Thursday, 27 April 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 52

[9. Ganilh and Ricardo on Net Revenue. Ganilh as Advocate of a Diminution of the Productive Population; Ricardo as Advocate of the Accumulation of Capital and the Growth of Productive Forces]

Marx then turns to the concept put forward by Ganilh and Ricardo that wealth depends on net product, i.e. surplus value rather than gross product, i.e. total value produced. Ganilh claimed that Ricardo had copied this idea from him.

There are some minor errors in Marx's formulations here that I will highlight along the way.

“Surplus-value presents itself (has its real existence) in a surplus-produce in excess of the quantity of products which only replace its original elements, that is, which enter into its production costs and—taking constant and variable capital together—are equal to the total capital advanced to production.” (p 213)

In other words, out of society's total output a physical portion must be set aside to replace those physical products, which constituted the means of production, and a further portion to replace those physical products, which constituted the workers means of consumption. Only what is left over, after these products have been physically replaced constitutes the surplus product, and surplus value.

This surplus value is equal to the rate of surplus value, s' or s/v, multiplied by the number of days labour, or the number of workers. So, if there is a 10 hour day, and the worker performs 4 hours of necessary labour, and 6 hours of surplus labour, s' = 6/4 = 150%. If there are 10 workers then the total surplus value = s' x v x n = 1.5 x 4 x 10 = 60 hours.

The surplus value can then be increased in two ways. Either the rate of surplus value can increase, or the amount of labour exploited might increase. If instead of 10 workers employed, 20 workers are employed, surplus value would rise to 1.5 x 4 x 20 = 120 hours. If the rate of surplus value rose to 200%, but only 10 workers are employed, then 2 x 4 x 10 = 80 hours. This would require that the working day rose from 10 hours to 12 hours.

“With a given length of labour-time, this surplus-value can only be increased by an increase of productivity, or at a given level of productivity, by a lengthening of the labour-time.” (p 214)

If the number of workers is halved, but each performs twice as much surplus labour as before, then the same amount of surplus value is produced. Marx says,

“On this assumption, therefore, two things would remain the same: first, the total quantity of products produced; secondly, the total quantity of surplus-produce or net product. But the following would have changed: first, the variable capital, or the part of the circulating capital expended in wages, would have fallen by half. The part of the constant capital which consists of raw materials would also remain unchanged, as the same quantity of raw material as before would be worked up, although this would be done by half the labourers employed before.” (p 214)

But, in fact, this is wrong. Suppose there is a 10 hour day being worked by 10 workers. Four hours comprises necessary labour and six hours surplus labour. Ten units of output are produced per hour. So, 1,000 units are produced in total. If the number of workers is reduced to 5, then to produce the same 60 hours of surplus value, the surplus value per worker must rise to 12 per day. That means the working day must rise to 16 hours.

Previously, to produce 60 hours of surplus value, 10 workers worked a 10 hour day, which is 100 hours in total, with 100 units of output being produced. Now, 5 workers work a 16 hour day, which is only 80 hours being worked in total, and only 800 units of output being produced. That means that less constant capital, as material, would be consumed, so the value of constant capital would fall.

The only other way that the rate of surplus value could rise would be if relative surplus value increased. If we take a 10 hour day once more, and assume that 6 hours comprises necessary labour and 4 hours surplus labour, then for surplus labour to double to 8 hours, necessary labour would have to fall to just 2 hours.

So, if we had:-

v 6 (60) + s 4 (40), with 10 workers, we would have total wages equal to 60, and total surplus value equal to 40, with total output equal to 1000 units. If the number of workers falls to 5, to retain the same mass of surplus value requires:-

v 2 (10) + s 8 (40) x 5, so that wages fall to a sixth their previous level at 2 x 5 = 10, leaving surplus value constant at 8 x 5 = 40, whilst the total amount of value is halved from 100 to 50, and total output from 1000 units to 500 units.

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