Theories of Surplus Value, Part I, Chapter 4 - Part 81

If A represents the producers of all consumable products, then as described, it does not matter if each of these individual producers consume only their own product out of their revenue, or they consume their revenue part from their own product, and part from that of the producer of some other consumable product. For A producers in total, their revenue will be totally consumed in their own products.

“So the part of the consumable product which represents the revenue of the producers of consumable products is consumed by them either directly, or indirectly, through exchanging among themselves the products to be consumed by them; in regard to this part, therefore, where revenue is exchanged for revenue—here it is the same as if A represented the producers of all consumable products. He himself consumes one-third of this aggregate amount, the aliquot part which represents his revenue. This part, however, represents exactly the quantity of labour which during the year category A has added to its constant capital, and this quantity is equal to the total sum of wages and profits produced by category A during the year.” (p 238)

In our example above, the baker represents the producers of all consumable products and consumes his revenue (10) in his own product. But, likewise, if we take all the producers of means of production (B), then as demonstrated above, it is only that part of their own production which represents revenue, which can be exchanged for consumable products. For B, the total revenue is 20, made up of 10 hours of new value created by the farmer, and 10 hours by the miller.

(B), therefore exchanges this 20 hours of value, as intermediate production with (A), obtaining 20 hours of value in consumable goods in return. The miller and farmer, therefore, also consume this part of the value of their output, equal to revenues, out of (A)'s production of consumable goods.

But, (B)'s total output value is not just equal to 20, i.e. the value of its revenue, or the value of intermediate goods. It is equal to 25, made up of 5 constant capital, and 20 new value created. This remaining 5 hours of value is simply exchanged with itself, an exchange of capital with capital, as the constant capital is physically reproduced out of current production.

Marx traces the relations in reverse from the value of the end consumable product of A, back through the intermediate production, which comprises its inputs to the original production of means of production. He makes linen the proxy for this total consumable product.

It can be set out like this. The value of linen is equal to 12 days. Two-thirds of this value is constant capital in the shape of machinery and yarn. The weaver, therefore, adds 4 days value to this constant capital. It constitutes his revenue, and it is only this value he can consume in his product. Likewise, the machinery maker and the spinner together create 4 days of new value, which is added to the 4 days of value incorporated in their own constant capital comprising flax etc. for the spinner, and iron etc. for the machine maker. Of the 8 days value of their product, they can, therefore, only consume 4 days of value equal to the new value they have created. The other 4 days of value they must use to pay the flax grower, and iron producer for the constant capital.

If its assumed the iron producer and flax grower use no constant capital then the 4 days of value they obtain is equal to the new value created by their labour, and likewise can be consumed as revenue.

“The revenue, although it is assumed to be of the same size— equal to 4 days—in all three cases, is of different proportions in the products of the three classes of producers who participate in producing product A. For the linen weaver, it is one-third of his product, equal to one-third of 12; for the spinner and for the machinery manufacturer it is equal to one-half of his product, equal to one-half of 8; for the flax-grower it is equal to his product, 4. In relation to the total product it is however exactly the same, equal to one-third of 12, that is, 4.” (p 241)

As set out earlier, for the weaver, his inputs appear as constant capital, past labour, not new labour. Similarly, for the spinner and machine maker, their inputs appear as constant capital, not new labour.

“For the spinner and machinery manufacturer, the total product represents the labour newly added by themselves and by the flax-grower, the labour-time of the flax-grower appearing as constant capital. For the flax-grower, this phenomenon of constant capital has ceased to exist.” (p 241-2)

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