Even within the laws of capital, however, it can be seen how, if workers exercised control over their collective property/socialised capital, this would be modified. Marx and Engels explain, in Capital III, Chapter 15, that the private industrial capitalists only introduce machines where the cost of the machine is less than the wages they save from its introduction. If the new value created by labour is, say, equal to £100, but resolves into £20 wages and £80 profit, the machine must cost less than £20.
Marx and Engels note that, in the worker cooperatives, this is not the case. For the worker, the criterion for introducing a new machine/technology is only that its value is less than the labour-time it saves. If an hour's labour is equal to £10, so that the £100 of new value, above, is equal to 10 hours of labour, a machine can be introduced if its value is less than £100. This is the difference between the private cost of production, and social cost of production, which is the basis of profit. The social cost of production of the commodity is £100/10 hours labour, but its private cost of production for the capitalist is only what he pays in wages, i.e. £20/2 hours labour.
For society, anything that reduces the social cost of production is an advantage, but it does not appear that way to the private capitalist. So, rather than waiting until a crisis of overproduction of capital arises, before engaging in innovation, a cooperative commonwealth would, from the start, have an incentive to be continually innovating, so as to reduce the burden of labour, raise productivity, and, thereby, increase real social wealth. Marx points out that that was seen in the Lancashire textile cooperatives, and Connolly noted the same with the agricultural cooperative at Ralahine.
What is true of the worker cooperative is, also, true of the other forms of socialised capital. In the joint-stock company/corporation, the workers within it, as the collective owners of that capital, have the same motivation for innovation as those in the worker cooperative. The difference is that the ruling-class deny that right to them, deny them the right to control their own collective property and, instead, place it in the hands of shareholders, whose interests are quite different. Shareholders see things in the same way as the private industrial capitalist, in so far as the use of machines/technology is concerned, but, as the size of fixed capital has become so astronomical, also, understand that the investment time-horizon has become significantly extended.
Marx, also, refers to this in, Theories of Surplus Value, Chapter 23.
“Thus there can be no doubt that in the case of all capitals employing a great deal of fixed capital—provided the scale of production remains unchanged—the rate of profit must rise in proportion as the value of the machinery, the fixed capital, declines annually, because wear and tear has already been taken into account. If the coal producer sells his coal at the same price throughout the ten years, then his rate of profit must be higher in the second year than it was in the first and so forth...“This extra profit may be equalised also as a result of the fact that—apart from wear and tear—the value of fixed capital falls in the course of time, because it has to compete with new, more recently invented, better machinery. On the other hand this rising rate of profit, which results naturally from wear and tear, makes it possible for the declining value of the fixed capital to compete with newer, better machinery, the full value of which has still to be taken into account. Finally, the coal producer sold his coal more cheaply [at the end of the second year], on the basis of the following calculation: 50 on 100 means 50 per cent profit, 50 per cent on 95 comes to 47½ ; if therefore he sold the same quantity of coal [not for 105 but] for 102½—then he would have sold it more cheaply than the man whose machinery, for example, began to operate only in the current year. Large installations of fixed capital presuppose possession of large amounts of capital. And since these big owners of capital dominate the market, it appears that only for this reason their enterprises yield surplus profit (rent). In the case of agriculture, this rent derives from working relatively fertile land, but here we are dealing with a case where relatively cheaper machinery is utilised.}”(Theories of Surplus Value, Chapter 23, p 388-389)
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