Friday, 5 January 2018

Theories of Surplus Value, Part II, Chapter 12 - Part 7

In the tables that Marx provides this is brought out, because it indicates the individual value per ton, from each mine, which illustrates the different level of productivity, in each case. As Marx points out, the reason that the individual value per unit falls is precisely because the total amount of value is now represented by a greater quantity of use values, so that each unit comprises a smaller amount of labour-time.

“Furthermore: The total value consists of the value of the capital advanced to production plus the surplus-value; that is of the labour-time contained in the capital advanced plus the surplus labour-time or unpaid labour-time appropriated by the capital. Thus the surplus-value contained in each individual part of the commodity is proportional to its value.” (p 265) 

So, changes in productivity do not alter the value of the total product. If 100 hours produces a product comprising 1,000 units, this product has a value of 100. If productivity rises, so that the product comprises 10,000 units, the product still has a value of 100 hours, but, now, each unit has a value only 10% of what it was. However, as seen in Capital I, and in TOSV I, this rise in productivity can alter the composition of the value of commodities, where the rise in productivity affects those commodities that go into the reproduction of labour-power. In other words, it reduces the value of labour-power, and consequently raises the rate of surplus value, and so the proportion of surplus value in the value of the total product.

“In so far as the greater productivity of labour creates relative surplus-value, it increases not the total value of the product, but that part of this total value which represents surplus-value, i.e., unpaid labour. Although, therefore, with greater productivity of labour, a smaller portion of value falls to the individual product—because the total mass of commodities which represents this value has grown—and thus the price of the individual product falls, that part of this price which represents surplus-value, nevertheless, rises under the above-mentioned circumstances, and, therefore, the proportion of surplus-value to reproduced value grows (actually here one should still refer to variable capital, for profit has not yet been mentioned). But this is only the case because, as a result of the increased productivity of labour, the surplus-value has grown within the total value.” (p 265-6) 

In other words, as productivity rises, the value of each individual commodity unit falls, but, in so far as this also reduces the value of labour-power, and raises relative surplus value, it increases the proportion of surplus value contained in each commodity unit, thereby raising also the rate of profit/profit margin.

“Since in competition everything appears in a false form, upside down, the individual capitalist imagines 1. that he [has] reduced his profit on the individual commodity by reducing its price, but that he makes a greater profit because of the increased mass [of commodities] (here a further confusion is caused by the greater amount of profit which is derived from the increase in capital employed, even with a lower rate of profit); 2. that he fixes the price of the individual commodity and by multiplication determines the total value of the product whereas the original procedure is division and multiplication is only correct as a derivative method based on that division. The vulgar economist in fact does nothing but translate the queer notions of the capitalists who are caught up in competition into seemingly more theoretical language and seeks to build up a justification of these notions.” (p 266-7)

This is the same point that Marx makes in Capital III, in relation to commercial profit. There is a general misconception that sellers voluntarily reduce profit margins in order to reduce prices so as to sell more. In fact, as he sets out, there, the lower profit margin is rather the consequence of the higher rate of turnover of the capital. For a productive-capital, a higher rate of turnover of capital means that for any mass of advanced capital, the mass of laid out, or employed capital will rise, and so the annual rate of profit will rise, because it is calculated on the advanced not the laid out capital. But, for the same reason, because this capital now produces a much expanded mass of use values,, each of these use values contains a smaller proportion of surplus value, so that the profit margin declines.

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