Friday, 5 October 2018

Theories of Surplus Value, Part II, Chapter 18 - Part 8

Marx does not deal with it here, but its not just the flour producer that has capital released. As presented, the linen producers have revenue released, but if the fall in the value of flour is permanent, linen workers' value of labour-power falls. If they were paid in linen, to exchange for flour, they would require less linen wages to buy the flour they required. So, the rate of surplus value rises, and linen capitalists have variable-capital released, which they could use to accumulate additional capital, or to use to start some entirely new business

In other words, the fact that revenue is released when the price of some commodities fall may mean that the demand for some other commodities rise, as the released revenue is diverted to these other commodities. But, it may not; the released revenue may simply be saved, or may be converted itself into capital. At the same time, the released capital may flow seamlessly into the production of those other commodities, the demand for which has risen, because released revenue has flowed towards them. But, it may not. The released capital will only be invested in these other areas, for example, bakery, if it can produce the average rate of profit by doing so. Moreover, although capital may be able to flow seamlessly to these alternative areas, labour may not. 

A released flour worker may not be employable as a bakery worker, for example. They may not have the appropriate skills, be in the right area of the country, and so on. Consequently, the fall in value of flour, releases capital for the flour producer – and as described above possibly also for the linen producer – it raises their surplus value, and rate of profit, and so potential rate of accumulation, but this released capital may not be capable of being reinvested. The released revenue arising from the fall in the value of flour enables consumers to thereby create a demand for additional types of commodities, but that demand may not be capable of of being met, because the released capital and labour from flour production may not be able to be employed in these other spheres. Moreover, those that save revenue from the fall in flour prices may simply choose to save it. 

“For the first fund which is saved or created through the discovery is that part of the revenue which society previously paid for flour and which it now saves as a result of the diminished price of flour. The second fund which is saved, however, is that which the miller previously paid for the ten men now displaced. This “fund” indeed, as Ricardo notes, is in no degree impaired by the discovery and the displacement of the ten men. But the fund has no natural connection with the ten men. They may become paupers, starve etc.” (p 553) 

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