[(b) Impossibility of Replacing the Whole Constant Capital of society by Means of Exchange between the Producers of Articles of Consumption and the Producers of Means of Production]
Marx continues to measure value in terms of hours, and to present this value in money form, for the basis of calculation, but he assumes that the linen basically acts as means of payment. In that way, the weaver pays the spinner for the yarn they receive with an equivalent value of linen, the loom producer with linen to the value of the loom, and so on. Likewise, the spinner uses some of the linen they receive to pay the machine maker for the spinning machine, and the flax grower for the flax they receive, whilst the machine maker uses some of the linen they receive as payment to pay the wood producer and iron-maker, who provide them with wood and iron to produce machines.
The principle here is that it is linen that represents society's consumption fund. It is assumed that all of the linen is for final consumption, and not an input into any other commodity. All of the other commodities are merely inputs, intermediate goods, which go into the production of this final product, the linen.
Marx is trying to show again that whilst all the linen can be accounted for in consumption, as an equivalent of revenue, i.e. of all the new labour undertaken in the economy, it cannot be equal to all of the value produced in the economy, because that production also includes the value of constant capital, which was produced in previous years, and whose value and use value must again be reproduced within current production, whilst taking no part in exchange against revenue.
In his examples, Marx uses yards as the standard of length. I have used metres.
In the example, a linen factory produces twelve metres of linen in a twelve hour day. The linen has a value equal to thirty-six hours, made up of twelve hours of new labour and twenty-four hours of constant capital. This thirty-six hours of value is the equivalent of an exchange value of £36.
The twelve hours of new value is divided between wages and profit. Assuming that the level of social productivity remains the same, so that the value of looms and yarn is unchanged, the eight metres of linen, which is the equivalent of the value of the constant capital (one metre = £3, constant capital = £24 = eight metres) can now be exchanged for looms and yarn, to replace that consumed in its production.
“But if the weaver’s constant capital is equal to 2 working-days (his daily consumed constant capital), then for one working-day of the weaver there are two working-days of spinner and machine maker—2 working-days which may themselves be divided in very different proportions into labour added and constant capital. But the total daily product of spinner and machine maker together (assuming that the machine maker makes only looms)—constant capital and added labour together— cannot amount to more than 2 days’ labour while that of the weaver, because of the 12 hours’ labour newly added by him, amounts to 3 working-days.” (p 126)
This law was established in Capital II. If we assume a closed system, in which the producers of looms and yarn here only supply the linen producer, then if the linen producer only has a demand for £24 of constant capital (twenty-four hours or two days of value), then the value of output of the loom maker and yarn producer cannot be more than the £24, because otherwise they would have overproduced and would be unable to sell all their output at its value.
Consequently, the combined value of the output of the machine maker and yarn producer can never be the same as that of the linen producer, who takes their output and adds new value to it. Its possible that the loom producer and yarn producer may themselves add twelve hours of new value, just as does the linen producer, but, in that case, their products must contain less constant capital, i.e. only twelve hours worth, as opposed to the twenty-four hours of value of constant capital used by the linen producer.
The £24 of constant capital of the linen producer thus reproduces all of the capital (constant capital plus variable capital) of the machine maker and yarn producer.
Out of the £24 (eight metres of linen) that the linen producer exchanges with the machine maker and yarn producer, a part, therefore, is consumed by them, equivalent to their wages and profit (revenue), which is equal to the new value created by the machine maker and yarn producer, and the remaining portion of the linen they receive as payment goes to the producers of their own constant capital – the wood producer, iron maker and flax grower.
But, on the same basis here, the value of the machine maker's output must be greater than the value of the output of the wood producer and iron maker, who provide him with the constant capital (wood and iron) he requires to produce machines. That is because, in addition to the value of their output, which comprises his constant capital, he also adds to it new value, as a consequence of the additional labour he expends. The same is true of the yarn producer, who takes the value of the flax produced by the flax grower, and adds additional value to it, as a consequence of his own labour, in spinning it into yarn.
Consequently, in reproducing the £24 of constant capital, (loom and yarn) used in his own production, the linen weaver also, thereby reproduces the value of the constant capital of the machine maker and yarn producer, because a portion of the linen produced not only is paid as revenue (wages and profit) to the machine maker and yarn producer, but another portion is used by them to buy their own constant capital.
But, the value of the wood and iron that comprise the constant capital of the machine maker is comprised not only of the constant capital of the wood producer and the iron maker. It also comprises the new value added by the wood producer and iron maker by their own labour. When the machine maker hands over the portion of the linen they receive from the weaver, which is the equivalent of their own constant capital, this linen also thereby covers not just the value of the wood producer's and iron maker's constant capital, but also the value of the new value added by their labour.
It too, comprises the value of the constant capital they use, as well as the value added by their labour. The one metre of linen they receive does not, therefore, just cover their revenue, i.e. the value of their added labour, but also the value of their own constant capital. The same thing would be true if the situation of the flax grower was examined.
In fact, as Marx sets out, if we examine the position of the spinner, who produces the yarn, their constant capital does not just comprise the flax, bought from the flax grower. It also comprises spinning machines and spindles bought from the machine maker. It also comprises coal to power the steam engine to run the machines and so on.
But, if we take the grower, then although a part of their constant capital may be in the form of commodities bought from other producers, a part such as the seed, will not be bought from elsewhere, but will simply be taken from their own output, and used to reproduce their constant capital in that regard. This portion of their own output, will, therefore, never be sold, and will, therefore, never obtain any linen in exchange for it.
“Here we find a part of the constant capital which replaces itself and is never sold, and therefore also is never paid for, and is never consumed, never enters into individual consumption. Seed, etc., are the equivalent of so much labour-time. The value of the seed, etc., enters into the value of the total product; but the same value, because it is the same amount of products (on the assumption that the productivity of labour has remained the same), is also deducted again from the total product and returned to production, not entering into circulation.” (p 127)
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