Theories of Surplus Value, Part III, Chapter 21 - Part 22

Marx repeats, in this section, an argument he made in Capital I, but, as I explain in my book Marx's Capital Translated For The 21st Century, Vol I, the argument is quite simply wrong. Marx, in fact, repeats an error he had previously criticised in Senior and others. It is particularly noticeable here given that Marx has so extensively shown what is wrong with Smith's argument that the value of outputs resolve wholly into revenues, i.e. v + s, rather than into c + v + s. Marx says, 

“Let us assume that I have saved £500 from my wages. In fact, therefore, this sum represents not only accumulated labour but, in contrast to the “accumulated labour” of the capitalist, my own labour accumulated by me and for me. I convert the £500 into capital, buy raw material, etc., and take on workers. Profit is, say, 20 per cent, that is, £100 a year. In five years I shall have “eaten up” my capital in the form of revenue (provided new accumulation does not continuously take place and the £100 [profit] is consumed). In the sixth year, my capital of £500 itself consists of other people’s labour appropriated without any equivalent.” (p 251) 

But, as I set out in my book, this is completely wrong. As Marx himself sets out, in Capital I, concrete labour “preserves” the value of the constant capital, in the production process; it does not reproduce it, or produce a new value equal to it. It is the same error that Senior and others made in relation to the debate over, the Last Hour, as part of the struggle over the Ten Hours Bill, whereby they required labour to produce sufficient value not only to reproduce the value of their wages, and of profit, but also to produce an equivalent amount of new value to reproduce the value of the materials etc. consumed in production. Put another way, Marx's argument would be correct if the value of output were equal only to v + s, rather than c + v + s. The reality is that because labour preserves the value of the means of production, then, whether or not the workers produce surplus value, this value of c is reproduced in the value of output. 

Suppose that £500 is saved and turned into £300 of materials (c), and £200 means of consumption (v). Now suppose I then begin production on my own account. I consume from the £200 fund of consumption goods, until my production is complete, and I can sell the output. After a month, production is complete. I have only undertaken necessary labour required to produce £200 of new value, required to replenish my fund of consumption goods, so as to reproduce my labour-power. The value of my output is £300 (c), which I have merely “preserved” by my labour, the use value now having been metamorphosed into that of the final product, plus £200 of new value created by my labour. On selling the output for £500, I thereby reproduce the £300 of constant capital, and £200 of variable-capital, but not a penny of that has been reproduced from surplus value. 

The same would apply where wage workers were employed who produced no surplus value. In that case, unless I had revenue from elsewhere, I would not be able to consume, but, in that case, it makes more sense to describe any surplus value produced by those workers funding my personal consumption than to describe it as replacing the productively consumed constant capital. 

In fact, Marx's argument here seems peculiarly back to front. So, in relation to a portion of the surplus value being accumulated, he makes the odd claim that, 

“If, on the other hand, I had always accumulated half of the profit made, the process [of eating up my original capital] would have been slower, for I would not have consumed so much, and [the process of appropriating other people’s labour] more rapid.” (p 251) 

Marx sets out the following table.

	Capital	Profit	Consumed
First Year	500	100	50
Second Year	550	110	55
Third Year	605	121	60
Fourth Year	665	133	66
Fifth Year	731	146	73
Sixth Year	804	160	80
Seventh Year	884	176	88
Eighth Year	972	194	97
			569

But, what Marx should have concluded from this is not that the original £500 of capital was consumed more slowly, because less surplus labour was consumed unproductively, but that an increasing proportion of the capital is constituted wholly of appropriated labour. By Year 8, the reality is that each year the £500 of original capital created by primary accumulation has been turned over, and reproduced, along with surplus value. But, each year, an amount of unpaid labour, having been appropriated, has been accumulated as capital, so that by Year 8, whilst the £500 of original capital has continued to be turned over, an almost equal amount of capital is now working alongside it, all of which is the product of unpaid appropriated labour. 

Had the original £50 of profit continued to be consumed unproductively, the accumulation of that unpaid labour, as capital would be even more stark.

	Capital	Profit	Consumed
First Year	500.00	100.00	50
Second Year	550.00	110.00	50
Third Year	610.00	122.00	50
Fourth Year	682.00	136.40	50
Fifth Year	766.40	153.28	50
Sixth Year	869.68	173.94	50
Seventh Year	1007.94	201.59	50
Eighth Year	1159.53	231.91	50
			400

Now, whilst the original £500 of capital has continued to be turned over, each year, it represents less than half the total capital. £659 of the total capital is new capital, that has been entirely appropriated from unpaid labour. 

Marx concludes this section with another comment that illustrates the need to view social reproduction not only in abstract mathematical equations of value relations, but also recognising the role of quality as well as quantity, of taking into consideration questions of demand as well as supply of use value as well as exchange-value. 

“In considering surplus-value as such, the original form of the product, hence of the surplus product, is of no consequence. It becomes important when considering the actual process of reproduction, partly in order to understand its forms, and partly in order to grasp the influence of luxury production, etc., on reproduction. Here is another example of how use-value as such acquires economic significance.” (p 251-2) 

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