Friday, 5 May 2017

Theories of Surplus Value, Part I, Chapter 4 - Part 60

Marx also could not have foreseen that as service industry expanded massively, as the need to spend revenue to meet basic consumption requirements declined, that the product of the labour of some of these artists, musicians etc. would be given a very high value in the market, causing their particular labour-power to be placed in very high demand.

“Within the productive class itself commercial middlemen will have multiplied, but in particular those engaged in machine construction, railway construction, mining and excavation; moreover, in agriculture labourers engaged in stock-raising will have increased in number, and also those employed in producing chemical and mineral materials for fertilisers, etc. Further, the farmers who grow raw materials for industry will have risen in number, in proportion to those producing means of subsistence; and those who provide fodder for cattle, in proportion to those who produce means of subsistence for people. As the constant capital grows, so also does the proportionate quantity of the total labour which is engaged in its reproduction.” (p 218-9)

In respect of the former, the professional managers, who Marx calls the “functioning capitalists”, as was shown in Capital III, the extension of public education means that they can be drawn increasingly from the ranks of the working class. The same is true of the commercial workers, book keepers, and other administrators, whose labour may be complex and high value, but whose wages may even sink below the average unskilled workers.

Marx's comment about the increasing numbers also employed in the production of constant capital also reflects the analysis earlier, in relation to Marx's question about what happens to those workers released by the introduction of labour saving equipment. Because the consequence is an increase in capital accumulation and expansion of the market, labour and capital freed from the production of means of consumption is drawn into the production of means of production on an expanded scale.

“Nevertheless, the part [of the population] directly producing means of subsistence, although its number declines, produces more products than before. Its labour is more productive. While for the individual capital the fall in the variable part of the capital as compared with the constant part takes the direct form of a reduction in the part of the capital expended in wages, for the total capital—in its reproduction—this necessarily takes the form that a relatively greater part of the total labour employed is engaged in the reproduction of means of production than is engaged in the production of products themselves—that is, in the reproduction of machinery (including means of communication and transport and buildings), of auxiliary materials (coal, gas, oil, tallow, leather belting, etc.) and of plants which form the raw material for industrial products. Relatively to the manufacturing labourers, agricultural labourers will decline in number. Finally the luxury, labourers will increase in number, since the higher revenue will consume more luxury products.” (p 219)

The replacement of constant capital arises out of capital and not from an exchange with revenue.

“If therefore capital is conceived as something contrasted with revenue, the constant capital appears to be capital in the strict sense: the part of the total product that belongs to production and enters into the costs of production without being individually consumed by anyone (with the exception of draught cattle).” (p 219)

In other words, constant capital is reproduced on a like for like basis out of current production. The current production cost of that constant capital determines its value, and the value it thereby transfers to current production, whatever its historic cost. But, the accumulation of constant capital arises out of revenue.

“This part may originate entirely from profit and wages. In the last analysis, it can never originate from these alone; it is the product of labour, but of labour which regarded the instrument of production itself as revenue, as the savage did the bow. But once transformed into constant capital, this part of the product is no longer resolvable into wages and profit, although its reproduction yields wages and profit. A part of the product belongs to this part. Each subsequent product is the product of this past labour and of present labour. The latter can only be continued in so far as it returns a part of the total product to production. It must replace the constant capital in kind. If it grows more productive, it replaces the product, but not its value, reducing this value as a result. If it grows less productive, it raises its value. In the first case the aliquot part drawn by past labour from the total product falls; in the second case it rises. In the first case the living labour becomes more productive, in the second, less productive.” (p 219-20)

Take Robinson Crusoe, he catches fish using his bare hands, or maybe picks up a rock to throw, or a stick to spear the fish. He has no constant capital, and what he produces is purely revenue. If he spends 8 hours per day catching fish, maybe 6 hours of this are necessary labour, and 2 hours surplus labour. But, both constitute revenue, the equivalent of wages and profit. He could store up the surplus fish so that after 3 days he has enough so as not to need spend time fishing that day. Alternatively, suppose at the end of the day he uses the 2 hours of surplus labour to produce a net, similar to Marx's reference above to the creation of a bow.

This net has been produced out of revenue, i.e. out of Robinson's surplus labour-time. The labour-time required for its production has nothing to do with the 6 hours of labour-time required to produce the fish required for his consumption, because this was expended prior to the construction of the net, which played no part in catching the fish.

The net itself forms no part of his consumption. He does not eat, wear or in any other way consume the net. Its purpose is only to act as means of production. It forms a part of the total 8 hours of value his labour creates, but no part of the 6 hours of revenue he consumes. But, as soon as he uses the net, the following day, to catch fish, it forms a part of his constant capital. A part of its value is transferred to the value of the fish he catches, and this value must be reproduced in the fish, in order that he can replace the net when it is worn out.

If the net lasts for 10 days, then each day it loses 0.2 hours of value, and this is transferred to the value of the fish he catches. If he now catches the same quantity of fish in 5.8 hours, therefore, the net would only just pay for itself, because the 0.2 hours he saves catching fish would now have to be expended repairing or replacing the net.

When the net is replaced after 10 days, then unlike the initial accumulation of the net, which was financed from revenue, it represents only an exchange of capital. The capital he expended on the net is only equal to the capital value transferred piecemeal to the fish by the net.

In reality, Robinson would only expend time producing the net if it saved him more time in catching fish than was required to produce the net. He may continue to spend 6 hours catching fish, but the value of this fish would then be equal to 6.2 hours of labour, 6 hours of living labour, plus 0.2 hours of labour transferred by the net, and which he must make good at some point by spending 2 hours of labour to produce.

But, this 6.2 hours of value may now be embodied in twice as many fish as previously. He may now be able to devote time to producing a needle or some other equipment so as to produce the net more quickly. Or it may simply be the case that he finds better material from which to construct the net. Suppose it is the latter, so that instead of lasting for ten days the replacement net will last for twenty days. Despite the fact that the historic cost of the first net amounted to 0.2 hours per day, it only now transfers 0.1 hours of value per day, as soon as this new net becomes possible.

All that is required is that the constant capital – the net – is replaced in kind. One net is consumed in production, another net is taken from production to replace it. If it becomes possible to produce the consumed constant capital more cheaply, i.e. it requires less social labour-time, and constitutes a smaller proportion of social production, then it is this value that is transferred to the value of production, not the historic cost of the constant capital, and it is this value that is thereby reproduced in, and subsequently drawn from current production, to physically replace the constant capital.

“The factors which reduce the costs of the constant capital, also include improved raw materials. For example, it is not possible to make the same quantity of twist in the same time both from good and from bad raw cotton, leaving entirely out of account the relative quantity of waste, etc. Hence the importance of the quality of seed, etc.” (p 220)

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