[OPE-L:7700] c/v in gold-mining branch of production

From: gerald_a_levy (gerald_a_levy@msn.com)
Date: Sun Sep 22 2002 - 07:31:43 EDT

Re Rakesh's [7699]:

I'm still thinking through some of these issues, but some contrary
thoughts occur to me:

>One may not
> want to understand why Michele, you and I are saying there would tend
> to be extra surplus value in the gold industry (lower than average
> OCC as a result of i. the use of little to no raw materials in the
> extraction of precious metals as Marx emphasizes,

The trend would be -- because of the increasing OCC in the gold-
mining branch (see below) -- for raw material costs to increase as well.
That is, the expanded use of constant fixed capital would tend to require
the expanded utilization of constant circulating capital, e.g. increasing
energy costs (putting aside the possibility of new more advanced constant
fixed capital  which is more "energy efficient" and which thereby decreases
energy and other constant circulating  capital costs).

> ii. economic
> disincentives for large investment on scarce, privately owned land
> for which the lease cannot be counted on to last as long as  long
> lived fixed capital,

A counter-tendency exists, though.  Gold-mining capitalists have a
*double incentive* to increase the OCC:  their quest for additional
surplus value drives them to increase the OCC (they share
this incentive with other industrial capitalists) _and_, ***precisely
because of the scarcity of land suitable for gold-mining***, they must
increase the OCC.  That is, as more gold is mined less gold is left in
the ground and it is more difficult to mine.  This requires the gold-mining
capitalists to increase their OCC if they are to obtain the additional
gold that is still in the ground but is less easily obtainable than was
previously the case. As a consequence, one might anticipate over
time that the OCC in the gold-mining branch (subject to the assumption
that gold is mined entirely capitalistically, e.g. there are no "small
gold mines by landless peasants, etc.) that the OCC might be *higher*
than the average OCC in the rest of the economy.

> iii. value of gold being set at marginal mine
> which will tend have the most labor intensive technique of production
> as you have underlined though I am not clear about this,

A contrary argument:  in "the more marginal mines" gold is less readily
available and the cost of mining will tend to be higher.  As a consequence,
the more marginal mines will be forced to substitute more advanced
means of production to obtain that gold.  This would suggest that the
marginal mines will either be forced into a higher than average OCC or
be forced to close the mines.

> iv. inherent
> technical difficulties in raising the capital intensity of in
> agriculture and mining etc.)

What "inherent technical difficulties"?  We have seen in capitalist
agriculture, an enormous increase in "capital intensity".  Witness
the technologies used by contemporary agribusiness.  Indeed, it
is precisely the increase in this "capital intensity" which has accelerated
the concentration and centralization of capital in agriculture. Moreover
this is a long-term trend.

> and why instead of being competed away
> this extra surplus value would tend to be appropriated by the owner
> of the land which is an inherently scarce means of production as
> absolute rent even as the gold capitalists themselves tend to make
> the average rate of profit.

I don't see how one can argue that the gold-mining capitalists make
the average rate of profit yet still appropriate the "extra surplus
value".  If they  appropriate extra s then wouldn't their rate of profit
tend to be higher than the average?

>Of course demand may not be strong enough
> for the full extra surplus value in the gold industry to be realized
> but given that gold is immediately exchangeable there seems little
> reason to doubt that the extra surplus value would in fact tend to be
> realized.

Well, yes.

In solidarity, Jerry

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