Tuesday, 14 May 2013

Capital II, Chapter 1 - Part 3

2. Second Stage. Function of Productive Capital

In Volume I, I made the comparison of Marx's analysis of value with that of energy and matter, contained in physics. We know that energy and matter are interchangeable. In the beginning, after the Big Bang, there was only energy. Energy runs through everything, it passes from one piece of matter to another, for example by conduction, convection and radiation. Heat moves from a piece of matter that is hot to one that is cooler and so on. In Marx's analysis, value is very much like energy. It is something which exists in its own right, and which can move from one thing to another, as well as taking a material form, in the same way that, for example, light can be either an energy wave, or a particle, a photon.

In the circulation process, discussed here, this can be seen again.

“By the transformation of money-capital into productive capital the capital-value has acquired a bodily form in which it cannot continue to circulate but must enter into consumption, viz., into productive consumption.” (p 34)

So long as it is circulating, value is like energy, but, in the production process, the circulation of that energy is interrupted. It takes on the material, bodily form of means of production and labour-power, in order to do work. In a way, it is like a flow of electric current. In order to do useful work, the flow has to be interrupted. It is passed through an element to generate heat, or through a motor to generate motion. The result of both, of course, is energy once more – heat energy and kinetic energy.

In the same way, the interruption in the circulation of value, represented by Productive Capital, results, via the work it does – Production – once again in value, and because of the role of labour in this process, it results in more value emerging from the process than went into it. That, of course, is something which the second law of thermodynamics says cannot, however, happen in respect of energy.

But, just as electric used to do work, for example, requires that the flow of electrons, although interrupted, does continue, so the flow of value, whilst interrupted, by the production process, must also continue. The capitalist is only able to buy means of production because they possess value in its material form – money.

That can only be the case if the money they spend at one end of the process is returned to them at the other end of that process, and for the production process itself to expand, they must get back more money at the end than they spent at the beginning.

“But money can return to him only through the sale of commodities.” (p 35)

The worker, to perform their tasks, needs to eat, and meet all their other requirements on a daily basis, and that requires two things. Firstly, the capitalist must have a ready supply of money to pay them on a frequent basis, so that they have wages to buy these necessities on a daily basis. Although today most workers are paid monthly, and into a bank account, that would never have been possible in the beginning of capitalist production. Workers needed money in hard cash on a daily basis, or at least weekly, to buy their necessities or they would have starved, been evicted and so on.

Secondly, it requires a well developed supply of the commodities they require for their subsistence. It is no use the worker having wages to spend if there are no shops from which to buy food, clothes etc., and no use having shops if there is no frequent and regular supply of food, clothes etc. to them.

Its rather like today with electric cars. For them to take off two things are needed. Firstly, they must be available in sufficient quantity, but secondly there would need to be sufficient places where they could be recharged etc. Even petrol engine cars would be pretty useless today without there being a sufficiently developed network of petrol stations to refuel them as and when required.

“When production by means of wage-labour becomes universal, commodity production is bound to be the general form of production. This mode of production, once it is assumed to be general, carries in its wake an ever increasing division of social labour, that is to say an ever growing differentiation of the articles which are produced in the form of commodities by a definite capitalist, ever greater division of complementary processes of production into independent processes. M — MP therefore develops to the same extent as M — L does, that is to say the production of means of production is divorced to that extent from the production of commodities whose means of production they are. And the latter then stand opposed to every producer of commodities which he does not produce but buys for his particular process of production. They come from branches of production which, operated independently, are entirely divorced from his own, enter into his own branch as commodities, and must therefore be bought. The material conditions of commodity production face him more and more as products of other commodity producers, as commodities. And to the same extent the capitalist must assume the role of money-capitalist, in other words there is an increase in the scale on which his capital must assume the functions of money-capital.” (p 35-6)

What Marx is describing here is a very real historical process. It is not an accident that he talks about “every producer of commodities” rather than capitalist. He is describing a process of capitalist evolution, in which not every commodity producer is a capitalist, and even the capitalist producers of commodities were frequently themselves still involved in the production process.

But now, for example, even the self-employed hand-loom weaver would buy their wool, yarn etc. rather than take it from their own sheep, grazing on the common land. A potter, like Wedgwood, would find more and more that rather than working as a potter themselves, their function would be as a provider of money-capital, not only to buy the increased quantity of labour-power required for an ever expanding production, but also to buy all these other elements that now were required as means of production, such as steam engines. Before long, that extended on an even greater scale, even outside the factory, as with Wedgwood's joining together with other North Staffordshire industrialists to commission Brindley to construct the Trent and Mersey Canal.

Increasingly, the role of Capitalist was to provide money-capital, whereas even the role of entrepreneur, manager etc. became the function of specialist employees. At the same time, the conditions which give rise to capitalist production also act to dissolve the previous modes of production.

They were designed to meet the needs of the producers, and only to sell what happened to be surplus to those needs. Capitalist production is based on selling everything it produces, and produces as much as it can sell! As it proceeds on this basis, it undermines and then overwhelms all previous modes of production.

“Whatever the social form of production, labourers and means of production always remain factors of it. But in a state of separation from each other either of these factors can be such only potentially. For production to go on at all they must unite. The specific manner in which this union is accomplished distinguishes the different economic epochs of the structure of society from one another.” (p 36-7)

As demonstrated in Volume I, in examining the labour process, the actual nature of this process is itself determined by Capital.

“Every enterprise engaged in commodity production becomes at the same time an enterprise exploiting labour-power. But only the capitalist production of commodities has become an epoch-making mode of exploitation, which, in the course of its historical development, revolutionises, through the organisation of the labour-process and the enormous improvement of technique, the entire structure of society in a manner eclipsing all former epochs.” (p 37)

Means of Production and Labour-power are the forms of existence of the advanced capital, which is itself materialised value i.e. capital-value. As capital, they are constant capital and variable capital. Consequently, when they participate in the process of production and creation of new value, it is into these components that the new value once more returns, as their material form is reproduced, and it is in these same physical proportions that any surplus value is divided.

On the one hand, however, outside the production process, the means of production continue to be the property of the capitalist, but the worker does not. The means of production are his property to dispose of as he sees fit, but he has only bought the worker's labour power for a certain period of time, and to undertake a certain function.

“The means of production do not become the material forms of productive capital, or productive capital, until labour-power, the personal form of existence of productive capital, is capable of being embodied in them. Human labour-power is by nature no more capital than means of production. They acquire this specific social character only under definite, historically developed conditions, just as only under such conditions the character of money is stamped upon precious metals, or that of money-capital upon money.” (p 37)

In the process of production, the productive-capital, is wholly consumed, as it assumes the form of new commodities, embodying new value. Although it is the Labour, which creates the surplus value, contained in these new commodities, that Labour is merely the result of the purchase of labour-power by capital. The labour-power, like the means of production was only a component of the productive capital, set in motion by the capitalist.

“Since labour-power acts merely as one of its organs, the excess of the product’s value engendered by its surplus-labour over and above the value of productive capital’s constituent elements is also the fruit of capital.” (p 37-8)

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