The second way that unproductive consumption by capitalists may decline is that the value of the commodities they consume unproductively may fall. Marx makes this point in Capital III. A rise in productivity, for example, may not only reduce the value of constant or variable capital, so as to raise the rate/amount of profit, but by reducing the value of commodities that form the capitalists unproductive consumption, also thereby increase the amount of surplus value available for accumulation.
Ricardo, in his comment, therefore, also makes the point that if the commodities consumed by the capitalists are imported and become cheaper, this has the same effect by reducing what must be spent on this consumption, and thereby increasing what is available for accumulation. If taken at a social level, the same principle applies, if fewer people are employed in unproductive activity, for example, as domestic servants, or government officials. And, the same would apply if the value of labour-power fell, so that not only would the mass of profit rise, but the amount set aside from profits to cover the wages of domestic servants and government officials etc. would fall, leaving more for accumulation.
“Thus with the same expenditure of revenue accumulation is the result of the rise in the rate of profit [but accumulation depends not only on the rate of profit but on the amount of profit]; with a constant rate of profit accumulation is the result of decreasing expenditure, which is however assumed by Ricardo to occur because of the reduced price (whether this is brought about by machinery or foreign trade) of “commodities on which revenue was expended”.” (p 536)
Ricardo examines this further in Chapter XX, where he also discusses the distinction between use value and value, or in his terms value and riches. Once again, because Ricardo sees accumulation only in terms of an accumulation of variable-capital, this leads him into further errors. Ricardo writes,
“The wealth” (Ricardo takes this to mean use-values) “of a country may be increased in two ways: it may be increased by employing a greater portion of revenue in the maintenance of productive labour,—which will not only add to the quantity, but to the value of the mass of commodities; or it may be increased, without employing any additional quantity of labour, by making the same quantity more productive,—which will add to the abundance, but not to the value of commodities.” (p 536)
In other words, Ricardo is saying here that if the level of productivity remains the same, but the number of workers employed rises from 1 million to 2 million, instead of producing 10 million use values, 20 million will be produced. Moreover, if the value of the 10 million use values was equal to 100 million hours, the value of the 20 million use values will be 200 million hours. On the other hand, Ricardo says, if productivity rises, the same number of workers may be employed, but they will produce more use values, even though the value of their output will not rise. So, if the number of workers employed remains 1 million, but the level of productivity doubles, these 1 million workers will produce 20 million use values. However, the value of those use values will remain 100 million hours.
In fact, Marx has shown why this is wrong. The use values produced by these workers do not consist only of labour, but also of constant capital – materials, wear and tear of fixed capital – and the more use values produced, the more constant capital consumed in their production. If 10 million use values are produced, they may contain 100 million hours of living labour, but they may also contain 100 million hours of dead labour, in the shape of materials etc. If productivity doubles, so that 20 million use values are produced, these may still contain only 100 million hours of living labour, but they contain 200 million hours of dead labour (assuming no change in the productivity of labour in the production of these means of production). So, contrary to Ricardo, the value of output here would rise from 200 million hours to 300 million hours. Only if productivity rose so that the value of all of the constant capital halved would the total value of all output not rise.
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