Saturday, 5 October 2019

Theories of Surplus Value, Part III, Chapter 23 - Part 19

The reality of social reproduction is that there are always surplus products being created, and these surplus products are the basis of accumulation, and reproduction on an expanded scale. Even where a producer does not use their own surplus product to expand their production, by accumulation in kind, for example, a farmer who sows more seed, a surplus product, in the hands of one producer, is exchanged for the surplus product in the hands of some other producer/s, so as to accumulate the means of production and consumption they require, so as to expand their production. 

So, a machine producer exchanges their surplus product with a wood producer, for example. The wood producer supplies the machine maker with additional wood to that they normally supply, and this additional supply of wood comes from their own surplus product. The machine maker now has additional wood so as to be able to expand their production of machines, and the wood producer has additional machines so as to be able to cut down and process more trees, so as to increase their production of wood. The machine maker does the same thing with the producers of iron etc. But, they also do this with the producers of food and other wage goods, and, by this means they are able to employ more workers so as to process the additional wood, steel, and so on into additional machines. 

Marx, however, also examines the situation where no actual physical surplus product, in the form currently required exists. So, no direct exchange of capital with capital takes place. He demonstrates that this does not fundamentally change anything. He takes a machine producer who has £1,000 of profit they wish to accumulate. So, they must buy additional wood, iron etc., and they must employ additional labour. To employ the additional labour requires £200 to be spent on wages, leaving £800 to be spent on means of production. It doesn't matter whether the additional £200 of wages employs additional workers or simply pays additional wages to the existing workers, who work additional hours. The additional wages, either way, end up in the hands of workers, for them to spend on wage goods. 

If we take the additional wood and iron required, we might assume that the £800 is divide equally, buying £400 of each. But, the producers of wood and iron, in selling these commodities, do so at a price that includes their own profit. If the profit, in each case, represents 25%, or £100, then its already clear that, out of this £800, £200 has not gone to wages, as part of the accumulation, but goes straight into the pocket of those capitalists, as profit. But, of the remaining £600, in the hands of the wood and iron producing capitalists, its clear that not all of this can go to wages either. They both have to acquire additional tools for their own additional workers to use. Even if they employ their existing workers and tools for longer, these tools will wear out more quickly, and so need to be replaced. They will require additional auxiliary materials, for example to provide energy for machines and so on. 

So, its clear that of this £1,000 of accumulation, it does not by any means all comprise additional expenditure on wages. £200 may go on additional wages by the machine maker. A further £200 may go in additional wages to the workers employed by the wood producer and iron producer, whilst £200 would go into the pockets of those capitalists as additional profits. The remaining £400 goes to buy additional tools and means of production, required by the wood and iron producers, either immediately, or to cover the more rapid wear and tear of their existing means of production. The suppliers of these tools etc. would indeed have to pay additional wages out of the £400 that comes their way, but, again, this £400 might divide £100 wages, £100 profit, £200 additional means of production they require themselves. 

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