Monday, 1 May 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 56

As Marx describes, it does not matter that the rise in productivity does not occur in industries that do not produce wage goods. A rise in productivity in wage goods production causes a fall in the value of all labour-power.  The value of labour-power falls, and so the physical product required by the workers, in all industries, falls in value, because it requires less labour-time, a smaller proportion of the working-day to produce. The value of the product of labour, in these industries, rises relative to the value of the product in industries producing wage goods, so a greater quantity of wage goods exchanges for a given quantity of goods in these other industries, where productivity has not risen.

“... consequently, a proportionately smaller aliquot part of these products, or a smaller part of the labour-time of the labourer which is materialised in them, would procure for him the same quantity of means of subsistence as before. The surplus-value would therefore rise in these branches of labour just as in the others.” (p 216)

Suppose in wage goods industries there is a 10 hour day with a 100% rate of surplus value. The total output is equal to 1000 units. Of this 500 units are consumed by the workers in the wage goods industry. The other 500 units of surplus product is exchanged by the capitalists for luxury goods.

In the luxury goods industry, 500 units are produced. There is again a 100% rate of surplus value.

500 units of wage goods exchange for 500 units of luxury goods. 250 units go to its workers.

Productivity in wage goods production doubles to 200 units. The 500 units required by its workers are now produced in 2.5 hours. There is a surplus product of 1500 units. The value of wage goods relative to luxury goods falls from 1:1 to 2:1. For every unit of luxury goods sold to the wage goods capitalists, the luxury goods capitalists get 2 units of wage goods.

The luxury goods capitalists only need to supply their workers with the same 250 units of wage goods, as before, but they now only have to exchange 125 units of luxury goods to obtain them. So, the portion of the day required to produce the labour-power in luxury goods production has halved, just as it has in the wage goods sector. The surplus product in both sectors has risen accordingly.

If the capitalists in both sectors had no reason to increase their own consumption of wage goods, so as to use up this surplus product, its quite clear that the relative rise in the value of luxury goods to wage goods would result in a reallocation of capital and labour away from wage goods production towards luxury goods production.

In fact, over time, it is precisely this reallocation of capital and labour towards luxury goods production that brings about the rise in general living standards – the process that Marx describes in the Grundrisse as “The Civilising Mission of Capital”. Capital and labour progressively moves to these forms of luxury production, in proportion as productivity in the production of existing wage goods rises. But, as it does so, it inevitably brings about a cheapening of some of these luxury goods, making them available to wider sections of the population, and so expanding the market for them.

By this means, what were once luxury goods become increasingly a part of the normal consumption and living standards of workers, and form part of the value of labour-power. Meanwhile, capital itself requires the demand for these commodities to be continually extended, so that the produced surplus value can be realised.

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