Wednesday 18 July 2018

Theories of Surplus Value, Part II, Chapter 17 - Part 20

In order for accumulation, in general, to occur, the production of surpluses, in general, must occur, and these surpluses must be physical surpluses, i.e. the production of a surplus product rather than merely a surplus value, because accumulation requires an expansion of the actual scale of production, the processing of additional material, by an expanded mass of employed labour. But, production of surpluses has to occur anyway, even without accumulation, because the necessary labour of non-producers has to be recompensed, as well as the needs of those in society who cannot produce, i.e. the young, old and infirm. And, in all class societies, a surplus is required to provide for the needs of the exploiters. The requirement, therefore, is only that the size of the surplus product exceeds these minimum requirements. In the same way that the surplus can be used to meet these consumption needs, so too it can be used to buy commodities to be used for productive consumption rather than personal consumption. 

What is transformed into capital is a proportion of revenue. In other words, it is a portion of the new value created by labour, during the year. It is then a portion of revenue, whether that revenue consists of wages, profit, rent or interest.  As Marx set out in Capital III, Chapter 6, and as he also sets out in Theories of Surplus Value, Chapter 22, dealing with the illusion of profit caused by the use of historic prices in Ramsey's analysis, where capital is released (because the values of the commodities that comprise constant and variable-capital fall) the released capital is then available as revenue to be used also for accumulation.  As Marx points out, the illusion of profit disappears as soon as it is realised that the consumed capital must be physically reproduced on a like for like basis, at its current reproduction cost, and that the circuit of capital ends with this reproduction, and not with the conversion of capital into money.

In other words, the circuit is

But, it is always the industrial capitalist who gets their hands on the surplus value first. The industrial capitalist then hands over a part of that surplus value as rent or interest. It may be that a landlord or a rentier may use some of their revenue to accumulate capital. A landlord, for example, may use some rent to establish a business such as a mine, or an ironworks on their land. A money-lender may use some of the interest they receive to establish or accumulate capital in some other business. Workers too, under some conditions, may be able to use some of their wages to start a small business. And all of these groups may use their revenues as loanable money-capital, which is pooled via the banking system, and then used by industrial capitalists to buy the elements of productive-capital. Moreover, money-capital itself does not need to intervene in this process. If Company A supplies Company B each month with 1,000 items, on the basis of 3 months commercial credit, i.e. it invoices B on the basis of payment within 3 months, then so long as A has the required surplus product, if B increases its order to 1200 units, it would continue to enjoy this 3 months credit on these additional 200 units too. B is then able to expand its own production by 20%, and provided it turns over the capital within 3 months, it would thereby reproduce the value of the 1200 units, and be able to use it to make payment to A. In fact, in periods of general expansion, a lot of accumulation takes place on this basis.   As Marx points out later in Chapter 21, the  accumulation of circulating capital, is actually only an expansion of coexistent labour, of commodities produced by that coexistent labour, being simultaneously produced and exchanged.

2 comments:

Blissex2 said...

«In order for accumulation, in general, to occur, the production of surpluses, in general, must occur, and these surpluses must be physical surpluses, i.e. the production of a surplus product rather than merely a surplus value»

Here I detect some serious terminological problem, even if the sense is vaguely discernible, because in the ordinary sense of the words all production processes except those involving "land", that is something that has "fertility", involve a physical loss, not surplus.

Consider the production of spoons from iron ore, coal, and productive plant in which they are processed: the amount of iron ore and coal needed is much greater than that that ends up in the spoon. We accept that loss of iron (for example) because the "use value" of the iron in the form of a spoon is much greater that of the much greater quantity of iron in the form of iron ore.

Conversely, "land" produces a physical output (many seeds per corn kernel seeded) that is greater than its input. That physical surplus arises from "fertility" (of farm fields, of oil fields, or fishing areas, of iron mines) that industry simply does not enjoy.

And there is the great debate about "value": while it is obvious that it is worth doing something where the inputs "magically" multiply, it is not always obvious why we do something there the outputs are physically a fraction of the inputs.

Boffy said...

I don't think any such terminological problem exists, if you read all of the other posts, which answer the objections you have raised. The surplus product, as with the surplus value arises as a consequence of the labour that is undertaken.

If we take corn, for example, the output of corn is not just greater than the input of corn as seed, but greater than the input of corn as wages for the reproduction of labour-power (assuming that the workers labour-power could be reproduced solely from the consumption of corn). This surplus product enables more corn to be used as seed in the following year, and more to be set aside to pay wages to additional workers.

If we take your spoons example, you have failed to take the analysis back far enough. You forget that the iron ore, coal etc. did not simply spring into existence from nowhere. It was dug from the ground by labour, and so the stock of iron ore, coal etc. goes from zero to something more than zero, before it is then used in the production of spoons etc.