[ Machinery and Profit]
After all these digressions on money — and we shall have occasionally to take up the subject again before ENDING THIS CHAPTER — we return to the point de départ (see. p. 25b).
Here is an example of how in manufacturing industry, too, the improvement of machinery, and the increase in productive power effected by it, creates (relatively) raw material, rather than necessitating an absolute increase in it:
"The FACTORY SYSTEM in the LINEN TRADE is very new. Prior to 1828, the great bulk of the linen yarn in Ireland and England was spun BY HAND. About that time, FLAX-SPINNING MACHINERY was so much improved, particularly by the perseverance of Mr. Peter Fairbairn of Leeds, that it came into very GENERAL USE. From that time SPINNING MILLS very extensively erected at Belfast and other parts of the North of Ireland, as well as in DIFFERENT PARTS in Yorkshire, Lancashire, and in Scotland, for the spinning of fine yarns, and in the course of a few years hand spinning was abandoned. FINE TOW YARN is now manufactured from what was 20 years ago thrown away as refuse" ([The Economist,] No. 366, 31 August 1850, [p. 954]).
Whenever machinery is employed — let us first consider the CASE in its immediate form, i.e. that a capitalist, instead of expending a part of his capital on immediate labour, puts it into machinery — a part of capital is taken away from the variable and self-multiplying portion of capital, i.e. from the portion which exchanges with living labour, in order to be added to the constant part, whose value is merely reproduced or is maintained in the product. Yet this is done TO MAKE THE REMAINING PORTION MORE PRODUCTIVE.
First case: The value of the machinery is equal to the value of the labour capacity which it replaces. In this case, the newly produced value would diminish, not increase, if the surplus time worked by the remaining labour capacity did not increase in the same proportion as its amount diminished. If 50 of 100 workers are dismissed and replaced by machinery, the remaining 50 must produce as much surplus labour time as did the 100 previously employed. If the 100 worked a total of 1,200 hours a day, of which 200 hours was surplus labour time, the same amount of surplus labour time must now be produced by the 50; i.e. 4 hours daily [by each of them], whereas the former only produced 2. In this case, the surplus labour time remains 50x4=200, the same as before (100x2=200), although the absolute labour time has diminished. Since capital is concerned only with the production of surplus labour, nothing changes for it in this CASE. The volume of raw material worked up would remain the same, and hence the outlay on it; the outlay on the instrument of labour would increase, and that on labour decline. The value of the total product would be the same, because it would equal the same sum of objectified and surplus labour time.
Such a CASE would hold no incentive for capital at all. What it gained in surplus labour time on the one hand, it would lose in that part of capital which would enter into production as objectified labour, i.e. as invariable value. Yet we must bear in mind that the machinery replaces less efficient instruments of production, which possessed a certain value, i.e. had been obtained in exchange for a certain sum of money. In the case of the capitalist who starts a new business, if not in that of the one already established in business, the part of the capital which was employed in instruments of lower productivity does not enter into the cost of the machinery.
[VII-40] Hence if, e.g., with the introduction of machinery to the value of £1,200 (50 labour capacities) an earlier outlay of, say, £240 on instruments of production falls away, the extra outlay of capital would amount to only £960, the price of 40 workers for a year. If in this case the remaining 50 workers produce between them exactly as much surplus labour as the 100 did before, so 200 hours of surplus labour are now produced with a capital of 2,160, as compared with the previous capital of 2,400. The number of workers has been halved; absolute surplus labour has remained the same, 200 hours of labour as before; the capital laid out in the material of labour has also remained the same; but the ratio of surplus labour to the invariable part of capital has increased absolutely.(1)
Since the capital laid out in raw material has remained the same, and that laid out in machinery has increased, but not in the same proportion by which the capital laid out in labour has diminished, it means that the total outlay of capital has decreased; surplus labour has remained the same, i.e. it has increased relative to capital, and not merely in the proportion by which surplus labour time must increase to remain the same with half as many workers, but to a greater extent, i.e., by the extent to which the [outlay] on the former means of production is deducted from the costs of the new ones.
The introduction of machinery — or, more generally, an increase in productive power which makes objectified labour the sub-stratum of this productive power itself, and therefore involves costs; when, therefore, part of the capital previously laid out on labour is laid out as a component of the capital that enters into the production process as lasting value — the introduction of machinery can only take place if the proportion of surplus labour time not merely remains the same, and hence increases in relation to the living labour employed, but increases in a greater proportion than the ratio of the value of the machinery to the value of the workers displaced.
This may occur either because the entire outlay made for the previous instrument of production must be deducted, in which case the total sum of the capital laid out diminishes, and although the ratio of the total sum of labour employed to the constant part of capital has declined, the surplus labour time has remained the same, and has, therefore, increased not merely in relation to the capital expended on labour, i.e., in relation to necessary labour time, but in relation to the total capital, the total value of the capital, because this value has diminished.
Or it may be that the value of the machinery is the same as that previously laid out on the living labour which has now become superfluous, but the ratio of surplus labour yielded by the part of capital still employed has increased, so that the 50 workers perform not merely as much surplus labour as the 100 did previously, but more. Suppose, e.g., that each now performs 4 */[4] hours [surplus labour] instead of 4. In this case, however, a larger part of capital is required for raw material, etc., in short, a larger total capital is needed.
Suppose that a capitalist who previously employed 100 workers at an annual cost of £2,400, discharges 50 and substitutes for them a machine costing £1,200. This machine — although it costs him as much as the 50 workers did before — is the product of fewer workers, because he pays to the capitalist from whom he buys it not only the necessary labour but the surplus labour, too. Or, if he had his own men make the machine, he could employ a smaller number of workers and have them perform only the necessary labour.
The introduction of machinery, therefore, leads to an increase in surplus labour and an absolute decline in necessary labour time. It may be accompanied by either an absolute decrease or an increase in the capital employed.
Surplus value as posited by capital itself, and measured by its numerical ratio to the total value of the capital, is profit. Living labour as appropriated and absorbed by capital appears as capital's own life-power, its self-reproducing power, modified, moreover, by the motion of capital itself, circulation, and the time required for that motion, circulation time. Only thus is capital posited as self-perpetuating and self-multiplying value, by its being distinguished as preposited value from itself as posited value.
Since capital enters into production wholly, and as capital its different components are distinct from one another only in form, being sums of value evenly, the positing of value appears to be evenly immanent to them. Moreover, since the part of capital which is exchanged for labour operates productively only in so far as the other parts of capital are posited too—and since the ratio of this productivity depends on the value magnitude, etc., and the different determinations of these components relative to each other (as fixed capital,[3] etc.), so the positing of surplus value, of profit, appears to be evenly determined by all parts of capital. Since, on the one hand, the conditions of labour are posited as objective components of capital, and, on the other, labour itself is posited as an activity incorporated in it, the entire labour process appears as the process of capital itself, and the positing of surplus value as its product, whose magnitude, therefore, is not measured by the surplus labour which capital forces labour to perform, but appears as [deriving from] the increased productivity which capital imparts to labour.
The real product of capital is profit. To that extent, capital is now posited as the source of wealth. But in so far as it produces use values, these are determined by value: "value constitutes the product" (Say(2)). Consequently, it produces for consumption. In so far as it is perpetuated by the constant renewal of labour, it appears as the permanent value presupposed for production, which depends upon its being maintained. In so far as it is constantly exchanged for new labour, it appears as the wages fund.
Obviously, the worker cannot produce without the objective conditions of labour. [VII-41] These are now separated from him in the form of capital and independently confront him. He can relate himself to them as conditions of labour only in so far as his labour itself has previously been appropriated by capital. From the standpoint of capital, the objective conditions of labour do not appear as necessary for the worker. What is essential to it is that they should exist independently over against him, that he should be separated from them, that they should be owned by the capitalist, and that this separation could only be abolished by his giving up his productive power to capital, in return for which capital should maintain him as abstract labour capacity, i.e., precisely as a mere capacity to reproduce wealth as a force dominating that capacity and confronting it in the form of capital.
Hence all parts of capital yield profit simultaneously, both the circulating part (laid out in wages and raw material, etc.) and that laid out in fixed capital. Capital can now reproduce itself either in the form of circulating capital or in that of fixed capital. Since, as we saw above, in our analysis of circulation,* the value of capital returns in different forms, depending upon whether it is preposited in either the one or the other form, and since, from the standpoint of capital which produces profit, it is not merely value which returns but the value of capital and profit, value as value itself and as self-valorising value, capital is obviously posited in either of these forms as, in different ways, profit-bearing.
The circulating capital enters into circulation wholly, with its use value serving as the bearer of its exchange value, and is thus exchanged for money. I.e., therefore, it is sold, sold entirely, although each time only a part of it enters into circulation. But in a single turnover it is entirely passed over into consumption as a product (whether this consumption is individual or productive), and is fully reproduced as value. This value includes the surplus value, which now appears as profit. Circulating capital is alienated as use value in order to be realised as exchange value. So this is selling at a profit.
By contrast, we have seen that the fixed capital only returns piecemeal, in the course of a number of years, a number of cycles of the circulating capital, and it does so only in the degree in which it is consumed (we saw this happen in the immediate act of production), enters as exchange value into circulation and returns as such value from it.(3) However, both the entry of exchange value into circulation and its return from it are now posited as the entry and return not merely of the value of capital, but simultaneously of profit as well, so that a fractional part of profit corresponds to the fractional part of capital.
"The capitalist expects an equal profit on all parts of the capital which he advances" (Malthus, Principles of Political Economy, 2nd ed., London, 1836, p. 268).
"WHERE WEALTH AND VALUE ARE PERHAPS THE MOST NEARLY CONNECTED, IS IN
THE NECESSITY OF THE LATTER TO THE PRODUCTION OF THE FORMER" (IBID., P . 3 0 1 ) .
//"The FIXED CAPITAL (IN COTTON FACTORIES) usually=4:1 to the circulating; so that if a MANUFACTURER has £50,000, he will expend £40,000 in erecting his MILL, and FILLING IT WITH MACHINERY, and devote only £10,000 TO THE PURCHASE OF RAW MATERIAL (COTTON, COALS, etc.) and the PAYMENT OF WAGES" (Nassau W. Senior, Letters on the Factory Act etc, [London] 1837, pp. 11-12).
" T H E FIXED CAPITAL IS SUBJECT TO INCESSANT DETERIORATION, not only from WEAR AND TEAR, but also from CONSTANT MECHANICAL IMPROVEMENTS..." (ibid.).
"Under the present law, NO MILL in which PERSONS under 18 years of age are employed CAN BE WORKED MORE THAN 11>/2 HOURS a DAY, i.e. 12 HOURS for 5 days and 9 on Saturday. Now, the following analysis will show THAT IN A MILL SO WORKED, THE WHOLE NET PROFIT IS DERIVED FROM THE LAST HOUR. Suppose a MANUFACTURER to invest £100,000—£80,000 IN HIS MILL AND MACHINERY, and £20,000 IN RAW MATERIAL and WAGES. The ANNUAL RETURN of that MILL, SUPPOSING
THE CAPITAL TO BE TURNED ONCE A YEAR, AND GROSS PROFITS TO BE 15%, ought to be GOODS WORTH £115,000, PRODUCED BY THE CONSTANT CONVERSION AND RECONVERSION OF THE £ 2 0 , 0 0 0 CIRCULATING CAPITAL, FROM MONEY INTO GOODS AND FROM GOODS INTO MONEY" (IN FACT, the CONVERSION and RECONVERSION of surplus labour first into commodity and then again into necessary labour, etc.) "IN PERIODS OF RATHER MORE THAN 2 MONTHS. Of these £115,000 EACH OF THE 23 HALF HOURS OF WORK PRODUCES 5 / n 5 , or V 2 3 . Of the 2 3 / 2 3 CONSTITUTING THE WHOLE £115,000, [20]/[23], i.e., £100,000 out of the 115,000 simply replace the capital; V[2]3 (or 5,000 OUT OF THE 115,000), MAKES UP FOR THE DETERIORATION of the MILL and MACHINERY. T h e REMAINING 2 / 2 3 , i.e. the LAST 2 OF THE 23 HALF HOURS OF EVERY DAY, PRODUCE THE NET PROFIT OF 10%. If therefore (PRICES REMAINING THE SAME) t h e FACTORY could be kept AT WORK 13 hours instead of 11 l/2, BY AN ADDITION OF ABOUT £2,600 TO THE CIRCULATING CAPITAL, THE NET PROFIT WOULD BE MORE THAN DOUBLED."
(I.e., the 2,600 would be employed without using proportionately more fixed capital and without any payment of labour AT ALL. The GROSS and NET PROFIT is=to the material which is worked up gratis for the capitalist, and then an extra hour is of course=to 100%, if surplus labour, as Mr. Shit wrongly assumes, is only=to Via of the day, or only [2]/[23], as Senior says.)
"On the other hand, if the hours of working were reduced by 1 hour per DAY (PRICES REMAINING THE SAME), NET PROFIT WOULD BE DESTROYED; if they were reduced by 1 V2 hours, GROSS PROFIT would be destroyed too. The CIRCULATING CAPITAL WOULD BE REPLACED, BUT THERE WOULD BE NO FUND TO COMPENSATE THE PROGRESSIVE DETERIORATION OF THE FIXED CAPITAL" ([ibid.,] pp. 12-13).
(Incorrect as Mr. Senior's data are, the example he gives is very important for our theory.)
"The ratio of FIXED to CIRCULATING CAPITAL grows constantly owing to 2 causes: (1) the TENDENCY OF MECHANICAL IMPROVEMENT TO THROW ON MACHINERY MORE AND MORE OF THE WORK OF PRODUCTION; (2) the IMPROVEMENT of the MEANS OF TRANSPORT, and the CONSEQUENT DIMINUTION OF THE STOCK OF RAW MATERIAL IN THE MANUFACTURER'S HANDS WAITING FOR USE. FORMERLY, WHEN COALS AND COTTON CAME BY WATER, THE UNCERTAINTY AND IRREGULARITY OF SUPPLY FORCED HIM T O KEEP ON HAND 2 OR 3 MONTHS' CONSUMPTION. NOW, A RAILWAY BRINGS IT TO HIM WEEK BY WEEK, OR RATHER DAY BY DAY, FROM THE PORT OR THE MINE. UNDER SUCH CIRCUMSTANCES, I FULLY ANTICIPATE THAT, IN A VERY FEW YEARS, THE FIXED CAPITAL, INSTEAD OF ITS PRESENT PROPORTION, WILL BE AS 6 OR 7 OR EVEN 1 0 T O 1 T O THE CIRCULATING; AND, CONSEQUENTLY, THAT THE MOTIVES TO LONG HOURS OF WORK WILL BECOME GREATER, AS THE ONLY MEANS BY WHICH A LARGE PROPORTION OF FIXED CAPITAL CAN BE MADE PROFITABLE. ' W H E N A LABOURER,' SAID M r . Ashworth TO ME, 'LAYS DOWN HIS SPADE, HE RENDERS USELESS, FOR THAT PERIOD, A CAPITAL WORTH 18D. WHEN ONE OF OUR PEOPLE LEAVES THE MILL, HE RENDERS USELESS A CAPITAL THAT HAS COST £100,000"' ([ibid.,] pp. 13-14).
(This is striking proof that, under the domination of capital, the employment of machinery does not reduce work, but rather lengthens it. What it reduces is necessary labour, not the labour necessary for the capitalist. Since fixed capital is devalued as long as it is not employed in production, its growth is linked with the tendency to make work perpétuai With respect to the other point emphasised by Senior, [VII-42] the decline in the ratio of circulating capital to fixed would be as great as he assumes if prices remained constant. But if, e.g., COTTON has fallen below its AVERAGE PRICE, the manufacturer will purchase as large a stock of it as his floating capital permits, and vice versa. O n the other hand, in respect of coal, whose output is regular and not subject to any special circumstances which might warrant expectations of an extraordinary increase in demand, Senior's remark is correct.
We have seen a that transport, and hence means of communication, d o not determine circulation, in so far as they are concerned with the bringing of the product to market or its conversion into a commodity. For, seen from this angle, they are themselves included in the production phase. But they do determine circulation in so far as they determine (1) the return [of capital]; (2) the reconversion of capital from the form of money into that of conditions of production. The more rapid and uninterrupted the supply of materials and matières instrumentales, the smaller stocks of them the capitalist needs to buy. H e can therefore turn the same circulating capital into this form, or reproduce it, the more frequendy, instead of having to keep it on hand as dormant capital. O n the other hand, as Sismondi remarked, it also has the
a See present edition, Vol. 28, pp. 447-59.— Ed.
effect that the retail trader, the SHOPKEEPER, can renew his stock the more quickly, and hence is less obliged to keep goods in stock, because he can renew his SUPPLY any moment.
All this shows how, with the development of production, accumulation in the sense of HOARDING relatively declines; it only increases in the form of fixed capital, whereas continuous simultaneous labour (production) increases in regularity, in intensity, and in volume, too. To an increasing extent, the velocity of the means of transport, along with their universality, converts (with the exception of AGRICULTURE) the necessity for ANTECEDENT LABOUR, AS FAR AS CIRCULATING CAPITAL IS CONCERNED, into that for the simultaneous operation of interdependent, differentiated branches of production. (This observation is important for the section on accumulation).//
"OUR COTTON FACTORIES AT THEIR COMMENCEMENT WERE KEPT GOING THE WHOLE 24 HOURS. T H E DIFFICULTY OF CLEANING AND REPAIRING THE MACHINERY, AND THE DIVIDED RESPONSIBILITY, ARISING FROM THE NECESSITY OF EMPLOYING A DOUBLE STAFF OF OVERLOOKERS, BOOK-KEEPERS, ETC., HAVE NEARLY PUT AN END T O THIS PRACTICE; BUT UNTIL HOBHOUSE'S ACT REDUCED THEM TO 69, OUR FACTORIES GENERALLY WORKED FROM 70 TO 80 HOURS PER WEEK" ([Senior,] Op. cit., p . 15).
"According to Baines, A FIRST-RATE COTTON-SPINNING FACTORY CANNOT BE BUILT, FILLED with machinery, and FITTED with STEAM ENGINES and GAS WORKS, under £100,000. A STEAM ENGINE OF 100 HORSE-POWER WILL TURN 50,000 SPINDLES, WHICH WILL PRODUCE 62,500 MILES OF FINE COTTON THREAD PER DAY. IN SUCH A FACTORY, 1,000 PERSONS WILL SPIN AS MUCH THREAD AS 2 5 0 , 0 0 0 PERSONS COULD WITHOUT MACHINERY" (S. Laing, National Distress etc., London, 1844, p. 75).
"WHEN PROFITS FALL, CIRCULATING CAPITAL IS DISPOSED TO BECOME TO SOME EXTENT FIXED CAPITAL. If interest is 5%, CAPITAL would not be USED IN MAKING NEW ROADS, CANALS OR RAILWAYS, until these WORKS YIELD A CORRESPONDING LARGE percentage; BUT WHEN INTEREST is only 4 OR 3%, CAPITAL WOULD BE ADVANCED FOR SUCH IMPROVEMENTS, IF IT OBTAINED ONLY A PROPORTIONAL LOWER PERCENTAGE. JOINT-STOCK COMPANIES, TO ACCOMPLISH GREAT IMPROVEMENTS, ARE THE NATURAL OFFSPRING OF A FALLING RATE OF PROFIT. I T ALSO INDUCES INDIVIDUALS TO FIX THEIR CAPITALS IN THE FORM OF BUILDINGS AND MACHINERY" (Th. Hopkins, Great Britain for the Last Forty Years etc., London, 1834, p. 232).
"McCulloch computes the NUMBERS and INCOMES of those ENGAGED IN the COTTON MANUFACTURE as:
833,000 WEAVERS, SPINNERS, BLEACHERS, etc., AT £24
EACH A YEAR £20,000,000 111,000 JOINERS, ENGINEERS, MACHINE MAKERS, etc.,
AT £30 EACH £3,333,000 PROFIT, SUPERINTENDENCE, COAL AND MATERIALS OF MACHINES £ 6 , 6 6 7 , 0 0 0
944,000 £30,000,000 " O f t h e 6 2 / 3 MILLIONS, 2 MILLIONS ARE SUPPOSED T O GO FOR COAL, IRON, AND OTHER MATERIALS, FOR MACHINERY AND OTHER OUTGOINGS, WHICH WOULD GIVE EMPLOYMENT, AT £ 3 0 A YEAR EACH, TO 6 6 , 6 6 6 , MAKING A TOTAL OF PEOPLE EMPLOYED OF 1,010,666; to these are to be added V2 the number OF CHILDREN, AGED, etc., DEPENDENT ON THOSE WHO WORK, OR AN ADDITIONAL 5 0 5 , 3 3 0 ; SO A TOTAL, SUPPORTED
ON WAGES, OF 1,515,996 PERSONS. To these are to be added those who ARE SUPPORTED, DIRECTLY OR INDIRECTLY, BY THE 4 2 / 3 MILLIONS OF PROFIT", e t c . ( H o p k i n s , ibid., pp. 336-37).
According to this calculation, therefore, 833,000 are directly engaged in production; 177,666 in the production of the MACHINERY and the matières instrumentales, which are only required because of the employment of machinery. But the latter are reckoned at £30 per head; hence, to reduce their number into LABOUR OF THE SAME QUALITY as that performed by the 833,000, they are to be reckoned AT £24 per HEAD; according to this, £5,333,000 would employ ABOUT 222,208 workers, which would mean 1 worker employed in the production of machinery and matières instrumentales to ABOUT 3 [3]/ [4] employed in the production of COTTON fabric. More than 1 to 4 but let us say 1:4. If now the 4 workers still employed worked only as much as 5 did previously, i.e. if each worked [1]/[4] surplus labour time more, there would be no [increase of] profit for capital. The remaining 4 must provide more surplus labour than 5 did previously; or the number of workers employed in the production of the machinery must be less than the number of workers displaced by it. Machinery is only PROFITABLE to capital to the extent that it increases the surplus labour time of the workers working with it (not in so far as it reduces labour time; only in so far as it raises the ratio of surplus labour time to necessary, so that the latter not merely decreases relatively, while the number of simultaneous working days remains the same, but decreases absolutely).
An increase in absolute [surplus] labour time implies the same or an increasing number of simultaneous working days; ditto an increase in productive power due to the division of labour, etc. In both cases, the aggregate labour time remains the same or increases. With the employment of machinery, relative surplus labour time increases not merely in relation to necessary labour time and hence to aggregate labour time; as well, its ratio to necessary labour time increases, while there is a decrease in aggregate labour, i.e. in the number of simultaneous working days (in proportion to surplus labour time).
A Glasgow factory-owner gave J. C. Symons, for his Arts and Artisans at Home and Abroad (Edinburgh, 1839), the following data (we reproduce several of his tables here to have examples at hand illustrating the proportion of FIXED CAPITAL, CIRCULATING capital, the part of capital laid out in WAGES, etc.): [VII-43] Glasgow:
"EXPENSE OF ERECTING A POWER-LOOM FACTORY OF 5 0 0 LOOMS, CALCULATED TO WEAVE A GOOD FABRIC OF CALICO, OR SHIRTING, SUCH AS IS GENERALLY-MADE IN GLASGOW, WOULD BE ABOUT £18,000
ANNUAL PRODUCE, SAY 1 5 0 , 0 0 0 PIECES OF 2 4 YARDS,
AT 6 SHILLINGS £ 4 5 , 0 0 0
WHICH COST AS UNDER:
INTEREST ON SUNK CAPITAL, AND FOR DEPRECIATION OF THE VALUE of the MACHINERY 1,800
STEAM-POWER, OIL, TALLOW, etc., KEEPING UP MACHINERY, UTENSILS, etc 2,000
YARNS AND FLAX 32,000
WAGES TO WORKMEN 7,500
SUPPOSE PROFIT : 1,700
45,000"
(p. 233).
Hence, if we take 5% INTEREST ON MACHINERY, GROSS PROFIT is 1,700+900 = 2,600. But the capital expended in wages amounts to only £7,500. The proportion of profit to wages therefore=26:75 = 5'7[5]:15, therefore 34[2]/[3]%-
"PROBABLE EXPENSE OF ERECTING A SPINNING COTTON-MILL with HAND MULES, CALCULATED TO PRO-DUCENO. 40 OF A FAIR AVERAGE QUALITY £23,000
IF PATENT SELF-ACTORS, £2,000 ADDITIONAL.
PRODUCE ANNUALLY TO THE PRESENT PRICES OF COT-TONS AND THE RATES AT WHICH YARNS COULD BE SOLD £25,000
COST OF WHICH AS FOLLOWS:
INTEREST OF SUNK CAPITAL, ALLOWANCE FOR DEPRECIATION OF VALUE OF MACHINERY
10% 2,300
COTTON 14,000
STEAM-POWER, OIL, TALLOW, GAS, AND GENERAL EXPENSE OF KEEPING UP UTENSILS and MACHINERY IN REPAIR 1,800
WAGES TO WORKERS 5,400
PROFIT 1,500
£25,000" (p. 234).
(Floating capital of £7,000 is thus assumed, since 1,500 is 5% on 30,000.)
"The PRODUCE of the MILL TAKEN AT 10,000 lb. WEEKLY" (ibid., p. 234).
Hence, profit here=l,150+l,500=2,650; 2,650:5,400 (wages) = l:2[2]/[53]=49[8]/[108]%.
"COST OF A COTTON SPINNING MILL OF 10,000 THROS-TLES, CALCULATED TO PRODUCE A FAIR QUALITY OF No. 24 £20,000 TAKING PRESENT VALUE OF PRODUCE, THE AMOUNT
WOULD ANNUALLY BE COSTING £ 2 3 , 0 0 0 INTEREST ON SUNK CAPITAL, DEPRECIATION OF VALUE
OF MACHINERY at 10% 2,000 COTTON 13,300 STEAM-POWER, TALLOW, OIL, GAS, KEEPING MACHINERY
IN REPAIR, ETC 2,500 WAGES TO WORKERS 3,800 PROFIT 1,400
23,000"
(p. 235).
Hence GROSS PROFIT=2,400; WAGES 3,800; 2,400:3,800=24:38= = 12:19=63 [3]/i9%-
In the first case, 34[2]/3%; in the second, 49[8]/ios%; and in the last, 63[3]/[19]%. In the first case, wages constitute 1/6 of the total price of the product; in the second, more than l/5; in the last, less than 1/6. But in the first case, the proportion of wages to the value of the capital employed=l:4[8]/[15]; in the second, l:5[15]/[2]7; and in the third, l:7[7]/i9- In the same measure as the ratio of the part of capital laid out in wages to that laid out in machinery and circulating capital (this equals, TOGETHER, in the first case, 34,000; in the second, 30,000; in the third, 28,000) declines, the profit on the part laid out in wages must, of course, increase if the percentage of profit is to remain the same.
The absolute decrease of the aggregate labour employed, i.e. of the working day multiplied by the number of simultaneous working days, relative to surplus labour can appear in either of two ways. Either in the form specified first, i.e., that a part of the workers previously employed are dismissed because of the use of fixed capital (machinery). Or, that the introduction of machinery diminishes the increase in the number of working days employed, although productivity grows, and (OF COURSE) does so in a greater proportion, too, than it is decreased in consequence of the "value" of the newly introduced machinery. To the extent that fixed capital possesses value, it does not augment but reduces the productivity of labour.
" T H E SURPLUS HANDS would enable the MANUFACTURERS TO LESSEN THE RATE OF WAGES; BUT THE CERTAINTY THAT ANY CONSIDERABLE REDUCTION WOULD BE FOLLOWED
BY IMMEDIATE IMMENSE LOSSES FROM TURNOUTS, EXTENDED STOPPAGES, AND VARIOUS OTHER IMPEDIMENTS WHICH WOULD BE THROWN IN THEIR WAY, MAKES THEM PREFER THE SLOWER PROCESS OF MECHANICAL IMPROVEMENT, BY WHICH, THOUGH THEY MAY TRIPLE PRODUCTION, THEY REQUIRE NO NEW MEN" (Gaskell, Artisans and Machinery, London, 1836, p. 314).
"WHEN THE IMPROVEMENTS NOT QUITE DISPLACE THE WORKMAN, THEY WILL RENDER ONE MAN CAPABLE OF PRODUCING, OR RATHER SUPERINTENDING, THE PRODUCTION OF [A] QUANTITY NOW REQUIRING 1 0 OR 2 0 LABOURERS (ibid., p . 3 1 5 ) .
"MACHINES HAVE BEEN INVENTED WHICH ENABLE ONE MAN TO PRODUCE AS MUCH YARN AS 2 5 0 , OR 3 0 0 EVEN, COULD HAVE PRODUCED 7 0 YEARS AGO, WHICH ENABLE 1 MAN AND 1 BOY TO PRINT AS MANY GOODS AS A HUNDRED MEN AND A HUNDRED BOYS COULD HAVE PRINTED FORMERLY. T h e 1 5 0 , 0 0 0 WORKMEN IN THE SPINNING MILLS produce as much yarn as 40 MILLIONS could have produced with the ONE-THREAD WHEEL" (ibid., p. 316).
[VII-44] "The IMMEDIATE MARKET FOR CAPITAL, or FIELD FOR CAPITAL, MAY BE SAID
TO BE LABOUR. T H E AMOUNT OF CAPITAL WHICH CAN BE INVESTED AT A GIVEN MOMENT,
IN A GIVEN COUNTRY, OR THE WORLD, SO AS TO RETURN NOT LESS THAN A GIVEN RATE OF PROFITS, SEEMS PRINCIPALLY T O DEPEND ON THE QUANTITY OF LABOUR, WHICH I T IS POSSIBLE, BY LAYING OUT THAT CAPITAL, T O INDUCE THE THEN EXISTING NUMBER OF HUMAN BEINGS TO PERFORM" (An Inquiry into those Principles respecting the Nature of Demand etc., London, 1821, p. 20) (written by a RICARDIAN in opposition to Malthus's Principles etc.).
Endnotes
[20] Thomas Hodgskin's pamphlet Labour Defended against the Claims of Capital, London, 1825, p. 16 contains the following: "One easily comprehends why ... the road-maker should receive some of the benefits, accruing only to the road-user; but I do not comprehend why all these benefits should go to the road itself, and be appropriated by a set of persons who neither make nor use it, under the name of profit for their capital."—89
[1] This is the concluding part of Marx's economic manuscript of 1857-1858. Consisting of seven large notebooks, which Marx numbered I-VII, the manuscript is the first rough draft of Capital. On the cover of the last, seventh, notebook, Marx wrote Political Economy, Criticism of in English and "Fortsetzung [Continuation]" in German. This implies that Notebook VII is a continuation of the preceding six notebooks and that Marx did not consider it to be the concluding one. The words Political Economy, Criticism of can be regarded as the author's title for the whole manuscript. The words "rough draft" are taken from Marx's letter to Engels of November 29, 1858 in which Marx calls his economic manuscript of 1857-1858 a Rohentwurf (Rough Draft). The manuscript is, indeed, a rough draft, for it is unfinished and breaks off in mid-sentence. A major part of the manuscript is included in Volume 28 of the present edition and begins with Chapter II—"Chapter on Money", followed by a long third chapter, "Chapter on Capital". Notebook VII contains the conclusion ot this chapter, followed by fragments intended as additions to the two chapters — on money and on capital. The Economic Manuscript of 1857-1858 is being published in the sequence given by Marx. The numbers of the notebooks are indicated in Roman numerals and the pages in Arabic ones, in square brackets. The square brackets in the manuscript are, therefore, replaced by oblique lines. Some passages have been transposed — as indicated by Marx in the manuscript or where there are obvious additions relevant to the preceding text. All such cases are mentioned in the footnotes, which also indicate passages crossed out by Marx and sometimes reproduce them. Where Marx, in quoting, gives references to pages of his excerpt notebooks, these have been supplemented, in brackets, with references to the pages of the editions Marx used. Where he merely gives the authors' names, the titles of the quoted works have been supplied. Foreign words and expressions, including Greek and Latin, are preserved when the author used them for stylistic or terminological purposes. English phrases, expressions and separate words are given in small caps. Quotations from English sources are given according to the editions used by the author. In all cases the form in which Marx quoted is respected. The language in which Marx quotes is indicated, unless it is German. The manuscript was first published in full in the language of the original (German) in Karl Marx, Grundrisse der Kritik der politischen Oekonomie (Rohentwurf). 1857-1858, Moscow, 1939-41 and reproduced by Dietz Verlag, Berlin, in 1953. In English, the manuscript was published in full in Karl Marx, Grundrisse. Foundations of the Critique of Political Economy (Rough Draft). Translated with a foreword by Martin Nicolaus. Penguin Books in association with New Left Review, London, 1973. Separate extracts had been published previously in Marx's Grundrisse, ed. David McLellan, Macmillan Press Ltd., London, 1971.—Title-page
[5] The reference is to the 1845 Brussels Excerpt Notebook. Other quotations from Storch are on pages 26, 34-35 of this notebook.— 24, 118
[53] A reference to J. Maclaren's A Sketch of the History of the Currency, London, 1858. Marx quotes, in English, a review of it that appeared in The Economist on May 15, 1858. Marx learned from the review that the book had come off the presses and became interested in it (see Marx's letter to Engels of May 31, 1858, present edition, Vol. 40, pp. 317-18). Subsequently Marx used Maclaren's book in his A Contribution to the Critique of Political Economy, Part One (see this volume, pp. 309, 398, 399).—250
[108] six books. The first, "On Capital", as can be seen from Marx's letter to Engels of April 2, 1858, was to be divided into four sections: 1) Capital en general, 2) Competition, or the interaction of many capitals, 3) Credit, 4) Share Capital (see present edition, Vol. 40, p. 298). This remained the general plan in 1861, when Marx resumed his work on the planned second part of A Contribution to the Critique of Political Economy (it was changed only in the course of further studies). Here Marx has in mind the second section of his book "On Capital".—514 108 References to My Own Notebooks belong to the period when, after an interruption caused by his editorial work on the newspaper Das Volk (summer 1859), writing his pamphlet Herr Vogt and other circumstances, Marx resumed intensive studies of political economy and returned to his work on the
[19] Marx examined Lauderdale's explanation of profit in his Economic Manuscript of 1861-63 (see present edition, Vol. 31 and this volume, pp. 78-79).—87
[7] Marx has in mind Notebook XVI of the 24 notebooks of excerpts on political economy he made in the early 1850s. The notebook contains excerpts from Gratuité du crédit. Discussion entre M. Fr. Bastiat et M. Proudhon, Paris, 1850. Proudhon's formula on the surplus added by labour is to be found on p. 200 of this book, as well as in Proudhon's Système des contradictions économiques, ou Philosophie de la misère, Vol. I, Paris, 1846, p. 73. Cf. present edition, Vol. 28, p. 531. For criticism of this formula, see also Marx's work The Poverty of Philosophy (present edition, Vol. 6, pp. 152-60).—29
[4] This refers to the discovery of rich deposits of gold in Australia in 1851. The development of these deposits, alongside the extraction of gold discovered in California in 1848, spurred industrial and stock-exchange activity in capitalist countries.—11, 265
[3] In his manuscript, to denote these categories Marx uses mostly the French terms "capital circulant" and "capital fixe", but sometimes he also uses the German ones "zirkulierendes Kapital" and "fixiertes Kapital", or the English "circulating capital", "floating capital", and "fixed capital".— 9, 201, 515, 526
[23] Here and elsewhere Marx uses the term "production costs" in the sense of "the immanent production costs of the commodity, which are equal to its value", i.e., "the real production costs of the commodity itself" and not the costs defrayed by the capitalist, who pays only part of the labour time contained in the commodity (see Economic Manuscript of 1861-63, present edition, Vol. 32).—97
[2] Marx dealt with the circuit and turnover of capital in the preceding part of Section Two of the "Chapter on Capital" (see present edition, Vol. 28, pp. 439-72), but then he interrupted his exposition of these problems and wrote a section about bourgeois theories of surplus value and profit (see Vol. 28, pp. 473-537). He did, however, return to the topic.— 7
[8] In the 1857-1858 manuscript Marx as a rule uses the term "Arbeitsvermögen" (labour capacity), hut in some cases "Arbeitskraft" (labour power). In Capital, Vol. I, Ch. VI, he treats the two terms as identical: "By labour-power or capacity for labour is to be understood the aggregate of those mental and physical capabilities existing in a human being, which he exercises whenever he produces a use-value of any description" (see present edition, Vol. 35).—29, 63
[15] Marx is referring to the Excerpt Notebook compiled in Manchester in 1845.—76