The Economic Doctrines of Karl Marx

2. The Role of Capital in the Formation of Value

In the first chapter of Part I we learnt the distinction, first drawn by Marx, involved in the double-sided character of the commodity-producing labour: on the one hand as a definite form of useful, use-value-creating labour, and on the other hand as general, human, simple, average labour, which forms commodity value. In consonance with this double-sided character, the production process under the rule of commodity production is also of a twofold nature, is a combination of labour-process and value-forming process, and as a process of capitalist production, it is a combination of labour-process and value-breeding process. In the last chapter we became acquainted with the two elements of the labour process: means of production and labour-power. We have also become acquainted with the different roles which both of these elements play as parts of capital in the value-breeding process. We have seen that the means of production participate in quite a different manner in the formation of the product-value from the labour-power.

We have found that the value of the means of production that is consumed re-appears in the value of the product. The transference of this value is effected in the labour-process by work. But how is this possible? The labour must perform two things at the same time, create new value and transfer old value. This can only be explained by the double-sided character of labour which we have just referred to. In its capacity as value-forming general human labour, it creates new value; in its capacity as a use-value-forming definite kind of useful labour, it transfers the value of the means of production to the product.

It is only through the special form of spinning labour that the value of cotton and spindle can be transferred to the yarn; the spinner, on the other hand, can create the same value that he creates as a spinner by means of other labour, if he were a carpenter, for instance. Then he would not make yarn or transfer any cotton-value to yarn.

The double-sided character of labour as value-forming and value-transferring labour is distinctly shown if we consider the influence of a change in the productivity of labour upon the act of forming value and the act of transferring value. The magnitude of value created in a working hour does not change if, other circumstances being equal, the productivity of labour grows or declines. On the other hand, the quantity of use-values produced in a definite period increases or decreases with the productivity of labour. Therefore, in the same degree, the value-transferring capacity of labour increases or decreases.

For instance, suppose an invention doubles the productivity of spinning labour, while the productivity of the cotton planter’s labour remains the same. As 1 lb. of cotton represents 2 working hours, it costs 1s., according to our assumptions in a previous chapter. Formerly, 2lbs. of cotton were spun in an hour, but now 4 lbs. are spun. The same new value which was previously added to the 2 lbs. by the work of one hour is now added to the 4 lbs., 6d. according to our assumption. But the doubled value is now transferred by the spinning labour to the yarn in one hour: previously 2s., now 4s.

It is apparent that the value-receiving or transferring capacity of labour depends upon a different quality of labour from its value-forming capacity.

As no producing is possible without means of production, so every kind of commodity-producing labour is not only value-forming, but also value-receiving, and this not only in the sense that it transfers the values of the used-up means of production to the product, but also in the sense that it has preserved the value of the former from dissolution. All earthly things are perishable, and therefore even the means of production wear out sooner or later, even if they remain unused. Many of them, various machines, for example, wear out even more quickly if they stand still than if they were kept running. With the use-value of the means of production, its commodity-value also disappears.

If the machines are worn out in a normal fashion in the process of production, the value which the means of production lose reappears in the value of the product. If the means of production are worn out without being employed in the production process, then their value disappears utterly.

The capitalist generally overlooks this side of the work, but it obtrudes itself very disagreeably on his consciousness if he is compelled to suspend the production process in consequence of some crisis. Marx quotes the example of an English cotton spinner, who in 1862 estimated the standing expenses of his factory when not working, as a result of the cotton crisis, at £96,000 a year, of which £1,200 went for depreciation of machinery.

The various parts of the means of production function in different ways in transferring value. Some lose their independent shape, such as raw and auxiliary materials. Others retain their shape during the labour process. The cotton that is spun loses its shape, not so, however, the spindle that spins. The former imparts its entire value to the product in the labour process, the latter only a fraction thereof. If a machine is worth £50 and is worn out, under normal conditions, in 1,000 days, it imparts in every working day the value of 1s. to the product that is produced with its assistance.

Here also we are confronted with the double-sided character of the production process. How can the machine impart ¹/₁₀₀₀th of its value to a specific product? In its production, it is not ¹/₁₀₀₀th of the machine, but the whole of the machine that is in operation. This objection has actually been raised. The answer is that the entire machine enters into the production process so far as it is a labour process; but only a corresponding fraction thereof so far as it is a value-breeding process. As use-value, the entire machine enters into every production process, as value, only a fraction of it.

Contrariwise, the entire value of an instrument of production may pass into the product, and yet only a portion of its substance. If we assume that, in order to produce 100 lbs. of yarn, 115 lbs. of cotton are required under normal conditions, that the waste in this case amounts to 15 lbs., only 100 lbs. of cotton are really transformed into 100 lbs. of yarn, but in the value of 100 lbs. of yarn, the value of 115 lbs. of cotton will be contained.

During the labour process the means of production transfer as much value to the product as they lose during the same operation. They can never impart more value to it than they possess themselves, however great their use-value may be. It is therefore quite pointless for the vulgar economists to derive the surplus-value and its converted forms, rent, interest, and profit, from the use-value of the means of production, from its “services.”

The value of the means of production consumed in the labour process reappears unaltered in the value of the product.

The labour not only receives value; it also forms new value. Up to a certain point in time, the new-value creating labour only replaces the value expended by the capitalist in the purchase of labour-power.

“That part of capital then,” says Marx, “which is represented by the means of production, by the raw material, auxiliary material, and the instruments of labour, does not, in the process of production, undergo any quantitative alteration of value. I therefore call it the constant part of capital or, more shortly, constant capital.

“On the other hand, that part of capital, represented by labour-power, does, in the process of production, undergo an alteration of value. It both reproduces the equivalent of its own value, and also produces an excess, a surplus-value, which may itself vary, may be more or less according to circumstances. This part of capital is continually being transformed from a constant into a variable magnitude. I therefore call it the variable part of capital, or, shortly, variable capital. The same elements of capital which, from the point of view of the labour-process, present themselves respectively as the objective and subjective factors, as means of production and labour-power, present themselves, from the point of view of creating surplus-value, as constant and variable capital.”

The magnitude of value of constant Capital is, of course, only to be understood as a constant magnitude in relation to the value-breeding process. The magnitude of value of constant capital is not altered by the production process in which it is employed, although such an alteration may be brought about by other factors. Moreover, the relation between constant and variable capital may change. But we shall return to this later.