## Saturday, 1 April 2017

### Theories of Surplus Value, Part I, Chapter 4 - Part 26

If we take these quantities of output, they each have a value.

“Let the values of these be equal to z, z', z'', z'''. These values are not the product of the day’s labour, since z/3, z'/3, z''/3, z'''/3 are only equal to the value which the constant elements of z, z', z'', z''' had before they entered into the day’s labour. Therefore also x/3, x'/3, x''/3, x'''/3, or a third part of the use values produced, represent only the value of the pre-existing labour and continually replace it.” (p 188)

We can set these values as £120, £150, £180 and £210. In that case, the coal miner sets aside £40 to replace their constant capital. Now, it does not matter whether this £40 takes the form of 40 tons of their own coal withdrawn from their output, to replace consumed coal, or takes the form of 20 tons of their own coal, plus 10 tons of steel, 5 tons of wood, and 5 machines, or any other combination, because these latter are only a different physical form of the coal as constant capital.

For example, the wood producer may require very little of their own output to directly replace their constant capital. Taking seeds, or cuttings from trees to grow new trees will not prevent the trees themselves being sold. But, to the extent that the wood producer requires little of their own output to reproduce their constant capital on a like for like basis, compared with the coal mine, they will require that constant capital in other forms on a proportionately larger basis, and they will obtain the constant capital in these other forms, by simply exchanging their constant capital in the form of wood for constant capital in these other physical forms.

So, for example, the wood producer needs to replace £60 of constant capital. None of that may come, physically, from their own output, but they may require 20 machines, 10 tons of steel, and 30 tons of coal to power their machines. In short, if we treat all these producers as a whole, for example, as if they were all just divisions of a single company, the situation would be that a third of their total output would not be sold, but would be used simply to replace their own constant capital. It would not go to consumption, therefore, even indirectly. It would not be bought, even indirectly by consumers, out of their revenue, i.e. setting aside accumulation, no part of the constant capital is bought out of wages, profit, rent or interest.  It forms no part of national income or expenditure. It is purely an exchange of capital with capital. It is consumed, but it is consumed by capital. It forms a part of the total value of national output, but not of national income.

This third of their output exchanges not with revenue, but with capital. In other words, it is output whose value is attributable to the value only of the consumed constant capital, and not to the new value created by labour during the year. This value, therefore, neither creates income as wages, profit, rent nor interest , nor is it bought out of any of this revenue.

“x=z; yet z is the value of the total x, but one-third of z is equal to the value of the raw material, etc., contained in the total x, thus is a part of the day’s product of the labour in which the preexisting labour combined with the day’s labour reappears and is replaced.” (p 188)