[OPE-L:6541] Variable capital

Eduardo Maldonado Filho (eduardo@orion.ufrgs.br)
Tue, 5 May 1998 17:48:59 -0300

This is the second tentative to post it

Jurriaan wrote (April 30, 1998)

> He [i.e., Eduardo] is of course free to interpret "variable capital" as
> he likes, but I don't think this interpretation has much to do with Marx
> whom Eduardo claims to follow - the quote notwithstanding.

Since our discussion concerns the interpretation of Marx's concept of
variable capital, and not my own theory, I'm afraid that I will have to
disagree with Jurriaan - I don't think that I have all that freedom in
interpreting Marx's concept of variable. In my opinion, in this case, my
interpretation, as for anyone else, is constrained by Marx's analytical
framework and method. Of course, if I was developing (say, from Marx's
theory) my own theory, then I would be free to interpret Marx's as I liked.

Since our discussion is related with Marx's concept of variable capital I
think that the textual evidence that I have presented to support my
interpretation is important (although it may not be definitive) and cannot
be simply brushed aside.

In other to permit greater clarity in our discussion, let me present my
argument concerning Marx's concept of variable capital as follows:

1) we are dealing here with a variable magnitude (i.e., a quantity of value
whose magnitude varies over time). Let us say that at time period t the
magnitude of the value advanced by a capitalist to buy LP is $90, and that
at time period t+h (where h = production period) this capital-value has
created a new value which amounts to $180. Thus, the magnitude of this
capital-value (i.e., variable capital) has changed over time. Thus we do
have different magnitudes (or "two measures"), but these measurements are
not coincident in time, rather they are taken at different points of time.

Chris, for example, has argued that "From a formal logical point of view it
is completely inconsistent to offer two different measures of variable
capital especially when the result is that something (v) is defined as part
of itself (v+s)!". If Marx's framework were timeless, then Chris would be
quite correct. But since the two measures of the magnitude of value are
taken at different points of time, I don't see any (formal logical)
inconsistency. But, perhaps, I'm misunderstanding Chris's argument.

Jurriaan, on the other hand, argues that "A given variable capital can
indeed be measured in two different ways, namely in money, or in terms of
the number of average socially necessary labour hours required to reproduce
it." As explained above, the two measures I'm talking about refers to the
amount of value (measured either on terms of money or labor time) at two
different points of time.

2) the really important question is: how can one explain the increase in
the magnitude of value? Since the only source of value, according to Marx,
is labor, it is clear that the increase in value between time t and time
can only be due to incorporation of new labor into previously materialized
labor (constant capital). So, the form of existence of variable capital
within the immediate production process must be that of living labor, and
living labor is the use value of the commodity LP.
The secret of surplus values lies in the existence of the commodity LP.

3) At time (t +h) the amount of new labor that has been incorporated in to
commodity capital was $180 (measured in money terms). So variable capital
whose magnitude at time t was $90 (the amount of money advanced to buy LP),
at time (t + h) it has materialized a new value equal to $180. From this
new value created during the production process ($180), $90 represents that
portion of the new value which only reproduces an equivalent to the amount
of the value originally advanced to purchase LP (i.e., the variable capital
advanced at time t), and the other portion of the new value created ($90)
represents the excess over and above the amount of variable capital
advanced at time t (i.e., surplus value).

4) In sum, variable capital exists initially in money form ($90), then it
is transformed - through the purchase of LP (i.e., the rental of the use
value of LP) - into living labor. By existing as living labor within the
production process, it incorporates a new value into the commodity capital
produced. The magnitude of variable capital at time t + h (which exists as
part of the value of the commodity capital produced) is $180, but $90
represent a reproduction of the value originally advanced and the other
portion ($90) represent the excess or surplus-value.

I would now like to ask to Jurriaan and Chris: what are you agreements/
disagreements with the above interpretation?

The following quotation presented by Jurriaan, it seems to me, strength my

> "The variable capital functions as variable capital only to the extent
that it is
> actually applied, and during the time for which it is applied" (Cap 2,
> Penguin, p. 375).

Let me present another textual evidence to support my argument:

"The position is otherwise with that portion of capital we have called
variable but which only becomes the really variable portion of capital when
it has been exchanged for labour power. In reality, money - the portion of
capital that the capitalist has expends on the purchase of labour power -
is nothing but the means of subsistence available on the market (or dumped
on it on certain terms), and destined for the individual consumption of the
workers. Money then is only the transmuted form of these means of
subsistence which the worker immediately transforms back into means of
subsistence as soon as he receives it... One part of capital, and thereby
the capital in its entirety, is transformed into a variable magnitude by
the fact that instead of money - which is a constant magnitude - or the
means of subsistence as which it may appear and which are likewise constant
magnitudes, it is exchanged for lining labour-power - a value creating
force, something which can be smaller or greater, which can manifest itself
as a variable magnitude and which in fact always enters the process of
production as a fluctuating, developing magnitude and hence as one
contained within different limits, rather than as a magnitude that has
become fixed". (Results of the Immediate Process of Production, In:
Capital, vol. 1, Vintage Books, p. 983-984).

> The "new value created" is in fact a component of the new commodity
> product, or a commodity capital, a materialised output. To obtain the
> "increment of variable capital", i.e. the result of the immediate process
> of production, i.e. the surplus-value (and not V), the production costs
> (C + V) must be deducted from the value of the new product. Now it seems
> a bit obscure to me to say that V "equals V + S", or that we have to
> "deduct V from the product... to obtain V".
See point 4 above.

> Eduardo seems to want to say that "V is still V at the end-point of a
> labour process", perhaps a bit like a hot-air balloon which has been
> shrunk or swollen in size, but is still a hot-air balloon. But to my way
> thinking this conflates input costs with output values. At the end of
> the working period variable capital has precisely been "expended" (to
> Marx's phrase), i.e. used up, and thus it ceases to be.

What I'm saying is that variable capital exists as living labor within the
immediate process of production and therefore, at the end-point (time t +
h) the magnitude of capital (which now exists as commodity capital) has
increased. It ceases to exists as living labour but it has now been
incorporated into the commodity capital.