Capitalism's Fatal Flaw, and the Way Forward: Part 8.: Karl Seldon on Karl Marx Series. Marx on the Profit-Rate-Raising Limits of Relative Surplus-Value.

Marx

on the

Profit-

Rate-Raising

Limits

Relative

Surplus-Value.

Part 8.:

Karl Seldon on Karl Marx Series.

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, Karl Seldon’s commentaries on the world-historic breakthrough work of Karl Marx.

This 8th text in this by now long-running series is posted herewith, together with supporting text-images and diagrams [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 his “rough draft” [“«rohentwurf»”] notes to himself on the critique of capitalist political economy, in the manuscript later known as the Grundrisse, sometime between 29 November and mid-December of 1857, Marx refuted, in advance, those negligent or ideology-serving later critics who claim that both the surplus-value numerator and the constant capital element of the denominator of Marx’s profit-rate ratio are susceptible of unlimited increase, thus rendering the time-trend of his profit-rate ratio, they say, “indeterminate” –

s^/(c^ + v^) ==> ? –

thus seeking to deny the validity of Marx’s, crucial, “law of the tendency of the rate of profit to fall”.”

“Marx wrote, describing capital profitability dynamics at a sufficiently general context and level, the following: “…The larger the surplus-value of capital before the increase in productive force, the larger the amount of presupposed surplus-labor or surplus-value of capital; or, the smaller the fractional part of the working day which forms the equivalent of the worker, which expresses necessary labor [K.S.: the labor-time value-equivalent of the value of the commodity-purchases needed to reproduce the worker’s labor-power – i.e., to keep the worker alive and fit for the next working-day], the smaller is the increase in the [K.S. relative-]surplus-value which capital obtains from the increase in productive force. Its surplus-value rises, but in an ever smaller relation to the development of the productive force. Thus, the more developed [K.S.: industrial-]capital already is, the more surplus-value it has created, the more terribly must it develop the productive force in order to realize itself in only smaller proportion, i.e. to add [K.S. any substantial] surplus-value – because its barrier always remains the relation between the fractional part of the [K.S.: duration of the working-]day which expresses necessary labor, and the [K.S.: duration of the] entire working day. It can only move within those boundaries, The smaller already the fractional part falling to necessary labor, the greater the surplus-labor, the less can any increase in productive force perceptibly diminish necessary labor; since the denominator has [K.S.: already] grown enormously. The self-realization of capital becomes more difficult to the extent that it has already been realized.”.”*

“Marx gives a numerical case-example to concretize this, his general proposition regarding industrial capitalism’s inherent ‘asymptoticity’ of gains to its surplus-value ‘‘‘value-mass’’’ (s), and to its surplus-value rate (s/v), via productive-force-increase-driven increments to “relative surplus-value” [as distinct from “absolute surplus-value”] –

“If necessary labor had already been reduced to 1/1,000 [K.S.: of the working-day’s duration], then the total [K.S.: relative-]surplus-value would be = 999/1,000. Now if the productive force increased a thousandfold, then necessary labor would decline to 1/1,000,000 [K.S.: of the duration of the] working day and the total surplus-value would amount to 999,999/1,000,000 of a working day; whereas before this increase in productive force it amounted to only 999/1,000 or 999,000/1,000,000; it would thus have grown by 999/1,000,000…”.”**

“A key point here is that the increase in the fixed capital denominator value-element, f, for the fixed-capital-value participating in a given round of production, and in c for the constant capital also so participating, in the more-concrete Marxian profit-rate ratio,

s/(f + c + v),

has no such inherent asymptotic ceiling, as does the increase in surplus-value, s, as described by Marx in the quoted passages above.”

“Thus, as capital accumulation proceeds,

both s and (f + c) increase,

but s must eventually increase less, because s cannot even encompass the labor-time of the entire working-day.”

“If s were to do so, then such would imply that no human labor-time was necessary labor-time for the social production process. It would imply an escalation of the productive forces to the point of the complete automation of production –

v = 0.”

“This would model, in the Marxian model’s s/v, rate of labor-exploitation ratio, and in its c/v, productive forces level [“organic composition”] ratio, as well as in the transformed version of the more-concrete Marxian profit-rate ratio –

(s/v)/( (f/v) + (c/v) + 1 )

– as [division-by-zero] “singularities” –

(s/0), (f/0), (c/0) “=” ¥, and –

(s/0)/( (f/0) + (c/0) + 1) “=” (¥/¥)

– which would model, per our interpretation of division-by-zero singularities in general, as a ‘dis-existentiation’ of the capital/wage-labor, profits-based social relation of production as the predominant social relation of social production, i.e., to a concrete transcendence of the dominance of “the capital-relation” [Marx].”

“Now, it is true that the diminishing profit-rate-returns of further, fixed-capital-enabled increases in productivity might tend to increasingly de-motivate industrial capitalists from continuing to invest in such productive-force innovations and escalations.”

“However, as capital accumulation proceeds, so does the concentration of industrial capital ownership also “lawfully” proceed. For large-enough-in-scale industrial production operations, with large-enough wage-worker employments, multiplying tiny increments to the surplus-value source of profits, by huge numbers for the numbers of workers being concurrently employed, may come to compensate, via the ‘‘‘value-mass’’’ of profits, for the falling increments to the rate of profit – enough to incentivize the owning capitalists to continue investing in via-fixed-capital productive force advances.”

“The above notwithstanding, at a certain level of ownership concentration, such concentrated-capital owners tend to enter into a condition of ‘olig-opoly’ or even of ‘du-opoly’ or of ‘mon-opoly’. Price-fixing deals among such ‘-opolists’ may tend to eliminate any incentive to continue productive-force increases, given their access to super-profits via «de facto» monopoly pricing. This may result in a tendency to stagnation in the productivity of industrial production – in the growth of the industrial “forces of production”.”

“The above constitutes yet another form of the later ‘enfetterment’ of the further growth of the social-productive forces by the capital social relation of production.”

*[Karl Marx, Grundrisse: Foundations of the Critique of Political Economy (Rough Draft), Translated and edited by Martin Nicolaus, Penguin Books [Middlesex, UK, 1973], pp. 333 to 341; excerpt, above, is from p. 340, spellings per American English, as opposed to the British-English spellings in the original. Also, in keeping with Marx’s later usage, e.g., in Capital, we have hyphenated Marxian terms-of-art, such as surplus-value and surplus-labor.].

**[Ibid., p.338.].

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