The OCC

I've always read this part:-

in the following way:-

productivity increases within a single firm/individual capital will clearly lead to an increase in the TCC

All other things being equal at this point in time there will be a direct correlation between the proportional increase in the TCC and VCC because at this stage all that is happening is that the change in VCC is expressing the change in TCC, in value terms. i.e. this change relates purely to the physical change in constant capital input items (the numerator in the equation) and if now more physical inputs are required relative to the same amount of labour then, the changed VCC (at this frozen point) is purely an expression of the TCC in value terms

So at this stage and considered abstractly/theoretically I can see how you can talk about a direct correlation between the two (and this is why Marx says he uses OCC to express the VCC, in so far as it is determined by its technical composition)

However, as the VCC of capital is expressed in value terms, in addition to it expressing the changes in TCC discussed above in relation to that individual firm/capital's productivity, it will also always reflect productivity changes outside of the firm/individual capital which will have an impact on both the numerator (value of constant capital) and the denominator (value of labour power)

So once these changes 'outwith' of the firm/individual capital are taken into account the correlation between the TCC and VCC is lost because the later contains & expresses things that are not contained or expressed in the former - i.e. it is possible (theoretically) for an individual capital to have an increasing TCC due to its own increased productivity while at the same time having a reducing VCC because productivity changes in wider capitalist society have made the value of those (increased) physical inputs/constant capital cheaper

So as Marx says in the quote - he uses OCC as a concept which expresses in value terms purely the changes in TCC for an individual firm/capital which excludes any changes to the VCC caused by productivity increases outwith of that individual firm/capital

Generally though Marx is very poor in getting across the distinctions between OCC and VCC (partly i think because OCC didn't even feature in volume 1 of capital until the third printing/edition of capital) - which leads a lot of people to use OCC & VCC interchangeably which was clearly not what Marx had in mind with them

I do think it's a useful distinction though as OCC indicates shifts in technology/productivity within an enterprise/capital that effects the VCC - so it identifies a particular source of the shift in VCC, i.e. an internal shift, one which individual capitals have more control over (i.e. their own production process, selection of technology etc..) and the dynamics of such a process can be understood, to an extent, independently of the changing values of inputs to the production rpocess. And this is in contrast to the overall shift in VCC which includes things that comes from outwith of the individual capital, i.e. that individual capital operates in a market environment where values of inputs are determined by proceses outwith their control - so in a way the different concepts are ways of identifying particular shifts/sources of change in composition of capital

this ends up in the situation where, as Marx says,

Sorry not sure if i've addressed your actual point or not

edit: also when you think about it, despite Marx's poorly worded explanation, if Marx really thought there was a hard definite and all the time applying correlation between the TCC and VCC there would be no need for him to introduce the concept of OCC at all. He introduces the OCC to distinguish the sources of shifts in VCC 'so far as it is determined by its technical composition' which logically implies he sees valid movements in the VCC which are not determined by the TCC (at the individual capital/firm/enterprise level), in which case he is saying there is not a direct, hard and all time applying correlation between TCC and VCC

a few thoughts.....

1) there has been a decide lack of clarity in the meaning and specificity of the terms VCC and OCC amongst Marxists and this has led to lots of confusion

2)I found the distinction between OCC and VCC and their relation to TCC (R-E-S-P-E-C-T find out what it means to me etc etc) to be well explained in Saad Filho's "The Value of Marx".

TCC relatively unproblematic - the physical relation of MoP to labour power as determined by a given level of productive technique

OCC as "value reflex" of this at the point of investment. as such does not tale into account the changes in the values of material inputs between reproduction periods

VCC as the value relation of constant and variable capital required to produce a given commodity unit. The VCC is determined at the level of exchange and hence takes into account changes in the value of material inputs and devaluation of fixed capital over the course of the production cycle

Forgotten where I'm was going with this - fecking acronyms...............

I guess I'm saying Marx's "strict correlation" was limited in scope. One you consider successive cycles of production the relationship between TCC and VCC is less clear. Obviously the value of inputs to a given production process is reduced by technological change in the sectors producing them etc. hence the fact that the wage bill hasn't shrunk to minute relative proportions.

not sure if any of this was of any "value" (see what I did there?)though...........

doh! looks like oisleep beat me to it! think we roughly on the same lines though, he says breathing sigh of relief

OCC is a post-Marx definition in Capital, right?

I've always thought I must have missed it in Vol 1 because I never heard of the term until Vol 3 where Engels points out that OCC was not mentioned in Vol 1 until the third edition. I have the second edition, which to my knowledge is the last one during Marx's lifetime (and which explains why I never heard of it...).

So I'm kinda wondering, is it truly a thing Marx came up with or do we have to thank Engels for that? Anyone know?

Nah it's a Marx term - the third (german) edition was published in 1883 the year of his death.

It also features a fair bit in Theories of Surplus Value so that would be going back to a few years before Volume 1 was even published for the first time in 1867 - although it was only introduced to Vol 1 of Capital itself much later which does suggest some kind of not worked out concept at the earlier stages (or even the later stages to be fair)

Interesting discussion. When dealing with OCC I've always just focused on VCC as TCC is much too ambiguous. I think that VCC is the one that "counts" the most since it directly relates to the tendency of the rate of profit to fall, and it is important for how surplus value is distributed as profit between different capitals. Tbh, I find TCC so useless as a concept that I tend to ignore it. Though this thread might change my mind.

In my mind, at the total societal level, the distinction between the OCC and the VCC largely collapses and they are almost one and the same thing, as there is no 'outside' at that level - everything is internal and therefore driven by the overall change of the TCC of society (poor choice of phrase there as I know there's no such thing, but hopefully you get what i mean). So at the societal level you could argue that regardless of whether Marx makes reference to the OCC or VCC he is just giving a different name to the same thing, and the distinction is only really valid when looking below the societal level

And i guess in a way that re-establishes the original correlation posited by Marx between TCC and VCC, as the reasons given in my earlier post for why VCC, for a firm, can change independently from changes of the TCC for that firm, no longer apply when looked at from the societal level, however I guess that would then bring back in your original questioning as to the TCC/VCC correlation now holding up empirically (which I haven't really thought through at this stage)

The other explanation (if Marx actually believed that there was still a difference between OCC and VCC at societal level, although i'm not sure what that could be) is that in Ch13/Vol3 he (or Engels) just used the wrong term and should have said Value Composition rather than Organic Composition - this is maybe a bit of a weak explanation, but there was definitely a bit of a confusion even within Marx with OCC & VCC and the phrases are sometimes used interchangeably and elsewhere used in ways that stresses a difference

Not sure I get what is puzzling about that (i.e. reading back all the text prior to the part you quoted)

What he does in that section is give two examples of different situations (and in each situation although Sphere A and Sphere B are different spheres of production, the sphere A in example 1 is not the same sphere A as in example 2 etc..)

Example 1 - Total capital employed (C+V) is the same but because the technical composition is different the individual (value) profit rates are different. What Marx says in the summary is that if these profit rates were to be equalised the technical composition would need to change (as in Sphere A you have a small proportion of labour and a large proportion of constant cpaital and in Sphere B you have a large proportion of labour and a small proportion of constant capital - so for these two spheres to equalise then clearly some changes in productivity in Sphere B would be required which would result in a changed technical composition)

Example 2 - Technical Composition in A and B is the same, Total Labour employed is also the same in each sphere but because the value of constant capital for each sphere is different (i.e. one may make something out of Gold and the other out of cheap metal) the individual profit rates are also different. However in this case he is saying that to equalise profits between these two spheres wouldn't require a change in technical composition (as they already are the same) but would only require a change in the value of the constant capital inputs (i.e. if the value of gold equalised with the value of cheap metal) to bring about the equalisation of value profit rates

Although in both these examples clearly either a change in technical composition (internally to that sphere) or a change in value composition (externally to that sphere through changes in value of constant capital inputs) could have the same equalising impact on the value profit rates between the two spheres

In terms of the commensurability of technical compositions between different types of production, I took that to mean say the production of something that was essentially the same (so same technical process) but used different inputs to make it (i.e. gold or cheap metal, or cheap cotton or expensive cotton). edit: actually possibly even more simpler/straightforward than this as he doesn't actually refer to the 'commensurability' of technical compositions between the two spheres, he only says that in the first example the technical composition of one of the spheres would have to 'change' if the value profit rates between the two sphere were ever to be equalised, i.e. as in that example sphere A had a low proportion of labour and high proportion of constant capital and vice versa in sphere B

So in general in that passage, he's just using two different examples of how the individual (value) profit rate of a capital can be impacted through composition changes, one looking at how (internal) changes in technical composition could have an impact on profit rate and the other looking at how (external) changes in value composition can also have an impact on profit rate

Not sure if I strayed there from the point you were making

In my mind, and somewhat pedantically, I would say the OCC is the one that directly relates to the tendency of the rate of profit to fall (as the OCC is merely expressing the increasing proportion of dead labour in relation to living labour within a specific production process)

While the VCC also incorporates the above, it also incorporates the counteracting influences acting against the tendency of the rate of profit to fall (as even though less labour is employed in a production process relative to constant capital, if wider productivity advances in society make those constant capital inputs cheaper, then the increase in TCC/OCC from a technical standpoint does not filter through to an increased VCC as the additional quantities of constant capital relative to labour could even reduce in value terms depending on how much productivity advances have been achieved etc..- which in turn prevents/negates/subdues/counteracts any tendential profit rate falls)

Exactly, which is why I should re-consider TCC from that point of view.

Well, the way I understood it, it is really the VCC that act on the OCC in that way. TCC has another effect that I haven't figured out yet. So typically I've just treated VCC as if it is OCC. Every time I've given it more thought than that I tend to hit a wall. Again, this discussion sorta forces me to revise my understanding of the OCC.

I would say it's the other way around - in that the OCC is the technical composition of an individual capital/firm expressed in value (prior to any changes in value of constant capital inputs) and then VCC is the above plus the inclusion of any value changes in constant capital inputs. So on that basis it doesn't make sense, to me, to say that the VCC can have an impact on the OCC as the OCC is effectively a value proxy for the TCC, so that would be the same as saying the VCC can have an impact on the TCC which seems the wrong way round to me in terms of cause & effect - i.e. I would expect it to be the other way around, as productivity changes are made in a production process then this filters down to impact the VCC of that capital

(obviously this is a bit logically absurd in a sense, as to work out the TCC in value terms you need to convert those physical inputs to value and that involves incorporating whatever the current level of productivity in relation to the constant capital inputs are - but say if you took that as a base level and then from that point, held the value of constant capital inputs constant, then the only changes to the value composition of capital would be via changes in technical composition, so that in effect gives the OCC, and then taking into account changes in the value of constant capital inputs then ends up at the overall VCC, of which of course they can only be one)

I might be wrong, but I think this fits better with Marx's comments about it, i.e.

and

It seems like these distinctions aren't fully worked out in Marx. The VCC is the TCC expressed in value. It makes no sense to give a TCC in value and then say it's different when outside inputs are considered. Thus TCC has to be expressed in physical terms, bodies and machines, or it doesn't make any sense as a category. Furthermore, you can say that the OCC is the VCC before outside inputs are taken into account, but I don't think Marx ever actually uses it that way, and thus OCC and VCC are de facto the same unless I am vastly wrong.

The only way the distinction would be really useful, I think, is if the VCC could somehow express the relative value of c and v per unit (whatever the unit would be, I guess it would have to start from some sort of baseline) but I don't know if that makes enough sense.

The only other way it makes sense is if OCC is just a way of speaking that draws our attention to TCC and falling rate of profit but doesn't express a different numerical value than VCC.

okay, how about we look it at this way.

we can agree that the competitive interaction of capitals imposes a tendency to revolutionise production technologies. This is associated with increasing division of labour and mechanisation etc. This is what Marx is trying to capture with TCC and its growth. TCC is a concept related to use values which are heterogenous and incommensurable. the TCC is represented in value terms by OCC. introducing a capital intensive innovation involves spending proportionately more on machinery hence the tendency for the OCC to rise. however, the effect of a new production technology and it become generalised transforms value relations across the economy as a whole - inputs in succeeding turnovers are reduced in value and so on. it's these knock on effects that Marx is trying to capture with the concept of VCC.

hence you could say TCC and its value reflex OCC are associated with LTRPF and VCC with the counteracting tendency of constant capital to be "cheapened" as a result of the process of accumulation.

AFAIK the interaction of these two variables - or aspects of the accumulation process - is at the heart of how bods like John Weeks, Saad Filho, Ben Fine et al conceptualise crisis formation

innit

sorry, my exegetical skills not up to you guys' exacting standards and can't assemble array of quotes to back this up. given time i could have a go.... or am a completely wrong on this

that's exactly what i said in posts 12 & 14!

I think this is exactly right, as far as I can tell. But I think this also implies that OCC and VCC are numerically identical. If we say the OCC is the value expression of TCC before taking external inputs into account, that makes no sense, because how the hell are we determining the value of the TCC to begin with? No external inputs, no determination of value! So I agree with you but that means that the distinctions are not incredibly crucial, they just indicate different emphases. If anyone can contradict this without going too far over my head I'm open to it, though.

bzfgt said

ooops! sorry comrade, had this one bouncing around in my head at work and in my eagerness to spout off didn't read your posts carefully enough.

my bad

Cool with me, but it was oisleep.

oh fucking hell............sorry both!

I think from the quotes oisleep has posted at #14 Marx envisaged a quantitative distinction between OCC and VCC as he explicitly discussed situations where OCC might be identical as the same production technology is employed but VCC distinct as the value of a given raw material input may vary - he uses a comparison between the manufacture of an iron implement and an identical copper one, i think. as the production technology identical OCC identical but as copper more valuable than iron VCC different.

more importantly perhaps is that OCC is a value ratio "fixed" at the point of investment whilst VCC varies over the course of turnover periods. hence it captures the effects of changing TCC and the forced depreciation of fixed capital this causes.

I think Saad Filho has suggested that the concept of VCC emerges in Marx between TSV and vol 1 of Capital as Marx becomes increasingly aware of the importance of value variations over the period of turnover. again, can't substantiate this with quotation. can send anyone who wants it a copy of the doc in question tho

Re your three statements above suggesting there is no quantitative difference between OCC & VCC (at the level of an individual capital)

The quote I posted from Volume 3 in my very first post on this thread makes it clear that Marx saw it differently to what you suggest above, i.e.

So clearly Marx is saying here that at least in conceptual/abstract terms the OCC and the VCC do express different numerical values.

Incidentally, ocelot, this usage of OCC in Ch45 of Vol 3 seems closer to your 'OCC-B' categorisation as it's clearly talking about comparing different capitals, so is not looking at it from a societal/macro point of view, and also clearly involves the consideration of technical productivity/technology within the individual capital.

Which is interesting (well, not really but you know what i mean) as the context of Ch45 is the theory of rent, which was also the context of the letter from marx to engels you quoted from 1862 where you say that the usage there is 'OCC-A'. Given that the completion on the section on Rent came later (i.e. Marx talks about the intention to include it in the letter in 1862, i.e. points to it being a lengthy & complex affair which is what the 200 odd pages on rent in vol3 certainly is) then based on that alone it does seem like the development of the concept of OCC was one which was based more as a category for analysis only at the sub-societal level. Although i've not properly thought through the whole content of your post tracking the development of the usage so apologies if i'm taking something out of context here

bzfgt, you also raised a valid point about how it seems counter-intuitive to suggest that the OCC and VCC could possibly be different , i.e.:-

i.e. - how can you calculate a composition of capital in value terms that doesn't bring in the value of constant capital inputs. The issue is a more subtle one that what you suggest above, it's not the exclusion of constant capital inputs completely from the calculation, it's the exclusion of the change in value of constant capital inputs that arise from productivity developments outwith of the individual capital/firm (this implies though some kind of baseline point from which these changes are excluded from which practically seems wrought with difficulty). I tried to address this question in post 14 immediately prior to you raising this, when i said:-

absolutely - that's what I said as part of my reply to you above about those examples:-

The profit rates could be equalised though even without an actual increase in the scale of production. If the value of the constant capital inputs were reduced low enough (from productivity changes in the sector that made those inputs) then the same scale of production with the same technical composition could then produce a profit rate that equaled the other sphere

(i haven't worked through the formulas/equations for this, but logically i'm sure this is right)

edit: yep when you work it through, if the constant capital inputs of Sphere A were reduced in value terms from 600 to 16.6, but this still represented the same mass due to the vast increase in productivity in that sector then you have a situation where:-

S/(C+V)

= 100/(16.6+100)

= 85.7%

So actually I don't understand why your example implies there needs to be a 6 fold increase in the scale of production, there doesn't. All that is required is the proportional changes in the component parts of C + V - the actual scale of production is actually irrelevant in this type of example, as it's the (value) rate of profit being equalised not the value mass of profit

This makes sense but I'm not sure why we'd want to do that. It seems like an unnecessarily abstruse formula nobody ever has or will actually calculate, that simply exists to express in principle the way value-composition, all else being equal, changes with increased mechanization.