Sunday, 22 March 2015

Capital II, Chapter 21 - Part 15

It is the switch of resources from producing consumer goods to an increased production of producer goods that is the basis of expanded reproduction.

If we assume that capitalists in both Department 1 and 2 accumulate half of their surplus value, as capital , rather than spend it, as revenue, we can see how this happens. We have previously seen how capitals can simultaneously realise their surplus value, as money hoards, rather than in consumer goods,, i.e. the example Marx gave of all capitals exchanging their output with a gold producer. Marx further emphasises this point in supplementary remarks at the end of the chapter.

It is sufficient to say, at this point that, just as all of the surplus value can be simultaneously realised as a money hoard, so can half of the surplus value, whilst the other half is realised through the purchase of consumer goods. The important point here is that the gold is not just money, but is also a commodity produced by Department 1. logically then, if the surplus value can be simultaneously realised as a money hoard, it can be realised in the form of other Department 1 commodities. It is, of course, necessary to bear in mind here the special nature of gold as money-commodity. It is one thing to realise surplus value in the form of a gold hoard, and quite a different thing to realise it as a hoard of lathes, wheat etc. Consequently, the problem of balances still has to be addressed.

We now have:

Department 1 C 4000 + V 1000 + S 1000

Department 2 C 1500 + V 376 + S 376

and out of the surplus value in both Departments, 50% is to be accumulated, £500 in Department 1, and £188 in Department 2. It can be seen that in both departments, the organic composition of capital is 4:1, i.e. there is £4 of constant capital to £1 of variable capital. If the £500 of surplus value in Department 1 is to be accumulated in the same proportion, that means £400 is invested in additional constant capital, and £100 in additional variable capital.

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