Wednesday, 7 August 2019

Theories of Surplus Value, Part III, Chapter 21 - Part 76

And again, presaging current conditions, whereby illusions of wealth and affluence are promoted where actually only exists a build up of debt and future penury, Marx notes the words of Ravenstone

““In pretending to stave off the expenses of the present hour to a future day, in contending that you can burthen posterity to supply the wants of the existing generation, they in reality assert the monstrous proposition that you can consume what does not yet exist, that you can feed on provisions before their seeds have been sown in the earth” (Piercy Ravenstone, [Thoughts on the Funding System, and Its Effects, London, 1824], p. 8.) 

“All the wisdom of our statesmen will have ended in a great transfer of property from one class of persons to another, in creating an enormous fund for the reward of jobs and peculation” (loc. cit., p. 9).” (p 309) 

Marx notes that this premature over exertion and exhaustion and disturbance between expenditure and income happens to both the worker and the land. Certainly, in the last thirty years, workers consumption has been funded by an increasing reliance on debt rather than income. The debt means a direct transfer of wealth into the hands of the money-lenders, thereby also diverting money-capital away from productive investment, which might have raised productivity, and thereby lightened the burden on labour. In order to repay the debt, the workers are also turned into debt slaves. 

But, as stated previously, even if no additional payments are made for overtime, there is a definite limit to how much overtime an individual worker can work. If a worker needs 8 hours a day for recuperation, the most they can work is then 16 hours. If the normal working-day is 8 hours, only 8 hours of overtime can be worked. After that, no additional surplus value can be produced by the worker. 

This is the point made by Marx, in Capital III, Chapter 15, where he discusses the meaning of an overproduction of capital

“There would be absolute over-production of capital as soon as additional capital for purposes of capitalist production = 0. The purpose of capitalist production, however, is self-expansion of capital, i.e., appropriation of surplus-labour, production of surplus-value, of profit. As soon as capital would, therefore, have grown in such a ratio to the labouring population that neither the absolute working-time supplied by this population, nor the relative surplus working-time, could be expanded any further (this last would not be feasible at any rate in the case when the demand for labour were so strong that there were a tendency for wages to rise); at a point, therefore, when the increased capital produced just as much, or even less, surplus-value than it did before its increase, there would be absolute over-production of capital; i.e., the increased capital C + ΔC would produce no more, or even less, profit than capital C before its expansion by ΔC. In both cases there would be a steep and sudden fall in the general rate of profit, but this time due to a change in the composition of capital not caused by the development of the productive forces, but rather by a rise in the money-value of the variable capital (because of increased wages) and the corresponding reduction in the proportion of surplus-labour to necessary labour.” 

So, there is not here a rise in the technical, and thereby organic composition of capital, but an actual fall in the value composition of capital, as money wages rise relative to constant capital.

In other words, here, if £1,000 employs a worker for an 8 hour day, and this capital comprises £500 constant capital, and £500 variable-capital, if no additional wages are paid for overtime, £1,500 will employ the worker for 16 hours (£1,000 constant capital, £500 variable-capital) If, in 8 hours, the worker produced £250 of profit (50% rate of surplus value) then, now, in 16 hours, they will produce £750 of profit (150% rate of surplus value).

Constant Capital
Variable-capital
Surplus Value
500
500
250
1000
500
750
1500
500
750

But, if the capital rises to 2000, no additional surplus value is produced, because the worker cannot physically work more than the 16 hours they were already working. They need 8 hours for recuperation. Absolute surplus value would have reached its limit. So, unless relative surplus value could be increased, as Marx says in the above quote from Capital III, Chapter 15, capital would have been absolutely overproduced, because the additional £500 of capital outlay results in no additional surplus value. This £500 of capital does not function as capital, as self-expanding value.  Moreover, as Marx also says in Capital III, Chapter 15, in these conditions, the demand for labour-power would itself cause money wages to rise, and that would mean that not only does surplus value not rise, but it now also falls.

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