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V. Grey

Shop Talks on Socialism

Constant and Variable Capital

(10 August 1946)

From The Militant, Vol. X No. 32, 10 August 1946, p. 6.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

All the mountains of surplus value in the form of factories, machinery, stockpiles and buildings are wonderful aids in the production of new wealth. But they produce nothing by themselves. Their own value is transferred to their products. It reappears in their products, like the mud of a mountain worn down reappears in the river delta miles away – in different form, with different natural results than in its former state.

All the wealth of capital is vitally necessary for production on a modern scale. But once put into production it does not breed new values. The iron ore reappears in the pig iron. But it is immersed there like shredded carrots in a gelatin salad, or like the fat of a soup bone in the soup. The ore has not added to itself nor subtracted from itself. It has been changed, it is true, by an outside force. But the ore has been all used up and reappears in the iron.

As it is with the thing itself, so it is with its value. The value of the iron ore didn’t fly up the furnace flue with the smoke. And it didn’t double itself with the iron’s weight. It was simply preserved in the iron itself. The value of iron ore, as well as other materials, stays CONSTANT.

The part of capital that is spent for raw materials Marx calls CONSTANT capital. The money spent for limestone, coke, sulphur and silicon is “barren” capital. It is like the wet clay waiting to be moulded by the potter. Marx calls it CONSTANT capital because it does not grow. It is CONSTANTLY the same, in spite of all its transformations – slag, smoke, gas, iron, steel – its value merely reappears in the new value. But it is neither more nor less than before.

Variable Capital

A laborer makes a chair out of sticks of wood and the sticks reappear in the chair. Take the chair apart again and you have the same sticks. But in the chair you have something which embodies the value of the sticks plus another value – the value added to it by the labor of the chair-maker. If chairs are made fast enough, a great deal of value is added to a great heap of sticks. (And if an employer pays a low enough wage, a great deal of value is added to his pocket.)

As it is with chair makers, so it is with iron makers. The furnace workers add value to the product by their labor. If limestone, coke and iron ore were just mixed together in a pot, they wouldn’t sell for a cent more than they were bought. But when they are put in a furnace, when they are boiled for a while and the slag is flushed off and all the necessary labor is performed, they turn into a new product with a newly added value. Labor added this value. (And workers always get paid less value than their labor creates.)

The part of capital that is invested by the employer in labor power MARX calls VARIABLE capital. That is because it is the living part of the capital that seems to make it add on to itself, like a coral island. Here is the. real source of the capitalist’s profit.

But what concerns us right now is not alone the fact that we as workers are being robbed day in and day out by this profit system. Right now we are trying to find out why the system itself is dying – why it is running down. It is very important now to understand the relation of constant capital to variable capital.

And before we deal further with this, there is another very important part of constant capital we must discuss – the part spent on machinery. Many people are apt to think that machines really do create new values. It is easy to prove that they do not. Marx proved it irrefutably long ago.

(Next week: The Machine)

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