4) CIRCUMSTANCES THAT, INDEPENDENTLY OF THE PROPORTIONAL DIVISION OF SURPLUS-VALUE INTO CAPITAL AND REVENUE, DETERMINE THE AMOUNT OF ACCUMULATION. DEGREE OF EXPLOITATION OF LABOUR-POWER. PRODUCTIVITY OF LABOUR. GROWING DIFFERENCE IN AMOUNT BETWEEN CAPITAL EMPLOYED AND CAPITAL CONSUMED. MAGNITUDE OF CAPITAL ADVANCED“The proportion in which surplus-value breaks up into capital and revenue being given, the magnitude of the capital accumulated clearly depends on the absolute magnitude of the surplus-value. Suppose that 80 per cent. were capitalised and 20 per cent. eaten up, the accumulated capital will be £2,400 or £200, according as the total surplus-value has amounted to £3,000 or £500. Hence all the circumstances that determine the mass of surplus-value operate to determine the magnitude of the accumulation. We sum them up once again, but only in so far as they afford new points of view in regard to accumulation.” (p 561)
The rate of surplus value is determined primarily by the degree of exploitation of labour. Assuming workers are paid the value of their labour power, this can only be increased by lengthening the working-day, making the working day more intensive (both of which we have seen have limits), or else by reducing the value of labour-power, thereby increasing relative surplus value.
But, in practice, the lowering of wages below the value of labour-power, also plays an important part.
“It, in fact, transforms, within certain limits, the labourer’s necessary consumption fund into a fund for the accumulation of capital.” (p 562)
As a consequence, all other things being equal, (which we know they are not) capital will always seek to lower wages to the minimum. Today, that means that capital will seek to locate its activities to where the labour it requires can be had at the lowest price e.g. China, Vietnam, India, Indonesia and Africa. That means this presses down on wages elsewhere, as Marx pointed out.
“Today, thanks to the competition on the world-market, established since then, we have advanced much further. “If China,” says Mr. Stapleton, M.P., to his constituents, “should become a great manufacturing country, I do not see how the manufacturing population of Europe could sustain the contest without descending to the level of their competitors.” (Times, Sept. 3, 1873, p. 8.) The wished-for goal of English capital is no longer Continental wages but Chinese.” (Note 2, p 563)
Today, also, as in Marx’s day, the bad employers get away with reducing wages below the value of labour power, and force other workers to make up the difference, in transfers through the tax and benefits system.
“At the end of the 18th and during the first ten years of the 19th century, the English farmers and landlords enforced the absolute minimum of wage, by paying the agricultural labourers less than the minimum in the form of wages, and the remainder in the shape of parochial relief.” (p 563-4)
Marx then looks at the effect on constant capital. The instruments of labour have to be efficient for the number of workers to work with them. But, increased production resulting from accumulation does not necessarily mean they have to be increased in the same proportion.
“In a factory, suppose that 100 labourers working 8 hours a day yield 800 working-hours. If the capitalist wishes to raise this sum by one half, he can employ 50 more workers; but then he must also advance more capital, not merely for wages, but for instruments of labour. But he might also let the 100 labourers work 12 hours instead of 8, and then the instruments of labour already to hand would be enough. These would then simply be more rapidly consumed. Thus additional labour, begotten of the greater tension of labour-power, can augment surplus-product and surplus-value (i.e., the subject-matter of accumulation), without corresponding augmentation in the constant part of capital.” (p 565)
In practice, Marx is right, however, because for most tools, being used 50% more will not mean they wear out proportionately quicker. This is particularly significant in the extractive industries like mining where increased production does not involve the purchase of additional raw material to be worked up. Here, almost all the constant capital is made up of the instruments of labour. So, the hours of labour can be increased, labour intensity can be increased, shift systems can be introduced, which result in increased output, but involve no significant increase in constant capital, either in the form of raw materials, or instruments of labour.
A similar thing applies in agriculture. Increased output requires additional constant capital in the form of raw materials (seed, fertiliser etc) but no additional instruments of labour. The workers can simply work with the existing implements for longer or work more intensively.
“Finally, in what is called manufacturing industry, every additional expenditure of labour presupposes a corresponding additional expenditure of raw materials, but not necessarily of instruments of labour. And as extractive industry and agriculture supply manufacturing industry with its raw materials and those of its instruments of labour, the additional product the former have created without additional advance of capital, tells also in favour of the latter.” (p 565-6)
A further factor is the rising productivity of social labour. The more productive labour becomes, the more use values are produced, and the cheaper each of these use values becomes. If the rate of surplus value remains the same, the total amount of surplus product increases. So, in terms of physical quantities, of use values, the capitalist could both consume more luxury goods, and yet still be able to accumulate more capital.
By the same token, the capitalist could increase their consumption without accumulation falling and vice versa.
Moreover, even if the rate of surplus value is falling, this can still be the case provided the productivity is rising faster than the rate of surplus value is falling.
C 1000 + V 1000 + S 1000 = E 3000 = 3000 units.
Suppose these units of output can be equally consumed by the capitalists or used for accumulation. Suppose productivity rises by 50%, so 4500 units are produced, whilst the rate of surplus value falls from 100% to 75%.
C 1000 + V 1000 + S 750 = E 2750 = 4500 units.
If capital divides the surplus equally between consumption and accumulation, then previously the surplus product was 1000 units, divided into 500 consumption and 500 accumulation. Now, however, the surplus product amounts to 750 x 1.5 = 1125 units, divided 562.5 consumption, and 562.5 accumulation.
Things don't stop there. Along with the rise in productivity goes the reduction in the value of labour power, as the workers necessaries are cheapened. That means that the rate of surplus value rises through Relative Surplus Value.
By the same token, this rise in productivity has an effect on the instruments of labour. That is the constant capital that is fixed capital being consumed only gradually over a period. Every so often, a portion of these machines wear out and have to be replaced. From the time these machines were originally bought, increases in productivity mean that the replacement machine will be cheaper than the original. Frequently, also, the replacement machine will not only be cheaper, but will be better and more productive than the original because of technological improvements incorporated in it.
As the productivity of labour rises, the new value created by it in a given time remains the same, but the volume of constant capital in raw material it processes increases. If the value of each unit of this raw material remains constant, the proportion of value accounted for by the constant capital compared to labour rises. That is true even though the intensity with which the workers work remains the same or may even fall.
“An English and a Chinese spinner, e.g., may work the same number of hours with the same intensity; then they will both in a week create equal values. But in spite of this equality, an immense difference will obtain between the value of the week’s product of the Englishman, who works with a mighty automaton, and that of the Chinaman, who has but a spinning-wheel. In the same time as the Chinaman spins one pound of cotton, the Englishman spins several hundreds of pounds. A sum, many hundred times as great, of old values swells the value of his product, in which those re-appear in a new, useful form, and can thus function anew as capital.
“In 1782,” as Frederick Engels teaches us, “all the wool crop in England of the three preceding years, lay untouched for want of labourers, and so it must have lain, if newly invented machinery had not come to its aid and spun it.”
Labour embodied in the form of machinery of course did not directly force into life a single man, but it made it possible for a smaller number of labourers, with the addition of relatively less living labour, not only to consume the wool productively, and put into it new value, but to preserve in the form of yarn, &c., its old value.” (p 567-8)
As the physical quantity of capital increases with the accumulation of capital, labour acts both to preserve its value, and to enhance it.
The bourgeois economists are quick to praise the power of capital embodied in physical equipment, but they fail to point out that this capital is only the result of past labour and that in two senses. Firstly, that it was produced by living labour, and secondly that the capitalist is only able to accumulate it as a result of the surplus value created by his own workers.
Yet, despite the fact that this capital is the product of workers they are so in awe of this capital that “... according to the Scotch genius MacCulloch, ought to receive a special remuneration in the shape of interest, profit, etc.” (p 569)
In other words, the productive assistance, to current living labour that the product of past labour affords it, in the shape of machines and other instruments of labour, is not assigned to the labour that made it possible, but to capital.
“With a given degree of exploitation of labour-power, the mass of the surplus-value produced is determined by the number of workers simultaneously exploited; and this corresponds, although in varying proportions, with the magnitude of the capital. The more, therefore, capital increases by means of successive accumulations, the more does the sum of the value increase that is divided into consumption fund and accumulation fund. The capitalist can, therefore, live a more jolly life, and at the same time show more “abstinence.” And, finally, all the springs of production act with greater elasticity, the more its scale extends with the mass of the capital advanced.” (p 570)
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