Re: [OPE-L] accumulation of capital and the working class - actual non existence of variable capital

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Fri Jan 11 2008 - 12:46:11 EST

Jurriaan Bendien wrote:
> It is true that in the normal situation employers do not advance wages
> before work is done, but I think that variable capital is a reality,
> to the extent that a firm must maintain sufficient funds to pay labour
> costs at any time. It is true though that the average stock of capital
> that must be reserved for this purpose is usually a fraction of the
> annual flow value, since labour costs are recouped through revenues
> from sales during the year (a point missed by most Marxists). The
> actual amount involved depends on the production cycle involved in
> producing particular products, and fluctuating sales volumes, but
> normally there are capital reserves in the account in this sense. This
> affects the total capital tied up during the year and therefore the
> calculation of the "real" profit rate.
Jurrian, I think this relates to a different question, the reserves of
money capital
( or overdraft rights ) that any firm must maintain to ensure that the
shot noise
inherent in randomly occuring purchases and sales of commodities does not
drive them into an illiquid state. Note though that this is, accross the
as a whole a zero sum. Where one firm is running a random surplus above
its mean income another is running a random deficit. It is for this
reason that
the credit system is able to cancel them out, dispense with actual money
and replace it with accounting entries and over-draft rights.

>  Essentially, Marx's analysis combines the product account and the
> capital account in a single system, where inputs and outputs represent
> quantities of capital assets whose value exists quite independently of
> the magnitudes of expenditures and sales revenue.
I agree, and this was useful for work at a high level of abstraction.
Once you analyse concrete conditions in say the USA in 2005, then
you need to be less abstract and distinguish flows from stocks.

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