Friday, 21 December 2018

Theories of Surplus Value, Part III, Chapter 19 - Part 47

However, as I've indicated elsewhere, the logic applied here is flawed, for several reasons. Firstly, the question of what the profits are spent on is not taken into consideration. If we take the initial £200 of profits, if it is spent on commodities such as that produced, it will buy the same quantity for less than £200, leaving the difference to be accumulated, and thereby employing additional labour. Secondly, in so far as these commodities are wage goods, the value of labour-power will fall, so that the £500 expended on wages would now buy approximately a third more labour-power

Moreover, it has been assumed that the rate of profit remains 20%, but, if the value of labour-power falls by a third, the rate of surplus value rises accordingly. This additional surplus value is then available for additional accumulation, and with the lower value of labour-power, this increased mass of surplus value is able to employ an even larger mass of labour-power, which produces a greater mass of surplus value. 

But, of course, all of this is only a potential for additional employment. The fact that a lower value of labour-power means that more of it can be employed, with any given quantity of variable-capital, and that more of it can be accumulated by any given quantity of surplus value, does not mean that it will be. Similarly, the fact that a fall in the value of labour-power means a rise in the rate and mass of surplus value does not mean that this additional surplus value will be accumulated. Nor does the fact that the value of personal consumption falls, for the capitalist, mean that the saving will be accumulated. 

And, indeed, in the short term, that is likely to be the case. However, the point is that the consequence of the introduction of machinery is not necessarily to reduce the absolute level of employment. On the contrary, by reducing the value of labour-power, so that a given mass of variable-capital employs more of it, and by raising the rate and mass of surplus value, it creates the potential for accumulation of more variable-capital. 

The consequence is that the employment of labour falls relatively, but increases absolutely. 

Marx points out that implicit in Cazenove's argument above is that the capitalist must either borrow capital from the bank, out of the £400 of savings by consumers, or must have additional capital of their own. That is because, out of the £400 of capital they have available, it would be impossible to lay out £250 as wages for the 25 men, and £50 in wages for the 5 men, as well as £250 for the machine, because that totals £550. 

Cazenove disagrees with McCulloch, who argues that the introduction of the machine must create additional demand, so that the displaced workers are employed. Marx dealt with these suggestions in Capital I, and again in Theories of Surplus Value, Part II. As I set out earlier, the lowering of commodity values creates that potential, but, in practice, as Marx says, it is a potential that generally only manifests itself for the next generation of workers that replace those that have been displaced. 

Cazenove also disagrees with McCulloch's argument that the fund for wear and tear can be used for accumulation, but as Marx showed in Capital II, and subsequently, that is indeed the case. 

“The sinking fund itself can, indeed, be used for accumulation in the interval when the wear and tear of the machine is shown in the books, but does not actually affect its work. But in any case, the demand for labour created in this way is much smaller than if the whole capital invested in machinery were laid out in wages, instead of merely the annual wear and tear. MacPeter is an ass—as always. This passage is only noteworthy, because it contains the idea that the sinking fund is itself a fund for accumulation.” (p 68) 

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