Marx notes that the same rise in productivity that results in a unit of labour spinning ten times as much cotton can equally result in a unit of labour picking ten times as much cotton, so that the value relation remains the same. That was one role of the introduction of the cotton gin.
“In fact it was only the large fall in the price of cotton which enabled the cotton industry to develop in the way it did.” (p 368)
“If tomorrow the price of cotton were to drop by 90 per cent, the spinning industry would develop even more rapidly the day after tomorrow.” (Note * p 368)
But, Marx says, it is, in fact, not possible to expand the production of some materials in this way, and thereby to reduce their value.
“To this it is quite easy to answer that some kinds of raw materials, such as wool, silk, leather, are produced by animal organic processes, while cotton, linen, etc., are produced by vegetable organic processes and capitalist production has not yet succeeded, and never will succeed in mastering these processes in the same way as it has mastered purely mechanical or inorganic chemical processes. Raw materials such as skins, etc., and other animal products become dearer partly because the insipid law of rent increases the value of these products as civilisation advances. As far as coal and metal (wood) are concerned, they become much cheaper with the advance of production; this will however become more difficult as mines are exhausted, etc.” (p 368)
But, this proved wrong on a range of counts. Firstly, Marx himself, in Capital, discussed the way selective breeding had made it possible to bring sheep and cattle to maturity much quicker. The same selective breeding made it possible to produce sheep that produced more wool. The opening up of vast tracts of land, in America, Australia and New Zealand, led to a huge rise in sheep and cattle herds. Secondly, the development of synthetic fibres, such as nylon, rayon and polyester replaced natural fibres such as silk, wool, and cotton. Synthetic fur replaces the real thing, vinyl and other synthetic materials replace leather.
Rather than coal becoming more expensive, large new mines were opened, where coal could be mined much more cheaply, but in any case, it was replaced by cheaper, and more effective oil and gas, and by electricity, now increasingly produced by wind, solar and other renewable sources, at increasingly lower cost. As Marx set out, in Chapter 9, it may take some years before all of the required investment, in new farms, mines and related infrastructure raise their natural fertility to that of existing farms and mines, but it then usually surpasses the fertility of existing facilities.
So, there is no reason why both the value of fixed capital and raw materials should not fall alongside the fall in the value of labour in output, so that no fall in the rate of profit would result. But, even if these values did rise, relative to labour, the effect would be neutralised by the rise in the rate of surplus value, and in the rate of turnover. As Marx says,
“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)
Moreover, as I have set out elsewhere, Marx was writing at a time when material production dominated, and where the processing of materials was, therefore, significant for the rate of profit. But, today, 80% of new value production comes from services, where the increase in material consumption plays no part.
Marx notes that surplus value only affects constant capital via the production of absolute surplus value by the extension or intensification of the working-day. It reduces the relative value of the constant capital.
“Relative surplus labour—where the working-day remains unaltered (apart from the greater intensification of labour)—increases the value ratio of profit to total capital by increasing the surplus itself. Absolute surplus labour-time reduces the cost of constant capital relatively.” (p 369)
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