The difference between a release of capital from a cheapening of constant capital, as opposed to a release of capital from a cheapening of wage goods can be seen here. Where constant capital is cheapened, it results in a rise in the rate of profit. It can only result in a rise in the mass of surplus value if the released capital is accumulated, so that more labour is employed. A cheapening of wage goods, however, raises the rate of profit, because less capital value is laid-out, i.e. if v falls, then (c + v) falls, and so, even if s remains constant, s/(c + v) rises. But, it also directly increases the mass of surplus value, because it raises the rate of surplus value, i.e. if v falls, s rises, and so s/v rises. In addition, by releasing variable-capital, it can also raise the mass of surplus value, where this released capital is accumulated so that more labour is employed. The opposite occurs where the value of wage goods rises, and capital is tied up, with more variable-capital having to be laid out.
“The amount of labour remains the same, but a smaller part of it is surplus labour, and this smaller part corresponds to a larger capital. This takes place when the scale of production remains the same, while the value of the total capital increases. If the value of the total capital does not increase, the scale of production must be reduced. The amount of labour declines and a smaller portion of this reduced amount constitutes surplus labour, which, too, bears a smaller proportion to the total capital advanced.” (p 386)
Marx examines further the relations between the technical, value and organic compositions of capital. As stated previously, he defines the organic composition of capital as being determined by the technical rather than value composition. Where the technical composition remains the same, the organic composition can vary as a result of a different value composition. For example, the technical composition may be the same in the steel producing industry as in the copper producing industry. However, iron ore is cheaper than copper ore. In both industries, say 1,000 tons of ore is processed by 100 workers, working for 10 hours, so that the technical composition is 1:1. Say wages amount to £1,000, and iron ore is £10 per ton, and copper ore £50 per ton. In steel production, the organic composition would be 10:1, but in copper production it would be 50:1.
Marx then asks if the organic composition can vary when the value composition remains the same. He shows that it can. His example involves two capitals A and B. A employs 5 workers who are more skilled, whereas B employs 25 less skilled workers. The wages of both sets of workers is £100. On the basis of the same rate of surplus value, the surplus value produced by the workers in A is the same as that produced in B. A's workers process 100 kilos of material, with a value of £500 whilst B's workers process 1,000 kilos of material also with a value of £500.
“The value ratio is the same: The value of constant capital in A is the same as in B, and proportionately A lays out the same amount of capital in, wages as B. But the quantity of his products will be smaller. Although he employs the same absolute quantity of labour as B, he uses more relatively, because his constant capital is dearer. He processes less raw material, etc., in the same time, but this smaller quantity costs him as much as the larger quantity processed by B. The value ratio in this case is the same, the organic composition is different. In the other case the value ratio being assumed to be the same, this can occur only if the amounts of the surplus labour are different or if the value of the different kinds of labour are different.” (p 387)
The other case cited by Marx, where the amount of surplus value differs, involves situations, such as in agriculture, compared to industry, where less surplus labour is undertaken. In agriculture, at least at the time Marx was writing, night work is not possible.
“... although the individual agricultural labourer can be over-worked, nevertheless the total amount of labour which can be expended on a given area of land is limited by the object being produced (corn), whereas in a factory of a given size the amount produced depends on the hours of labour worked—that is to say, it is due to the different kinds of production that more surplus labour can be employed in one sphere at a given level of production than in another then, even if the value ratio of constant and variable capital is the same, the amount of labour employed in proportion to the total capital will nevertheless be different.” (p 387)
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