Saturday, 29 April 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 54

Marx's actual example proceeds as follows. Wages are £1 per worker. £300 is advanced as wages. £310 is advanced for materials. He assumes that the number of workers is halved, so wages fall to £150, but because the same quantity of output is produced, the same quantity of material is required, so this component of c remains £310.

He says, 

“If the value of the machinery was four times as much as the rest of the capital, it would now be £1,600.” (p 214)

Again, this is not quite correct as it would be £1,840. This is not significant and would only complicate the calculations. On the basis that the fixed capital loses 10% p.a. in wear and tear, £160, and previously amounted to only £40, Marx derives the following table.

Raw Material
Rate of Profit
Total Product
Old capital
150 or 50%
23 1/13%
New Capital
150 or 100%
24 6/31%

As shown, the result here is that the rate of profit rises, because the mass of surplus value has remained constant whilst the advanced capital has declined. More capital is advanced as fixed capital, but a much bigger reduction results from the fall in wages.

On the assumptions made, there is a £30 release of capital, which can, therefore, be used for additional accumulation. But, as described earlier, the foundation of Marx's argument here is false. So, he writes,

“If a labourer without machinery needs 10 hours to produce his own means of subsistence, and if with machinery he only needs 6, then (with 12 hours’ labour) in the first case he works 10 for himself and 2 for the capitalist, and the capitalist gets one-sixth of the total product of the 12 hours.” (p 215)

But, for any particular industry this additional productivity – other than for individual firms, initially and temporarily – does not result in a higher rate of surplus value, for the reasons set out above, and set out by Marx in Capital I. The higher productivity simply results in a lower value of each unit of output, as the same quantity of labour is spread amongst a much greater quantity of use values. If weavers produce 1000 metres of cloth per day, instead of 500 metres, the value of each metre halves, so that twice as much cloth as before must be produced and sold to reproduce the labour-power.

It is only if all labour, or at least all labour employed in producing wage goods, enjoys this rise in productivity that it raises the rate of surplus value, by reducing the value of labour-power.

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