Wednesday, 4 April 2018

Theories of Surplus Value, Part II, Chapter 15 - Part 7

Marx then investigates a range of scenarios that could exist on this basis. He begins by examining a situation whereby a change in technology changes the technical composition of capital, and thereby the organic composition, and contrasts that with where the technical composition remains constant, but the organic composition changes as a result of a change in the value composition

“A change in the method of production brings about a change in the proportion between the amounts of constant and variable capital employed. In this case the rate of surplus-value remains the same provided wages remain constant (in terms of value) [i.e., in terms of the labour-time they represent].” (p 380) 

So, a rise in social productivity may mean that 12 units of material are processed by 1 unit of labour, whereas previously 10 units were processed by labour. If the unit value of material and labour remains constant, the organic composition rises from 10:1 to 12:1. Provided this change does not affect the value of labour-power, it does not change the rate or mass of surplus value. If the figures were: 

c 1000 + v 100 + s 100, s' = 100%, r' = 9.9% 

they become: 

c 1200 + v 100 + s 100, s' = 100%, r' = 7.69% 

“But the surplus-value itself is affected if a different number of workers is employed by the same capital, i.e., if there is an alteration in the variable capital. If the change in the method of production results in a relative fall in constant capital, the surplus-value grows and thus the rate of profit. The reverse case produces the opposite result.” (p 380) 

In other words, if we take the opposite situation to that described above, so that productivity falls, then to process 1000 units of material may require 120 units of labour. If this does not affect the value of labour-power, and thereby the rate of surplus value, we would have: 

c 1000 + v 120 + s 120, s' = 100%, r' = 10.71% 

The rate of surplus value has remained the same here, but the amount of surplus value has risen, because the lower level of productivity means that more labour (say 12 workers rather than 10 workers) is employed, and now 12 workers rather than 10 workers are producing 10 hours each of surplus value. The organic composition of capital has fallen from 10:1 to 10:1.2, because now more variable capital is employed to process the same constant capital. The rate of profit must rise here because, although more capital in total (c + v) is advanced, the increase in the surplus value is in greater proportion. That has to be the case, because only v and not c, increases. So, (c + v) rises from 1100 to 1120, whilst s rises from 100 to 120. 

“It is here assumed throughout that the value pro tanto, per £100 for example, of constant and variable capital remains the same.” (p 380) 

This is the same assumption as used in some of the scenarios used in Capital III, in discussing factors affecting the rate of profit. As I set out in discussing that, in relation to Capital III, in practice, this assumption cannot hold, because changes in social productivity would affect the value of constant capital and labour-power, with consequent effects on the rate of surplus value, and the value composition of capital. 

“In this case the change in the method of production cannot affect constant and variable capital equally; that is, for instance, constant and variable capital—without a change in value—cannot increase or diminish to the same extent, for the fall or rise is here always the result of a change in the productivity of labour. A change in the method of production has not the same but a different effect [on constant and variable capital]; and this has nothing to do with whether a large or small amount of capital has to be employed with a given organic composition of capital.” (p 380) 

In other words, if we assume that the change in productivity has no effect on the value of the commodities that comprise the constant capital, or the variable capital, any change in productivity must then change the technical composition of the capital with a corresponding effect on the organic composition. If productivity rises, more material is processed by a given amount of variable-capital, so the organic composition rises, and the rate of profit falls, and vice versa. 

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