Friday, 28 October 2016

Capital III, Chapter 49 - Part 11

None of the output equal to the capital component of the total output comprises an income for anyone. Just as that portion of output that comprises means of production cannot simultaneously be means of consumption, so that portion that comprises capital, cannot simultaneously be revenue. If all of Department I is considered as one giant enterprise, then its clear that what is true of the farmer and the use of a portion of his output simply to reproduce the seed used in this year's production, is also true for the whole of Department I, however, differently this may appear on the surface, as a consequence of competition, and a multitude of individual purchases and sales amongst Department I firms.

What then appears, on the surface, as a sale of coal to the steel producer, which generates an income for the coal producer – divided into wages, profits, interest and rent – can be seen, when taken in the context of the totality of such transactions, as no such thing. If the coal producer and steel producer are seen as only different departments, within one large single capital, it becomes clear that the coal supplied to the steel producer, to replace that consumed, is no different to the grain produced by the farmer, part of which is used as seed. It is not the revenue of the steel producer (workers, capitalists and landlords) that consumes the coal, but the capital of the steel producer, and the steel producer does not produce consumption goods to be consumed by the coal producer (workers, capitalists and landlords), but likewise produces means of production consumed by the coal producer's capital.

The only portion of the value of Department I, which creates revenues – wages, profits, interest and rent – is that represented by the new labour expended, which creates new additional value, to that represented by the constant capital, itself consumed within the Department, i.e. consumed by capital rather than revenue.

“Thus, the value of the annual commodity-product, just like the value of the commodity-product produced by some particular investment of capital, and like the value of any individual commodity, resolves itself into two component parts: A, which replaces the value of the advanced constant capital, and B, which is represented in the form of revenue — wages, profit and rent. The latter component part of value, B, is counterposed to the former A, in so far as A, under otherwise equal circumstances: 1) never assumes the form of revenue and 2) always flows back in the form of capital, and indeed constant capital. The other component, B, however, carries within itself, in turn, an antithesis. Profit and rent have this in common with wages: all three are forms of revenue. Nevertheless they differ essentially in that profit and rent represent surplus-value, i.e., unpaid labour, whereas wages represent paid labour.” (p 838-9)

One portion of the value of this product is then equal to wages, which, under the assumptions made, is equal to the variable capital. This portion then has a two-fold function. On the one hand, as variable capital, it is a sum of money-capital that is metamorphosed into productive-capital, labour-power. This is its function from the perspective of capital. But, from the perspective of the worker, this portion of value appears not as capital but as revenue, money wages, obtained in exchange for the sale of their commodity, labour-power, and required for its reproduction via the purchase of wage goods.

“If we imagine the circulation of money to be eliminated, then a part of the labourer’s product is in the hands of the capitalist in the form of available capital. He advances this part as capital, gives it to the labourer for new labour-power, while the labourer consumes it as revenue directly or indirectly through exchange for other commodities. That portion of the value of the product, then, which is destined in the course of reproduction to be converted into wages, into revenue for the labourers, first flows back into the hands of the capitalist in the form of capital, or more accurately variable capital. It is an essential requirement that it should flow back in this form in order for labour as wage-labour, the means of production as capital, and the process of production itself as a capitalist process, to be continually reproduced anew.” (p 839)

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