Surplus Value and the Transition to Growth
C. Surplus Value and the Transition to Growth
We return to the proposition that productivity improvement generates an increase in surplus value in the sense of “a value which is not intended simply to be exchanged as an equivalent but to maintain itself; in a word, more money” (above, p. 242). Now
C. Surplus Value and the Transition to Growth 245 Marx spells out the conditions for transition to an expanding economy entailing
effective accumulation – in his terms the transition of the “money” entity from its “abstract form of general wealth” pertaining immediately after the rise in produc- tivity, to its function as (we shall see) “a draft on future labor” or “labor capacity coming into being.” Accumulation, in brief, requires the availability of an adequate labor supply. We note here that Marx had Proudhon in mind in making his case, for Proudhon had taken a wholly static view by his proposal “that capital should not
be loaned and bear interest, but should be sold as a commodity for its equivalent, like every other commodity [see Bastiat 1850: 65–74]” ; for this was “nothing but the demand that exchange value should never become capital but remain mere exchange value, i.e. that capital should not exist as capital ” (MECW 28 : 244). Bas- tiat, in opposing Proudhon, had “unconsciously, re-emphasise[d] the moments in simple circulation which tend to give rise to capital” (245).
The notion of money as draft on future or new labor, taking the form of accel- erated population growth or a reserve of unemployed, is spelled out in pas- sages describing the transition from an economy “in a state of rest” to one “in motion”:
In a state of rest, this released exchange value, by which society has enriched itself, can only be money; and then only the abstract form of wealth is increased; when in motion, it can only realise itself in new living labour (it may be that previously unem- ployed labour is set in motion or that new workers are created (population [growth] is accelerated) . . . (273–4). 17
The surplus value, the increase of objectified labour, so far as it exists for itself, is money; but money is now in itself already capital, and as such a draft on new labour. . . . [N]o longer as money which is merely the abstract form of general wealth, but as money which is a draft on the real possibility of general wealth – on labour capacity, and, more precisely, on labour capacity coming into being (292).
From this perspective “[t]he accumulation of capital in the form of money is . . . in no way a material accumulation of the material conditions of labour, but the accumulation of property titles to labour. It posits future labour as wage labour, as use value of capital. No equivalent exists for the newly created value; its possibility [exists] only in new labour.”
All this proceeds at rather too abstract a level, merely setting the stage for an appreciation of the transition to growth. Our next section brings the discussion down to earth.
17 Marx proceeds as if there are alternatives to population increase or an available pool of unemployed: “or again . . . a new circle of exchange values is created, . . . the circle of exchange
values in circulation is enlarged, which can occur on the production side, if the released exchange value opens up a new branch of production, therefore [creates] a new object of exchange, objectified labour in the form of a new use value; or finally . . . the same is achieved by the introduction of objectified labour into the sphere of circulation in a new country by means of the expansion of trade” (MECW 28 : 274). But it seems more satisfactory to regard these options as complementing the initially stated conditions rather than as alternatives.
1857–1858 I: Surplus Value
Parts
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» The Transformation of Values into Prices: Formal Analysis
» The Transformation and the Allocation Mechanism
» Competition Constrained: Land Scarcity and Firm Size
» On “Market Value” and Competition
» The Inverse Wage-Profit Relation and Profit-Rate Equalization
» Materials, the Luxury-Goods Sector, and the General Profit Rate
» The Rate of Surplus Value as Endogenous Variable
» More on Final Demand and Distribution
» Concluding Comment: The Baumol-Samuelson Exchange
» Setting the Stage: Stationary Reproduction as Circular-Flow Process
» Determinants of the Rate of Accumulation
» The “Simple Reproduction” Scheme
» The “Extended Reproduction” Scheme
» ARRANGEMENT CHANGED FOR PURPOSES OF ACCUMULATION:
» The Subsistence Wage and the Value of Labor Power
» The Falling Wage Trend and Population Growth
» The Industrial Reserve Army and Cyclical
» Inter-Sectoral Labor Movements
» Concluding Remarks: Objections to Malthus
» The Conditions for a Falling Rate of Profit
» Increasing Rate of Surplus Value and Cheapening of Constant Capital
» The Limited Impact of a Rising Rate of Surplus Value
» Implications of Differential Rates of Productivity Increase
» Technical Progress and the Falling Profit Rate: An Overview
» Concluding Comments: On the Significance of the Falling Profit Rate
» Trend and Cycle: Causal Mechanisms
» The Raw Material Constraint and Upper Turning Point
» The Labor Constraint and Upper Turning Point
» Inter- and Intra-Departmental Imbalance
» Wage-Rate and Profit-Rate Trends
» The Private-Property System: Ricardo as bˆete noire
» On Aggregate Demand and “Overproduction”
» In Partial Defense of Proudhon
» Objections to Friedrich List
» Allocation, Cost Price, and the Labor Theory
» On “Labor Power” and the Source of Surplus Value
» The Inverse Wage-Profit Relation
» More on the Real-Wage Trend: Increasing Organic Composition,
» Profit-Rate Determination: “Competition of Capitals”
» Labor and Free Trade: On Marx’s Ricardian bonˆa fides
» Surplus Value and the Transition to Growth
» Elements of a Growth Model: Productivity Increase, Population
» A Marxian “Reply” to B¨ohm-Bawerk
» Surplus Value: Matters of Timing and Indebtedness
» On Ricardo and Surplus Value: An Excursus
» Capital Turnover: A Circular-Flow Process
» Obstacles to Value Realization
» On the Law of Markets and Overproduction Literature
» On Working-Class Consumption
» Profit-Rate Equalization and the Transformation
» The Transformation Aborted: Absolute Rent and the Priority
» The Falling Rate of Profit and Its Significance
» Materials, the Luxury Sector, and the General Profit Rate
» Commercial Capital and the Surplus-Value Doctrine
» Conditions for “Continuous” Accumulation
» Aggregate Demand Constraints
» Sources of Cyclical Instability
» The Recovery Process: Corrective Mechanisims
» On the “Overproduction” Literature
» The “Wages Fund” Doctrine Rejected: Synchronized
» Labor Demand and Technical Change
» Labor Supply: Population Growth and the “Reserve Army”
» The Mechanics of Population Growth and the Falling Wage Trend
» The Economic Role of Inequality
» The Allocative Role of the Free Market vs. Central Control
» Preliminaries: Industrial Organization
» The Supervisory and Allocative Functions
» Science and the Sources of New Technology
» On “Profit of Enterprise” in Capital 3
» On Joint-Stock Organization and Limited Liability
» Marx’s “Revisionism”: The 1860s and 1870s
» Marx and the Classical Canon: The Theory of Value
» Marx and the Classical Canon: The Trend Path of the Factor Returns
» Epilogue: On Engels and the “Closure” of Marx’s System
» Objections to Smithian National-Income Accounting
» On Differential Rent 1851–53
» Contemporary Commentary on Limited Liability
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