Productivity
Summary
Bourgeois economics defines productivity in terms of added value, whereas Marx defines it in terms of additional use values.
Bourgeois economics says all factors of production contribute to new value, whereas Marx says only labour creates new value.
Marx says, Labour is not the only source of use values. Nature produces use values too.
Whatever produces use values can be more or less productive/fertile, and this is the basis of Marx's theory of Differential Rent I, in respect of land, and Differential Rent II, in respect of capital.
Higher productivity (a greater quantity of use values), with no increase in new value, means lower unit values of output, which is central to understanding the role of The Law of Value through history in determining the evolution of social organisms, and so of Marx and Engels' theory of historical materialism.
Producers with higher productivity (because of more fertile land, better machines etc.) have lower individual value of output, but sell at the higher market value, and so obtain surplus profits, which is the basis of differential rent.
The rise in productivity, if it is not equal across all production, means that the new value created by labour falls as a proportion of total output value, and so the proportion accounted for by raw materials rises. This is the basis of Marx's Law of the Tendency for the Rate of Profit to Fall.
Bourgeois economics, if applied logically, in conditions of perfect competition, means that profit should not exist, as each factor should be paid only what it contributes to the creation of value. Land has no value, and a machine is only a machine, whose value is transferred to output via wear and tear. The labour of a functioning capitalist/entrepreneur is, now, undertaken by salaried professional managers, mostly drawn from the working-class.
Marx explains that profit does exist, because it is only labour that creates new value, whereas the owners/controllers of land and capital only allow workers to work and create new value, if they hand over gratis, an amount of surplus labour/profit, in excess of the necessary labour required to reproduce the workers' labour-power. The higher the level of productivity, the greater the amount of this surplus labour/relative surplus value.
When labour becomes relatively scarce, and wages rise, surplus labour is squeezed, capital responds by technological innovation, raising productivity that creates a relative surplus population, which causes wages to fall, and surplus value to rise.
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