Monday, 3 December 2018

Theories of Surplus Value, Part III, Chapter 19 - Part 29

The higher the percentage profit the capitalist levies, as part of the price of the commodity, the smaller the proportion of what they have produced can the workers buy back, and the larger the size of the surplus product. If the capitalist levied a 50% profit, then workers could only purchase 2/3 of the commodities they produced, with the surplus product then being equal to a third. But, there are limits on the size of the surcharge, because if it is too large, workers would not be able to buy back a sufficient quantity of commodities to be able to reproduce their labour-power

“It makes no difference to the situation if, in addition to variable capital, constant capital is also advanced, for example, if, in addition to the 100 thaler wages, there is another 100 for raw materials, etc. In this case, if the rate of profit is 10, then the capitalist sells the goods for 220 instead of for 210 (namely, 100 constant capital and 120 the product of [direct] labour).” (p 42) 

In this case, the direct wages of the workers account for only half the value of the product, and so, with their £100 of wages, they still only buy back 10/11 of the part of the output attributable to their labour. 

“Here, as regards the class of capitalists A, who produce articles which are directly consumed by the workers—necessaries, we have a case where as a result of the nominal surcharge—the normal profit increment added to the price of the advances—a surplus fund is in fact created for the capitalist, since, in this roundabout way, he gives back to the worker only a part of his product while appropriating a part for himself. But this result follows not because he sells the entire product to the worker at the increased value, but precisely because the increase in the value of the product makes the worker unable to buy back the whole product with his wages, and allows him to buy back only part of it. Consequently, it is clear that demand by the workers can never suffice for the realisation of the surplus of the purchase price over and above the cost-price, i.e., the realisation of the profit and the “value” of the commodity. On the contrary, a profit fund only exists because the worker is unable to buy back his whole product with his wages, and his demand, therefore, does not correspond to the supply.” (p 42) 

So, the capitalists, in this sphere A, have this surplus product, whose size depends upon the surcharge they impose on the value of the commodities they sell. They can use this surplus product for their own consumption, or for accumulation. Each capitalist, within this sphere, can use the revenue from selling their share of this surplus product to finance their consumption of other commodities, or to finance accumulation of capital. The capitalists A, if all their capital were advanced as variable-capital, would have reproduced it by selling the 10/11 of their output back to their workers, by which means the wages they had paid out would flow back to them. Taking all of the capitalists A into consideration, they can, of course, collectively consume all of their surplus product themselves, even if this involves individual capitalists, within this sphere, exchanging portions of this surplus product with one another. 

But, of course, the commodities produced by capitalists A do not comprise just variable-capital. They also comprise constant capital in the shape of raw materials etc. These commodities that comprise the constant capital of A, are produced by capitalists B. The capitalists B do not sell any commodities to workers, because they only produce constant capital, which is not directly bought or consumed by workers. The capitalists B are also taken as not selling commodities to the producers of luxury goods, or to the producers of constant capital, required for the production of luxury goods. In other words, capitalists B only sell to capitalists A

“Now we have seen that, in the capital advanced by A, 100 is included as constant capital. If the rate of profit is 10 per cent, the manufacturer of this constant capital has produced it at a cost-price of 90 10/11, but sells it for 100 (90 10/11 : 9 1/11 = 100:10). Thus he makes his profit by imposing a surcharge on class A. And thereby he receives from their product of 220, his 100 instead of only 90 10/11, with which, we will assume, he buys immediate labour. B does not by any means make his profit from his workers whose product, valued at 90 10/11, he cannot sell back to them for 100, because they do not buy his goods at all.” (p 43)

It should be noted that where Marx uses the term "cost-price" here, he is using it in the conventional sense, as meaning cost of production, and not in the sense he has used it previously in Theories of Surplus Value, to mean price of production.

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