[OPE] devaluation and revaluation of variable capital

From: Jurriaan Bendien (adsl675281@tiscali.nl)
Date: Sat Feb 16 2008 - 16:45:39 EST


The ambiguity is who the "costs" are costs to - costs to the owners of capital, costs to workers, or costs in the economic reproduction process viewed in its totality. Marx's argument is that total variable capital costs are affected by fluctuations in:

- the cost of living
- wage levels
- the value of labour power (roughly, the ratio between cost of living and labour compensation in the long term, expressed in constant dollars)
- the technical composition of capital 
- the supply of credit

These can vary independently of each other, but they all impact directly or indirectly on the average rate of surplus value and the average rate of profit. The "costs" in this case are the costs to capital, either individual capitals, or total social capital. 

I realise Marx uses "variable capital" here also as a shorthand for the "reproduction costs of labour power", viewed from the standpoint of the economic reproduction process as a whole, analogous to a "consumption fund". It is just that it does not follow that the costs to capital are the same as the costs to workers - all that is implied is that, if the aggregate cost of the reproduction of labour power falls for any reason, then ceteris paribus that can increase the average rate of surplus value and the average rate of profit, insofar as it lowers variable capital requirements. The ceteris paribus clause may not apply however, if the result is that aggregate demand falls, since in that case the additional surplus value cannot be realised. 

If we regard housing purchased by workers as a variable capital component, we are confusing a capital outlay with an expenditure of revenue. It is true that fluctuations in housing costs can affect the cost of living which indirectly impacts on the variable capital requirements of the system as a whole, but that still doesn't mean housing costs are a variable capital outlay, unless the employer directly pays for them. 

The categories C, V and S apply to the value of the gross output of new capitalistically produced commodities. In Marx's simplified models, this constitutes the whole circuit of the reproduction of capital. But he was well aware that this is not in reality the case, and he say so explicitly too. Reproduction models can explicate what variables are important, and how they can influence the outcome. But no necessary result follows from them in reality, since it all depends on the quantitative assumptions adopted, and because the circuit of production capital is not the only circuit of capital.

The argument about "devaluation or revaluation of variable capital" really applies only to the economy as a whole, i.e. to the specific intersection of the five main variables mentioned in the pure case. In other respects, variable capital is "revalued or devalued" only by the result of the valorization and realization process, i.e. by the return for the capital outlay invested.


ope mailing list

This archive was generated by hypermail 2.1.5 : Fri Feb 29 2008 - 00:00:03 EST