Introduction to Political Economy

Author: Wang Yuanzhang
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Publishing Date: 2002-01-01
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II. The process of value formation and value (zēngzhí) results in the production of a specific use value. However, the production of use value is not the purpose of commodity production. The goal of investors is to produce value and surplus value. They produce use value only because use value is the material bearer of value and surplus value. Thus, the production process of commodities has a dual nature of interconnection and mutual constraint: on the one hand, it is the labor process that creates use value; on the other hand, it is the process of value formation and value. To reveal the origin of surplus value, we first examine the capitalist production process as a process of value formation. Taking the production process of cotton yarn as an example. Assume that a capitalist in a textile mill hires spinning workers and pays them a daily labor value of 3 yuan, which equals 6 hours of labor. Also assume that the workers consume 10 kilograms of cotton during 6 hours of labor, valued at 10 yuan, and also consume labor materials such as spinning bobbins, valued at 2 yuan. In this way, the capitalist prepayes a total of 15 yuan. During the production process, the workers, through their concrete labor, spin 10 kilograms of cotton into 10 kilograms of yarn in 6 hours. The cotton and other labor materials are consumed, but their value is not lost because these materials are purposefully consumed by the spinning workers, transforming them into new use value—yarn. The concrete labor of the spinning workers, while creating new use value, transfers the value of the production materials to the new product, forming part of the value of the yarn. However, the portion of value the capitalist prepayed to purchase the workers' labor is different. The workers use this portion to buy personal consumer goods, which are consumed outside the production process and reproduce labor power. Therefore, this portion of value is not transferred to the new product but is instead reproducibly created by the workers' labor for the capitalist during the production process. Thus, the labor of the spinning workers, when stripped of its concrete form, is also abstract labor. As abstract labor, it creates new value by condensing the labor expended in the spinning process into the new product—yarn, forming another part of the value of the yarn. According to the above assumptions, spinning 10 kilograms of cotton into 10 kilograms of yarn requires 6 hours of labor. The spinning workers add 6 hours of labor, or a value equivalent to 3 yuan, to the yarn. Therefore, the value of 10 kilograms of yarn includes the value transferred from the production materials (12 yuan) and the newly created value by the spinning workers (3 yuan), totaling 15 yuan. If the capitalist sells the 10 kilograms of yarn at its actual value, he receives 15 yuan, which is the same as the prepayed value (15 yuan). The value of the product equals the value of the prepayed capital, and there is no capital appreciation or surplus value. Thus, this is merely a process of value formation. Such a production process is absolutely unacceptable to the capitalist. The capitalist is the personification of capital, and the sole purpose and decisive motivation of capital movement is to make money and get rich. Therefore, the capitalist must not only recover the value of the prepayed capital but also obtain surplus value. Thus, the process of value formation must be transformed into a process of value. How, then, does the process of value formation become a process of value? Still using the previous example, the value of labor power for one day is 3 yuan, and the workers can create this value in 6 hours. However, for the capitalist, he purchases the use of labor power for one day, and the entire use of this labor power belongs to him. Therefore, the capitalist will never allow the workers to labor only 6 hours but will instead demand that they labor for a longer period. Now, assume that the capitalist requires the spinning workers to labor for 12 hours a day, producing 20 kilograms of yarn. The labor time has doubled, and so has the product, as well as the consumption of labor materials that absorb the workers' living labor, which must also increase accordingly, requiring 20 kilograms of cotton and labor materials such as spinning bobbins valued at 4 yuan. In this way, the capitalist needs to spend 24 yuan on production materials and 3 yuan on labor power, totaling 27 yuan. The value of the new product—yarn—is 3 yuan more than the capital the capitalist prepayed. This 3 yuan is the surplus value. It can be seen that surplus value is the portion of value created by employed workers during the production process that is appropriated by the capitalist without compensation and exceeds the value of labor power. Through the above analysis, it can be seen that the process of value is nothing more than an extended process of value formation beyond a certain point. If the value created by the workers exactly compensates the value of the labor power prepayed by the capitalist, it is a process of value formation; if the process of value formation exceeds this point, it transforms into a process of value.
Section III Characteristics of Capital and the Rate of Surplus Value
I. Characteristics of Capital
Through the above analysis, it is not difficult to see that capital has the following main characteristics:
1. Capital has a prepayment or (diànzhī) nature. The capital held by investors, whether invested in a new enterprise or continuously added during production, is a form of prepayment or. Although this prepayment or will eventually circulate and then be re-prepaid or, relative to the circulation, capital always retains a prepayment or nature.
2. Capital has a compensatory or reflux nature. After being prepayed, capital must be compensated after selling goods. The compensation of prepayed capital is the reproduction of capital. If there is only prepayment of capital without compensation, the movement of capital cannot continue, and if the compensation amount is less than the prepayment amount, production can only proceed in a contracting state.
3. Capital has a reproductive nature. The direct goal of investors investing a certain amount of capital is, after all, to produce a certain use value, but ultimately to achieve the reproduction of capital value. The reason capital can reproduce value is only because the portion of capital used to purchase labor power has a special use value that comes into play, the product of the surplus labor of workers. Reproductive nature is the main and essential characteristic of capital.
4. Capital has a mobility nature. Capital is value that can bring surplus value. Only when a certain amount of capital is put into use and functions can it bring surplus value. If it is not put into use or does not function, it is not capital but merely money. Therefore, Marx pointed out: "The circulation of money as capital is itself the purpose, because only in this constant renewal of movement is there value reproduction. Therefore, the movement of capital is limitless."
5. Capital is not a single-factor production input. Capital is a very important production input, and without it, even commodity production may not be possible. However, compared to production materials, labor power, and other production inputs, capital, as value, can never be used as a single-factor production input. It can only participate in the commodity production process when it exists in a certain material form, i.e., when it is used to purchase production materials and labor power. Moreover, the role of production materials in producing surplus value is reflected as the role of capital; the result of the use of labor power, i.e., the surplus value created by labor exceeding the value of the labor power prepayed by the investor, is also reflected as the fruit of capital.
6. Capital is not a thing but a value, an economic relationship. Ordinary things such as money, machines, raw materials, tools, and various commodities cannot reproduce value because they are not capital themselves. Capital is value that can bring surplus value, and although it always manifests in these material forms, it is itself the condensation of abstract labor, a certain amount of value, and thus reflects the relationship between people in the production process. Marx said very well: "A black person is a black person. Only under certain relationships does he become a slave. A spinning machine is a machine for spinning cotton. Only under certain relationships does it become capital. Without this relationship, it is no longer capital."
II. Rate of Surplus Value
In capitalist commodity economy, the capital prepayed by capitalists is always divided into two parts: one part is used to purchase production materials, and the other part is used to purchase labor power. The two different parts of capital play completely different roles in the process of value. The portion of capital in the form of production materials is consumed in the production process through the workers' concrete labor, forming new use value. The value of the production materials is simultaneously transferred to the new product. Due to the different forms in which different parts of production materials participate in the production process, their methods of value transfer are also different. Among production materials, raw materials, fuel, and auxiliary materials participate in the production process only once, losing their use value once and transferring their value only once to the new product. However, buildings, machinery, and equipment, which can be used for many years and participate in multiple production processes, only consume a small part of them in each production process. Their value is gradually transferred to the new product in portions according to the degree of wear and tear, so they participate in the labor process as a whole but only partially in the process of value formation. However, regardless of the form of value transfer of production materials, the value transferred to the new product is limited to its original value and does not realize value reproduction. In contrast, the portion of capital used by the capitalist to purchase labor power is different. During the production process, the value of labor power is not transferred but is reproduced by the use of labor power. While the employed workers transfer the value of production materials to the new product through concrete labor, they also add newly created value to the new product through the condensation of abstract labor. This newly created value, after deducting the value that reproduces labor power, has a surplus, i.e., surplus value. Therefore, the result of the functioning of labor power is not only to reproduce the value of labor power itself but also to produce surplus value. It can be seen that the different parts of capital play different roles in the process of value. The portion of capital used to purchase production materials only changes its material form in the production process and does not change its value, which Marx calls constant capital. The portion of capital used to purchase labor power changes its value in the production process, enabling value to be reproduced, which Marx calls variable capital. Based on the different roles of the different parts of capital in the process of value, Marx divides capital into constant and variable capital, further scientifically clarifying the true source of surplus value.