Tuesday, 1 October 2019

Theories of Surplus Value, Part III, Chapter 23 - Part 15

Marx points out the contradiction in Cherbuliez argument that, 

“First the amount of profit grows at a rate at least as great as that at which “the total amount of the capital invested” grows, and then the rate of profit falls, because the total amount of capital invested grows more rapidly than the amount of profit. First P-c grows “at least” proportionally to C, and then P-c/C falls, because C increases even more rapidly than P-c, which increases at least as rapidly as C. If we throw aside all this confusion, then all that remains is the tautology that P-c/C can fall again although P-c increases, that is, that the rate of profit can fall although profit increases when the rate falls. The rate of profit simply signifies the ratio of P-c to C, [and this ratio declines] when capital increases more rapidly than the amount of profit.” (p 375-6) 

This means nothing more than that the rate of profit can fall even as the mass of profit rises, if the mass of capital rises more than the rise in the mass of profit. 

“But that this phenomenon is within the bounds of possibility, and even its existence, has never been called to question. The sole point at issue was precisely to explain the cause of this phenomenon, and Cherbuliez explains the decline in the rate of profit, the decline in the amount of profit in relation to the total capital, by the relative increase in the amount of profit which is at least proportionate to the growth of the capital. He obviously surmises that the mass of living labour employed declines relatively to past labour, although it increases absolutely, and that therefore the rate of profit must decline. But he never arrives at a clear understanding.” (p 376) 

In other words, Cherbuliez effectively obtains the correct view of the tendency for the rate of profit to fall, but without actually grasping or setting out, any of the justification for arriving at that conclusion. He appears to arrive at the conclusion that the rise in fixed capital results in a rise in social productivity, which means that although more labour is employed, absolutely, less is employed relative to output, and that the mass of material rises relative to labour, but nowhere is this set out clearly, or the mechanism by which this arises explained. 

“The closer one comes to the threshold of understanding, the more distorted the statements become, unless the threshold is actually crossed and [the greater is] the illusion of having crossed it.” (p 376) 

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