Marx then examines the situation where the price of an agricultural product affects the price of means of production and means of consumption equally, so that no change in the organic composition of capital arises. Marx refers to the situation as previously set out in a table on p 281.
Constant capital
£'s
|
Variable capital
£'s
|
Surplus-value
£'s
|
Rate of surplus-value
%
|
Rate of profit
%
|
Product
|
Price per kilo of yarn
£
|
|
I
|
80= 1,600 kilos of cotton
|
20=20 workers
|
20
|
100
|
20
|
1600 kilos. yarn
|
0.075
|
II
|
80=800 kilos of cotton
|
20=10 workers
|
10
|
50
|
10
|
800 kilos yarn
|
0.1375
|
But, this example from p 281 is wrong, Marx notes. The example shows the situation where the price of cotton doubles, so that where £80 bought 1600 kilos of cotton, it now buys only 800 kilos. As the technical composition of capital is not changed, only 10 workers are required to process this 800 kilos. But, wages have also doubled, so these 10 workers now also cost £20, so the organic composition of capital is unchanged. However, the new value created by these 10 workers is only half that created by 20 workers.
Initially, (I) 20 workers produced £40 of new value. Of this £20 replaces their wages, and £20 constitutes surplus value . But, after the rise in agricultural prices, (II), only 10 workers are employed, and they thereby create £20 of new value. If their wages have doubled to £20, that means they could produce no surplus value.
“If, therefore, the value of the labour-power rose in the same proportion as that of the raw material, i.e., if it doubled, then it would be £20 for 10 workers as compared with £20 for 20 workers before. In this case, there would be no surplus-labour left. For the value, in terms of money, which the 10 workers produce is equal to £20, if that which the 20 produce is equal to £40. This is impossible. If this were the case, the basis of capitalist production would have disappeared.” (p 284)
Marx, therefore, presents a different example, consistent with capitalist production. In the example, the cost of constant and variable capital rises proportionally, as before, but not by so much that surplus value becomes impossible. Instead of the price of cotton doubling, he proposes a rise of a third. This is illustrated in a further table, from page 285.
Constant capital
£'s
|
Variable capital
£'s
|
Surplus-value
£'s
|
Rate of
surplus-value
%
|
Rate of
profit
%
|
Product
kilos of yarn
|
Price per
kilo of yarn
£'s
|
|
IV
|
80=1,200 kilos of cotton
|
20 = 15 men
|
10
|
50
|
10
|
1,200
|
0.092
|
£80 now buys 1200 kilos of cotton, instead of 1600 kilos. To process these 1200 kilos, 15 workers are required, rather than 20 to process 1600. But, these 15 workers are now paid wages of £20. The organic composition of capital, therefore, remains 80:20 or 4:1. These 15 workers produce a new value of £30, just as previously 20 workers produced £40 of new value. However, because £20 of this new value is paid labour, only £10 remains as unpaid labour. So, surplus value falls from £20 to £10.
The price per kilo of yarn rises from £0.075 to £0.092, and that is because the price of the cotton contained in it has risen by a third. However, the price of the product itself has not risen by a third. That would have required the price to rise to £0.10 per kilo. The reason is that the rise in the price of cotton does not change the amount of new value created by labour.
“Although the labour has become dearer in the same ratio as the raw material, the quantity of immediate labour contained in 1 lb. of yarn has remained the same, though more of this quantity is now paid and less unpaid labour. This change in the value of wages does not, therefore, in any way affected the value of the lb. of yarn, of the product.” (p 285)
What this does show, however, is that the cotton now accounts for a greater portion of the value of the product, even though the organic composition of capital has not changed.
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