Friday, 29 November 2019

Theories of Surplus Value, Part III, Chapter 24 - Part 39

If we return to the spinner, and the spinning machine, in six weeks, the machine has transferred ⅛ of its value to the 10,000 kilos of yarn produced. When the yarn is sold, the spinner gets back this £1,000 of value of wear and tear. But, the turnover period of the spinner's circulating capital is not confined to this production period. It may take a further 6 weeks for the yarn to be sent to market, sold, and for the replacement cotton to be ready to spin. The spinner's advanced circulating capital is then, not just what they must advance for the 6 weeks of production, but for this 12 week period, because they must produce continuously. 

But, suppose the circulation period is extended, so as to be not 6 weeks, but say 18 weeks. Now, the total turnover time is 24 weeks. Now imagine the fixed capital has a lifespan not of a year but of 12 weeks. In each production cycle of 6 weeks, the fixed capital gives up half its value in wear and tear. However, at the point it must be physically replaced, the spinner has not yet sold the yarn, and so has not received back the value of wear and tear required to reproduce the machine. The machine maker may have produced the machine so that it is available, but the spinner must now, themselves advance additional capital to buy it. 

The other part of this argument involves the question of how a machine/fixed capital can be introduced where none currently is employed (extensive accumulation), or how a new type of machine can be introduced to replace an existing type of machine (intensive accumulation). Associated with this is then the question of what leads to the capitalist undertaking such accumulation. 

On the first point, Marx notes, 

“The reproduction of the auxiliary capital takes place if the productivity is so great, in other words, if the increased amount of output produced during the working-day of the same length is such that a unit of a particular commodity is cheaper than a unit produced by the former method... “ (p 437) 

In other words, this comes down to the total labour-time expended. If 100 workers work 10 hours each producing 1,000 units of commodity A, each unit has a value of 1 hour of labour-time. If 20 workers work 10 hours each producing a machine, which is used by 30 workers, who are thereby enabled to produce the 1,000 units of commodity A, it now has a value of only 0.5 hours of labour-time, per unit (assuming the machine has to be replaced every 1,000 units of output.) 

Provided a surplus product existed that enabled the 20 workers to be employed by a machine builder, which is a requirement for all accumulation, then the producer of commodity A, once the machine is available, simply advances capital for the machine that otherwise they would have advanced as variable-capital. If 1 hour of labour-time is equal to £1, they would previously have advanced £1,000 as variable-capital (ignoring surplus value). Now, they advance £200 of capital, as fixed capital, and only £300 as variable-capital. The 1,000 units of commodity A have a value of £500, which now reproduces the value of the machine and the variable-capital. In the process, £500 of variable-capital has been released along with 50 workers, and this freed capital could be used to employ these workers in the production of some new commodity. As Marx points out, elsewhere, the fact that it could does not mean that it will be so, immediately. 

The other aspect here is in relation to the introduction of such a machine by one particular producer. The firm producing commodity A that introduces the machine reduced the individual value of its output to £0.50 per unit. However, it will continue to sell its output at the market value of £1 per unit, and will thereby make a surplus profit of £0.50 per unit, unless its own output is so large that it dominates production, and thereby determines the market value itself. 

Marx notes, 

An increase in the product could take place without fulfilling this condition. If, for example, the numbers of pounds of twist were to increase tenfold (instead of a hundredfold, etc.) and if the value of the wear and tear of the machinery which has to be added to the price were to drop from one-sixth to one-tenth, then the twist spun by machinery would be dearer than that produced by spindle. If an additional £100 of capital in the form of guano were used in agriculture and if this guano had to be replaced in a year, and if the value of a quarter (produced by the old method) were £2, then 50 additional quarters would have to be produced merely to replace the depreciation. And without this the guano could not be used (profit is here disregarded).” (p 437-8) 

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