[OPE-L:5429] Re: turnover time and surplus value

From: Allin Cottrell (cottrell@wfu.edu)
Date: Thu Apr 26 2001 - 08:55:56 EDT

Allin's response to Rakesh's [5425] and [5427]

1. I wrote:

"Now consider an innovation that cuts turnover time or 'production
time'.  To isolate the effect in question we imagine that the
innovation does not reduce the labour time (worker-hours) required to
produce one unit of the product."

and gave a hypothetical example from wine-making.  Rakesh asks:

"How does this isolate the effect if the effect I want to study is
exactly the effect of an increase in labor productivity as manifested
in the reduced production time that thereby allows the variable
capital advanced to be reduced?"

If you want to get at the effect of a reduction in turnover time, per
se, on the rate of profit, you must hold "other things equal".  When
Marx and Engels construct their examples, they impose a common
("real") rate of surplus value in their variant cases.  This is
clearly necessary, otherwise one is going to mistakenly attribute to
turnover an increase in profit stemming from the standard mechanism of
relative surplus value, namely the cheapening of the wage-bundle via
increased labour productivity.

If you don't like my example as stated, then alter it thus: suppose
that the technical improvement in wine-making _does_ increase labour
productivity (i.e. cut the number of worker-hours embodied in a bottle
of wine) at the same time as it cuts the calendar time of production
of wine, but control for this by raising the wage so that the real
rate of surplus value is held constant.  In that case any increase in
the annual rate of profit, s/K, must be attributable to a fall in K/v,
the ratio of capital stock to the annual wage-bill, which is the
measure of organic composition that I'm advocating in this context.

2. I wrote, of the wine-making illustration:

"Another perspective on the innovation is that it will reduce
'variable capital advanced' (the capitalist now need 'advance' only
half the wages that he used to) and hence raise the annual rate of
surplus value.  But this doesn't explain the increase in the rate of
profit, it's just an arithmetical side-effect."

and Rakesh asks:

"What do you mean by side effect--that the annual rate of surplus
value is merely a subjective measure?"

Those are not the words I'd choose.  But note that, unlike the "real"
rate of surplus value, which is always well defined and meaningful,
the annual rate of surplus value is not in general well defined.
What is the size of the "variable capital advanced" in a continuous
process industry such as oil-refining or electricity production?
That is, how many weeks' wages do the capitalists have to lay out
before they get any saleable output from their workers?


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