Lecture 10: Production of absolute surplus value (continued)
Constant and variable capital
Under capitalist production the factors of the production process, the means of production and labour-power, are presented as component parts of industrial capital. The worker adds new value to the object of his/her labour by expending upon it a given amount of additional labour. And the values of the means of production used up in the process are preserved and transferred to the resulting product. The ‘very act of adding new value…preserves their former values.’ This result can only be explained by the two-fold nature of the worker’s labour: as abstract labour it creates, adds value and as concrete labour it preserves or transfers value (pp199-200).
If labour becomes more productive then the mass of products produced will increase but contain the same amount of additional value as previously. However the value transferred to the new product will increase with the increase in the consumption of raw materials and means of production. On the other hand if the productivity remains the same and there is a rise or fall in the value of the raw materials then the value transferred will rise or fall accordingly.
The means of production never transfer more value to the product than they themselves lose during the labour process by the destruction of their own use-value. How much it transfers to the product each day it is in use depends on its life span , that is the time over which its use-value is completely consumed. If an instrument of labour has no value to lose, that is, it is not a product of human labour, no value will be transferred to the product during the labour process.
In a footnote Marx mentions repairs to the instruments of labour which he says do not concern us here. A machine which is undergoing repairs, no longer plays the part of an instrument, but that of an object or material of labour. Work is no longer done with it but upon it. Here he says it is quite permissible for us to assume that the labour expended on the repair of instruments of labour is included in the labour necessary for their original production.
As regards the means of production what is consumed is their use-value. There is no consumption of their value and it is inaccurate to say that it is reproduced. It is rather preserved. In the value of the product there is a reappearance of the value of the means of production, but there is strictly speaking no reproduction of that value. What is produced is a new use-value in which the old value reappears.
In the capitalist production process the action of labour power not only reproduces its own value but produces value over and above it. This surplus value is the difference between the value of the product and the value of the elements consumed in the formation of that product, that is, of the means of production and the labour power. The surplus of the total value of the product over the sum of the value of the constituent factors, is the surplus of the expanded capital over the capital originally advanced. The means of production and labour power are merely different modes of existence which the value of the original capital assumed when it was transformed from being money into the various factors of the labour process.
The part of capital represented by the means of production, by the raw material, auxiliary material and the instruments of labour, does not undergo any quantitative alteration of value. It is called the constant part of capital or constant capital.
The part of capital represented by labour power does, in the process of production, undergo an alteration of value. It both reproduces the equivalent of its own value and also an excess, a surplus-value, which varies according to different circumstances. This part of capital is being continually transformed from a constant into a variable magnitude. This is called the variable part of capital or variable capital. (NB Rowthorn in his article on vulgar economy shows how little he understands variable capital when he says it is the worker’s labour power – this ignores the essential point ie the transformation of this part of capital from a constant into a variable magnitude in the labour process).
Finally Marx points out that the definition of constant capital does in no way preclude the possibility of a change in the value of its elements independent of the production process taking place. Marx gives the example of the failure of a cotton crop which increases the value of the raw material cotton. The value transferred to the product will increase because of the increased value of the cotton. The same process occurs with the instrument of labour, machinery etc. If there is an increase in the productivity of labour in producing the relevant machinery, then the old machinery undergoes a certain amount of depreciation and transfers proportionately less value to the product. For its value at any given time is measured by the labour time socially necessary for its production ie under the then existing social conditions.
The rate of surplus value
The surplus value generated in the process of production by C, the capital advanced; or the self-expansion of the capital C (Verwertung) presents itself to us first as the amount by which the value of the product exceeds the value of its constituent parts.
The capital C is made up of two components; the sum of money c laid out in the means of production and the sum of money, v, expended on labour power.
C= c + v, the sum of the constant and variable capital leads after production to (c + v) + s, where s is the surplus value.
Here Marx makes the point that the proportion of the constant capital which consists of the instruments of labour, transferred to the product only a fraction of its value, while the remainder resides in those instruments. Since this remainder plays no part in the formation of value, we can, at present leave it to one side. If we include it, then its value would be transferred to the product. However the amount of new value added to the product and the amount of surplus value produced remains unchanged. So throughout Capital Volume I Marx assumes, unless the context dictates otherwise, that by the constant capital advanced for the production of value we actually always mean the value of the means of production consumed in the course of production.
This being the case if C becomes C’ after the process of production then C’ = (c + v) + s. The new value added will be v +s, as the value of constant capital is transferred to and merely re- appears in the product.
Here Marx reminds us that variable capital, the proportion of capital invested in the purchase of labour power is a definite quantity of materialised labour, a constant value like that of the value of labour power purchased (p214).
The ratio of surplus value/variable capital or s/v we call the rate of surplus value. If we call that part of the working day during which the reproduction of the living labourer takes place, that is the portion in which the value of his/her labour power or value of his/her means of subsistence is produced, necessary labour-time: and the remaining part of the working day when surplus-value is created surplus labour-time: then the rate of surplus value can be expressed by the ratio surplus-labour/necessary-labour.
It is just as important to think of surplus-value as a congealed quantity of surplus labour-time, as nothing but materialised surplus-labour, as to think of value as a congealed quantity of so many hours of labour, as nothing but materialised labour. Marx then gives us a clear understanding of his concept of class society when he says that ‘the essential difference between the various economic forms of society, between, for instance, a society based on slave-labour, and one based on wage-labour lies only in the mode in which this surplus-labour is in each case extracted from the producer, the labourer (p217).’
The rate of surplus-value is therefore an exact expression for the degree of exploitation of labour-power by capital, or of the labourer by the capitalist (p218). In a footnote Marx tells us that this should not be confused with the absolute amount of exploitation. For example if the working day is divided equally between necessary and surplus labour then the longer the working day the greater will be the absolute amount of exploitation while the rate of exploitation remains the same. Marx’s example is of a 10 and 12 hour working day. (Here lies the confusion of the Socialist Workers Party).
The rate of exploitation must not be confused with the rate of profit s/c + v. This ratio is also of ‘very great importance’ but will be treated in Capital Volume III. We will be able to understand this as soon as we understand the laws of surplus value. However if we reverse the process we cannot understand either.
The rate of surplus value is independent of the magnitude of constant capital, because the added new value ( or what amounts to the same thing, the amount of new labour absorbed in the labour-process by means of production) is quite independent of how big or how small might be the capital which absorbs thenew value.
In a final footnote at the end of this section Marx makes the point that throughout he has assumed that prices equal values. He warns us, as we shall see in Volume III that even in the case of average prices this assumption cannot be made in a simple manner (p220).
In the next section Marx shows how the component parts of the value of the output can be represented by proportional parts of the output itself. In the example which Marx gives the value of the yarn 30s= 24s const + 3s var + 3s surplus. This value is contained in the 20lbs of yarn produced. So the constant part 24s will be contained in 16lbs of the yarn, this in turn can be divided into the relevant proportions of raw material (20s of cotton = 13 1/3) and spindle (4s = 2 2/3) used up etc. And the remaining 4lbs represents the value added of 6s created during the12hrs spinning process, 2lbs representing the variable capital and 2lbs the surplus value.
From this it can be seen that a proportion of the new commodity accounts for the previous labour of producing raw materials etc. But none of this previous labour is part of the new labour of spinning. Hence Senior’s ‘last hour’ where all the profit is produced is nonsense. Senior argued that the value of the means of production is reproduced in part of the working day, and the new value is produced only in the remaining part of the working day. So in a working day of say 11 1/2hrs, 10 hrs are taken up in replacing the consumed capital which leaves only 1 1/2 in which to produce the new value. If the working day was reduced then all the profit of the capitalists would disappear. Senior was used by the capitalists opposing the 10hrs agitation.
The truth is the worker only transfers the value of the means of production into the new commodity and this is done all thetime he/she is working, and all the time too he/she creates new value in addition. If the worker works less time, assuming the same productivity of labour, proportionally less value will be transferred to the product and less value will be added. Similarly with the worker working more time. The source of the profit is the unpaid labour time, which in our example is half the working day, that is 5 3/4 hrs.
The sum of the necessary-labour and the surplus-labour, that is the period of time in which the worker replaces the value of his/her labour power and produces surplus-value, this sum is the actual time the worker works, that is the working day.
The working day
This chapter shows historically how the increase of capital is simply the surplus labour of an exploited working class. The limits of the working day are very elastic. It must be longer than necessary labour time and within 24 hrs because the worker has to feed, wash, sleep etc. Beyond this are moral and social limitations corresponding to the stage of social development and the state of the class struggle.
In this historical study a number of points are worth making. The earlier tendency in capitalism was to increase the working day and the number of working days in the year. So ‘Protestantism, by changing almost all the traditional holidays into work days, plays an important part in the genesis of capital.’ (p276 ft note)
The Factory Acts of the 19th Century regarded the ‘greed for surplus labour’ such a shocking reality, that in the interests of capital itself, they introduced regulation to save the working class from destruction by excessive exploitation. In particular limitations were placed on the length of the working day and the employment of young persons and children. Marx shows how the Factory Acts were first introduced in those industries where the productiveness of labour had become greatest.
The rate and mass of surplus value
Marx shows how the mass of surplus value = rate of surplus value multiplied by the mass of variable capital. That is S = s/v x V.
Given the rate of surplus value the ‘mass’ of surplus value will depend on the ‘mass’ of variable capital. Or given the rate of exploitation, the ‘mass’ of surplus value will depend on the value of an average labour power multiplied by the number of such labour powers exploited.
In this chapter Marx begins to point to inherent contradictions in the capitalist production process which will be taken up later. First the working day has impassable limits. The compensation of a decrease of the number of labourers employed, or the amount of variable capital advanced, by a rise in the rate of surplus value, or by lengthening the working day, has impassable limits. That is it will always be less than what a labourer can produce in 24 hours. This is important when we recognise the ‘inherent tendency of capital to reduce as much as possible the number of labourers employed by it (by increasing the rate of surplus value and the productivity of labour), in contradiction to its other tendency to produce the greatest possible mass of surplus value’ (p305).
Another point which Marx begins to develop here requires Volume III for its solution. The masses of value and surplus value produced by different capitals – assuming the value of labour power and the rate of exploitation is given – will vary directly with the size of the variable component of these capitals. Marx then goes on to say:
‘This law clearly contradicts all experience based on appearance. Everyone knows that a cotton spinner, who, reckoning the percentage on the whole of his applied capital, employs much constant and little variable capital, does not on account of this, pocket less profit or surplus value than a baker, who relatively sets in motion much variable and little constant capital’ (p307)
This solution requires many intermediate terms which will be dealt with in Volume III. Here Marx attacks Classical economy for trying to defend the general law of value by ‘violent abstraction’ – treating such experiences as exceptions to the rule. ‘Vulgar economy which indeed “has really learned nothing,” here as everywhere sticks to appearances in opposition to the law which regulates and explains them’. (p309)
Finally Marx ends the chapter with a powerful reminder of how the relationship of the labourer to the means of production has changed under capitalism.
‘It is now no longer the labourer that employs the means of production, but the means of production that employ the labourer. Instead of being consumed by him as material elements of his productive activity, they consume him as the ferment necessary to their own life process, and the life-process of capital consists only in its movement as value constantly expanding, constantly multiplying itself.’ (p310)
