Theories of Surplus Value, Part II, Chapter 8 - Part 22

Marx then examines manufacture, and the nature of intermediate production. There is a difference, he says, between the cotton grower and the spinner, weaver, dyer and so on.

“The raw material of the latter type of manufacturers enters the production process not only as a commodity, but is already a commodity of the second degree; it has already taken on a different form from the first commodity, which was a raw product in its natural form, it has already passed through a second phase of the production process.” (p 48)

The cotton grower produces a commodity – cotton – but it has undergone no transformation of its form. The spinner, however, takes the cotton and transforms it into yarn by spinning. The yarn is then a commodity which forms the raw material of the weaver, who transforms it into cloth and so on.

Marx returns to a point here referred to in several other places, including in Capital III, where he considered whether profits were being double counted, where intermediate goods are used for the production of final output. He examines the situation in respect of the cotton grower. Spinner and weaver. He assumes that the cotton grower only uses constant capital reproduced out of his own production.

That means he uses seeds from the cotton plants, uses waste vegetable matter for fertiliser and so on. That means he buys no materials or machinery from any other producer, which might contain a profit/revenue that has to be replaced. There is a 10% rate of profit.

So,

Cotton grower	Capital Outlay	90.91	Profit	9.09
Spinner	Capital Outlay	181.82	Profit	18.18
Weaver	Capital Outlay	363.64	Profit	36.36

In physical terms, 4,000 kilos of cotton had a value of £100, which is sold to the spinner , who turns it into 4,000 kilos of yarn, with a value of £200, who sells it to the weaver, who turns it into 4,000 metres of calico with a value of £400.

The total value of output is 100 + 200 + 400 = 700, whilst the capital laid out was 636.36, giving total profit of 63.64, which is 10%.

The composition of the capital, in each case, here does not change the rate of profit that each obtains. The cotton grower produces 10% profit on the capital they advance. The cotton spinner advances £100 for cotton as constant capital, but also advances a further £81.82 of capital to produce the yarn, with a value of £200. The profit obtained is again 10%. Finally, the weaver advances £200 for the yarn as constant capital and advances a further £163.64 of capital to produce the cloth. But the weaver also produces 10% profit.

The value of the final consumable product, the £400 of calico, contains not only sufficient to cover the individual revenues/profit of the weaver, spinner and cotton grower, but also to reproduce the capital of each of these producers.

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