Saturday, 8 April 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 33

For those industries that produce only items for individual consumption, they can only be bought from revenue. None of their output is used to replace, in kind, any part of their own constant capital, and nor does it form part of the constant capital of any other industry. It cannot, therefore, be bought out of capital, i.e. it is not a question of capital in one form here being exchanged for capital in another form.

The constant capital of the consumer goods producer, is bought from the producer of constant capital, but they obtain this by exchanging revenue for it, not capital. Marx explains this with reference to the linen producer. As with the example of the linen producer he used earlier, he assumes that a linen producer's output comprises two-thirds constant capital, and one third new value produced by labour.

If this is represented by proportions of the produced linen, we might then have 2 metres constant capital, 1 metre new value added by labour. So, the linen producer must sell 2 metres (or exchange it directly with the producers of their constant capital) in order just to replace their constant capital – yarn, looms etc. That leaves 1 metre which they can consume themselves as revenue. Marx assumes that a fifth of this metre accounts for surplus value, and the other four-fifths accounts for wages. For simplicity, it could be considered that linen is, or represents, all consumer goods, in which case the workers, in the linen industry, would consume 0.8 metres of linen as wages, and the linen capitalists would consume 0.2 metres of linen. Marx assumes here that profits account for the whole surplus value, and that profits are consumed as revenue rather than part used for capital accumulation.

It would be just the same here if there were a range of consumer goods, which the linen workers and capitalists consumed. In that case, the linen workers would effectively exchange a part of their 0.8 metres of linen for these other consumer goods – say shoes – just as shoe workers would then consume this linen rather than the equivalent value of shoes.

But, just as 1 metre of linen is used only as revenue for workers (0.8 metres) and capitalists (0.2 metres), in the linen industry, so the other 2 metres can only form revenue for workers and capitalists in the industries producing means of production. For one thing, linen does not form means of production for anyone. It can only be consumed individually, and so out of the revenue of workers and capitalists. This 2 metres can only be consumed by workers and capitalists in the producer goods sector, because all the revenue of workers and capitalists in the linen industry has itself been used up buying the other metre of linen.

Similarly, it was seen earlier that in the producer goods industry, producing machines, yarn and flax, a proportion of their own output had to be used just to reproduce those same commodities used as constant capital in their own output. The machine maker had to use some machines to replace their own worn out machines. They also had to exchange some machines just to replace wood, iron and leather used in producing machines. The yarn producer had to exchange a portion of that yarn just to replace the machines they used up in spinning, and a further proportion to replace the flax they spun into yarn. Only what was left over from their output after they had deducted these amounts, could they exchange for consumer goods to meet their own needs. This amount is equal to the new value created by labour, divided into wages and profit.

But, similarly, as was seen, the producers of wood, iron leather and flax, who exchanged their output with these producers of yarn and machines, would have to use a portion of their own output just to replace their own constant capital. Once again, it is only the portion of their own output, equal to the new value added by labour that can be exchanged for consumption goods – linen – that can be consumed as wages and profits.

In short, if we total up the output of the producer goods industries, and divided its output into that part which must simply replace its own consumed constant capital, and that which represents the value newly added by labour, the latter would be equal to 2 metres of linen, and this is consumed as wages and profits.

From the standpoint of the linen producer,

“... the exchange ‘of the 2 yards of linen is an exchange of constant capital; but he can only exchange it against the revenue of other people. So he pays for the yarn, say, with 4/5 of the 2 yards or 8/5 yards, and for the machinery with 2/5 of a yard. The spinner and machine builder in turn can each consume 1/3 of what they get, that is, the former, out of 8/5 yards, 8/15 of a yard; the latter 2/15 out of the 2/5 of a [yard]. Added together, 10/15 or 2/3 of a yard. But 20/15 or 4/3 yards must replace for them the raw material, flax, iron, coal, etc., and each of these articles in turn consists of one part which represents revenue (labour newly added), and another part which represents constant capital (raw materials and fixed capital, etc.).” (p 196)

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