Capital II, Chpt 20 (Sect 10)

The moral of this story is that the bourgeois economists are wrong.

Some math:

Value product of current year (v+s) < value of the product of year

Value of product – value product = value transferred from constant capital that existed beforehand

Department I (means of production):        4,000c + [1,000v + 1,000s] = 6,000

Department II (means of consumption):   2,000c + 500v + 500s = 3,000

Dept I[1,000v +1,000s] exchanges for Dept II[2,000c]

Sum of values = 9,000

Newly produced value= v+s = 3,000

6,000 is value transferred from past

2/3 of labor spent during year (v+s=3,000), so 2,000, is spent on replacing constant capital for dept. II.

Difference between capitalist society vs. pre-capitalist society:

a.       Capitalist society makes more constant capital. Uses 2/3 of its annual labor to do so. This constant capital doesn’t become s and v. Only functions as c. (not everything is resolved into revenue)

b.      Savage is smarter than the bourgeois economists. He knows what he’s doing when he’s making means of production. Bourgeois economist thinks we’re making things that resolve into "revenue."

Now he’s going to set those bourgeois economists straight:

1.      They believe that v functions as capital for capitalist and revenue for wage-laborer. He’s going to show us that it’s not that simple.

• First, it’s money capital in hands of capitalist and when he uses it to buy labor-power. It’s not v at this point. It is only potentially v.
• Once he buys the worker’s labor-power, the money becomes money form of v.
• Worker converts it into means of subsistence.
• It is $ that changes hands, not v.
• Mistake of bourgeois economists: They think same $ realizes two capitals. Thinks that the worker’s labor-power is his capital.
• Marx tells us that this is goofy. “In point of fact, labour-power is his capacity (ever renewing and reproducing itself), not his capital. It is the only commodity that he can constantly sell, and he has to sell it in order to live, but it operates as capital (v) only in the hands of the buyer, the capitalist” (516). If we say he’s a capitalist just because he keeps on selling something, we’ve stretched the words to meaninglessness.

Now he examines the exchange of 1,000 Iv +1,000 Is for 2,000 IIc

From standpoint of worker:

 Worker in dept I sells his labor-power and makes 1,000v. He buys food and toiletries from capitalist II. We have a simple commodity circulation going on. C (labor-power of worker in dept I) – M (his wage) – C (means of consumption, the commodity of department II)

From standpoint of capitalist:

More complicated. He owns the factories that make things people eat and use in private, individual consumption. A part of his commodity product—2,000—is in the form of constant capital, and he needs to replenish it. He gets 1,000 from workers in dept I (1,000 Iv). That replenishes half of his constant capital value. He gets it in the form of $, though. (Marx points out that it is not v that is converted into half of IIc, but rather $. I’m not sure exactly why this is so important.) It needs to be converted into means of production in order to function as c again, though.

            So, capitalist II needs to take the $ he got from workers in dept I and use it to buy means of prod from dept. I.

C – M – C : means of consumption from Dept II - $ (from Dept I workers) – means of prod from Dept I to function in Dept II

Then he talks about it in another way, as M – C – M. Again, I’m a little confused as of the significance of all this. But here goes anyway…

Dept I started out with some cash (1,000) that it intended to use to buy some labor-power. So it transforms that into v. We’ll look at the equation—

1,000 ($ from capitalist I) – labor-power worth a value of 1,000 (v) – 1,000 in commodities (use values from Dept II purchased by Dept I workers) – 1,000v ($ in the hands of Dept II capitalists, which they will use to buy means of prod from Dept I capitalists)

Capitalists in dept I have gotten the variable portion of its capital back in cash. Now they can use it again to buy labor-power.

It’s a little easier inside dept II. He pays his workers some $$; they use it to buy back the product they’ve made. The worker doesn’t just back 500v back for the capitalist, though. He maintains constant value portion of product (2,000) and adds to it another 1,000 (v+s).

Starting on page 520, I get confused. Is there a typo here? He writes, “The value of 500 IIv which the department I capitalist still possesses in commodities returns to him in the form in which he originally advanced it by the purchase of means of consumption to the value of 500 on the part of the department II worker.” Ok, department II worker takes his 500v and buys commodities. How does that go back to the capitalist from dept I right now?

I think the $ is flowing back to the capitalist from department II. 

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This is how it keeps going: The return of both of these at opposite poles—i.e. the reappearance of the 500 in money, not just as money, but also as variable capital in the money form—is conditioned by one and the same procedure. The 500 in money flows back to capitalist II because he has sold worker II means of consumption to the value of 500, i.e. because the worker has spent his wage, and in this way has maintained not only himself and his family, but also his labour-power. In order to carry on living and to reappear as a buyer of commodities, he must sell his labour-power afresh. The return of the 500 in money to capitalist II is thus simultaneously the return—or the preservation of labour-power as a commodity available for purchase with 500 in money, and hence the return of the 500 in money as potential variable capital” (520).

Now he turns to luxury items: IIb. It is similar to what happens with the v in dept I: “The money that renews the IIb capitalists’ variable capital in the money form flows to them via a detour through the hands of capitalists IIa” (521).

Worker lives hand to mouth. He needs to buy stuff from IIa as soon as he makes money. The capitalist however has different motives—valorization of his capital. He might delay selling the 1,000 IIc to capitalists from department I. What will capitalist from dept I do? Well, he’ll put in some reserve money.

3 changes of form of v in dept. I:

1.      1,000 Iv in $ → labor-power. This is a conversion that doesn’t appear in commodity exchange between 1 and II, although it is what allows workers of I to buy commodities of II.

2.      This is the only change of form “in which the variable capital actually varies, i.e. actually functions as variable capital” (522). This is the production process.

3.      Annual value product. For dept I, it is 1,000v + 1,000s =2,000. Lots of commodities.

What’s the take-away here? Marx is basically debunking the bourgeois myth of a real exchange between workers and capitalists, in which they are each “capitalizing” on something (labor for the workers, $ for the capitalists) and each get something in return as “revenue.” Instead, the capitalist always is in control of v: 1. as $ capital; 2. As “v” proper, an element of his productive capital; 3. As a part of his commodity capital (result of production process); and 4. As $ capital again, capable of buying more labor-power.

The idea that the worker benefits from this is absurd, Marx tells us. The capitalist is the only one in control of capital. No one else gets any “revenue.”