Capital II. Chapter 20: Simple Reproduction, Sections 1 – 6

first summary notes from this chapter sections 1 – 6 (ongoing)

1.Formulation of the Problem

Begins with considering the annual functioning of the social capital and the commodity product supplied by a society in the course of a year, this will show how the reproduction of the social capital proceeds, and what the distinguishing and common characteristics between the social capital and the individual capitals of which it is made up.

Annual product: includes productive and unproductive consumption, those parts of social product that replace capital, social reproduction and that of the consumption fund, for both workers and capitalists. This involves the reproduction of the working and capitalist class, and of capitalist relations of production.

The form of circulation analysed is that of commodity capital, see Chapter 3, vol II.

The beginning point of the circuit of commodity capital is C’. This commodity capital includes constant, variable and surplus value. The movement of this encompasses productive and unproductive consumption.

This circuit also highlights the preconditions for social reproduction, as it is necessary to show the movement of each of the portions of the overall C’ (c, v, s).

The overall process of reproduction includes the consumption process mediated by circulation as well as the reproduction of capital itself.

The consumption process stands out here in this discussion, it is a necessary component in understanding reproduction of social capital.

Here we consider the replacement of the components of C’ in both value and material.

“We can no longer content ourselves…with the assumption that the individual capitalist first converts the components of his capital into money by selling his commodity product, and can then transform this back into productive capital by repurchasing his elements of production on the commodity market. These elements of production, in so far as they are of the objective kind, form as much a part of the social capital as the individual finished product that is exchanged for them and replaced by them. On the other hand, the movement of the part of the social commodity product that is consumed by the worker in spending his wage, and the capitalist in spending surplus-value, not only forms an integral link in the movement of the total product, but is also interwoven with the movements of the individual capitals” p469.

The form of the problem:

“How is the capital consumed in production replaced in its value out of the annual product, and how is the movement of this replacement intertwined with the consumption of surplus value by the capitalists and of wages by the workers?” p 469

Assume that products exchange at their values and that no revolution in values take place.

The analysis of the reproduction of social capital is a little more messy than that of the analysis of the production and movement of an individual capital value, in this situation one assumed the process of social reproduction, that there were sufficient conditions within circulation for transformation of individual product back into elements of production.

However, this is not sufficient for the analysis of total social capital and the value of its product.

“The transformation of one portion of the product’s value back into capital, the entry of another part into the individual consumption of the capitalist and working classes, forms a movement within the value of the product in which the total capital has resulted; and this movement is not only a replacement of values, but a replacement of materials, and is therefore conditioned not just by the mutual relations of the value components of the social product but equally by their use-values, their material shape.” p470

Again the importance of the materiality of commodities arises here, their bodily form in use-value, and consumption, emerge as a threshold… the distinction and relationship between the value element and the material element of the form of capital is important here…

2.The Two Departments of Social Production

The total product and production process breakdown into two great departments:

  1. Means of production: commodities that possess a form in which they either have to enter productive consumption, or at least can enter this.
  2. Means of consumption: commodities that possess a form in which they enter the individual consumption of the capitalist and working classes.

Within these departments the various branches of production form a single great branch: the of means of production and means of consumption. The total capital applied in each of these two great branches forms a separate major department of the social capital.

Each department, the capital has two components:

Variable capital: in terms of its value, this equals the value of social labour power applied in this branch of production, which is the sum of wages paid for it. In terms of its material aspect, it consists of self-acting labour-power itself, the living labour set in motion by this capital value.

Constant capital: value of all the means of production applied in this branch. Breaks down further into fixed capital: machines, instruments of labour, buildings, draught animals. And into circulating constant capital: materials of production, such as raw and ancillary materials, semi-finished goods etc.

The value of the total annual product in each of these two departments breaks down into constant capital consumed in production (c) (the value of this transferred to the product), and the value added by labour, which includes the replacement of variable capital advanced (v), and excess which forms surplus value (s). In each department the value of the total annual product breaks down into c+v+s.

c = constant capital, v = variable capital, s = surplus value, and rate of valorisation s/v = 100 per cent.

Dept. I Production of means of production:

Capital 4000c + 1000v = 5000
Commodity product 4000c + 1000v + 1000s = 6000 existing in the form of means of production.

Dept. II Production of means of consumption:

Capital 2000c +  500v = 2500
Commodity Product 2000c + 500v + 500s = 3000 existing in means of consumption.

Total annual commodity product together is:
Commodity product 4000c + 1000v + 1000s = 6000 means of production.
Commodity Product 2000c + 500v + 500s = 3000 means of consumption.

Total value is 9000.

From this, looking at the transactions necessary for simple reproduction to occur, three initial points.

  1. The wages (500v) of workers and surplus-value (500s) of capitalists in Dept. II must be spent on means of consumption. Wages and surplus-value in dept. II are converted within dept. II into the product of dept. II. (500v+500s)II = 1000 in means of consumption thereby drops out of the total product.
  2. The 1000v and 1000s in dept. I must also be spent on means of consumption, products from dept. II. It must therefore be exchanged for the remaining part of this product, representing constant capital, to the equal amount of 2000c. Dept. II receives for this an equal sum in means of production, the product of dept. I which embodies the value of 1000v + 1000s in dept. I. So 2000 Iic and (1000v + 1000s)I drop out of the account.
  3. There remains 4000 Ic. This consists of means of production that can only be used in dept. I and serve to replace the constant capital consumed there. This occurs through exchange between capitalists in dept. I.

3. Exchange Between the Two Departments: I(v+s) Against IIc

Begin with major exchange between the two departments: (1000v + 1000s)I (in natural form of means of production (mp)) are exchanged for 2000 IIc (in natural form of means of consumption).

For Dept II capitalists their conversion results in their receiving a form which can function as part of labour process and as constant capital value for process of valorisation.

For Dept. I the components of v and s are converted into a form in which they can function as revenue.

This all occurs through money circulation. Component of variable capital must always appear in money form, money-capital converted into labour-power (lp). This is advanced simultaneously across ‘surface of society’.

Workers in Dept. I have received 1000 in wages (the v component), which they spend on means of consumption in Dept. II. Through this they transfer half of Dept. II’s constant capital into money. Capitalists from Dept. II use this 1000 in turn to buy mp from Dept. I. This process transforms the 1000v in Dept. I back into money for the capitalists in Dept. I, functioning again here as money-capital.

Money needed to the s component of Dept. I’s commodity capital for the second half of Dept. II’s constant capital may be advanced in various ways. Refers back to discussions throughout the previous two parts of this volume – certain reserves of money needed of advance of capital or expenditure of revenue, always taken as existing.

Looks at the relationship between money circulation and the exchange of commodities.

Consumption mediated by circulation.

4. Exchange Within Department II. Necessary Means of Subsistence and Luxury Items

Sets aside two questions for later: a) the extent to which the breakdown of the value of each individual capital (c, v, s) holds for the total annual product, and b) the particular kind of reflux of the variable capital advanced in the money form, which takes place through the process in which the working class appears as buyer and capitalist as seller.

Immediate question is that of the components v & s in dept. II

What to make of the idea of ‘tokens of value’ which comes up here? (tokens of value came up on page 434 as well)

Dept. II breaks into two main subdivisions:

IIa: produces necessary means of consumption

IIb: produces luxury means of consumption

Direct reflux of variable capital in money form in dept IIa to capitalists in IIa. Not so with variable component in dept IIb, which exists in natural form of luxury items, indirect reflux – IIb variable component spent on commodities from IIa, which then capitalists from IIa spend on luxury commodities in IIb.

Long discussion of the breakdown of the components of capital, and their circulation, exchange and realisation between the subdivisions of IIa and IIb.

‘It is a pure tautology to say that crises are provoked by a lack of effective demand or effective consumption’ p 486.

5. The Mediation of the Exchanges by Monetary Circulation

 

6. The Constant Capital in Department I

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