“There must be some counteracting influences at work, which cross and annul the effect of the general law, and which give it merely the characteristic of a tendency, for which reason we have referred to the fall of the general rate of profit as a tendency to fall.” (p 232)
1) Increasing intensity of exploitation
Absolute surplus value, as was seen in Capital I, can be achieved by either extending the working day, or making it more intensive. If five hours are required to produce the worker's means of subsistence, then in a ten hour day, they will produce five hours of surplus value, whereas in a twelve hour day they will produce seven hours of surplus value. But, if the intensity of labour can be increased, for example, by improving techniques that reduce the amount of time a worker has to spend unproductively, moving from task to task, then the same amount of labour can be undertaken in a smaller amount of time. The same thing applies if a machine is speeded up, so that the worker has to work faster, or, for example, if a postman is given less time to complete their round, so they have to walk faster. On this basis, twelve hours of labour may be compressed into just ten hours. It counts as twelve hours unless this new intensity becomes normal.
This increase in intensity of labour is not the same as a rise in productivity, arising from the introduction of some new machine, though the two often go together. A new machine may require the worker to actually work less intensively or exert less effort than previously, whilst raising their productivity precisely because the machine itself takes over some of the manual functions that the worker had to perform. On the other hand, a new machine with 36 spindles, that replaces four machines with nine spindles, although it still requires only one worker to mind one machine, requires that worker to mind 36 spindles whereas before they only minded nine.
Some means of extracting additional absolute surplus value imply increasing the constant capital relative to the variable capital, and thereby creating a tendency for the rate of profit to fall. If a worker has to work faster, they process a greater quantity of material and so the value of constant capital rises relative to the variable capital. However, by the same token, they produce more surplus value, and the rise in the rate of surplus value more than counteracts the tendency for the rate of profit to fall induced by the higher organic composition of capital.
Suppose:
c 1000 + v 1800 + s 200. s' = 11.11%, r' = 7.14%
c 2000 + v 1800 + s 2200. s' = 122.22%, r' = 57.89%
So, the rate of profit rises by 710.78%
Whereas,
c 1000 + v 200 + s 1800. s' = 900%, r' = 150%
c 2000 + v 200 + s 3800. s' = 1900%, r' = 172.73
So, the rate of profit rises by 15.15%. The rate of profit rises more than 40 times as much, therefore, in conditions where the rate of surplus value is low, compared to where the rate of surplus value was already high.
Suppose, there are different organic compositions of capital.
c 100 + v 1000 + s 1000. s' = 100%, r' = 90.91%
c 200 + v 1000 + s 3000. s' = 300%, r' = 250%
The rate of profit rises by 175%
With a much higher composition.
c 10,000 + v 1,000 + s 1,000. s' = 100%, r' = 9.1%
c 20,000 + v 1,000 + s 3,000. s' = 300%, r' = 14.29%
The rate of profit rises by 57.03%
Finally, where the rate of profit is already high, and where the organic composition is already high, we have.
c 10,000 + v 200 + s 1800. s' = 900%, r' = 17.65%
c 20,000 + v 200 + s 3800. s' = 1900%, r' = 18.81%
The rate of profit rises by 6.57%.
The lesson appears to be that, on the basis of absolute surplus value, the increase in the rate of surplus value offsets the increase in the constant capital (material processed) so that the rate of profit rises, but its ability to do so is increasingly reduced where the organic composition of capital is already high, and the rate of surplus value already high. The increase in the constant capital is assumed to rise here in the same proportion as the increase in the working day, but, in fact, as Marx points out, this is not accurate, because although twice as much material may be processed, the actual increase in wear and tear of fixed capital is likely to rise, in practice, by a smaller proportion. An increase in the working day, is, therefore, a powerful means of increasing the rate of profit, even as it increases the organic composition of capital.
“But notably, it is prolongation of the working-day, this invention of modern industry, which increases the mass of appropriated surplus-labour without essentially altering the proportion of the employed labour-power to the constant capital set in motion by it, and which rather tends to reduce this capital relatively.” (p 233)
However, as seen in Capital I, there are limits on the extent of the working day that form the basis of a normal working-day. If workers work beyond it, they are unable to work as intensively and their own wear and tear increases, raising the value of labour-power, and reducing the rate of surplus value. If they work more intensively, the same thing applies, and they are unable to work so extensively.
Moreover, for any particular concrete labour there are limits to how long the working day can be prolonged. For example, suppose the examples given are for coal miners working an 8 hour day. Its possible that this day could be extended to 16 hours, to obtain the results set out in the examples. But its not possible to go beyond that, because the miners require some time to rest, sleep and recuperate.
Marx describes other means by which this effect can be obtained, however, such as the employment of women and children. By employing the labour of the entire family, for little more if anything in wages, than was formerly paid to a male worker, capital is able to raise the amount of labour exploited in a single day, by simply employing more workers for the same amount of variable capital.
If one worker previously worked for 10 hours providing 5 hours of surplus labour, for a wage of £5, they provided £5 of surplus value. But, if six members of their family are now employed for the same amount of wages, 60 hours of labour are provided, and now 55 hours constitute surplus labour, producing a surplus value of £55. However, as was seen in Capital I, the effects of this process on the longer term supply of labour-power were eventually recognised by capital and its representatives, which together with the actions of workers and their trades unions, limited such practices via the Factory Acts. Instead capital found a much more effective means of raising the rate of exploitation, via relative surplus value arising from increases in productivity resulting in a reduction in the value of labour-power.
As Marx sets out in Capital I, there are two ways in which the introduction of new technology and techniques result in a rise rise in relative surplus value. Firstly, for an individual capital, if it introduces such new methods, ahead of others, it sells into the market at prices below the market price but above its own individual price of production. It thereby obtains an additional surplus value. It is as though the value of the product of an hour of its workers' labour represents more than the product of an hour of the labour of its competitors' workers, i.e. it is as if this labour stood in the same relation as does complex to simple labour. As Marx points out, this applies also when comparing the capital of a developed and developing economy. This is a point important for further discussion.
The second way that relative surplus value is produced is that the value of wage goods is reduced, by the rise in productivity, so the value of labour-power falls, leaving a greater portion of the working day available as surplus labour. It is this process which reduces the value of commodities in general and which in the process reduces the quantity of surplus value in each individual commodity, whilst increasing the mass of surplus value, as discussed in the previous chapter.
“Everything that promotes the production of relative surplus-value by mere improvement in methods, as in agriculture, without altering the magnitude of the invested capital, has the same effect. The constant capital, it is true, does not, in such cases, increase in relation to the variable, inasmuch as we regard the variable capital as an index of the amount of labour-power employed, but the mass of the product does increase in proportion to the labour-power employed. The same occurs, if the productiveness of labour (no matter, whether its product goes into the labourer's consumption or into the elements of constant capital) is freed from hindrances in communications, from arbitrary or other restrictions which have become obstacles in the course of time; from fetters of all kinds, without directly affecting the ratio of variable to constant capital.” (p 233)
In other words, these means raise the rate of surplus value without requiring that more fixed capital is employed to raise productivity or resulting in more materials being processed by a given quantity of labour. The clearer example that Marx gives is the repeal of the Corn Laws. By removing such restrictions, the price of food was reduced, which, in turn, reduced the value of labour power, which meant the rate of exploitation could rise. The same amount of labour continued to process the same amount of material as before, but the surplus value was higher resulting in a higher rate of profit.
Anything, such as the creation of the EU, or removal of other barriers, which improve free trade, and thereby reduce the cost of wage goods, equally act to raise the rate of surplus value and of profit. As Marx pointed out, with the repeal of the Corn Laws, a lot of other tariffs were abolished , which reduced the prices of other imported materials that constituted constant capital.
“The rise in the rate of surplus-value is a factor which determines the mass of surplus-value, and hence also the rate of profit, for it takes place especially under conditions, in which, as we have previously seen, the constant capital is either not increased at all, or not proportionately increased, in relation to the variable capital. This factor does not abolish the general law. But it causes that law to act rather as a tendency, i.e., as a law whose absolute action is checked, retarded, and weakened, by counteracting circumstances. But since the same influences which raise the rate of surplus-value (even a lengthening of the working-time is a result of large-scale industry) tend to decrease the labour-power employed by a certain capital, it follows that they also tend to reduce the rate of profit and to retard this reduction.” (p 234-5)
The mass of surplus value always tends to rise because the number of workers employed always tends to rise absolutely, even if it declines relative to the total capital, and also because even with a constant number of workers, the rate of surplus value tends to rise. But, whether this rising mass of surplus value results in a rising rate of profit depends upon its relation to the total capital employed.
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