## Friday, 8 May 2015

### 4) s' constant, v,c, and C all variable

The original formula is p' = s' ev/EC. Remember here that e is the proportion between v' and v, and E is the proportion between C' and C. So, with a constant rate of surplus value,

a) if the constant capital expands faster than the variable capital, so E is greater than e, then the rate of profit falls.

“If a capital of 80c + 20v + 20s changes into 170c + 30v + 30s, then s' remains = 100%, but v/C falls from 20/100 to 30/100, in spite of the fact that both v and C have grown, and the rate of profit falls correspondingly from 20% to 15%.” (p 61)

b) If e = E, the rate of profit does not change, even though v, c and C will have changed.

“The capitals 80c + 20v + 20s and 160c + 40v + 40s obviously have the same rate of profit of 20%, because s' remains = 100% and v/C = 20/100 = 40/200 represents the same value in both examples.” (p 61)

c) If e is greater than E, the rate of profit rises.

“If 80c + 20v + 20s turns into 120c + 40v + 40s, the rate of profit rises from 20% to 25%, because with an unchanged s' (v/C) = 20/100 rises to 40/160, or from 1/5 to 1/4.” (p 61)

If both v and C change in the same direction, but by differing amounts, it can be simplified by taking the amount by which they move by the same amount, and then dealing with the one variable that has changed by more.

“Should, for instance, 80c + 20v + 20s become 100c + 30v + 30s, then the proportion of v to c, and also to C, remains the same in this variation up to : 100c + 25v + 25s. Up to that point, therefore, the rate of profit likewise remains unchanged. We may then take 100c + 25v + 25s as our point of departure; we find that v increased by 5 to become 30v, so that C rose from 125 to 130, thus giving us the second case, that of the simple variation of v and the consequent variation of C. The rate of profit, which was originally 20%, rises through this addition of 5v to 23 1/13 %, provided the rate of surplus-value remains the same.” (p 61-2)

The same applies if v and C change in opposite directions.

“For instance, let us again start with 80c + 20v + 20s, and let this become: 110c + 10v + 10s. In that case, with the change going as far as 40c + 10v + 10s, the rate of profit would remain the same 20%. By adding 70c to this intermediate form, it will drop to 8⅓%. Thus, we have again reduced the case to an instance of change of one variable, namely of c.

Simultaneous variation of v, c, and C, does not, therefore, offer any new aspects and in the final analysis leads back to a case in which only one factor is a variable.” (p 62)