Saturday, 4 January 2020

Theories of Surplus Value, Part III, Addenda - Part 25

Marx then explores, as in Capital III, how its is that the loanable money-capital, which exists outside the production process, and so outside the circuit of capital, becomes separated, and produces interest, whereas the industrial capital produces profit

Its necessary to read what Marx says next carefully, because it could be misunderstood. In Capital III, in setting out that it is productive-capital which produces profit, and that the rate of profit is to be calculated on the basis of the self-expansion in the value of this productive-capital, Marx emphasises that the only rational basis on which this calculation can be made is on the basis of monetary values. It is not possible to view things, as, for example, the Physiocrats did, that a quantity of use values go into one end and a greater quantity of use values come out of the other, because, in terms of industrial capitalism, the actual use values that go into one end of the production process are not at all the same use values that come out of the other. 

A rational calculation can only be undertaken on the basis of the value of the inputs compared to the value of the outputs. In a communist society, this could be done directly, on the basis of the measurement of actual values, i.e. the labour-time required for the reproduction of those inputs compared to the labour-time represented by the output. But, in a commodity producing economy, value is measured indirectly, as exchange-value, and, in money economies, therefore, by money prices. The calculation of the rate of profit, then, can only be rationally calculated on the basis of the money equivalent of the value of inputs compared to the money equivalent of the value of output. 

This is quite different from calculating the rate of profit on the basis of historic prices paid for the inputs compared to the current prices received for the outputs. That is so not only because of potential changes in the value of money, in the intervening period, i.e. inflation or deflation, but precisely because changes in social productivity means that the value of the inputs themselves will have changed compared to their historic price. Where social productivity has risen (which always tends to be the case), the value of inputs will have fallen compared to their historic price, and so the rate of profit will be a higher than a measurement based on historic prices would suggest. The more rapid social productivity rises, for example, as happened in the later 1980's and onwards, due to the role of the microchip, Internet and so on, the more the value of inputs is reduced, compared to the historic price, and for large stocks of fixed capital, there is large-scale moral depreciation, causing the rate of profit to rise sharply, as much less current labour-time, a much smaller proportion of current output is required to reproduce it. 

In Capital II, therefore, Marx make clear that the money prices he puts on the inputs and outputs, in calculating the rate of profit/self-expansion of capital should not be taken as meaning actual prices paid and received, but only money equivalents of the actual values/current reproduction costs of the elements of the productive-capital, and of the output. 

“In calculating the aggregate turnover of the advanced productive capital we therefore fix all its elements in the money-form, so that the return to that form concludes the turnover. We assume that value is always advanced in money, even in the continuous process of production, where this money-form of value is only that of money of account. Thus we can compute the average.” 

(Capital II, p 187) 

Marx repeats that analysis here. 

“Money (as an expression of the value of commodities in general) in the [production] process appropriates surplus-value, no matter what name it bears or whatever parts it is split into, because it is already presupposed as capital before the production process. It maintains, produces and reproduces itself as capital in the process [of production] and moreover on a continually expanding scale. Once the capitalist mode of production is given and work is undertaken on this basis and within the social relations which correspond to it, that is, when it is not a question of the process of formation of capital, then even before the [production] process begins money as such is capital by its very nature, which, however, is only realised in the process and indeed only becomes a reality in the process itself. If it did not enter into the process as capital it would not emerge from it as capital, that is, as profit-yielding money, as self-expanding value, as value which produces surplus-value.” (p 475) 

In other words, money, because it is able to buy the commodities that comprise the industrial capital, and as the unit of account representing those commodities' value, as they enter into the production process, always has the potential to act as capital. Money is always potentially money-capital. Money, of course, does not have to be used as money-capital. The money I spend to buy my dinner does not act as capital. It acts only as money, as currency. But, money always has the potential to act as money-capital, which is why, whenever it is not used simply as currency or means of payment, whenever, instead, it is loaned out, it acts as capital. The lender always expects the return of a larger sum of money. It does not matter whether the lender lends the money to a capitalist, who uses it productively, to produce profit, or to a spendthrift who uses it wastefully; what the lender lends is the potential for this money to act as capital, and they expect to get a return on their loan for that reason. 

Yet, the fact remains that, although the lender will always see the money they lend as capital, as magically returning to them a greater sum of value, in the form of interest, it is only when this money is actually used as capital, productively, having been metamorphosed into industrial capital, that it does actually result in a self-expansion of value. 

“Money and commodities as such are therefore latent capital, potential capital; this applies to all commodities insofar as they are convertible into money, and to money insofar as it is convertible into those commodities which constitute the elements of the capitalist process of production. Thus money—as the pure expression of the value of commodities and of the conditions of labour—is itself as capital antecedent to capitalist production.” (p 475) 

What determines that this money or commodities acts as capital, rather than simply money or commodities, is the social relation. It is only because variable-capital, i.e. wage goods, or rather their money equivalent as wages, in the hands of capital, confronts wage-labour, itself sold as a commodity, that this variable-capital can command a greater quantity of labour than it itself represents, and thereby to produce and appropriate a surplus value, thereby expanding the capital value. 

“The fact that living labour is confronted by past labour, activity is confronted by the product, man is confronted by things, labour is confronted by its own materialised conditions as alien, independent, self-contained subjects, personifications, in short, as someone else’s property and, in this form, as “employers” and “commanders” of labour itself, which they appropriate instead of being appropriated by it.” (p 475-6) 

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