Tuesday, 6 August 2019

Theories of Surplus Value, Part III, Chapter 21 - Part 75

Marx quotes the author of “An Inquiry into those Principles, respecting the Nature of Demand and the Necessity of Consumption, lately advocated by Mr. Malthus etc”, who writes, in response to Sir Edward West .

““The author of the Essay […] observes […] that more will be given for labour when there is most increase of stock, and that […] will be when profits on stock are highest. ‘The greater the profits of stock’, he adds, ‘the higher will be the wages of labour.’ The fault of this is, that a word or two is left out. ‘The greater have been the profits of stock’ … ‘the higher will be the wages of labour’… The high profits and the high wages are not simultaneous; they do not occur in the same bargain; the one counteracts the other, and reduces it to a level. It might as well be argued, ‘the supply of a commodity is most rapid when the price is highest, therefore, large supply and high price go together’. It is a mixing up of cause and effect” (op. cit., pp. 100-01).” (p 307) 

In other words, the causal relation is that high profits encourage additional investment. That leads to an increased demand for labour, and this increased demand for labour is what then leads to higher wages. But, as previously described, eventually, higher wages squeeze profits, which give rise to an incentive to replace labour with machines. Not all capital accumulation is the same. It has different causes and effects, depending on the phase of the cycle

Hodgskin’s proposition, therefore, has meaning only if, as a result of the process of accumulation, more capital is set in motion by the same workers, or if the capital grows in relation to labour.” (p 307) 

And, as described earlier, it is only possible for the same worker to set in motion more capital under certain conditions. Either the labour must become more productive, as a result of being assisted by newer machines and technology etc., or else, if productivity remains the same, the working-day must be extended, or become more intensive. 

There are also different conditions under which this latter may take place. The working-day might be extended or made more intensive (speed-up etc.) without the worker being paid any additional wages. In that case, all of the additional labour is surplus labour, and produces surplus value for capital. So, the rate of surplus value rises. Or, the worker may be paid additional wages, at their normal hourly rate of pay for the additional hours. In that case, whatever the rate of surplus value, for the existing working-day, applies to the additional hours. The mass of surplus value, thereby rises proportionately to the increased hours. Finally, the worker may be paid enhanced rates for the overtime worked. In that case, the rate of surplus value, on these additional hours, is lower than for the rest of the working-day, but the consequence is to reduce the overall rate of surplus value, whilst increasing the amount of surplus value produced. 

The reason for paying enhanced rates is to reflect the fact that as labour is worked for longer, or more intensively, the value of labour-power rises. The worker needs more food etc., so as to replace their consumed energy; the workers themselves may wear out more quickly. But, even where these enhanced rates are paid, the mass of profit rises, and the rate of profit may rise, because of other economies of scale

“The profit grows more rapidly. For there is a more rapid turnover of fixed capital, while the more intensive use of the machinery does not cause the wear and tear to increase at the same rate. There is a reduction of expenditure on fixed capital, for less machinery, workshops etc. are required for 100 workers who work longer hours than for 200 workers employed simultaneously. Likewise fewer overseers, etc. (This gives rise to a most satisfactory situation for the capitalist, who is able to expand or contract his production without hindrance, in accordance with the market conditions. In addition, his power grows, since that portion of labour which is over-employed, has its counterpart in an unemployed or semi-employed reserve army, so that competition amongst the workers increases.)” (p 308) 

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