The absolute number of workers that can be employed, depends on the gross revenue. But, the rate at which employment can be expanded depends on the net revenue, i.e. on the surplus value. This is what Tory governments do not seem to understand. They have sought to emphasise high levels of low value/low productivity employment that produces low levels of profit and growth, over lower levels of high value/high productivity employment that produces higher levels of profits and growth.
This might seem in contradiction to Marx's comment,
“Labour therefore becomes redundant, because the demand for labour diminishes, and that demand diminishes in consequence of the development in the productive powers of labour” (p 568), but it isn't, because it only signifies that labour demand falls relatively, at the same time that demand for labour rises absolutely, as a consequence of the much greater accumulation of capital. This greater accumulation of capital arises on the back of an increase in revenue.
“In order that revenue is transformed in this way into capital, capital is first transformed into revenue. Or, as Ricardo puts it: First the net produce is increased at the expense of the gross produce in order then to reconvert a part of the net produce into gross produce. Produce is produce. Net or gross makes no difference (although this antithesis may also mean that the excess over and above the outlay increases, that therefore the net produce grows although the total product, i.e., the gross produce, diminishes). The produce only becomes net or gross, according to the determinate form which it assumes in the process of production.” (p 569)
The capitalist reduces what is laid out as variable capital, because the machine means that more than half the workers are redundant. But, with the help of the machine, the same quantity of output is produced. What was previously laid out as capital is now available as revenue, which means that the capitalist can use it to accumulate capital. Ricardo says,
““All I wish to prove, is, that the discovery and use of machinery may be attended with a diminution of gross produce; and whenever that is the case, it will be injurious to the labouring class, as some of their number will be thrown out of employment, and population will become redundant, compared with the funds which are to employ it” (l.c., p. 472).” (p 69-70)
To which Marx responds,
“But the same may, and in most instances will, be the case, even if the gross produce remains the same or increases; but that part of it which was formerly used as variable capital, is now consumed as revenue.” (p 570)
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