But, in fact, this greater proportional increase in the quantity of raw materials compared to the fall in its unit value, also turns out not to be true either, particularly in economies as we have now, based upon service industry rather than manufacturing industry. Marx's reason for assuming that raw material prices do not fall proportionate to the increase in their consumption is that they are subject to the vagaries and constraints of Nature, rather than just the higher productivity made possible by machine industry. Marx's argument, in that context, was consistent with his materialist method, dealing with reality as it then existed. He says,
“...some kinds of raw materials, such as wool, silk, leather, are produced by animal organic processes, while cotton, linen, etc., are produced by vegetable organic processes and capitalist production has not yet succeeded, and never will succeed in mastering these processes in the same way as it has mastered purely mechanical or inorganic chemical processes. Raw materials such as skins, etc., and other animal products become dearer partly because the insipid law of rent increases the value of these products as civilisation advances. As far as coal and metal (wood) are concerned, they become much cheaper with the advance of production; this will however become more difficult as mines are exhausted, etc.”
Those conditions ceased to apply more than a century ago. Machines and technology increasingly dominate primary production too, reducing the value of primary products as much as manufactured products. And, whilst its true that, for any mine, the costs of production rise, as it becomes exhausted, because its more difficult to extract the minerals, technology has also made it possible to extend that period considerably, as well as making it possible to mine and extract minerals from places previously inaccessible.
But, as Marx sets out in Theories of Surplus Value, Chapter 9, those are only short-term rising costs, and lead to capital engaging in exploration and development of new mines, farms and so on that are more fertile and productive, and so lower cost. Secondly, as Marx describes in Capital III, Chapter 5, firms reduce the waste in the usage of raw materials, by various means. Larger scale production, means that waste products can become utilised as bi-products, and so on. And, larger scale production, brings economies of scale in the use of energy to power, heat and light buildings. Furthermore, synthetic materials have increasingly replaced natural materials, so that those limitations imposed by Nature no longer apply.
The same technological developments mean that the new machines use less power/auxiliary material. Technological development, meant that newer steam engines could produce much more power, with any given quantity of coal, than the steam engines they replaced, as a result of better engineered boilers, the use of multiple condensers and so on, and, as described above, petrol driven tractors were more efficient, cheaper to produce, and used less auxiliary material than steam driven tractors. As I have set out previously, the same applies, nowadays, with the use of oil. Oil consumption from the 1980's up to the early 2000's, increased by only a sixth of the increase in global GDP, during that time, as a result of technological developments improving the efficiency of engines, boilers and so on, as well as other means of reducing energy consumption.
In terms of raw materials themselves, technological development ensured that new synthetic materials like nylon, polyester, and so on replaced natural fibres, in the same way that new alloys, and new materials like carbon fibre replaced iron, steel and so on, and materials science ensured that not only were these new materials relatively cheaper than the natural materials they replaced, i.e. they were more durable and so on, but, frequently, were absolutely cheaper too, as with transistors replacing valves, and then microchips replacing transistors and so on, or fibre optic cable replacing copper cable. Its not the case that nylon stockings are more durable, and so relatively cheaper than silk stockings, but that it is much cheaper to produce nylon stockings than silk stockings. And, in economies in which 80% of new value is accounted for by service industry, rather than manufacturing industry, the argument about the quantity of raw material consumed being greater than the fall in its unit value, is no longer relevant anyway.
But, even in Marx's time, when those limitations of Nature in reducing the value of organic products applied, he makes clear that its effect was not enough to prevent the overall reduction in the value of the costs of production, and so prevent a fall in the rate of profit.
“The cheapening of raw materials, and of auxiliary materials; etc., checks but does not cancel the growth in the value of this part of capital. It checks it to the degree that it brings about a fall in profit.”
(ibid)
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