Theories of Surplus Value, Part I, Chapter 4 - Part 94

Marx sets out the following example, which excludes constant capital, or in line with his argument in Volume I, sets it to zero. He says, assume the working day is 12 hours and it takes 6 hours to reproduce the value of labour-power. In that case, workers work half the day reproducing their wages, and the other half producing profit. In a product that comprises 100 days labour, equal say to £50, then £25 would be wages and £25 profit. If all the £50 value of the product, now in money form, in the hands of the capitalist, were used to employ labour, it would buy the labour not of 100 days (or 1 day's labour of 100 workers) but 200 days labour, i.e. 1 day's labour by 200 workers.

But, now these 200 workers will produce a product with a value of £100, which will divide into £50 wages and £50 profit. If the £100 were used to employ labour it would employ 400 workers, and so on.

“And this is what Adam Smith means by saying that “the annual produce of labour” will always be sufficient “to purchase or command a much greater quantity of labour” than what was employed to produce the product.” (p 256) 

To return to the point made earlier, if productivity rose, so that the workers reproduced their labour-power in 3 hours, then wages would fall to £12.50. But, now profit would rise to £37.50. The effect is then obvious. The £50 now in the hands of the capitalist will enable the expansion of the workforce not to 200 as before, but to 400. These 400 would then produce a product with a value of £200 and this £200 would then employ 1,600 workers.

“A part of this product however is consumed by the owners of profit and rent; a part by their parasites. The part of the product that can be expended again in (productive) labour is consequently determined by the part of the product which the capitalists, landlords and their parasites (that is the unproductive labourers) do not themselves consume.” (p 257)

As demonstrated in Capital III, this is not an arbitrary division. Objective laws determine the value of labour-power, and the commodities produced by that labour-power. The difference between the two objectively determines the mass of surplus value and its relation to the capital employed determines the rate of profit. Similarly, different objective laws determine the rate of interest and rent, which determines how much landlords and money-lending capitalists have to use as revenue, and how much profit of enterprise then remains for capital, part of which must be used as revenue, for the capitalist and part for accumulation. But, the laws of capitalist competition also compel the productive capitalist to use a given proportion for accumulation rather than simply extending their consumption, or else they will become uncompetitive and ultimately die.

“But nevertheless there is always a new fund (a new fund of wages) to set in motion, with the previous year’s product, a greater quantity of labourers in the current year. And as the value of the annual product is determined by the quantity of labour-time employed, the value of the annual product will grow each year.” (p 257)

Capital, driven by competition, will always seek to accumulate on this basis, but, of course, having the capital available to purchase this additional labour is only any use if the additional labour exists to be employed. As Marx set out in Capital III, Chapter 6 and 15, the further through an expansionary cycle we are, the more this becomes a problem both because available labour supplies start to be used up, and because productivity growth starts to slow down.

Back To Part 93

Forward To Part 95