THE WORKERLESS FACTORY:

Capitalist Apportionment of Surplus-value

 

“Thus, although in selling their commodities the capitalists of the various spheres of production recover the value of the capital consumed in their production, they do not secure the surplus-value, and consequently the profit, created in their own sphere by the production of these commodities. What they secure is only as much surplus-value, and hence profit, as falls, when uniformly distributed, to the share of every aliquot part of the total social capital from the total social surplus-value, or profit, produced in a given time by the social capital in all spheres of production. Every 100 of an invested capital, whatever its composition, draws as much profit in a year, or any other period of time, as falls to the share of every 100, the Nth part of the total capital, during the same period. So far as profits are concerned, the various capitalists are just so many stockholders in a stock company in which the shares of profit are uniformly divided per 100, so that profits differ in the case of the individual capitalists only in accordance with the amount of capital invested by each in the aggregate enterprise…”[1]      

 

Marxists hold that all value-added comes as the result of purposeful labor expended.  That is, any additional revenue[2] (which is value-added realized through the medium of a sale) must come from labor-power (lp) purchased and put into productive activity as labor (l).  This labor has the unique property in that when it is activated as l it produces more than it itself is worth.  That is it produces surplus-value which, when transformed through that medium of sale, metamorphoses itself into profit.  Is this so?

 

“the individual capitalists, through improved methods, etc., may depress the value of their individual commodity below the social average value and thereby realise an extra profit at the prevailing market-price.” Vol 3.  Chap Xv.  pp258-9.

 

Consider the case of two carwashes (A1 and A2).  Each employs 20 workers who each receive 1 unit of variable capital as their wage for a total of 20 units (v).  The constant capital arrayed consists of 80 units (c).  This latter is composed of 90% fixed and 10% circulating or 72 (f) units of the former and 8 (u) of the latter. 

 

We will assume that these two taken together constitutes 10% of a total social capital (C) and further that these carwashes are in no way remarkable.  That is their organic composition[3] is exactly the same as the general composition of the rest of the total social capital (B); that their rate of transference of value of the fixed into the product is the norm; and, that their workers pay is as usual (i.e. 1 unit).  We will still further assume a general rate of profit (P’) (and thus a sector rate (p’) of 10%. 

 

What would be the effect if one of these car washes (say A1) completely automates?  This is the situation pre-automation:

 

                A1                               A2                                        B                                             C

OC          80c + 20v                  80c + 20v                          1440c + 360v                        1600c + 400v

EOC[4]   72f + 8u + 20v          72f + 8u + 20v                 1296f + 144u + 360v              1440f + 160u + 400v

Profit      10                                10                                        180                                          200

 

We may quickly assess the situation as regards one aspect:  the rate of surplus-value (s[5]/v) is 50%.  System-wide as well as in each of the three aforementioned areas (A1, A2, B).

 

            A1                                               A2                                  B                                             C

                10/20 = 50%                        10/20 = 50%                        180/360 = 50%                     200/400 = 50%

 

This may be of some interest later.

 

 

The total amount of purchasing power ($), in the form of profits and wages, created is

 

A1                               A2                                                B                                                  C

10p + 20w[6] = 30$                10p +20w = 30$                       180p + 360w = 540$                200p + 400w = 600$

 

We will make the arbitrary but perfectly reasonable assumption that every unit of $ finds its correspondence in 1 unit (#) of commodities[7] issuing out of the process.

 

Therefore $= # and $/# = 1.

 

Each commodity is able to capture 1$ (i.e. there are 600# and 600$).

 

Now B automates:

 

A1                                               A2                                  B                                             C

OC          80c + 20v                          100c + 0v                              1440c + 360v                            1600c + 400v

EOC        72f + 8u + 20v                  90f+ 10u + 0v                       1296f + 144u + 360v                1440f + 160u + 400v

Profit      10                                            10                                       180                                           200

 

We have continued our assumption that there is a 9-1 ratio of fixed to circulating capital. 

 

 

The total amount of purchasing power ($), in the form of profits and wages, created is

 

A1                                           A2                                                B                                                  C

10p + 20w = 30$                   10p + 0w = 10$                       180p + 360w = 540$                200p + 380w = 580$

 

Therefore the same 600# finds itself now facing only 580$.

 

$/# = 580/600 = .967

 

 

The result is deflation.  System-wide deflation.  If all #’s produced are to be bought they can only be bought at the cost of a lesser price.

 

The system-wide P’ must fall by that ratio:

 

            10% x 580/600 = 9.67%

 

A2’s profit can only come to pass pocketed out of the revenue generated by A1 and B. 

 

As regards the rate surplus-value, if the rate of profit system-wide is to maintain itself then this s’ must increase and increase by exactly the reciprocal of the purchasing power to unit output ratio (580/600) such that the new rate of surplus-value (S’):

 

50% x 600/580 = 51.72%

 

As, of course, this only pertains to those sectors still with workers, one could conclude

that this sketch is much like the “Picture of Dorian Grey” with the neo-capitalist as the dilettante Grey and the remaining workers as the colors on the canvas of the woebegone portrait.