Sunday, 8 September 2019

Theories of Surplus Value, Part III, Chapter 22 - Part 20

These kinds of fluctuations are common for agricultural products where harvests are affected by the seasons. In this case, Marx says, those years where there are good harvests produce released capital that can be utilised in years where there are poor harvests, as with the seven lean years and seven years of plenty, referred to in the Bible. 

Marx is still dealing here only with the effect on the rate of profit resulting from a rise or fall in the value of the commodities that comprise the constant capital. In the same way that a fall in the value of elements of constant capital results in a release of capital, the illusion of an increase in the mass of profit, but a real rise in the rate of profit, so a rise in the value of elements of constant capital has the opposite effect. A rise in the value of the commodities comprising constant capital means that either the scale of production must be curtailed or additional capital must be employed, or a part of the profit that would have been apportioned to revenue now has to be allocated as capital. The effect, therefore, is both to tie-up capital, and to cause a fall in the rate of profit. 

Once again, Marx makes clear, here, that he views capital primarily in these physical terms, rather than in value terms – that has to be the case, because for Marx capital is a social relation between the means of production monopolised by capitalists, and wage labour – and that, because it is the physical components of capital that must be replaced, on a like for like basis, the rate of profit must be calculated on the basis of the value of the capital, i.e. its current reproduction cost, and not the historic price paid for it. If the technical composition of capital remains constant, then the quantity of labour set in motion depends on the quantity of constant capital employed. The importance of that is that the quantity of surplus value produced, if the rate of surplus value remains the same, depends on the quantity of labour simultaneously employed. 

If the value of cotton falls, then capital is released, and this released capital can then be used to buy more cotton. If more cotton is to be spun, more labour is required. So, although the total capital value remains constant, the physical quantity of capital employed increases, and because the quantity of labour employed rises, the mass of surplus value also rises. So, then both the mass and the rate of profit rises, as a result of the fall in the value of cotton. 

Accumulation has taken place in the one case although the value of the capital advanced has remained the same (but its material elements have been increased). The rate of creating surplus-value increases, and the absolute magnitude of profit increases, because the effect is the same as if additional capital had been advanced on the old scale.” (p 345) 

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