But, again, of this total value of machinery supplied to these other producers, it is only the revenue component – the component equal to the value newly added by labour, and equal to wages and profit – that can be consumed by the machine maker. The other component of the value of the machine, the constant capital, must be reproduced. The machine maker must use linen to buy these commodities – wood, iron, leather and so on – from the suppliers of these commodities, or as with the flax grower, who reproduces their seed from their own output, the machine maker must reproduce their own machines out of their own output.
Looking at the machine maker's production, the value of a machine is comprised two-thirds constant capital, and one-third new value added by labour. Consequently, only one third of the linen they obtain represents revenue, which can be consumed.
In total, they can consume 0.66 metres of linen from loom production, 0.33 metres from spinning machine production, and 0.33 metres from agricultural machine making, which makes 1.33 metres altogether. The remainder of the 2.66 metres of linen they have obtained represents the value of the constant capital contained in those machines. Out of this, they must pay their own suppliers for that constant capital.
Marx assumes that of the value of this constant capital (2.66 metres = eight hours labour = £8) raw material used in their production constitutes two-thirds, whilst the other third is comprised of the wear and tear of their own machinery, used in the production. As described above, the position of this machine is the same as for the flax grower, who has to replace their own seed, but Marx analyses it further later on.
The amount of linen equivalent for wood, iron, etc. comes down to 1.78 metres. But, its necessary to refer back to the machinery producer again at this point, because the wood producer and iron maker also use machines in their own production, and they must therefore hand some linen back to the machine producer equal to the value of machinery used in their output.
The situation is, however, more straightforward in respect of those extraction industries, because they do not use any raw materials for processing, so the value of their output divides into the value of wear and tear of the machines used in production, plus the value of the new labour added.
The point being here that there are innumerable exchanges that could continue to mushroom out of the total production. Just as was the case in trying to find sufficient demand from revenue, by introducing revenue from additional capitals only compounded the problem, because the total value of output necessarily grew faster than revenue, so its impossible to resolve the problem on the back of exchange itself.
“And so we might go on calculating to infinity, with ever smaller fractions, but never able to divide the 12 yards of linen without a remainder.” (p 133)
The linen here represents the consumption fund, and consequently is equal to, and can only be consumed by revenue – the value added by labour, or v + s. But, in examining the production of the linen, in ever more detail, we find that the total value of production is greater than the value of this final output, i.e. the linen, because it necessarily involves the production of constant capital used not in the production of the final output, but also in the production of constant capital itself.
In other words, the value of the consumption fund, of final output, is equal to v + s, but the value of total output is equal to c + v + s, so that it is impossible for the value of total output to be resolved into incomes – wages, profit, interest and rent – as Smith and his inheritors claim. National Income/Expenditure does not equal national output, but only the value of the consumption fund, the new value added by labour during the year.
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