically, in part because of the
introduction of capital equipment, and chemicals produced by
manufacturing industry. But again, in manufacturing Capital replaced
Labour, so that now in Britain only 21.4% of the population is
employed in manufacturing, but again the value of manufacturing
output is higher than it was! Today, 78% of the population are
employed in Services, and once again, Capital is replacing Labour in
all of these areas too.
“But in whatever proportion a given capital breaks up into a
constant and a variable part, whether the latter is to the former as
1:2 or 1:10 or 1:x, the law just laid down is not affected by this.
For, according to our previous analysis, the value of the constant
capital reappears in the value of the product, but does not enter
into the newly produced value, the newly created value product. To
employ 1,000 spinners, more raw material, spindles, &c., are, of
course, required, than to employ 100. The value of these additional
means of production however may rise, fall, remain unaltered, be
large or small; it has no influence on the process of creation of
surplus value by means of the labour-powers that put them in motion.
The law demonstrated above now, therefore, takes this form: the
masses of value and of surplus value produced by different capitals —
the value of labour-power being given and its degree of exploitation
being equal — vary directly as the amounts of the variable
constituents of these capitals, i.e., as their
constituents transformed into living labour-power.” (p 290)
This appears to contradict all experience.
“Everyone
knows that a cotton spinner, who, reckoning the percentage on the
whole of his applied capital, employs much constant and little
variable capital, does not, on account of this, pocket less profit or
surplus value than a baker, who relatively sets in motion much
variable and little constant capital. For the solution of this
apparent contradiction, many intermediate terms are as yet wanted, as
from the standpoint of elementary algebra many intermediate terms are
wanted to understand that 0/0 may represent an actual magnitude.”
(p 290)
What Marx is referring to here is that Capitals of equal magnitude
tend to obtain the same rate, and consequently amount of profit,
irrespective of how much Variable Capital they employ. The
resolution of this apparent paradox is provided in Volume III of
Capital, where Marx demonstrates that competition acts to share out
the total amount of Surplus Value between these different Capitals,
and in the process establishes “Prices of Production” separate
from Exchange Values, which then take the place of the latter, as the
pivot around which market prices fluctuate. This is the so called
“Transformation Problem.”
If we take the total number of workers in a country and a given
length of working day, then these workers can be considered as a
single collective worker, and their labour as a single collective
work day. So, if there are 1 million workers, and a 10 hour day we
have a collective 10 million hour day. If we assume that all labour
is simple labour, then this limit is set by the growth of population,
and the amount of surplus value, by this and the possible lengthening
of the working day. As Marx says in examining Relative Surplus
Value, it will be seen that this is not exactly true.
I would again point out here that this also only applies in relation
to simple labour. As I demonstrated in my
Reply To Dr. Paul Cockshott
the population could be falling, but if via education, training etc.
and consequent changes in the nature of production and consumption,
simple labour is replaced by complex labour, then the collective
working day and collective surplus value can rise, and possibly rise
substantially. For example,
1 million simple labours working 10 hours = A collective working day
of 10 million hours.
10,000 David Beckham's working 10 hours = A collective working day of
100 million hours, if each Beckham hour = 1000 hours of simple
labour.
Not all money or value can be turned into Capital. If a worker needs
to work 8 hours to reproduce the value of their labour power, and
also works 4 hours producing surplus value, the capitalist, to live
only as well as the worker, off this surplus value, would have to
employ 2 workers i.e. 2 x 4 hours surplus value = 8 hours necessary
labour time, to buy those necessities. But, capital needs to expand
not just feed the capitalist.
So, to live twice as well as a worker, and convert half the surplus
value into capital, the capitalist would have to increase the minimum
amount of capital employed 8 times. That is not just the amount
required to employ 8 workers, but also to provide them with the
necessary amount of constant capital. The capitalist could, and they
did work themselves.
“..but he is
then only a hybrid between capitalist and labourer, a “small
master.” A certain stage of capitalist production necessitates that
the capitalist be able to devote the whole of the time during which
he functions as a capitalist, i.e., as
personified capital, to the appropriation and therefore control of
the labour of others, and to the selling of the products of this
labour.The guilds of the middle ages therefore tried to prevent by
force the transformation of the master of a trade into a capitalist,
by limiting the number of labourers that could be employed by one
master within a very small maximum. The possessor of money or
commodities actually turns into a capitalist in such cases only where
the minimum sum advanced for production greatly exceeds the maximum
of the middle ages. Here, as in natural science, is shown the
correctness of the law discovered by Hegel (in his “Logic”), that
merely quantitative differences beyond a certain point pass into
qualitative changes." (p 292)
Marx elaborates a principle that applies today.
“The
minimum of the sum of value that the individual possessor of money or
commodities must command, in order to metamorphose himself into a
capitalist, changes with the different stages of development of
capitalist production, and is at given stages different in different
spheres of production, according to their special and technical
conditions. Certain spheres of production demand, even at the very
outset of capitalist production, a minimum of capital that is not as
yet found in the hands of single individuals. This gives rise partly
to state subsidies to private persons, as in France in the time of
Clobber, and as in many German states up to our own epoch, partly to
the formation of societies with legal monopoly for the exploitation
of certain branches of industry and commerce, the forerunners of our
modern joint stock companies." (p 293)
This is relevant today in a number of aspects. For example, we see
in many established industries high barriers to entry due to the
minimum amount of capital required. Its impossible to enter mass car
production without hundreds of millions of pounds of capital for
instance. On the other hand, Microsoft began in Bill Gates' parents
garage. Similarly, many areas of production would not start without
state support, or the state taking them on. For example, there would
have been no space industry without the US and Soviet states engaging
in that activity.
“Capital
further developed into a coercive relation, which compels the working
class to do more work than the narrow round of its own life-wants
prescribes. As a producer of the activity of others, as a pumper-out
of surplus labour and exploiter of labour-power, it surpasses in
energy, disregard of bounds, recklessness and efficiency, all earlier
systems of production based on directly compulsory labour.
At first, capital subordinates labour on the
basis of the technical conditions in which it historically finds it.
It does not, therefore, change immediately the mode of production.
The production of surplus value — in the form hitherto considered
by us — by means of simple extension of the working day, proved,
therefore, to be independent of any change in the mode of production
itself. It was not less active in the old-fashioned bakeries than in
the modern cotton factories.” (p 293)
Capitalist production and the production of surplus value changes the
relation of the worker to the means of production. Outside
Capitalism, the worker utilises the means of production to achieve
his goal, the creation of some new Use value. He does not relate to
them as Capital, but merely as a means to an end, means of
production.
But, under Capitalism, the worker relates to them as capital. Now,
the means of production are the means of absorbing the workers'
labour, in order to create value and surplus value. Instead of the
worker employing the means of production to achieve his end, of
creating a new Use Value, the means of production (Capital) employs
the worker to achieve its end of creating Exchange Value, and Surplus
Value.
“It is
now no longer the labourer that employs the means of production, but
the means of production that employ the labourer. Instead of being
consumed by him as material elements of his productive activity, they
consume him as the ferment necessary to their own life-process, and
the life-process of capital consists only in its movement as value
constantly expanding, constantly multiplying itself. Furnaces and
workshops that stand idle by night, and absorb no living labour, are
“a mere loss” to the capitalist. Hence, furnaces and workshops
constitute lawful claims upon the night-labour of the work-people.
The simple transformation of money into the material factors of the
process of production, into means of production, transforms the
latter into a title and a right to the labour and surplus labour of
others.” (p 293-4)
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