Capital III, Chapter 49 - Part 7

A farmer who uses 100 kg. of seed with a value of £100, in producing 1000 kg. of wheat, with a value of £1,000, recovers the value of the seed in the price of the wheat. But, in order to produce wheat the following year, they must physically replace the 100 kg. of seed used. As Marx put it,

“This entire portion of constant capital consumed in production must be replaced in kind.” (loc. cit.)

If the level of productivity remains the same, the amount of social labour-time required, i.e. the value of this seed remains constant, and it is this value that is also, therefore, reproduced in this year's output value. 

“Assuming all other circumstances, particularly the productive power of labour, to remain unchanged, this portion requires the same amount of labour for its replacement as before, i.e., it must be replaced by an equivalent value.” (loc. cit.)

However, if productivity has risen, the amount of social labour-time required for the production of this 100 kg. of seed will have fallen. In other words, the value of this seed will have fallen, irrespective of the historic cost of the seed actually consumed in this year's production, i.e. the labour time required for its production last year. It is this current reproduction cost, not the historic cost, which is reproduced in the value of this year's production, and it is this corresponding value recouped by the producer in the price of the wheat, which thereby enables the producer to physically reproduce the seed, no more and no less. This determination of the value of the consumed constant capital, on the basis of the current reproduction cost, as opposed to its historic cost, is a fundamental requirement of Marx's model of social reproduction. Without it, social reproduction breaks down. 

The same is true if a technological change brings about an improvement in the constant capital itself. In other words, if an improved version of a machine is introduced so that one machine replaces the functionality of two previous machines, it is the labour-time that is required for the production of this new machine that is determinate. It brings about a moral depreciation of existing machines. 

A portion of the labour-time required for producing the wheat is effectively set aside for producing this seed, which replaces the seed used in this year's production. Of the 1000 kg. of wheat produced, 100 kg. (discounting the weight of the chaff) is set aside as seed for the following year, so only 900 kg. are sold.

“But to be sure, new additional labour is required to replace the value and use-value of constant capital consumed during the preceding year, without the replacement of which no reproduction at all is possible.” (p 836)

Or to go back to the example of the tailor, no additional labour is required other than that of the tailor in producing the suits, to preserve the value of the cloth, yarn and needles, but if he is again to have cloth, thread and needles, to make more suits, labour must indeed be expended by others to produce these replacement elements of his constant capital.

“All newly added labour is represented in the value newly created during the year, and this in turn is divided into the three revenues: wages, profit and rent. — Thus, on the one hand, no excess social labour remains for the replacement of the consumed constant capital, which must be replaced partially in kind and according to its value, and partially merely according to its value (for pure wear and tear on fixed capital). On the other hand, the value annually created by labour, divided into wages, profit and rent, and to be expended in this form, appears not to suffice to pay for, or buy, the constant portion of capital, which must be contained, outside their own value, in the annual product.” (p 836)

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