Marx looks at how this breaks down further. He looks first at raw materials. For Marx, raw materials are not just primary products, but anything that is used as material, or components, to be processed at some later stage. For example, cloth is raw material for the tailor.
“Their constant capital consists in the first place of fixed capital, machinery, instruments of labour and buildings, and perhaps auxiliary materials, which are means of consumption for the machinery employed.” (p 245)
In other words, raw materials are the subject of the machines activity; they are what it processes in the same way that a labourer processes materials. The auxiliary materials, such as coal to fuel it, oil to lubricate it, are merely the equivalent, for the machine, of the food and drink the labourer must consume in order to reproduce their labour-power. They are independent of the labour process itself.
Some of the raw materials enter directly into the production process of Department II. Cattle are milked, or slaughtered for meat, grain is processed into flour, grapes into wine. So, all of this directly constitutes that part of Department I output exchanged with Department II for consumption goods. It constitutes a part of Department I revenues that cannot be consumed in Department I use values, and must be converted into consumption goods. The farmer sells milk, and gets back other dairy products, or products containing milk, or they sell cattle, and get back beef sirloin from the butcher.
“This part of the constant capital contained in them enters into the two-thirds of the constant part of A, which is exchanged as capital against the unconsumable products of B or in which B consumes his revenue. This holds good too in general for such raw materials that cannot be immediately consumed as far as they enter in kind into the consumable product itself, however many intermediate stages they may pass through in the processes of production. The part of flax that is transformed into yarn and later into linen enters in its entirety into the consumable product.” (p 245)
In other words, all of these constitute that part of Department I production equal to its revenues, and which form the “intermediate production” component of GDP. It represents the value added by Department I labour, not the value of any constant capital itself. Another part of these raw materials, however, are never exchanged with Department II. A portion of cattle is used as breeding stock to produce replacement livestock; a portion of grain reproduces seed; a portion of coal – which could be used for heating as well as baking bread – is used to produce coal, steel, and so on.
“... a part of these vegetative raw materials, such as timber, flax, hemp, leather and so on, partly enters directly into the components of the fixed capital itself, and partly into the auxiliary materials for the fixed capital. For example, in the form of oil, tallow, etc.
Secondly, however, seed [belongs to the constant capital expended for the production of raw materials]. Vegetative materials and animals reproduce themselves. Vegetation and generation. By seed we mean actual seed, and in addition fodder which reverts to the land as dung, pedigree cattle, etc. This large part of the annual product—or of the constant part of the annual product—itself serves directly as material for regeneration, it reproduces itself.” (p 245-6)
With vegetative raw materials, they always require, seed, or its equivalent, as part of the production process, which must then be reproduced. But, that is not the case with minerals. They are not the product of such a process. Coal can only be said to have “grown” in the sense that it is the product of vegetation that died and has been compressed over millions of years. It is the carbon locked up in vegetation. Producing coal does not require the use of raw material, in the way that agricultural products require seed, breeding stock etc. It requires only fixed capital, and auxiliary materials consumed by that fixed capital.
“Their value consists of only two parts, since here there is no seed—which represents the raw materials of agriculture. Their value consists only of added labour and machinery consumed (including the means of consumption for the machinery). In addition therefore to the part of the product which represents newly-added labour and is hence included in the exchange of B for the two-thirds of A, there is nothing to be replaced but the wear and tear of the fixed capital and its means of consumption (such as coal, oil, etc.). But these raw materials form the principal component part of the constant capital, of the fixed capital (machinery and instruments of labour, buildings, etc.). They therefore replace their constant capital in kind by the exchange [of capital against capital].” (p 246)
In other words, this all forms a part of the total output of Department I that never exchanges with Department II, and has no revenue equivalent. It enters into the total value of output, but not GDP, not the consumable fund. It replaces itself in kind, just as it transfers its value to final output, and reproduces that value from final output, without ever forming a part of revenues.
“If beasts of burden are included among machines, what has to be replaced in their case is fodder and in certain conditions stabling (buildings). But if fodder enters into the production of cattle, so do cattle into the production of fodder.” (p 246-7)
Finally, there is auxiliary materials. Some require raw materials for their production.
“On the other hand, in the form of fertilisers, etc., they in turn enter in part into the production of these raw materials. Coal is required for making gas, but gas lighting is used in producing coal, etc. Other auxiliary materials consist only of labour added and fixed capital (machinery, containers, etc.). Coal must replace the wear and tear of the steam-engine used to produce it. But the steam-engine consumes coal. Coal itself enters into the means of production of coal. Thus it replaces itself in kind. Transport by rail enters into the production costs of coal, but coal in turn enters into the production costs of the locomotive.” (p 247)
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