In Capital III, Chapters 3, 5, 6 and 7, Marx examines the effects of these changes in the values of different components of capital. He undertakes a further investigation in Theories of Surplus Value, Chapter 12 and after. As Marx says,
“It is an incontrovertible fact that, as capitalist production develops, the portion of capital invested in machinery and raw materials grows, and the portion laid out in wages declines. This is the only question with which both Ramsay and Cherbuliez are concerned. For us, however, the main thing is: does this fact explain the decline in the rate of profit? (A decline, incidentally, which is far smaller than it is said to be.) Here it is not simply a question of the quantitative ratio but of the value ratio.”
(Theories of Surplus Value, Chapter 23)
It is obviously the case that a large factory costs more to build than a small workshop, and that a large, complex machine costs more than a simple machine, or a hand tool. But, there are other factors that have to be considered. Firstly, even in terms of this absolute cost, is it necessarily the case that the former is more costly than the latter? If construction costs fall dramatically, it will still be the case that a large factory will cost more than a small workshop, but its conceivable that the current cost of building the factory will be less than the former cost of building a workshop. The same with machines. Increases in productivity, mean that the materials used in making the machine, as well as the labour required to make the machine become much cheaper, so a more complex machine that comes into production might be cheaper than the older machines it replaces. But, also, a change in technology itself may simply mean that the new machine is more effective than the machines it replaces, without any increase in the materials used in its production, or the labour required for its production.
For example, when Watt and Boulton made improvements to their steam engine, it was by better technology and engineering. They were able to engineer better boilers that would withstand greater pressures of steam, and they introduced multiple condensors that used the steam produced more effectively. This required essentially no additional materials for production, nor additional labour for construction (in fact rises in productivity reduced the value of both), but resulted in the new steam engines producing multiple amounts of power compared to the machines they replaced, as well as using less coal as fuel. The diesel engine tractor is much smaller than the earlier steam driven tractors; it uses fewer and cheaper materials to produce, and much less fuel to operate it.
Or take a more recent example, a modern personal computer, even one produced around 2000, has more processing power than a 1970's mainframe computer. Yet, the mainframe computer had a value of around £2 million, whereas the PC has a value of only around £500. So, even where new, bigger or more complex elements of fixed capital are introduced that replace previous versions, it is not at all necessary that, even in absolute terms, they are more costly. As Marx says,
“If one worker can spin as much cotton as 100 [workers spun previously], then the supply of raw material must be increased a hundredfold, and this is moreover brought about only by the spinning-machine which enables one worker to control 100 spindles. But if simultaneously, one worker produces as much cotton as 100 workers did previously and one worker produces a spinning-machine whereas previously he produced only a spindle, then the ratio of value remains the same, that is, the labour expended in the spinning, [in the production of] the cotton and the spinning-machine remains the same as that expended previously in spinning, the cotton and the spindle.”
(Theories of Surplus Value, Chapter 23)
Or to put this in the modern context described above, if one worker using a PC can produce the same quantity of output that ten workers using a mainframe computer previously produced, then the amount of new value, and surplus value produced is reduced by 90%, all else being equal. That would mean that the rate of profit would be expected to fall. However, if the cost of the PC is only 1/4000 that of the mainframe computer, that would mean the rate of profit would rise. So, if we assume that a mainframe costs £1 million, and each worker produces £0.1 million of surplus value, being paid £0.1 million in wages, the original mass and rate of profit is £1 million, and 50%. With a PC, it is £0.1 million and 99%. What is more, given the price of the PC, and the consequent reduction in the value of output, it creates additional demand for such output. Personal computers become used in places, and to undertake functions, that a mainframe computer would have been far too expensive to justify. So, in place of the 10 workers employed by the mainframe computer, 4000 workers can instead be employed operating 4000 personal computers, and that means that, instead of producing £0.1 million of surplus value, they produce £400 million of surplus value, or 400 times the profit produced using the mainframe computer.
In fact, this fall in the value of fixed capital, in absolute terms, is inevitable because of the normal tendency of capital to increase social productivity.
“There can be no doubt that machinery becomes cheaper, and this for two reasons: [1] The application of machinery to the production of raw materials from which the machinery is made. [2] The application of machinery in the transformation of these materials into machinery.”
(ibid)
But, the machine, as with all other forms of fixed capital, becomes cheaper for another reason, which is that a large part of the cost of new types of fixed capital is the labour required for their development, for example, of the architect and designer who must come up with the initial plans. But, once constructed, the same plans can be used over and over again for similar factories, machines and so on. Moreover, initial problems can be ironed out in the initial production, and means of producing faster utilised in later production. Production of factories and machines on a larger scale, itself enables further economies of scale to be obtained.
“The astonishing expedition with which a great cotton factory, comprehending spinning and weaving, can be erected in Lancashire, arises from the vast collection of patterns of every variety from those of gigantic steam engines, water wheels, iron girders and joists, down to the smallest member of a throstle or loom in possession of the engineers, mill-wrights, and machine makers. In the course of last year Mr. Fairbairn equipped water wheels equivalent to 700 horses power and steam engines to 400 horses power from his engineer factory alone, independent of his mill-wright and steam-boiler establishment. Hence, whenever capital comes forward to take advantage of improved demand for goods, the means of fructifying it are provided with such rapidity, that it may realise its own amount in profit, ere an analagous factory could be set a-going in France, Belgium or Germany” (Andrew Ure, [Philosophy of Manufactures, London, 1835, p. 39,] Philosophie des Manufactures etc., tome I, Paris, 1836, pp. 61-62).”
(Theories of Surplus Value, Chapter 23)
Replace the contents, here, with design of materials, microchips, software and so on in a smart phone, tablet, or similar aspects of the production of a new drug, and the modern equivalent can be ascertained.
The value of the individual machine falls, even in absolute terms, as a consequence of rising social productivity, and technological development, or moral depreciation, as Marx describes it, but the total mass of fixed capital rises, because the individual machine is only part of a much larger system of machinery, which also replaces labour, and reduces the value of labour-power.
“... what becomes cheaper is the individual machine and its component parts, but a system of machinery develops; the tool is not simply replaced by a single machine, but by a whole system, and the tools which perhaps played the major part previously, the needle for example (in the case of a stocking-loom or a similar machine), are now assembled in thousands. Each individual machine confronting the worker is in itself a colossal assembly of instruments which he formerly used singly, e.g. 1,800 spindles instead of one. But in addition, the machine contains elements which the old instrument did not have. Despite the cheapening of individual elements, the price of the whole aggregate increases enormously and the [increase in] productivity consists in the continuous expansion of the machinery.”
(ibid)
The 4000 personal computers require offices in which to be located, for example. For other types of machines, involved in the production of material goods, the rise in productivity is also reflected in a huge rise in the quantity of the material processed, so that, even if the unit value of this material falls, the total value of it rises, relative to wages. For the 4,000 personal computer operators, in so far as this is new employment, created as a result of an expansion of the market, caused by a reduction in output costs, it does not represent any actual reduction in employment. However, these 4000 workers now produce the output and value, which previously 40,000 workers would have been required to produce, had they had to use a mainframe computer, which thereby represents a corresponding fall in the value of variable capital relative to output, and to the constant capital.
As Marx puts it,
“If it be said that 100 millions of people would be required in England to spin with the old spinning-wheel the cotton that is now spun with mules by 500,000 people, this does not mean that the mules took the place of those millions who never existed. It means only this, that many millions of workpeople would be required to replace the spinning machinery. If, on the other hand, we say, that in England the power-loom threw 800,000 weavers on the streets, we do not refer to existing machinery, that would have to be replaced by a definite number of workpeople, but to a number of weavers in existence who were actually replaced or displaced by the looms.”
(Capital I, Chapter 15)
In other words, its not that this employment of fixed capital, and consequent rise in productivity, results in an absolute reduction in employment, quite the contrary, but that it creates a relative reduction in employment compared to the increase in output. The reduction in costs makes possible an expansion of the market, and creation of whole new markets, for new types of production of goods and services, which leads to an expansion of employment, but an expansion that is not as great as the expansion of output. In economies based upon the production of manufactured goods, this is also manifest in a reduction in the proportion of output that must go to reproduce that labour-power, compared to the proportion that must go to replace the consumed raw material/constant capital. That is the basis of Marx's analysis of a rising organic composition of capital, and his Law of the Tendency for the Rate of Profit to Fall that flows from it.
No comments:
Post a Comment