The only changes in the value of the elements of the constant capital that arise during the production process are changes that are nothing to do with the process, and are the consequence of changes that occur outside it. That is why contrary to the Temporal Single System Interpretation, and the use of historic prices, it is necessary to separate out these changes in the value of these components, from the self-expansion of capital value that occurs within the production process itself. Only then can an accurate measurement of that self-expansion, and thereby the rate of profit be established. So, for example, the value of cotton, in the process of being spun into yarn, may rise or fall, as a result of the fact that the value of cotton in general, i.e. its current reproduction cost, is rising or falling, as a consequence of changes in social productivity. The value of the fixed capital, of the cotton spinner, may fall, as a consequence of a similar change in social productivity, or because a development of a new type of spinning machine devalues all previous machines, as a result of moral depreciation. The spinning machine itself, or the stocks of materials, may depreciate, as a consequence of the passage of time itself, for example, machinery rusts, if not used, cotton may deteriorate or eaten by mice if not properly stored. But, these changes have nothing to do with the production process itself.
That is not the case with the variable-capital. The variable-capital consists of all those wage goods, or their money equivalent, required for the reproduction of the employed labour-power. Those wage goods, or their money equivalent is exchanged for a commodity – labour-power – of equal value, and this labour-power, then constitutes an element of productive-capital. Capital value in the form of money-capital has been metamorphosed into capital value in the form of productive-capital. But, even if the value of that labour-power remains constant, the value that this labour-power produces, as a consequence of being employed directly in the production process, does not. Indeed, the labour-power would not have been bought unless that were the case. It is not the fact that the labour-power has a value of say 6 hours, which determines the value of the product of this labour, but the quantity of new labour it performs. That may be, 8,10, 12, or more hours.
It is precisely this which gives it its nature of being variable-capital, of taking one fixed amount of value, represented by the value of labour-power/wage goods, and transforming it, via the production process, into a larger sum of value.
“It follows from this that, if equal rates of exploitation are assumed, of two capitals of equal size, that which sets less living labour in motion—whether this is due to the fact that the proportion of variable capital is less from the start, or to the fact that it has a [longer] period of circulation or period of production during which it is not exchanged against labour, does not come into contact with it, does not absorb it—will produce less surplus-value, and, in general, commodities of less value.” (p 178-9)
This is what poses the problem for Ricardo, because, if two capitals are of the same size, but one employs less labour, it also thereby produces less surplus value. If both capitals equal £100, but one is comprised 80 c + 20 v, whilst the other is comprised 20 c + 80 v, the first will produce a commodity with a value of £80 + £20 + £20 = £120, whilst the second will produce a commodity with a value of £20 + £80 + £80 = £180. So these two capitals, each of £100, produce commodities with divergent values, and produce different amounts of surplus value, and consequently different rates of profit.
“Ricardo was unable to answer this question because, put in this way, it is absurd since, in fact, neither equal values nor [equal] surplus-values are produced. Ricardo, however, did not understand the genesis of the general rate of profit nor, consequently, the transformation of values into cost-prices which differ specifically from them.” (p 179)
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