Wednesday, 30 April 2014

Capital II, Chapter 16 - Part 4

The relation between the advanced variable capital, and that actually employed, all other things being equal, can only affect the production of surplus value to the extent that it determines how much labour-power can be exploited in a given period of time. In other words, the longer the period of turnover, the more capital must be advanced in proportion to that actually employed. Consequently, a larger capital is then required to productively employ a given number of workers for a given amount of time.

In our example, B had to be ten times the advanced capital of A, in order to employ the same amount of labour-power, for the same amount of time.

“The advanced variable capital functions as variable capital only to the extent and only during the time that it is actually employed, and not during the time in which it remains in stock, is advanced, without being employed. But all the circumstances which differentiate the relation between the advanced and the employed variable capital come down to the difference of the periods of turnover (determined by the difference of either the working period, or the circulation period, or both). (p 303)

Equal quantities of variable capital, however it is expended, (e.g. 10 hours of simple labour or 5 hours of complex labour, 1 worker working for 10 hours or 10 workers working for 1 hour) produce equal amounts of surplus value, if the rate of surplus value is constant.

“If then, equal quantities of variable capital are employed by the capitals A and B in equal periods of time with equal rates of surplus-value, they must generate equal quantities of surplus-value in equal periods of time, no matter how different the ratio of this variable capital employed during a definite period of time to the variable capital advanced during the same time, and no matter therefore how different the ratio of the quantities of surplus-value produced, not to the employed but to the advanced variable capital in general. The difference of this ratio, far from contradicting the laws of the production of surplus-value that have been demonstrated, rather corroborates them and is one of their inevitable consequences.” (p 303)

Examining the rate of surplus value for A and B, over a five week period, A produces £500 of surplus value for £5,000 (even though only £500 are employed) = 500/5000 = 10%.

In a year, we calculated that the figures were 1000% and 100% respectively, but these ratios are still the same as for a five week period i.e. 10:1.

“The annual rate agrees with the actual rate of surplus-value. In this case it is therefore not capital B but capital A which presents the anomaly that has to be explained.” (p 304-5)

The answer is that capital A is never advanced for more than 5 weeks, whereas capital B is advanced for 50 weeks. So, A is only five times larger than the capital advanced each week, whereas B is 50 times larger. The five week turnover period of A is just one tenth of a year, in which A is turned over ten times. So, although the employed capital is £5,000, the same as B, for the year, the capital advanced is only a tenth of that, £500.

The surplus value is produced according to the amount of variable capital employed, not that advanced. The amount of variable capital employed is the same in the case of both A and B, i.e. £5,000, and so the amount of surplus value produced is also the same. Necessarily, when measured against the variable capital advanced then, the rate for A must be ten times that of B, because B is ten times A.

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