The reproduction of the fixed capital comprises two different things. First the reproduction of the value of the fixed capital (value of wear and tear), and secondly, the physical replacement of the use value of this fixed capital. The difference between fixed capital and circulating capital is that the total use value of the latter is consumed in the production process, and thereby reproduced in the value of the output resulting from that process. That is not the case with the fixed capital. The part of its value not transferred to output in the production process by wear and tear remains “fixed” in it.
For example, suppose the output of a working period of 6 weeks is 10,000 kilos of yarn. In this period, 10,000 kilos of cotton is consumed as raw material. The cotton is circulating capital. The whole 10,000 kilos are consumed in production, and when the yarn is sold, the value of this cotton is then reproduced. The spinner obtains the value of the cotton, say, £1,000, which they can then use to physically replace the consumed cotton. Herein lies the other element of the reproduction process, because it assumes that the cotton grower has themselves produced the 10,000 kilos of cotton, so that the spinner can buy it from them.
In producing the 10,000 kilos of yarn, the spinner will also have used spinning machines. But, the machine is not fully consumed in this production process. For the sake of argument assume a 48 week year, and that the machine lasts for a year. In the production process of the 10,000 kilos, therefore, the machine does not give up all of its value. It gives up only 1/8 of its value. If the machine has a value of £8,000, it transfers £1,000 of value to the yarn, which the spinner gets back when they sell the yarn. But, unlike with the circulating capital, all of which must be thrown back into circulation, to replace the 10,000 kilos of cotton, the spinner can put the £1,000 into a reserve fund, which they only need to throw back into circulation at the end of the year, when they replace the machine.
For most fixed capital, therefore, the physical replacement only needs to have been accomplished over this longer time period, extending over several production cycles, even though the reproduction of the value of the fixed capital is is taking place constantly, alongside the reproduction of the value of the circulating capital, via the transfer of the value of wear and tear to the end product.
So, the producer of spinning machines only needs to produce a replacement machine by the end of the year. But, this is not always the case, as Marx demonstrated in Capital II. Instead of physically replacing the spinning machine, the spinner might piecemeal replace or repair parts of it, during the year. Marx gives the example, in Capital II, of locomotives that continually have their component parts replaced. In Only Fools and Horses, council road sweeper, Trigger, says he has had the same brush for twenty years, though he has got through several new brush heads, and handles. In Capital II, Marx also gives the example of things like canals. A canal does not usually get physically replaced by another canal. The wear and tear instead assumes the form of repairs to locks, canal walls, bridges, tunnels etc. Today, the same would apply to motorways, telecommunications networks and so on.
If we take the spinning machine, and assume it is physically replaced, in its entirety, then, because a number of such machines are bought by different spinners, at different times, we might expect that, on average, 1/8 of the total number of such machines wear out during each 6 week production cycle, so that the machine maker must have physically produced that quantity of machines, so that they can be physically replaced. In practice, as I've set out elsewhere, because producers tend to have to acquire new types of machine not long after they become available, to remain competitive, these replacement cycles can tend to become synchronised. That is marked, for example, in relation to companies buying new computers, when new, more powerful processors become available and now more advanced software becomes available to utilise their power. A countervailing factor to that, as Marx showed in the previous chapter, is where large firms, with large amounts of fixed capital, have already written down much of the value, as a result of the transfer of wear and tear over many years.
On an average, however, we could say, taking the total fixed capital of an economy, the amount of value transferred to final output in wear and tear, is equal to the amount of value that must be taken out of current production, for the year, to physically reproduce that fixed capital that has actually worn out during that period.
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