Wednesday, 12 June 2019

Theories of Surplus Value, Part III, Chapter 21 - Part 20

So far, the process of social reproduction has only been considered in terms of simple reproduction. In other words, that part of the total output that constitutes revenue has all been consumed. But, social reproduction proceeds on the basis of expanded reproduction. That requires that a portion of revenue be accumulated as productive-capital rather than consumed. In other words, a portion of total output must be saved rather than consumed unproductively. As also described earlier, and as Marx sets out further, in the next chapter, this same effect can be achieved where capital is released, as a consequence of a fall in the value of productive-capital, i.e. depreciation

If the price of the commodities that comprise productive-capital falls, a given mass of money-capital will buy more of them, so that the effect of this release of capital is to enable greater capital accumulation, even with no change in the mass of surplus value, and no change in the level of unproductive consumption. So, if a textile capitalist buys 1000 kilos of cotton to spin into yarn, and pays €100 for the cotton, whilst making €10 profit, which they consume unproductively, they can still be able to accumulate capital, without changing their consumption from profit, if the price of cotton falls. In other words, if they have sold the 1,000 kilos of yarn and obtained their €10 profit, they can consume that profit unproductively. If the price of cotton falls to €50 for 1000 kilos, they will have had €50 of capital released. They may then employ €25 to buy additional cotton and €25 to employ additional workers, thereby expanding their capital which now produces €15 of profit. 

Ricardo, like Smith, because he saw the value of output resolving into revenues, believed that all accumulation amounted to to an accumulation of variable-capital, i.e. wages, because he thought that, even though any expansion entails also more means of production, these means of production are themselves the product of new labour, and so their value resolves into labour. But, just as the value of commodities actually resolves into c + v + s, not just v + s, so the accumulation of capital involves accumulation of both c + v, not just of v. The underlying relations are no different in relation to expanded reproduction as for simple reproduction, other than in the nature of the use values produced. In other words, instead of all the use values produced, which are exchanged against revenue, being for personal consumption by the rich, a portion of these use values are produced as additional means of production, and another portion is produced as additional wage goods for consumption by an enlarged working-class. 

As described earlier, this does not necessarily mean reduced unproductive consumption by the rich. A fall in the value of the components of capital is the same thing as a greater quantity of that use value being produced for only the same amount of labour. Take an example like that used by Marx in the next chapter, arguing against Ramsay. Suppose we have a situation where a farmer has 20 kilos of seed corn, 40 kilos used to pay wages, and a store of 20 kilos to cover their own consumption during the year, until the harvest. If they wanted to accumulate capital, to the extent of 10%, they might have to take 2 kilos of their corn for personal consumption, to use as additional seed corn, and a further 4 kilos to pay as wages to additional workers. However, suppose, during the year, there is a good harvest, so that instead of the output being 80 kilos as expected, it is 100 kilos. Now, the farmer can either keep production on the same scale, planting 20 kilos as seed, paying 40 kilos as wages, leaving them with a surplus product of 40 kilos, rather than 20, or they can use 15 kilos out of the surplus to accumulate additional capital. So, now, they would plant 25 kilos as seed, and pay out 50 kilos as wages, to an expanded workforce, whilst still being able to raise their own personal consumption from 20 kilos to 25 kilos! Even if, the following year, the harvest returned to its normal level of productivity, the 25 kilos of seed, and 50 kilos paid out as wages, would result in total output of 100 kilos, up by 25%, with the surplus product having now risen from 20 kilos to 25 kilos. 

And, as I set out in my book, Marx's Capital Translated For The 21st Century,Vol II, in reality, the capitalists are able to utilise their reserves of money-capital, throughout the year, to accumulate capital, without any actual reduction in their day to day consumption, and as a result of the increased profits from this accumulated capital, can even increase their personal consumption. Moreover, as Marx describes in Capital III, in examining credit and the banking system, vast reserves of money-capital are available, even more so now, in a global financial system, so that capital accumulation can be financed without any actual diminution in personal consumption by the rich. It is only a question of a rising amount of future production being devoted to accumulation rather than unproductive consumption. 

No comments: