Friday, 14 February 2020

Theories of Surplus Value, Part III, Addenda - Part 66

The use value of capital is the ability to produce this 20% average rate of profit (or whatever the average rate is at the time). This use value, like the use value of land, is not produced by labour, and so has no value. Yet, like land, the entrepreneur who wishes to produce capitalistically must have possession of it. So, as with the capitalist who pays rent to temporarily possess the use value of land, so the entrepreneur pays interest to possess, temporarily, the use value of capital. 

The owner of interest-bearing capital, thereby, as with the owner of rent-bearing capital, appropriates value from the industrial capitalist, whilst giving nothing of value in exchange. The owner of interest-bearing capital, and rent-bearing capital exploit the industrial capitalists in the same way that the industrial capitalists exploit wage labour. 

“This irrationality of expression (the irrationality of the thing itself arises from the fact that, as regards interest, capital as the prerequisite appears divorced from its own process, in which it becomes capital and consequently self-expanding value, and that, on the other hand, rent-bearing capital exists only as agricultural capital, as capital which only yields rent in a particular sphere, and this form in which it appears is transmitted to the element that differentiates it in general from industrial capital), this irrationality of expression is so much felt by the vulgarian that he falsifies both expressions in order to make them appear rational. He asserts that interest is paid on capital insofar as it is use-value, and therefore talks about the utility which the products or means of production have for reproduction and of the utility which capital has as a material element of the labour process.” (p 520-1) 

But, its not the use values of the elements of capital, i.e. the use value of buildings, machines, materials etc., that is the basis of profits, or, thereby, interest, but the use value of capital itself, i.e. of capital as a social relation, of self-expanding value, its potential to produce average profit

But, after all, its utility, its use-value, already exists in its form as a commodity and without this it would not be a commodity and would have no value. As money, it is the expression of the value of commodities and is convertible into them in proportion to their own value. But if I convert money into a machine, into cotton, etc., then I convert it into use-values of the same value. The conversion is concerned only with the value form. As money, it has the use-value of being convertible into any other commodity, a commodity, however, of the same value. As a result of this transformation, the value of money changes no more than that of the commodity when it is converted into money. The use-value of the commodities into which I can convert money does not give the money, in addition to its value, a price which is different from its value.” (p 521) 

Economics students are often taught to classify commodities on the basis of whether they are for productive use or not. An electric drill may be used merely as an item of consumption, for home DIY, or may be used by a firm productively to construct cabinets, or in house building. But, this definition omits the social relations in which this drill is used. That the drill is used by a company does not at all make it capital. It makes it only means of production, rather than an article of consumption. In a communist society, drills will also be used to produce cabinets and build houses, but they will not constitute capital. They will only constitute means of production. A peasant producer may use a drill to produce cabinets, which they exchange in the market, for other commodities they require for their own personal consumption, but the drill is not thereby capital, only means of production. 

What makes the drill capital is not that it is used productively, but the social conditions in which it is used, social conditions that enable the owner of the drill to appropriate surplus value, either directly from the employment of wage labour, or indirectly by being able to appropriate the average rate of profit. That social relation requires that workers do not own the means of production, required by them to work, which in turn they must do in order to live. It means they can only work, and thereby live, with the permission of the owners of means of production, who form a tiny minority of society as a whole, and who form a separate social class based upon their ownership of this specific form of property – capital. It is that relation which means the owners of capital can demand, as the price of being allowed to work, that the labourers provide them with free labour in addition to paid labour. It is this unpaid labour that is the source of the surplus value, and means by which the value set in motion by the capitalist expands. It is what ensures that the products of the workers' own labour perpetually confront them as alien property, as capital, and do so on an expanding scale. 

“The productive usefulness of a commodity can therefore account for the fact that the commodity has exchange-value at all, for the labour embodied in the commodity is paid for only if it has use-value. Otherwise it is not a commodity—it is a commodity only as the unity of use-value and exchange-value. But this use-value can by no means account for the fact that as exchange-value or as price, it has in addition another and different price as well.” (p 521) 

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