Marx cites Cherbuliez' comment,
““Productive capital […] is composed of a consumable part […] and a non-consumable part […] The more wealth and population increase, the more the consumable part tends to increase, because the extractive industries demand an ever greater supply of labour. On the other hand, this same progress […] causes the amount of capital invested to increase at a much faster rate than the amount of capital consumed. Thus although the total mass of capital consumed tends to increase […] the effect is neutralised, because the mass of products grows in more rapid progression and the total amount of profit must be considered as growing at a rate at least as high as that at which the total amount of capital invested grows” (loc. cit., p. 71).
“The amount of profit grows, not the rate, which is the ratio of this amount to the capital invested, r=P–c/C. It is clear that P–c or the profit, since P–c=π can grow although r declines, if C grows more rapidly than P–c” (p. 71, note).” (p 375)
He comes close to identifying the cause of the tendency for the rate of profit to fall, here, but the lack of clarity in his formulation simply leads him into confusion and contradiction. His distinction of consumed and unconsumed capital is essentially a distinction between fixed capital and materials. He recognises that, as fixed capital increases, productivity rises, and so the quantity of materials consumed rises. So, he sees that, alongside this rise in output, arises a rise in total value and rise in profit. His definition of profit, π, is P (the value of output) – c (the value of consumed capital). So, as P rises, with the rise in output, c also rises, because more material is consumed. However, he sees P rising more than c, so that π rises.
However, he defines the rate of profit as the ratio of π to the total employed capital, i.e. including the unconsumed fixed capital. Because he sees this total employed capital rising at a faster rate than output, the result is then a fall in the rate of profit. But, as Marx points out, his argument is based on assumptions that he does not justify, and other statements that are just outright contradictions.
“First the amount of capital consumed grows but the amount of products grows even more rapidly (i.e., the excess of the value of the products over their cost-price in this case), for it grows in proportion to the capital invested and this grows more rapidly than the capital consumed. Why the fixed capital grows more rapidly than the mass of raw materials, for example, is not explained anywhere. But never mind, the amount of profit grows in proportion to the capital invested, to the total capital, but the rate of profit is nevertheless supposed to fall, because the total capital grows more rapidly than the mass of products or rather than the amount of profit.” (p 375)
In fact,as Marx describes, in Capital III, Chapter 6, although the mass of fixed capital rises absolutely, it declines relative to output (both physically and in value terms) because it results in rising social productivity, so that, at least in economies based upon the production of physical commodities, it is the quantity of materials that increases proportionally, whilst labour and fixed capital declines. Moreover, Marx argues, because fixed capital is the product of manufacturing processes, where the rise in social productivity is more pronounced, the value of the commodities that comprise this fixed capital are more likely to fall relative to the value of raw materials, whose value is also dependent on organic processes, land fertility and so on.
No comments:
Post a Comment