Chapter V. Economy in the Employment of Constant Capital
The increase of absolute surplus value, or the prolongation of surplus labour, and thus of the working day, while the variable capital remains the same and thus employs the same number of labourers at the same nominal wages, regardless of whether overtime is paid or not, reduces relatively the value of the constant capital as compared to the total and the variable capital, and thereby increases the rate of profit, again irrespective of the growth of the quantity of surplus value and a possibly rising rate of surplus value. The volume of the fixed portion of constant capital, such as factory buildings, machinery, etc., remains the same, no matter whether these serve the labour process 16 or 12 hours. A prolongation of the working day does not entail any fresh expenditures in this, the most expensive portion of constant capital. Furthermore, the value of the fixed capital is thereby reproduced in a smaller number of turnover periods, so that the time for which it must be advanced to make a certain profit is abbreviated. A prolongation of the working day therefore increases the profit, even if overtime is paid, or even if, up to a certain point, it is better paid than the normal hours of labour. The ever-mounting need to increase fixed capital in modern industry was therefore one of the main reasons prompting profit-mad capitalists to lengthen the working day."' The same conditions do not obtain if the working day is constant. Then it is necessary either to increase the number of labourers, and with them to a certain extent the amount of fixed capital, the buildings, machinery, etc., in order to exploit a greater quantity of labour (for we leave aside deductions from wages or the depression of wages below their normal level), or, if the intensity and, consequently, the productive power, of labour increase and, generally, more relative surplus value is produced, the magnitude of the circulating portion of constant capital increases in such industrial branches which use raw materials, since more raw material, etc., is processed in a given time; and, secondly, the amount of machinery set in motion by the same number of labourers, therefore also this part of constant capital, increases as well. Hence, an increase in surplus value is accompanied by an increase in constant capital, and the growing exploitation of labour by greater outlays in the conditions of production through which labour is exploited, i. e., by a greater investment of capital. Therefore, the rate of profit is thereby reduced on the one hand while it increases on the other.
Quite a number of current expenses remain almost or entirely the same whether the working day is longer or shorter. The cost of supervision is less for 500 working men during 18 working hours than for 750 working men during 12 working hours.
"The expense of working a factory 10 hours almost equals that of working it 12" (Reports of Insp. of Fact., October 1848, p. 37).
State and municipal taxes, fire insurance, wages of various permanent employees, depreciation of machinery, and various other expenses of a factory, remain unchanged whether the working time is long or short. To the extent to which production decreases, these
[1] ') "Since in all factories there is a very large amount of fixed capital in buildings and machinery, the greater the number of hours that machinery can be kept at work the greater will be the return" (Reports of Insp. of Fact., 31st October, 1858, p. 8).
expenses rise as compared to the profit (Reports of Insp. of Fact., October 1862, p. 19).
The period in which the value of the machinery and of the other components of fixed capital is reproduced is determined in practice not by their mere lifetime, but by the duration of the entire labour process during which they serve and wear out. If the labourers must work 18 instead of 12 hours, this makes a difference of three days more per week, so that one week is stretched into one and a half, and two years into three. If this overtime is unpaid the labourers give away gratis a week out of every three and a year out of every three on top of the normal surplus labour time. In this way, the reproduction of the value of the machinery is speeded up 50% and accomplished in -y of the usually required time.
To avoid useless complications, we proceed in this analysis, and in that of price fluctuations for raw materials (Chap. VI), from the assumption that the mass and rate of surplus value are given.
As already shown in the presentation of co-operation, division of labour and machinery,(1) the economy of production conditions found in large-scale production is essentially due to the fact that these conditions prevail as conditions of social, or socially combined, labour, and therefore as social conditions of labour. They are commonly consumed in the process of production by the aggregate labourer, instead of being consumed in small fractions by a mass of labourers operating disconnectedly or, at best, directly co-operating on a small scale. In a large factory with one or two central motors the cost of these motors does not increase in the same ratio as their horse-power and, hence, their possible sphere of activity. The cost of the transmission equipment does not grow in the same ratio as the number of working machines which it sets in motion. The frame of a machine does not become dearer in the same ratio as the mounting number of tools which it employs as its organs, etc. Furthermore, the concentration of means of production yields a saving on buildings of various kinds not only for the actual workshops, but also for storage, etc. The same applies to expenditures for fuel, lighting, etc. Other conditions of production remain the same, whether used by many or by few.
This total economy, arising as it does from the concentration of means of production and their use en masse, imperatively requires, however, the accumulation and co-operation of labourers, i. e., a social combination of labour. Hence, it originates quite as much from the social nature of labour, just as surplus value originates from the surplus labour of the individual labourer considered singly. Even the continual improvements, which are here possible and necessary, are due solely to the social experience and observation ensured and made possible by production of aggregate labour combined on a large scale.
The same is true of the second big source of economy in the conditions of production. We refer to the reconversion of the excretions of production, the so-called waste, into new elements of production, either of the same, or of some other line of industry; to the processes by which this so-called excretion is thrown back into the cycle of production and, consequently, consumption, whether productive or individual. This line of savings, which we shall later examine more closely, is likewise the result of large-scale social labour. It is the attendant abundance of this waste which renders it available again for commerce and thereby turns it into new elements of production. It is only as waste of combined production, therefore of large-scale production, that it becomes important to the production process and remains a bearer of exchange value. This waste, aside from the services which it performs as a new element of production, reduces the cost of the raw material to the extent to which it is again saleable, for this cost always includes the normal waste, namely the quantity ordinarily lost in processing. The reduction of the cost of this portion of constant capital increases pro tanto* the rate of profit, assuming the magnitude of the variable capital and the rate of surplus value to be given.
If the surplus value is given, the rate of profit can be increased only by reducing the value of the constant capital required for commodity production. So far as constant capital enters into the production of commodities, it is not its exchange value, but its use value alone, which matters. The quantity of labour which flax can absorb in a spinnery does not depend on its value, but on its quantity, assuming the productivity of labour, i. e., the level of technical development, to be given. In like manner the assistance rendered by a machine to, say, three labourers does not depend on its value, but on its use value as a machine. On one level of technical development a bad machine may be expensive and on another a good machine may be cheap.
The increased profit received by a capitalist through the cheapening of, say, cotton and spinning machinery, is the result of higher labour productivity, not in the spinnery, to be sure, but in cotton cultivation and construction of machinery. It requires smaller outlays of the conditions of labour to objectify a given quantity of labour, and hence to appropriate a given quantity of surplus labour. The costs required to appropriate a certain quantity of surplus labour diminish."
We have already mentioned savings yielded in the production process through co-operative use of means of production by the aggregate, or socially combined, labour. Other savings of constant capital arising from the shortening of the time of circulation in which the development of means of communication is a dominant material factor will be discussed later. At this point we shall deal with the savings yielded by continuous improvements of machinery, namely 1 ) of its material, e. g., the substitution of iron for wood; 2) the cheapening of machinery due to the general improvement of machine-building; so that, although the value of the fixed portion of constant capital increases continually with the development of labour on a large scale, it does not increase at the same rate(2)'; 3) special improvements enabling existing machinery to work more cheaply and effectively; for instance, improvements of steam-boilers, etc., which will be discussed later on in greater detail; 4) reduction of waste through better machinery.
Whatever reduces the wear of machinery, and of fixed capital in general, for any given period of production, cheapens not only the individual commodity, in view of the fact that in its price every individual commodity reproduces its aliquot share of this depreciation, but reduces also the aliquot portion of the invested capital for this period. Repair work, etc., to the extent that it becomes necessary, is added to the original cost of the machinery. A reduction in repair costs, due to greater durability of the machinery, lowers pro tanto the price of this machinery.
It may again be said of all these savings that they are largely possible only for combined labour, and are often not realised until production is carried forward on a still larger scale, so that they require an even greater combination of labour in the immediate process of production.
I2) Cf. Ure on the progress in factory construction.b However, on the other hand, the development of the productive power of labour in any one line of production, e.g., the production of iron, coal, machinery, in architecture, etc., which may again be partly connected with progress in the field of intellectual production, notably natural science and its practical application, appears to be the premiss for a reduction of the value, and consequently of the cost, of means of production in other lines of industry, e.g., the textile industry, or agriculture. This is self-evident, since a commodity which is the product of a certain branch of industry enters another as a means of production. Its greater or lesser price depends on the productivity of labour in the line of production from which it issues as a product, and is at the same time a factor that not only cheapens the commodities into whose production it goes as a means of production, but also reduces the value of the constant capital whose element it here becomes, and thereby one that increases the rate of profit.
The characteristic feature of this kind of saving of constant capital arising from the progressive development of industry is that the rise in the rate of profit in one line of industry depends on the development of the productive power of labour in another. Whatever falls to the capitalist's advantage in this case is once more a gain produced by social labour, if not a product of the labourers he himself exploits. Such a development of productive power is again traceable in the final analysis to the social nature of the labour engaged in production; to the division of labour in society; and to the development of intellectual labour, especially in the natural sciences. What the capitalist thus utilises are the advantages of the entire system of the social division of labour. It is the development of the productive power of labour in its exterior department, in that department which supplies it with means of production, whereby the value of the constant capital employed by the capitalist is relatively lowered and consequently the rate of profit is raised.
Another rise in the rate of profit is produced, not by savings in the labour creating the constant capital, but by savings in the application of this capital itself. On the one hand, the concentration of labourers, and their large-scale co-operation, saves constant capital. The same buildings, and heating and lighting appliances, etc., cost relatively less for the large-scale than for small-scale production. The same is true of power and working machinery. Although their absolute value increases, it falls in comparison to the increasing extension of production and the magnitude of the variable capital, or the quantity of labour power set in motion. The economy realised by a certain capital within its own line of production is first and foremost an economy in labour, i.e., a reduction of the paid labour of its own labourers. The previously mentioned economy, on the other hand, is distinguished from this one by the fact that it accomplishes the greatest possible appropriation of other people's unpaid labour in the most economical way, i. e., with as little expense as the given scale of production will permit. Inasmuch as this economy does not rest with the previously mentioned exploitation of the productivity of the social labour employed in the production of constant capital, but with the economy in the constant capital itself, it springs either directly from the co-operation and social form of labour within a certain branch of production, or from the production of machinery, etc., on a scale in which its value does not grow at the same rate as its use value.(3)
Two points must be borne in mind here: If the value of c = zero, then p' = s', and the rate of profit would be at its maximum. Second, however, the most important thing for the direct exploitation of labour itself is not the value of the employed means of exploitation, be they fixed capital, raw or auxiliary materials. In so far as they serve as means of absorbing labour, as media in or by which labour and, hence, surplus labour are objectified, the exchange value of machinery, buildings, raw materials, etc., is quite immaterial. What is ultimately essential is, on the one hand, the quantity of them technically required for combination with a certain quantity of living labour, and, on the other, their suitability, ie., not only good machinery, but also good raw and auxiliary materials. The rate of profit depends partly on the good quality of the raw material. Good material produces less waste. Less raw materials are then needed to absorb the same quantity of labour. Furthermore, the resistance to be overcome by the working machine is also less. This partly affects even the surplus value and the rate of surplus value. The labourer needs more time when using bad raw materials to process the same quantity. Assuming wages remain the same, this causes a reduction in surplus labour. This also substantially affects the reproduction and accumulation of capital, which depend more on the productivity than on the amount of labour employed, as shown in Book I (S. 627/619 ff.).b
The capitalist's fanatical insistence on economy in means of production is therefore quite understandable. That nothing is lost or wasted and the means of production are consumed only in the manner required by production itself, depends partly on the skill and intelligence of the labourers and partly on the discipline enforced by the capitalist for the combined labour. This discipline will become superfluous under a social system in which the labourers work for their own account, as it has already become practically superfluous in piece-work. This fanatical insistence comes to the surface also conversely in the adulteration of the elements of production, which is one of the principal means of lowering the relation of the value of the constant capital to the variable capital, and thus of raising the rate of profit. Whereby the sale of these elements of production above their value, so far as this reappears in the product, acquires a marked element of cheating. This practice plays an essential part particularly in German industry, whose maxim is: People will surely appreciate if we send them good ,samples at first, and then inferior goods after-ward. However, as these matters belong to the sphere of competition they do not concern us here.
It should be noted that this raising of the rate of profit by means of lowering the value of the constant capital, i.e., by reducing its expensiveness, does not in any way depend on whether the branch of industry in which it takes place produces luxuries, or necessities for the consumption of labourers, or means of production generally. This last circumstance would only be of material importance if it were a question of the rate of surplus value, which depends essentially on the value of labour power, i.e., on the value of the customary necessities of the labourer. But in the present case the surplus value and the rate of surplus value have been assumed as given. The relation of surplus value to total capital — and this determines the rate of profit — depends under these circumstances exclusively on the value of the constant capital, and in no way on the use value of the elements of which it is composed.
A relative cheapening of the means of production does not, of course, exclude the possible increase of their absolute aggregate value, for the absolute volume in which they are employed grows tremendously with the development of the productive power of labour and the attendant growth of the level of production. Economy in the use of constant capital, from whatever angle it may be viewed, is, in part, the exclusive result of the fact that the means of production function and are consumed as joint means of production of the combined labourer, so that the resulting saving appears as a product of the social nature of directly productive labour; in part, however, it is the result of developing productivity of labour in spheres which supply capital with its means of production, so that if we view the total labour in relation to total capital, and not simply the labourers employed by capitalist X in relation to capitalist X, this economy presents itself once more as a product of the development of the productive forces of social labour, with the only difference that capitalist X enjoys the advantage not only of the productivity of labour in his own establishment, but also of that in other establishments. Yet the capitalist views economy of his constant capital as a condition wholly independent of, and entirely alien to, his labourers. He is always well aware, however, that the labourer has something to do with the employer buying much or little labour with the same amount of money (for this is how the transaction between the capitalist and labourer appears in his mind). This economy in the application of the means of production, this method of obtaining a certain result with a minimum outlay appears more than any other inner power of labour as an inherent power of capital and a method peculiar and characteristic of the capitalist mode of production.
This conception is so much the less surprising since it appears to accord with fact, and since the relationship of capital actually conceals the inner connection behind the utter indifference, isolation, and estrangement in which they place the labourer vis-à-vis the conditions of realising his labour.
First, the means of production that make up the constant capital represent only the money belonging to the capitalist (just as the body of the Roman debtor represented the money of his creditor, according to Linguet(4)) and are related to him alone, while the labourer, who comes in contact with them only in the direct process of production, deals with them as use values of production only, as means of labour and materials of labour. Increase or decrease of their value, therefore, has as little bearing on his relations to the capitalist as the circumstance whether he may be working with copper or iron. For that matter, the capitalist likes to view this point differently, as we shall later indicate, whenever the means of production gain in value and thereby reduce his rate of profit.
Second, in so far as these means of production in the capitalist production process are at the same time means of exploiting labour, the labourer is no more concerned with their relative dearness or cheapness than a horse is concerned with the dearness or cheapness of its bit and bridle.
Finally, we have earlier seen(5) that, in fact, the labourer looks at the social nature of his labour, at its combination with the labour of others for a common purpose, as he would at an alien power; the condition of realising this combination is alien property, whose dissi-pation would be totally indifferent to him if he were not compelled to economise with it. The situation is quite different in factories owned by the labourers themselves, as in Rochdale, for instance.[17]
It scarcely needs to be mentioned, then, that as far as concerns the productivity of labour in one branch of industry as a lever for cheapening and improving the means of production in another, and thereby raising the rate of profit, the general interconnection of social labour affects the labourers as a matter alien to them, a matter that actually concerns the capitalist alone, since it is he who buys and appropriates these means of production. The fact that he buys the product of labourers in another branch of industry with the product of labourers in his own, and that he therefore disposes of the product of the labourers of another capitalist only by gratuitously appropriating that of his own, is a development that is fortunately concealed by the process of circulation, etc.
Moreover, since production on a large scale develops for the first time in its capitalist form, the thirst for profits on the one hand, and competition on the other, which compels the cheapest possible production of commodities, make this economy in the employment of constant capital appear as something peculiar to the capitalist mode of production and therefore as a function of the capitalist.
Just as the capitalist mode of production promotes the development of the productive powers of social labour, on the one hand, so does it whip on to economy in the employment of constant capital on the other.
However, it is not only the estrangement and indifference that arise between the labourer, the bearer of living labour, and the economical, i. e., rational and thrifty, use of the material conditions of his labour. In line with its contradictory and antagonistic nature, the capitalist mode of production proceeds to count the prodigious dissipation of the labourer's life and health, and the lowering of his living conditions, as an economy in the use of constant capital and thereby as a means of raising the rate of profit.
Since the labourer passes the greater portion of his life in the process of production, the conditions of the production process are largely the conditions of his active life process, or his living conditions, and economy in these living conditions is a method of raising the rate of profit; just as we saw earlier(6) that overwork, the transformation of the labourer into a work horse, is a means of increasing capital, or speeding up the production of surplus value. Such economy extends to overcrowding close and unsanitary premises with labourers, or, as capitalists put it, to space saving; to crowding dangerous machinery into close quarters without using safety devices, to neglecting safety rules in production processes pernicious to health, or, as in mining, bound up with danger, etc. Not to mention the absence of all provisions to render the production process human, agreeable, or at least bearable. From the capitalist point of view this would be quite a useless and senseless waste. The capitalist mode of production is generally, despite all its niggardliness, altogether too prodigal with its human material, just as, conversely, thanks to its method of distribution of products through commerce and manner of competition, it is very prodigal with its material means, and loses for society what it gains for the individual capitalist.
Just as capital has the tendency to reduce the direct employment of living labour to no more than the necessary labour, and always to cut down the labour required to produce a commodity by exploiting the social productive power of labour and thus to save a maximum of directly applied living labour, so it has also the tendency to employ this labour, reduced to a minimum, under the most economical conditions, i. e., to reduce to its minimum the value of the employed constant capital. If it is the necessary labour which determines the value of commodities, instead of all the labour time contained in them, so it is the capital which realises this determination and, at the same time, continually reduces the labour time socially necessary to produce a given commodity. The price of the commodity is thereby lowered to its minimum since every portion of the labour required for its production is reduced to its minimum.b
We must make a distinction in economy as regards use of constant capital. If the quantity, and consequently the sum of the value of employed capital, increases, this is primarily only a concentration of more capital in a single hand. Yet it is precisely this greater quantity applied by a single source — attended, as a rule, by an absolutely greater but relatively smaller amount of employed labour — which permits economy of constant capital. To take an individual capitalist, the volume of the necessary investment of capital, especially of its fixed portion, increases. But its value decreases relative to the mass of worked-up materials and exploited labour.
This is now to be briefly illustrated by a few examples. We shall begin at the end — the economy in the conditions of production, in so far as these also constitute the living conditions of the labourer.
Endnotes
[1] Volume III of Capital, edited by Frederick Engels and published in Hamburg in November 1894, concludes the theoretical part of Marx's main economic writing. Both the economic theory itself and the structure of Capital, Book III included, were the product of many years of study. In his work on the manuscript of Book III Marx evidently followed the plan which he had drawn up when writing the Economic Manuscript of 1857-58, and which he sets out in a letter to Engels dated April 2, 1858: "Capital falls into 4 sections, a) Capital en général... b) Competition, or the interaction of many capitals, c) Credit, where capital, as against individual capitals, is shown to be a universal element, d) Share capital as the most perfected form (turning into communism) together with all its contradictions" (see present edition, Vol. 40, p. 298). In the course of his further study, however, Marx concentrated on the first point dealing with "capital in general", and was to set forth the problems of the process of production of capital, the process of its circulation, and the unity of the two, or capital and profit (interest) (ibid., p. 287). "The Draft Plan of the Chapter on Capital", drawn up after the completion of the Economic Manuscript of 1857-58, listed the problems to be examined in the section "Capital and Profit" (ibid., Vol. 29, p. 516). The next stage in Marx's economic studies was the manuscript of 1861-63 in which he scientifically substantiated the theory of average profit and price of production, and also formulated the doctrine of special forms of surplus value — industrial profit, rent, interest, etc. In December 1862, basing himself on the new results of his studies, Marx wrote down in Notebook XVIII a detailed plan of Part III, or Section III, of Capital, according to which the future book was to have the following chapters: "1) Conversion of surplus value into profit. Rate of profit as distinguished from rate of surplus value. "2) Conversion of profit into average profit. Formation of the general rate of profit. Transformation of values into prices of production. "3) Adam Smith's and Ricardo's theories on profit and prices of production. "4) Rent. (Illustration of the difference between value and price of production.) "5) History of the so-called Ricardian law of rent. "6) Law of the fall of the rate of profit. Adam Smith, Ricardo, Carey. "7) Theories of profit. Query: whether Sismondi and Malthus should also be included in the Theories of Surplus Value. "8) Division of profit into industrial profit and interest. Mercantile capital. Money capital. "9) Revenue AND ITS SOURCES. The question of the relation between the processes of production and distribution also to be included here. "10) REFLUX movements of money in the process of capitalist production as a whole. "11) Vulgar economy. "12) Conclusion. "Capital and wage labour" (ibid., Vol. 33, pp. 346-47). This plan served, in fact, as the basis for the manuscript of the third book. A comparison of the text of this manuscript and the exposition of the same issues in the Economic Manuscript of 1861-63 shows that Marx not only made use of certain fundamental ideas set out in this manuscript, but included in the text whole passages from it (see respective footnotes). As early as July 1863, having finished the Economic Manuscript of 1861-63 (see present edition, vols 30-34), Marx turned to his plans concerning Capital. His aim, as formulated on May 29, 1863, was "to make a/air copy of the political economy for the printers (and give it a final polish)" (ibid., Vol. 41, p. 474). Marx began prepar-ing Book I and continued working on it till the summer of 1864. Of this manuscript only "Chapter Six. Results of the Direct Production Process" has survived in full (ibid., Vol. 34. pp. 355-466). Marx already envisaged Capital as consisting of four books and he wrote about this to Ludwig Kugelmann on October 13, 1866 (ibid., Vol. 42, p. 328). At the end of summer, 1864, Marx finished work on Book I of Capital and immediately began Book III. In the first half of 1865, however, he interrupted his work on Book III in order to write the first draft of Book II. The only full manuscript version of Book III had been written by early 1866. Engels started to prepare this manuscript for the printers at the end of February 1885, as is seen from his correspondence, and continued working on it almost to the end of his life. It was Engels' great service to prepare for the printers and publish Volume III of Marx's Capital.~5, 112, 119, 211, 223, 234, 236, 310, 397, 818.
[17] In 1844, workers in the town of Rochdale (Lancashire industrial region) who had been influenced by Owen's ideas took the initiative in organising a consumers' cooperative, the Rochdale Equitable Pioneers' Society, which became the prototype for workers' cooperatives in England and other countries. Workers' cooperatives often combined productive functions with their activities as consumer co-operative societies.—89