Thursday, 19 September 2019

Theories of Surplus Value, Part III, Chapter 23 - Part 3

[2. On the Progressive Decline in the Number of Workers in Relation to the Amount of Constant Capital] 

Marx then turns to the question of whether this rise in the proportion of total output going to the reproduction of constant capital, relative to variable-capital, explains the tendency for the rate of profit to fall. 

“For us, however, the main thing is: does this fact explain the decline in the rate of profit? (A decline, incidentally, which is far smaller than it is said to be.) Here it is not simply a question of the quantitative ratio but of the value ratio.” (p 364-5) 

If productivity, in all spheres, increased in the same proportion, Marx says, then, on the basis of this value ratio, there could be no effect on the rate of profit. Suppose a worker uses one spindle and produces 100 kilos of cotton. If, now, the worker uses a machine, with 10 spindles, they process 1,000 kilos of cotton. But, if the machine, with 10 spindles, now has the same value as the spindle had previously, and if, now, 1,000 kilos of cotton can be produced for the same value as 100 kilos previously, there is no change in the value relations between labour, machine and cotton, so that there is no change in the rate of profit. Indeed, to the extent that the rise in productivity reduces the value of labour-power, the rate of surplus value, and so rate of profit would rise! 

Marx sets this out in an example where a single worker, using a 100 spindle machine, replaces 100 workers using a single spindle. 

“As far as the machinery is concerned, its cost is not as great as that of the labour it displaces, although the spinning-machine is much more expensive than the spindle. The individual capitalist who owns a spinning-machine must possess a greater amount of capital than the individual spinner who buys a spinning-wheel. But the spinning-machine is cheaper than the spinning-wheel in relation to the number of workers it employs. Otherwise it would not have displaced the spinning-wheel.” (p 365) 

But, this is at odds with his initial assumption, in the previous paragraph, where he says, 

“... and one worker produces a spinning-machine whereas previously he produced only a spindle, then the ratio of value remains the same...” (p 365) 

The later statement is only valid on the basis that the value of spinning wheels also fall. 

Illustrating the point made earlier, however, that even as the proportion of output going to replace machinery relative to labour rises, the proportion going to replace machinery itself falls, Marx says, 

“But the spinning-machine is cheaper than the spinning-wheel in relation to the number of workers it employs. Otherwise it would not have displaced the spinning-wheel. The place of the spinner is taken by a capitalist. But the capital which the former laid out on the spinning-wheel was larger relative to the size of the product, than that which the capitalist lays out on the spinning-machine.” (p 365) 

Marx, here, sets out both the countervailing forces to the tendency for the rate of profit to fall, and the limits of those countervailing forces. His statement, above, that the fall in the rate of profit is much less than it is said to be, is reinforced in his later comment that, 

“ The cheapening of raw materials, and of auxiliary materials; etc., checks but does not cancel the growth in the value of this part of capital. It checks it to the degree that it brings about a fall in profit.” (P 369) 

This reinforces Marx's comment that the fall in the rate of profit is only small, and only perceptible over long periods of time. It puts into perspective those theories that attempt to explain crises on the basis of this fall in the rate of profit that according to Marx is “much smaller than it is said to be”, only perceptible over very long periods, and which, in any case, is checked by the fall in the value of raw and auxiliary materials. 

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