Thursday, 20 July 2017

Theories of Surplus Value, Part I, Chapter 6 - Part 11

The miser seeks to draw more money out of circulation than they throw into it, but does not succeed. They accumulate more money, but only because they throw more commodities into circulation. They only take out in money, the same value that they throw into circulation. The capitalist succeeds in this venture because they produce surplus value in production. That is the value of the commodities they take out of circulation is less than the value of the commodities they throw back into circulation, and so the money they take out of circulation is also greater than the money they throw into circulation.

But, this then poses the question how then can all capitalists together take out more money than they throw in, because enough money must be thrown into circulation to buy the total value of commodities thrown into circulation.

The answer was given in Capital II, The capitalist throws a greater value of commodities into circulation than they took out, as a capitalist, and so, as a capitalist takes more money out of circulation than they throw in. But, the capitalist does not enter the market only as a capitalist. That is they do not only buy commodities to act as capital, i.e. to participate in production. The capitalist also enters the market as a consumer, and in this role, the money they throw into circulation is only equal to the value of the commodities they take out of circulation. Moreover, in this role, they throw no commodities into circulation, and so the value of the commodities they take out of circulation, is greater than they threw in, the money they throw in, greater than they took out.

On this basis, capitalists in total, may throw £80 into circulation, and take £80 of commodities out. They then throw £100 of commodities into circulation, and take £100 of money out. They can do this because, as consumers, they throw £20 of money into circulation, from their own pocket, and take £20 of commodities out, for their personal consumption, so that, in total, they have thrown £100 into circulation, and taken £100 of commodities out.

If we consider all of the commodities in circulation, in terms of being physical products, then, assuming simple reproduction, a proportion of these products will have to be taken out to replace the constant capital consumed in production, a further proportion will have to be taken out as means of subsistence for workers, and thereby replace the variable capital, and the remainder constitutes a surplus product, which belongs to the capitalist. The constant capital must be physically replaced on a "like for like basis", and the use values required to reproduce the labour-power is equally objectively determined. On this basis, the surplus product, and surplus value is equally objectively determined, as is its relation to the constant and variable capital, i.e. the rate of profit.

The only reason that the capitalists have to throw money into circulation, to take out this surplus product, is because none of them consume all of their profit in their own product. This is also essential to understanding Marx's theory of crises of overproduction, because, as he sets out in Capital III, Chapter 15, the realisation of the produced surplus value depends upon all of the produced use values being sold, and a large part of the demand for those use values comes from those classes whose revenues derive from this surplus value.

“But this last-named is not determined either by the absolute productive power, or by the absolute consumer power, but by the consumer power based on antagonistic conditions of distribution, which reduce the consumption of the bulk of society to a minimum varying within more or less narrow limits. It is furthermore restricted by the tendency to accumulate, the drive to expand capital and produce surplus-value on an extended scale.” (Capital III, Chapter 15)

But, in reality, this surplus product comes to them for free. At the same time that they throw £20 into circulation, as a consumer of this surplus product, they take the same £20 out of circulation as the capitalist seller of this product, a product which has been produced for them for free by workers.

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