The OCC

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Jul 4 2012 10:07
The OCC

As in, the organic composition of capital. Is it valid or not? According to Marx the OCC represents the "strict" correlation between the movements of the technical composition of capital (TCC) and the value composition of capital (VCC). This correlation is posited in vol 1:

Quote:
The composition of capital is to be understood in a two-fold sense. On the side of value, it is determined by the proportion in which it is divided into constant capital or value of the means of production, and variable capital or value of labour power, the sum total of wages. On the side of material, as it functions in the process of production, all capital is divided into means of production and living labour power. This latter composition is determined by the relation between the mass of the means of production employed, on the one hand, and the mass of labour necessary for their employment on the other. I call the former the value-composition, the latter the technical composition of capital.

Between the two there is a strict correlation. To express this, I call the value composition of capital, in so far as it is determined by its technical composition and mirrors the changes of the latter, the organic composition of capital. Wherever I refer to the composition of capital, without further qualification, its organic composition is always understood.

But the reasons why the TCC and VCC are strictly correlated are not given in vol 1. At least AFAICS. The validity of this correlation is in question for me.

By that, I don't mean that I can't see the logic of a secular tendency for the TCC to rise. As productivity increases, the amount of raw materials consumed in the production of material goods and deliverance of services, in order to employ a given amount of labour, must necessarily increase. That's not a full worked out demonstration, but I don't think it would be too difficult to create a fairly waterproof demonstration that the dynamics of capitalism mean that it is powerless to do anything other than increase the TCC over time. It should be noted, that from the perspective of long term crises, specifically the environmental one, that is an insoluable problem, in itself.

However, the proposition that a secular increase in the TCC necessarily creates a "strictly correlated" increase in the VCC, has no immediately obvious foundation. There are a number of counter-indications, at first sight.

Secular trends should be visible on historical scales. A secular increase in the value-composition of capital means that the amount of SNLT in the constant capital (fixed and circulating) is ever greater, compared to the available living labour power. Two immediately apparent contra-indications spring to mind.

Over time, England, Germany, the USA, Russia, and now Brazil, India and - last but never least - China, have made the transition from pre-industrial to state-of-the-art, cutting edge industrial power. If the VCC associated with fixed (and circulating constant) capital was increasing over time, then it should take each country more and more years to effect this transition. In historical fact, the opposite is the case. Germany industrialised quicker than England, the USA quicker than Germany. And today China has effected the transition in a staggeringly short period.

Secondly, if the VCC is increasing over time, we may expect, either the composition of the proletariat to have shifted to where most of the workforce is engaged in producing means of production goods (questionable argument), or, the share of the wage bill in corporations current accounts, should have shrunk to a tiny proportion of total liabilities. This does not appear to be the case.

Neither of those contra-indications are necessarily conclusive, but they are, imo, suggestive enough to seriously question what, exactly, is the foundation for the OCC hypothesis - i.e. the correlation between TCC and VCC?

I could say more, but I'll leave it there for openers.

P.S. The only previous thread that I could find that really started to address the OCC was this one constant capital (badly hijacked - you can ignore everything except Cardinal Tourettes and mikus, and occasionally lem, as the rest of the thread is off-topic).

P.P.S. Also - a lot of ortho Marxists seem to have a programmed response that any mention of the OCC is really a discussion about the TRPF, which they then drone on about at length, ignoring the question of the OCC's validity. Such responses will be ignored as off-topic (by me, anyway).

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Jul 4 2012 12:09

I've always read this part:-

Quote:
I call the former the value-composition, the latter the technical composition of capital. Between the two there is a strict correlation. To express this, I call the value composition of capital, in so far as it is determined by its technical composition and mirrors the changes of the latter, the organic composition of capital.

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,

vol3 wrote:
capitals of equal organic composition may be of different value-composition, and capitals with identical percentages of value-composition may show varying degrees of organic composition

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

andy g
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Jul 4 2012 11:58

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...........

andy g
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Jul 4 2012 13:16

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

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Jul 4 2012 14:51

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?

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Jul 4 2012 15:08

oisleep. Thanks for the considered response. I can see how that reading would be consistent with v1, ch 25, and (with reservations*) with v3, ch 8,9&12 on the average rate of profit.

However, when we get to v3, ch 13:

Quote:
If it is further assumed that this gradual change in the composition of capital is not confined only to individual spheres of production, but that it occurs more or less in all, or at least in the key spheres of production, so that it involves changes in the average organic composition of the total capital of a certain society, then the gradual growth of constant capital in relation to variable capital must necessarily lead to a gradual fall of the general rate of profit, so long as the rate of surplus-value, or the intensity of exploitation of labour by capital, remain the same.

that doesn't seem consistent with the localised, pari passu reading you give for the v1 version. Ideas?

* reservations being that there's already some more generally relative character to the category that applies society-wide. Also, in ch 8, he says something that I find puzzling in it's implications:

Quote:
The difference between this second example and the first is just this: The equalisation between A and B in the second case would require only a change in the value of the constant capital of either A or B, provided the technical basis remained the same. But in the first case the technical composition itself is different in the two spheres of production and would have to be completely changed to achieve an equalisation.

Given that A and B are earlier defined as different spheres of production, this seems to imply that it is possible to commensurate technical compositions between chalk and cheese manufacture (say) independently of value. That, I find baffling.

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Jul 4 2012 15:48
Railyon wrote:
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)

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Jul 4 2012 16:02

Also see this letter Marx To Engels, 2 August 1862.

Imho it's well worth a read as you have a skeleton outline of his general solution to the avg rate of profit and how he thought it related to Ricardo's theory of rent, all in one brief sketch.

[N.B. in the interests of full disclosure, I found this by using MIA google search for "organic composition of capital" - I'm not that much of a nerd that I've read all the letters :)]

The only philological question I still haven't quite resolved is whether the actual coinage is Marx's, or whether it was used by some of the authors he looked at in TSV (and earlier research).

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Jul 4 2012 16:24

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.

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Jul 4 2012 16:52
ocelot wrote:
oisleep. Thanks for the considered response. I can see how that reading would be consistent with v1, ch 25, and (with reservations*) with v3, ch 8,9&12 on the average rate of profit.

However, when we get to v3, ch 13:

Quote:
If it is further assumed that this gradual change in the composition of capital is not confined only to individual spheres of production, but that it occurs more or less in all, or at least in the key spheres of production, so that it involves changes in the average organic composition of the total capital of a certain society, then the gradual growth of constant capital in relation to variable capital must necessarily lead to a gradual fall of the general rate of profit, so long as the rate of surplus-value, or the intensity of exploitation of labour by capital, remain the same.

that doesn't seem consistent with the localised, pari passu reading you give for the v1 version. Ideas?

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

Quote:
Also, in ch 8, he says something that I find puzzling in it's implications:
Quote:
The difference between this second example and the first is just this: The equalisation between A and B in the second case would require only a change in the value of the constant capital of either A or B, provided the technical basis remained the same. But in the first case the technical composition itself is different in the two spheres of production and would have to be completely changed to achieve an equalisation.

Given that A and B are earlier defined as different spheres of production, this seems to imply that it is possible to commensurate technical compositions between chalk and cheese manufacture (say) independently of value. That, I find baffling.

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

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Jul 4 2012 16:50
Khawaga wrote:
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.

Well, as already stated, the fact that the seemingly inexorable rise of the TCC threatens our continued existence as a species, is imo a reasonable argument for us to stop ignoring it and maybe give it a bit more attention.

The second thing is that my intuition is that the OCC is effectively on its head. That is, that the real secular trend is for the TCC to rise while the VCC falls. A kind of scissors effect, in which the response to one trend actually aggravates the direction of the other. But now, maybe it's me who's in danger of a micro-macro 'fallacy of composition' style confusion with the two categories. I still haven't fully worked it out yet.

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Jul 4 2012 17:02
Khawaga wrote:
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

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)

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Jul 4 2012 17:06
ocelot wrote:
Well, as already stated, the fact that the seemingly inexorable rise of the TCC threatens our continued existence as a species, is imo a reasonable argument for us to stop ignoring it and maybe give it a bit more attention.

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

oisleep wrote:
In my mind, 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)

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.

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Jul 4 2012 17:23

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.

Ch8 Vol3 wrote:
The first proportion rests on a technical basis, and must be regarded as given at a certain stage of development of the productive forces. A definite quantity of labor-power represented by a definite number of laborers is required to produce a definite quantity of products in, say, one day, and — what is self-evident — thereby to consume productively, i. e., to set in motion, a definite quantity of means of production, machinery, raw materials, etc. A definite number of laborers corresponds to a definite quantity of means of production, and hence a definite quantity of living labor to a definite quantity of labor materialized in means of production. This proportion differs greatly in different spheres of production, and frequently even in different branches of one and the same industry, although it may by coincidence be entirely or approximately the same in entirely separate lines of industry.

This proportion forms the technical composition of capital and is the real basis of its organic composition.

and

CH8 Vol3 wrote:
The difference between the technical composition and the value composition is manifested in each branch of industry in that the value-relation of the two portions of capital may vary while the technical composition is constant, and the value-relation may remain the same while the technical composition varies. The latter case will, of course, be possible only if the change in the ratio of the employed masses of means of production and labor-power is compensated by a reverse change in their values.

The value-composition of capital, inasmuch as it is determined by, and reflects, its technical composition, is called the organic composition of capital.

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Jul 4 2012 19:56

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.

bzfgt
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Jul 4 2012 19:57

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.

andy g
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Jul 4 2012 21:22

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

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Jul 4 2012 22:26

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

bzfgt
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Jul 4 2012 22:35
andy g wrote:
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.

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.

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Jul 4 2012 23:11

At the risk of getting excessively nerdy, I want to look at the different stages of the appearance of the OCC in Marx's writings (as best I know of).

First we have OCC-A, as per the 1862 letter above. There is no association with any technical composition. The concept refers exclusively to the proportion between constant and variable capital - at the level of comparison between different sectors of production in a given society. That is to say, it is a macro concept, specifically linked to the problem of the average rate of profit, the transformation of values into cost of production prices (and the critique of Ricardo's theory of rent). It is called organic by reference to Marx's vitalist metaphor of constant capital as dead labour and variable as living. (which is why, although the concept of the differing ratios of 'fixed' and variable/circulating capital predates Marx, I suspect the OCC term is Marx's)

I haven't read Theories of Surplus Value, but the dips in and out via MIA and search engines, don't seem to show a big move away from OCC-A.

But in Capital v1, we get a move to OCC-B. The most obvious new development is the appearance of the TCC. But also the context (v1 - the only one Marx finished* for publication) is micro - the immediate process of production in the context of a single firm.

In v 2, the brief mentions of the OCC appear to be to OCC-A (afaics).

In v3, there are, imo, two different versions of the OCC, both of which informed by both OCC-A and OCC-B but not reducible to either, nor even equivalent to each other.

Moving away from A & B, within Capital, we can label v1, ch 25 as OCC-1 (aka OCC-B), v3 ch 8 & 9 as OCC-2, and ch 13 as OCC-3.

Chapter 8 (I will return to the responses to my points on this chapter by oisleep in a later post) of course mainly follows the argument laid out in the 1862 letter (OCC-A), concerned as it is with the macro question of the equalisation of the rate of profit. But it also tries to incorporate the unfolding of the OCC into the TCC/VCC duality (OCC-B). But, in the original macro context of OCC-A (hence, imo, some of the contradictions already creeping in).

But in ch 13, we have a different articulation of A & B. Whereas ch 8 was mostly a restatement of the OCC-A argument about the RoP & transformation, with an added aspect of OCC-B.But here, the only thing remaining from OCC-A is really the macro level - this is a dynamic of the whole economy. From the micro, single firm level of OCC-B, we have the correlation between the TCC and the VCC (pari passu), but now raised to the macro level of a dynamic of the whole economy.

No surprises then, that I think that last move is invalid. I do think that the move from OCC-A to OCC-B did represent a productive unfolding of the concept, moving into the context of the immediate process of production. But I think the further productive unfolding of the concept moving back from the micro to the macro was stillborn. Perhaps because Marx just did not have the time and the health and the creative energy in his last years, to complete it. Perhaps also, because the implications of v3, ch 13 fulfilled a very strong need for a guarantee of inevitable victory for his epigones. Whatever. I don't think the project of unfolding the true relationship between the TCC and the VCC is a dead loss. I do think that process of unfolding took a wrong turn, and hit a blockage at ch 13.

* well, ish... he kept changing things with every new edition while he was still living.

andy g
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Jul 5 2012 04:59

bzfgt said

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

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 embarrassed

bzfgt
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Jul 5 2012 05:43

Cool with me, but it was oisleep.

andy g
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Jul 5 2012 07:24

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

embarrassed embarrassed roll eyes

andy g
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Jul 5 2012 07:39
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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.
.

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

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Jul 5 2012 08:14
bzfgt wrote:
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.
bzfgt wrote:
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
bzfgt wrote:
I think this also implies that OCC and VCC are numerically identical

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.

C45, Vol3 wrote:
capitals of equal organic composition may be of different value-composition, and capitals with identical percentages of value-composition may show varying degrees of organic composition and thus express different stages in the development of the social productivity of labour.

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.:-

bzfgt wrote:
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!

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:-

oisleep wrote:
(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)
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Jul 5 2012 14:19

Sheesh. I've been on a rollercoaster trying to figure out my problem with the example given in v3.ch8. I started thinking it was completely wrong. Then I realised that, in fact, the technical composition is not entirely relative - that for a given total capital, it sets in motion an absolute mass of labour - so perhaps the technical composition is commensureable across industries after all? And then I went back down again, by realising that the fact that the other pole is still relative, still produces my original problem. Enough waffling, let's try and demonstrate. (Excuse lengthy quote)

Quote:
When a capital invested in production sphere A expends only 100 in variable capital for each 700 of total capital, leaving 600 for constant capital, while a capital invested in production sphere B expends 600 for variable and only 100 for constant capital, then capital A of 700 sets in motion only 100 of labour-power, or, in the terms of our previous assumption, 100 weeks of labour, or 6,000 hours of living labour, while the same amount of capital B will set in motion 600 weeks of labour, or 36,000 hours of living labour. The capital in A would then appropriate only 50 weeks of labour, or 3,000 hours of surplus-labour, while the same amount of capital in B would appropriate 300 weeks of labour, or 18,000 hours. Variable capital is not only the index of the labour embodied in it. When the rate of surplus-value is known it is also an index of the amount of labour set in motion over and above that embodied in itself, i. e., of surplus-labour. Assuming the same intensity of exploitation, the profit in the first case would be 100/700 = 1/7 = 14 2/7%, and in the second case, 600/700 = 6/7 = 85 5/7%, or a six-fold rate of profit. In this case, the profit itself would actually be six times as great, 600 in B as against 100 in A, because the same capital set in motion six times as much living labour, which at the same level of exploitation means six times as much surplus value, and thus six times as much profit.
[...]
We get practically the same result if the technical conditions are the same in both spheres of production, but the value of the elements of the employed constant capital is greater or smaller [...]

The difference between this second example and the first is just this: The equalisation between A and B in the second case would require only a change in the value of the constant capital of either A or B, provided the technical basis remained the same. But in the first case the technical composition itself is different in the two spheres of production and would have to be completely changed to achieve an equalisation.

So, can the rate of profit in production sphere A in the first example, be equalised to that of B, without changing the technical composition - i.e. by a change in the value of the constant capital? In fact it can:

Starting condition for production sphere A, example one. (incl. assumption S = V, static)

N mop units . UV(1) unit value = £600 = C(1); i)
100 labour hours = £100 = V(1)
S(1)/(C(1) + V(1)) = 100/700 = 14 2/7%

Change: value of mop units drops drastically (by revolution in productivity without, in mop production) such that the scale of production can be increased six-fold. NB technical composition - the ratio of the mass of mop to mass of labour - remains constant.

6N . UV(2) = £100 = C(2)
6 x 100 labour hours = £600 = V(2)
S/(C(2) + V(2)) = 600/700 = 85 5/7%

solving for UV(2)

from i) N = £600/UV(1)

UV(2) = £100/6N = £100/6(£600/UV(1)) = 1/36 . UV(1)

Which is admittedly a hell of a revolution in productivity (36 times original) in one go. But, afaics, the point remains that the technical ratio of mop/labour can remain unchanged while rate of profit is equalised with B.

Now, the possible objection would be that a six-fold increase in the scale of production is a change in the technical composition. But that would mean that the TCC is an absolute matter, rather than a relative one. Whereas, the very next thing the man himself says is:

Quote:
The different organic composition of various capitals is thus independent of their absolute magnitude. It is always but a question of how much of every 100 is variable and how much constant capital.

So, following oisleep, I think (?) these particular difficulties can be overcome by taking a "baseline" approach of assuming that the TCC in different industrial sectors is correlated to the VCC at a given starting point, and then you can investigate the different sources of changes in VCC going forward (from value changes in inputs from without, versus changes in TCC/productivity, from within). I still have a slightly nagging worry about circularity with that, but I think it's functional within the framework of what's being investigated in that section.

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Jul 5 2012 16:19
ocelot wrote:
So, can the rate of profit in production sphere A in the first example, be equalised to that of B, without changing the technical composition - i.e. by a change in the value of the constant capital? In fact it can:

............

Which is admittedly a hell of a revolution in productivity (36 times original) in one go. But, afaics, the point remains that the technical ratio of mop/labour can remain unchanged while rate of profit is equalised with B.

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

oisleep wrote:
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
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Jul 5 2012 16:21
ocelot wrote:
Now, the possible objection would be that a six-fold increase in the scale of production is a change in the technical composition.

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

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Jul 5 2012 16:24
Quote:
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

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.

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Jul 5 2012 16:51
oisleep wrote:
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

I was just following the convention of the example in keeping the total capital unchanged at £700. But I agree, what matters is the rate, not the mass of the technical comp.

(But, as an aside, in the question of the secular trend for a rising TCC and related environmental threat, the mass is important)

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Jul 9 2012 15:56
andy g wrote:
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

I took Andy up on his offer. The two pieces are a paper in Capital & Class 50 (1993) and Saad-Filho's 2002 book, "The Value of Marx", the chapter 6 of which (on composition) is, afaics, more or less a word-for-word cut and paste from the C&C article. As it happens, I've made the joyful discovery that C&C have made their back-catalogue now freely available online (up to 3 years before current date, so in 2009 at the mo) - so the link for "A Note on Marx's Analysis of the Composition of Capital" is here.

Overall I thought it was worth a read as an up-to-date restatement and/or clarification of a relatively orthodox take on the distinctions between TCC, OCC & VCC and some discussion on the relations between them and the accumulation process in general.

However. It didn't really help my enquiry as to how the correlation between TCC and VCC is justified. Saad-Filho notes that

Quote:
Now, which set of values is to be used in the calculation of the OCC and the VCC, the older and higher or the newer and lower? For Marx, the answer is unambiguous. The OCC reflects the TCC at the initial (and higher) values of the component parts of capital, before the new technologies affect the value of the output, while the VCC reflects the TCC at the final ( and lower) values of the elements of constant and variable capital. As a result, changes in the social VCC will capture the previous rise in the social TCC as well as the ensuing fall in commodity values, inclusive of those that have been used as inputs in the last production period. Because of that, the VCC will tend to increase more slowly than the social TCC and OCC

But the question of whether the VCC could actually decline while the TCC rises, is not even considered.