Capitalism's Fatal Flaw, and the Way Forward: Part 04: Marxian Theory Series. MARX illustrates Enfetterment of Productive Force Growth by the Capital-Relation: Another Neglected Key Passage in Capital III. GLOBAL STRATEGIC HYPOTHESES.

Part 04: Marxian Theory Series.

MARX illustrates

Enfetterment

of Productive Force Growth by

the Capital-Relation:

Another Neglected Key Passage

in Capital III.

GLOBAL STRATEGIC HYPOTHESES.

Dear Reader,

It is my pleasure, and my honor, as an elected member of the Foundation Encyclopedia Dialectica [F.E.D.] General Council, and as a voting member of F.E.D., to share, with you, from time to time, as they are approved for public release by the F.E.D. General Council, Encyclopedia Dialectica definitions ‘of the key terms of Seldonian Theory.

The 4th text in this new such series is posted below [Some E.D. standard edits have been applied, in the version presented below, by the editors of the F.E.D. Special Council for the Encyclopedia, to the direct transcript of our co-founder’s discourse].

Seldon –

“In Capital, volume III, Marx presents the following ‘‘‘numerical’’’ example of how the capital “social relation of production” and “the growth of the social forces of production” part ways.

In this passage, excerpted below, Marx gives a detailed, highly particularized ‘arithmetical model’ of the inherent limits of capitalist productivity-increasing innovation.

This model illustrates a way in which “the capital-relation”, as the predominant “social relation of production” of a capitalist society, once the development of the “social forces of production” – initially fostered by “the capital relation” – reaches a sufficiently ‘fixed-capital-intensive’, “relative-surplus-value”-pursuant stage, begins to retard the further growth of the “social forces of production”.

The “capital-relation” does so because the accelerating growth of the productive forces begins to attack and destroy especially fixed-capital value, by productive-force-growth induced, prior-to-amortization competitive obsolescence of increasingly massive and costly fixed-capital plant and equipment –

“Suppose, a certain line of capitalist industry produces a normal unit of its commodity[-kind] under the following conditions: The wear and tear [depreciation] of fixed capital amounts to ½ shilling [abbreviated by “sh.” or “s.”] per piece; raw and auxiliary materials go into it to the amount of 17 ½ shillings per piece; wages, 2 shillings [per piece]; and surplus-value, [also] 2 shillings at a rate of surplus-value of 100% [s/v = (2)[s.]¹/(2)[s.]¹ = (1)[s.]^1-1 = (1)[s.]⁰ = 100%].”

“We assume for the sake of simplicity that the capital in this line of production has the average [organic-]composition of social capital, so that the price of production of the commodity is identical with its [abstract labor-time] value, and the profit of the capitalist with the created surplus-value. Then the cost-price [ (c + v) ] of the commodity [per piece] = ½ + 17 ½ + 2 = 20s. [(½)[s.] + (17 ½)[s.] + 2[s.] = (20)[s.]], the average rate of profit 2/20 = 10% [s/(c + v] = 2[s.]¹/(20)[s.]¹ = (1/10)[ s.]^1-1 = 10%], and the price of production per piece of the commodity, like its value[,] = 22s. [(c + v + s) = ((18)[s.] + (2)[s.] + (2)[s.] = (22)[s.])].”

“Suppose a machine is invented which reduces by half the living labour required per piece of the commodity, but trebles that portion of its [of each commodity unit’s] value accounted for by wear and tear [depreciation] of the fixed capital.”

“In that case, the calculation is: Wear and tear [depreciation expense] = 1 ½ sh. [3 ´ (1/2)[sh.] = (3/2)[sh.]], raw and auxiliary materials, as before, 17 ½ sh., wages 1 sh. [(½) ´ (2)[sh.] = (1)[sh.]]; surplus-value 1 sh. [s/v = 100% or 1, ´ v = (1)[sh.], = 1 ´ (1)[sh.] = (1)[sh.]], total 21s. [(c+v+s) = (1 ½ + 17 ½)[s.] + (1)[s.] + (1)[s.] = (19 + 1 + 1)[s.] = (21)[s.]].”

“The commodity then falls 1 sh. in value; the new machine has certainly increased the productivity of labour [i.e., the productive force].”

“But the capitalist sees the matter as follows [a ‘‘‘psychohistorical’’’ insight]: his cost-price [ (c + v) ] is now 1 ½ s. for wear [i.e., for fixed capital “wear and tear” depreciation cost/expense for each commodity unit produced using the new machine], 17 ½ s. for raw and auxiliary materials [c = (1 ½ + 17 ½)[s.] = (19)[s.]], 1 sh. for wages [v], total 20s. as before. Since the general rate of profit is not immediately altered by the new machine[‘s commodity output entering into the market, in price-competition with similar commodity product outputs offered in that market by other capitalists, using the old machines], he will receive 10% over his cost-price [ (c + v) ], that is 2s. [profit per commodity unit = s/(c + v) = 10% = (2)[s.]/(20)[s.]]. The price of production, then, remains unaltered[,] = 22s. [(c + v + s) = (19+1+2)[s.] = (22)[s.]].”

“For a society producing under capitalist conditions [i.e., under “the capital-relation” as predominant “social relation of production”], the commodity has not cheapened. The new machine is no improvement for it. The capitalist is, therefore, not interested in introducing it.”

“And, since its introduction would make his present, not as yet worn out machinery simply worthless, would turn it into scrap iron [i.e., the old machinery would be retired and, if possible, sold for scrap, if replaced by the new machine [unless, coincidently, the scale of production of the example commodity could be profitably »doubled through a growth in market demand]], hence would cause a positive loss [a subtraction to/from capital, in the amount of the un-worn-out remaining value of the old machine], he takes good care not to commit this, what is for him a utopian mistake.”

[Marx: Preface, «Zur Kritik»: “From forms of development of the forces of production these relations turn into their fetters. Then comes the period of social revolution.”:

K.S.: In the passage immediately above, Marx recognizes the capital-contracting, losses-incurring impact of growth-of-the-productive-forces-induced depreciation of fixed capital plant and equipment – ‘technodepreciation’ – although he does not explicitly state that, for capital[ist] accounting to work, ‘technodepreciation’ losses to fixed-capital value must be deducted from gross profits in the accounting period in which the technologically obsolete fixed capital is retired].

“The law of increased productivity [i.e., of increasing productive force] of labour is not, therefore, absolutely valid for capital [i.e., for a society within which “the capital-relation” is the dominant “social relation of production”]. So far as capital [i.e., so far as the human, capitalist «mentalité»; so long as this ideological «mentalité» is socially dominant] is concerned, productiveness does not increase through a saving in living labour in general, but only through a saving in the paid portion of [present] living labour, as compared to [‘‘‘stored’’’] labour expended in the past [ratios like (v/c) = (c/v)^-¹, or (v/f) or (v/(f + c)), in relation to the profit-rates, (s/(c+v)) or (s/(c+v+f))], as we have already indicated in passing in Book I [Capital, volume I, New World paperback ed., pp. 392-393].”

“Hence the capitalist mode of [human-societal self-re-] production is beset with another contradiction. Its historical mission [justification] is the unconstrained development in geometrical progression of the productivity of human labour [i.e., is the exponential growth of the ‘human-societal ‘‘‘self-force’’’ of self-expanding human-societal self-re-production’, and hence of the ‘meta-Darwinian fitness’ of the human species, genome and phenome united].”

“It goes back on its mission wherever, as here, it checks [“fetters”] the development of productivity [“productive force”].”

“It thus demonstrates again that it is becoming senile and that it is more and more outlived.”

[Excerpted from: Capital, volume III; PART III, The Law of the Tendency of the Rate of Profit to Fall; CHAPTER XV, Exposition of the Internal Contradictions of the Law; Sec. IV Supplementary Remarks, pages 261-262, New World Paperbacks edition, 1967].”

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