Friday, 17 February 2017

Theories of Surplus Value, Part I, Chapter 3 - Part 37

[10. Inquiry into How It Is Possible for the Annual Profit and Wages to Buy the Annual Commodities, Which Besides Profit and Wages Also Contain Constant Capital]


[(a) Impossibility of the Replacement of the Constant Capital of the Producers of Consumption Goods through Exchange between These Producers]


The example given earlier, of the way Robinson Crusoe works for ten hours, but only eight creating revenue (consumption), whilst working two hours to produce means of production, is useful for the next element of Marx's analysis too. In the above example, the two hours that Robinson works to produce fishing rods is surplus labour, whose capitalist form would be profit. Here, this profit is used for the purpose of accumulation, to produce fishing rods where previously none existed. If this profit had been used as revenue, to fund consumption, the problem would still exist.

Robinson would have spent eight hours producing the fish he requires to reproduce his own labour-power, but the other two hours have been spent producing fishing rods, not fish, so there are no additional fish to consume. It is quite clear here, as Marx says, that this is a different situation, where accumulation takes place, than where existing constant capital is replaced.

Suppose in the next period, Robinson now uses the fishing rods produced in the previous period, and that these rods are completely worn out during this period, and so have to be replaced. In that case, two hours will again have to be allocated to their production, but this will now not constitute an accumulation of additional capital, but merely a reproduction of the existing constant capital (means of production). If we imagine for a moment that the fishing rods add nothing to Robinson's production, and so he still has to work for eight hours to produce the fish required for his consumption, (revenue, wages) so as to reproduce his labour-power, he now has a ten hour day, in which only eight hours produce revenue, whilst two hours of labour are required to reproduce his constant capital, and now no part of the working-day constitutes surplus labour!

But, of course, there would be no reason for Robinson to have spent two hours producing or reproducing fishing rods, unless they did increase his productivity. Suppose that previously he produced nine fish in eight yours, and now, with the aid of the rods, he can produce this quantity in two hours. He must then spend another two hours, not catching fish, but reproducing his fishing rods.

But, he has now not two hours of surplus labour-time, as before, but six hours. If he uses the six hours to produce more fish, then he simply uses that time to increase his revenue. This is the situation where capital uses profit simply to finance consumption, by the capitalist, as with simple reproduction, rather than using a portion of the profit for the purpose of accumulation.

So, in order to avoid the confusion that may arise by thinking that the problem that exists is a consequence of such accumulation, Marx assumes that what exists is a situation of simple reproduction. In other words, all of the revenue comprising wages and profits is consumed with no accumulation. In that case, the problem still exists for Smith et al to explain how it is that the total value of output resolves into wages and profits, and yet wages and profits cannot buy all of the output.

“The difficulty is the reproduction of the existing constant capital, not the formation of new constant capital in excess of what has to be reproduced. The new constant capital obviously originates in profit, and has existed for a moment in the form of revenue which is later transformed into capital. This part of the profit consists of the surplus labour-time, which, even without the existence of capital, must constantly be performed by society, in order to have at its disposal, so to speak, a fund for development, which the very increase of population makes necessary.” (p 107)

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