[OPE-L:5258] waste and transfer of the value of the means of production

From: Gerald_A_Levy (Gerald_A_Levy@msn.com)
Date: Sat Mar 24 2001 - 22:03:44 EST

In [5115], I wrote previously:

While re-reading  Vol 1, Ch 7, Section 2 
in connection with another thread, I  noticed the 
following that has significance for this thread:
(From the paragraph that begins: "Moreover,
the time spent in production counts only in so
far as it is socially necessary for the production of
a use-value"): "Lastly -- and for this purpose our
friend (the capitalist, JL) has a penal code of
his own -- all wasteful consumption of raw material
or instruments of labour is strictly forbidden, 
because what is wasted in this way represents a
superfluous expenditure of quantities of
objectified labour that does not count in the 
product or enter into its value." (Penguin ed, 303).
Note, however, that before the raw materials
and instruments of labour can be set in motion
in the labour process they must first be
purchased with money-capital. I.e. they have
value when entering the production process,
but if there is then a violation of the capitalist
"penal code" and are consumed wastefully, then
there is a *loss of value*.  In other words, the
value of the means of production are not fully
transferred to the commodity product in the
course of production: thus value itself is
being *wasted*. 
Expressing the matter differently: the value of
the means of production can be *potentially*
transferred to the commodity product but there
is the distinct possibility (as I suggested in 
a previous post last week on "capacity
utilization" and as I suggest above) that a
portion of that value can be "lost" or "wasted"
rather then being transferred.
    *A continuation of a discussion of this issue*

I.  What was Marx's position?
I think it was Marx's position that while such 
wastage of the value of constant capital was
possible the tendency is for the percentage of
the total value of constant capital wasted in this
way to be diminished. I.e. the drive to increase
the  profit rate by individual capitalists will push
them in the direction of enforcing this unwritten
"penal code" and thereby causing the wastage 
of the value of constant capital,  to the extent that
it currently exists, to be diminished to the 
minimum possible. It seems reasonable to project
this as a long-term tendency, thus: 

a)  with the continuing development of manufacture,
machinery, and "modern industry" the percentage
of the value of c wasted in this manner would
be diminished. 

b) the more advanced capitals in the more advanced
capitalist nations could be expected to waste
less of the value of their c than less efficient
capitals in economies that are not as advanced
along the path of capital accumulation. In other
words, this tendency would develop unevenly
internationally and would be more pronounced within
the most developed capitalist national economies.

I don't recall Marx explicitly making point b), but
it seems a logical extension of what he wrote 

II. A  historical and empirical evaluation

If there is this long-term tendency towards the 
minimization of the waste of the value of c in the
production process, we should be able to get
empirical confirmation of this trend.

Yet, I seriously doubt whether the empirical and
historical evidence will confirm this trend as
expressed in a) and/or b) above. 

Indeed, while there are no reliable statistical
studies on this question, I think there is serious
empirical evidence in anecdotal form and case
studies to challenge these propositions.

To begin with, as a rebuke to a), we do not have
to look far in the period of "modern industry" to
observe *massive* waste of c in the form of wastage
of constant circulating capital. If you don't believe
this, take a field trip to a major factory and look at
the "garbage" generated. One can also very
frequently observe this wastage on the factory
floor (I could tell lots of stories about the wastage
of elements of constant circulating capital, e.g. of
nuts, bolts, screws, raw metal, etc. at GM and
Ford  auto assembly plants).

Wastage is also highly visible in one-off large-scale
industrial production. E.g. in the shipbuilding and
aircraft construction industries. The fact that there
is massive waste of means of production is well
known to all of the workers in such industries.

In the construction industry, one has to be a very
casual observer to not note the massive bulk
of new construction materials that are discarded.
Indeed, in the construction industry and much of
the above industries within advanced capitalist
nations, this waste not only represents lost value
but often even has *negative exchange value*
as these capitalist firms have to contract out
"garbage" disposal to other firms. In other words,
they have to often pay other firms an amount
(often not insubstantial) for disposing of the waste.

Now lets consider b) above. If it were true, then
we could expect to see less wastage of the
value of c within less advanced capitals in nations
which are not the most capitalistically developed.

Yet, I think one can observe the *opposite*  trend
happening internationally. I.e. I think there is lots
of evidence that the percentage of c wasted by
more advanced capitals in more advanced capitalist
nations is *greater* than the percentage of c
wasted by less advanced capitals in less advanced
capitalist nations. 

Thus, the percentage of the c that is wasted by 
firms in the US is *much greater* than the 
percentage of c wasted by firms in India and
Egypt and Brazil.  I think this counter-trend can
be very easily confirmed as an empirical

III. Explaining the Counter-Trends

I believe that the best explanation for these
counter-trends is as follows:

When individual capitalists make their calculations
about whether to save all of the value of their
constant capital or whether to discard a percentage
of that value, they calculate:

a) the monetary worth of the c recovered (measured
at replacement cost)


b) the cost of labor power in terms of additional
wages required for workers to salvage the c and
"recycle" it back into the production process.

If this is the case, then it follows that firms with
higher wages will tend to sacrifice a greater
percentage of the value of their c since their
costs for internal recycling will tend to be lower.
For firms that pay relatively low wages, the
above "calculus" suggests that they get a
greater return -- as measured in the value of
the c recovered -- on their utilization of labor
power to clean-up this industrial waste.

On the other hand, technical change in the internal
industrial recycling process in terms of new means
of production which raise the productivity of workers
engaged in this activity, could result in a potential
counter-counter-trend. Yet, in many of the most
efficient and least efficient capitals alike there is still
often the utilization of not very sophisticated older
technologies like brooms and dustbins.

Interestingly, thus while larger firms in more
advanced capitalist nations often have to pay
other firms to dispose of this "garbage", to the extent
that there is any waste of constant circulating 
capital by firms in less developed capitalist nations
this often gives rise to producers in the petty
commodity (informal) sector who recover this waste
and then re-sell it to other capitalist firms. This
subject is related to the size of the IRA and the 
conditions of mass poverty in many parts of the 

Another secondary factor to consider is how nation-
states in different parts of the capitalist world 
differ in terms of their laws regarding waste

It would seem, based on the above, that the 
"penal code" that Marx alluded to is not being
enforced in many parts of the world today.

IV. Lean Production

There is another counter-trend that is worthy of
note: flexible or "lean production".  Sometimes
called the "just-in-time" system and based on
the "kanban" system employed originally by
many Japanese firms in basic industry, lean
production seeks to cut down on constant
capital costs by more efficient inventory control
systems and warehousing.  It also requires a
different relationship between the main 
manufacturing facility and the supplier plants. 
This sometimes means the construction of new
plants for the main manufacturer (rather than the
conversion of existing plants) and the geographic
relocation of supplier plants so that they are in closer
proximity to the main manufacturing facility.

I believe that it is one of the well established
goals of lean production to seek to *minimize* the
waste of constant capital as described above. 
This is more necessary within this system 
since there is intentionally less "room" for
waste. I.e. less waste of c is *required* for there
to be an efficient system of inventory control and 
re-ordering for this system to work as designed.
Thus, there is less tolerance for waste and less
space available to allow for substantial waste.
Moreover, production will potentially be
interrupted earlier if there is substantial waste
of c. I.e. since only a few hours or a day's worth
of circulating c may be stored on-site, if there
is excessive and unplanned waste then there will
be "down time" earlier (although, the down time
might not last as long since the suppliers are
often located nearby -- yet, as part of lean
production, the suppliers also seek to utilize the
same system and thus manufacture new elements
of what become circulating c [and intermediate
goods] on a "just-in-time" basis).

V. *NB*

Despite the above, I think that the more
important cause of the  premature *loss of value* of the c in the production process is due to low
rates of capacity utilization (see [5186]). I do not
believe that the implications of this process on the
quantity of value transferred by the means of
production have been adequately theorized by

In solidarity, Jerry

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