Archive for the ‘Capital Volume 3, Part 3: The Law of the Tendential Fall of the Rate of Profit’ Category

1  General Considerations

1 If the rate of surplus-value, δ, = s/v  , and the rate of profit, π, = s/(c + v)  , then, unless c  = 0, i.e. all the capital advanced is advanced as wages, δ > π . In addition, as we have seen, even a rising rate of surplus-value tends to accompany a falling rate of profit. A fall in the rate of profit would only be a consequence of a falling rate of surplus-value if either the ratio between constant and variable capital remained unchanged or if the former was falling with respect to the latter. Thus if capitalists are accumulating surplus-value as constant capital, and the organic composition is rising, the fall in the rate of profit is not caused by a fall in the rate of exploitation of labour.

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Marx opens the chapter with the following comment:

If we consider the enormous development in the productive powers of social labour over the last thirty years alone, compared with all earlier periods, and particularly if we consider the enormous mass of fixed capital involved in the overall process of social production quite apart from machinery proper, then instead of the problem that occupied previous economists, the problem of explaining the fall in the profit rate, we have the opposite problem of explaining why this fall is not greater or faster. Counteracting influences must be at work, checking and cancelling the effect of the general law and giving it simply the character of a tendency; which is why we have described the fall in the general rate of profit as a tendential fall.

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Given that the substance of this chapter bases itself on matters Marx has already addressed in volume 1, some of the more salient relevant points are summarised here below.

* * *

relative and absolute surplus-value

If the amount of surplus-value produced by the worker were only dependent on to what degree her working day could be prolonged beyond the time necessary to reproduce her labour power, extending surplus labour time, the former supposes a natural limit. But surplus labour time can also be extended by shortening necessary labour time, through reducing the value of labour-power. This in turn can be achieved through a rise in the productivity of labour and a consequent cheapening of the commodities necessary for labour-power’s reproduction.

That surplus-value produced by a simple lengthening of the working-day Marx calls absolute surplus-value; that arising from the curtailment of necessary labour relative surplus-value.

Clearly, the value of labour-power can only be lowered if productivity is increased in those branches of industry whose products determine the value of labour-power, viz. products of direct subsistence, or products which form the means of production of products of direct subsistence. The reduction in the value of labour-power is the overall sum of all the reductions in necessary labour-time in the various branches of industry that enter as components in the value of labour-power, i.e. it is the consequence of a number of independent acts, necessarily carried out without joint agreement as to their final effect

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