Capital III, Chapter 3 - Part 7

2) s' constant, v variable, C changes through variation of v.

Again, the same kind of objections exist as registered for the previous example. If v is variable, then for the same capital, if v rises, because more labour-power is employed, then, given all of the constraints Marx set out, in respect of constant productivity etc., this increase in v must also result in an increase in c, as well as C. The reverse is also true.

Once again, the simple answer is to view each capital as that of separate firms in different industries.

“This case differs from the preceding one only in degree. Instead of decreasing or increasing by as much as v increases or decreases, c remains constant. Under present-day conditions in the major industries and agriculture the variable capital is only a relatively small part of the total capital. For this reason, its increase or decrease, so far as either is due to changes in the variable capital, are likewise relatively small.” (p 58-9)

If there are two capitals.

1) c 100 + v 20 + s 10; C = 120, s' +50%, p' = 8.33%

2) c 100 + v 30 + s 15; C = 130, s' = 50%, p' = 11.54%

The higher organic composition of capital in 1) results in a lower rate of profit, even though the rate of surplus value is the same and the total capital employed is smaller. The difference results from the greater volume of surplus value produced in industry 2.

If this example is used in relation to a single capital, then we have to drop the assumption of no changes in productivity. Marx notes that it may be applied to agriculture, and in a note, Engels comments,

“The manuscript has the following note at this point: "Investigate later in what manner this case is connected with ground-rent."” (Note 9, p 51)

We can indeed consider a situation in agriculture where the productivity of labour rises or falls both in the same farm and certainly between farms. Setting aside short-term fluctuations of output, due to weather conditions etc., Marx describes elsewhere how annual application of constant capital, in the form of manure etc., can bring about a permanent change in the fertility of the soil. So, in this case, the same amount of of constant capital may be used, but either the same amount of labour-power then produces a larger output or the same output is produced with less requirement for labour.

As will be seen later in Marx's analysis of rent, these differences do play a part in the way rent is extracted.

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