The OCC

humph! That's gratitude for you.......

noticed the similarity between the two texts - not quite word for word but close in parts.

the closing paragraph of the chapter in "The Value of Marx" is relevant here

so the secular tendency of the VCC is contingent on how much technical change cheapens the elements of constant capital. critically, the changes in the value of inputs (and the OCC) are realised in turnover periods subsequent to the OCC raising capital investment.

raises questions on if LTRPF can be considered a secular trend or not. Saad-Filho, Fine and Weeks argue not. sometimes, Marx appears to argue it does, others not IIRC

Ocelot, maybe I don't understand your argument but are you viewing TCC as quantity measured by something other than labor value? What I get from your earlier Marx quote and Andy and Oisleep's thorough discussion is that TCC would be only measured by value. TCC could refer broadly to current technological conditions but the only quantitative measure you have in Marx's discussions seems to be value. This allows the correlation between VCC and TCC to be "strict" (since it follows more or less by definition).

The variations between TCC and OCC which Oisleep's multiple Marx quotes describe seems to all involves measuring TCC this way. IE, It seems like TCC refers to material processes but is still not measured by immediate physical material such as weight or volume.

To crudely paraphrase oisleep: OCC would be "socially necessary" VCC. Thus the differences between these quantities don't relate directly to the material processes of production.

Now whether VCC increases over times seems to be a different question. Answering that would involve a complex study of multiple industries and the changes in their technical compositions. I would find that an interesting discussion but keep in mind that it's the large field to consider: there is the question of empirical data, the dynamics of whatever Marxian model one finds compelling and how these fit together. Among other knotty problems; there certainly have been some industries where VCC has decreased and others where it has increased and I would argue two such changes don't necessary "add up" in a linear fashion.

If means of production can be produced in such a fashion that they can be used in a shorter time frame, it would be possible to more quickly produce means-of-production but that wouldn't automatically imply that was lower VCC. As a not-intended-to-be-realist example, If a capitalist switched to using a cheap aluminum machine that lasted a shorted time and could made more quickly, then he could get up-and-running more quickly but he might still have higher ratio of machines-as-embodied-labor-to-living labor than previously if fewer workers were needed to tend each machine or if the machines wore out quickly enough. So these advances in technology could still mean a capitalist employed more labor value as material than as living labor. IE, your argument above isn't necessarily compelling (though perhaps you meant it as suggestive).

To ramble on about the examples you mention (without claim here to support or contradict your points). Russia's industrialization was never at the technical level of the West and certainly depended on the ability of the Stalinists to mobilize massive amount of labor (as recall, the book Behind The Urals gives an interesting discussion of how ideological fervor gave rise to workers literally starving while they built machinery). The ability of the USA to quickly industrialize was very much helped by its large scale. I actually don't think China industrialized in an equivalent fashion to the US in the 19th century. Rather, China has become a huge assembly point for a global production process. This is why China can run a trade deficit even though it remains the primary source of the world's finished goods. The iPad2 was assembled in China but using a processor made in Texas by Samsung (I don't know the current situation is). China also had quite a bit of (backward) heavy industry whose monetary value possibly didn't reflect its embodied labor even discounted for its technological backwardness. And I believe China's transformation also involved the direct importing of machinery.

But as I said, a full survey of all these factors would be major undertaking.

i'd say it's fairly self evident that, at an individual capital level, that would be possible

i.e.

i) small changes in technology/the productive process within an organisation allows for a small increase in units of constant capital input 'A' that can be made into commodity 'B' per labour unit, giving a slight increase in TCC , combined with

ii) far deeper changes in the technology/productive process of the production of 'A' itself, makes the constant capital inputs of item 'A' into the production process of product 'B' far cheaper than they previously were, so increased TCC and reduced VCC (but not as reduced as the VCC would have been if there had purely been increases in productivity in the production of 'A' in isolation)

So I don't see any hard & fast correlation between the TCC and VCC at an individual capital level as there are at least two distinct & independent social processes/variables that go into VCC of which only one impacts TCC. So the one which doesn't go into TCC (i.e. productivity increases in production of circulating capital inputs) could have a positive or negative impact on overall VCC which is completely independent from any positive or negative changes that may have occurred in TCC.

However I would expect to see the correlation hold at the individual capital level between TCC and OCC because it's the same thing impacting both measures (assuming OCC is 'correctly' calculated by excluding the impact of any productivity increases on the circulating capital inputs). So OCC effectively serves as the solution to the non commensurability of TCC components by converting them into a baseline value composition which excludes any changes in production process/technology that is external to the individual capital's productive process

At the social/total level however I don't think a negative correlation is possible. Partly because any decrease in the VCC at the individual capital level relates to an increase in the TCC elsewhere & outside of that individual capital, so once these things are brought together at the social level there is not quite the same scope for the divergent movements in TCC and VCC that you could at least in theory see at the individual capital level. But also there are totally different reasons for not expecting a negative correlation at the social level, which are nothing to do with the above.

This is mainly because a rising value composition of capital (and the related tendency of the profit rate to fall) is not purely just down to increases in productivity in general, but due to the unevenness of productivity increases across the supply chain of commodity production.

What I mean by this, is that if productivity increased by the exact same amount in every production process in society then despite this huge increase in production due to productivity, there would be no rise in the value composition of capital (and therefore no tendency for the rate of profit to fall). It's only when there is a deviance between the relative productivity within a production process and the relative productivity of the production of the inputs to that process do we see a change in VCC.

i.e. if production process B used 100 units of A per labour hour to make 100 units of B and then implemented a new production process where they could process 1,000 units of A per labour hour to make 1,000 units of B. Then this in isolation would see an increase in TCC,OCC and VCC due to the increased constant capital inputs (in both value and volume) to the production process.

However if the production of 'A' was also, and at the same time, improved so that it also saw a ten fold increase in productivity, then the impact of this on Production process B would be an increase in TCC & OCC , but a VCC that remained the same as prior to the productivity increases in A & B. As although the volume of constant capital inputs has increased ten fold, the value per unit of them has reduced by a factor of ten, leaving the value of inputs the same as they previously were per labour hour, leaving VCC unchanged (leaving out fixed constant capital considerations for just now)

The point of this big detour however, is that when looking at the social level and particular in relation to things like resources, oil, energy, food etc.. - the productivity increases in these areas (due to natural restraints etc..) are never likely to keep pace with the production processes that use them as inputs, so increases in productivity in relation to production inputs are never going to improve in relative terms as much as the increases in productivity in the production processes that use those inputs. So this has to always lead to an increasing TCC & OCC and an increasing (but at a lower rate) VCC

Sorry, i've completely lost my train of thought now, so best stop!

ocelot:

on the "commensurability" of TCCs - yeah, you can measure TCC within any given industry in terms of man hours per unit of physical output. that measure breaks down for cross sectoral comparisons, as in how do you compare cans of lager per labour hour with bags of crisps per labour hour? you could look at embodied carbon or whatever but I'm not sure if you're then talking about something very different?

I can't see TCC as making sense if it's a value relation as Red suggests...

I'd speculate that rising TCC is just Marx's way of saying that the drive to improve the productivity of labour tends to involve the use of increasingly complex instruments of production. Human grunt work becomes relatively less important. Not sure this is anything other than an empirical proposition based on the history of technology (?)

OCC is a "dispacement" of TCC and a means to solve the incommensurability prob - that's is why Saad-Filho calls it the value reflex of TCC. not necessarily sure his argument posits a long run trend in the VCC because the reciprocal of increasingly capital intensive investment is the decreasing cost of inputs.

IIRC Saad-Filho talks about VCC and OCC as operating at different levels of abstraction - the former at the level of many capitals and the latter at the level of capital in general? John Weeks refers to the levels of "value production" for OCC and "value formation" for VCC in his take on the issue. I think it's the temporal disjunction of the two measures that they are trying to highlight - I guess in a way it's the same as the critique of "simultaneous valuation" in TSSI and the "historic versus replacement" cost of fixed constant capital thang.

oisleep:

AFAICS you seem to be arguing that VCC will tend to rise as "declining marginal productivity" (to use a loaded phrase) in primary product producting industries means there are limits to the degree to which productive inputs can be cheapened. Am I right in this or have I completely misunderstood you?

I have just noticed that every sentence int his post ends in a question mark! must be becoming an Australian (he says with rising inflexion)

yeah that was partly what I was getting at - although just using primary products as a particular example to make the general point that it's not productivity in general that leads to rising VCC (and therefore all the tendency of the rate of profit to fall stuff) but differences in relative productivity changes between the production process that makes use of capital inputs and the production process that produces those capital inputs

gotcha. seems to make sense.

i know this is an incredibly naive question but do we have any empirical data on actual changes to the capital structure on which to assess claims about the long-run trends of VCC? I know thia won't demonstrate that any movement discernable is a necessary rather than contingent effect of capital accumulation but would be interesting nonetheless.

when I say "we" I mean "you" obviously, as I don't...

and that is definitely one scarey machine!

What does this mean?

Also: I'm still stuck with this: if we can agree (which it seems now like everybody but Red does) that TCC is not measured in value, then I can see how it can rise when VCC falls. But I still don't see how OCC can be numerically different from VCC. For instance, oisleep's example:

This seems, unless I'm massively missing something, to depend on TCC not being measured in value in order for it to differ from VCC. If TCC were measured in value, cheaper inputs would mean less socially necessary labor time, i.e. less value, in each unit of constant capital. Thus there can not be a difference in TCC and VCC if they are both measured in value.

OCC seems to be the middle term but if they are all measured in value then they are all three numerically identical. If someone can explain to me why this is wrong I'd be grateful, otherwise a certain percentage of what is being said here does not make sense to me.

I'll take your word about the importance of each of Marx's words.

I would just say if you are measuring constant capital by material goods, then, for any given production process, there is actually less reason to expect the ratio of material goods to living labor to rise. Capital has every reason to limit the amount of energy and raw materials that it uses in production and it has done so over the last two hundred years (though other factors like speed and flexibility of distribution counteract this). Every common product we buy uses less physical material than twenty years and considerably less than fifty years. Automobiles are lighter, Computers have gone from desktop machines to iPads, houses are cheaper and lighter etc. Now, capital has at the same time made labor much more productive. How these two tendencies interact is complicated question (and I'd tend to think it is the wrong level of abstraction).

I would also say that the rise in the world's total consumption of material is not necessarily related directly to an increasing TCC. The more well-off segments were till recently still increasing their consumption, capitalist production has been increasing in scale, the world's population is still slowly increasing, military production and so-forth calls up massive unnecessary consumption and so forth.

In modern production processes, it is more plausible to my mind to expect a rise in VCC (if I'm using it correctly) - the ratio of embodied labor to living labor than to expect a rise in the material goods to living labor (and I think this is also a more useful level of abstraction, one that is looking more abstractly at social transformation).

bzfgt

Ben Fine explains the VCC/OCC distinction in these terms

(from "Marx's Capital")

To complicate matters Fine argues this is a static comparison. The explanatory power of the two concepts comes into play when the dynamic process of accumulation is considered. The point of changing TCC is to reduce output unit values to gain competitive advantage. This feeds through the system meaning that by the time a given mass of commodity capital comes up for sale the current value of the material inputs used in its production will be different from they were at the time of investment. The OCC VCC distnction is supposed to capture this, with the OCC reflecting values at the point of investment and the VCC the adjusted values in the process of circulation.

Fine, Weeks and Saad-Filho all place great emphasis on the depreciation of fixed capital over the turnover period - or over successive turnover periods. This is a major contradiction of accumulation - the struggle to gain competitive advantage reduces unit prices of output but simultaneously devalues fixed capital

I couldn't tell if this description of TCC is correct-according-to-Marx or not. But if it is, it seems like a problematic approach.

I mean, I could get different amounts of matter by measuring weight-of-material, volume-of-material, atoms-of-material, protons-of-material, protons-plus-neutrons-of-material, "bars" of material and so-forth. Many of these properties really are used in a given, modern production process (even when your talking two production processes which are "exactly the same"). One or another of the many measures of material would indeed matter most in a given process, though usually several come into play.

If this is what is being argued, then I guess that I'm with Ocelot that jumping from TCC to OCC is a big, unjustified leap.

Further, the same mass of gold and of silver would likely involve different amounts of embodied living labor so this OCC doesn't seem like the OCC of Capital v3, c13.

OK, TCC is not measurable in value but OCC is but OCC "strictly correlates" with TCC? I suppose they could strictly correlate in a single production process, at a single time when you can assume no economies of scale or processes of diminishing returns. But this seems to tell us nearly nothing.

Yeah these distinctions are problematic. The distinction Fine is making seems to be to count the value of fixed but not circulating capital ("leaving aside the greater or lesser value of the raw materials employed"), but as far as I know Marx talks about TCC in terms of constant vs. variable capital, so that doesn't seem to quite work.

My perplexity can be summarized fairly easily: to calculate the value of something is to calculate the values of inputs, so if we arrive at the TCC by calculating the values of raw material and machinery vs. labor, what have we not counted that we will then count in VCC? It doesn't help to mention that the materials are devalued by the time they go to market, because there is no sense of value in which this is not taken into account: value is socially necessary labor time, not actual labor expended on producing something.

we don't arrive at TCC by any form of value calculation - it is a comparison of use values. OCC is the value equivalent of TCC - i.e it compares the values of means of production to the labour power that sets them in motion. thus OCC "reflects" changes in productive technique. changes in the value of raw materials are not changes in productive technique and do not impact on TCC or OCC. VCC accounts for changes in input (raw material or means of prod)values in the course of the accumulation process.

the OCC / VCC distinction is designed to draw out the implications of changes of value over turnover periods that result specifically from technological change. it is something Harvey draws out too - how there are simultaneous but contradictory pressures to prolong the life of fixed capital investments to get maximum returns but also to revolutionize production thereby devaluing fixed capital assets. this is a normal part of the operation of the "law of value" but that doesn't diminish the significance of the process or the distinction.

Fine is far from suggesting an "embodied labour" definition of value as his polemics against the Sraffians years back show. TBH am not sure of your point, bzfgt

Red - i think Marx had this thing about the two-fold character of commodities, as use values and values.....sure that was in a book he wrote somewhere....

anyhow, this is all getting a bit "theological" - I am off to see how many angels I can fit on a pin head . . .

Thanks, Andy, that's helpful.

This is what Red, somewhat convincingly, contests.

OK, you're saying TCC accounts for fixed but not circulating constant capital, and does so in terms of use-value. That probably is the best way to make these distinctions make sense but, as Red pointed out, it may lead to intractable problems of measurement as far as actually calculating TCC goes.

I can't remember what I said that your reference to "embodied value" refers to.

OK, I think the opposite side of Buzzy's question above would be; How does OCC matter then? If we assume the prices and labor-value correlate, then it would seem that VCC is the fixed cost of the capitalists and the rest (edit: meaning the other quantities in question) is irrelevant to their decisions, accountings, quarterly reports and so-forth. (or if OCC is what the capitalists see, how do they not see VCC).

I don't understand how describing the purpose of these quantities explains anything here. They are both numerical values, am I correct? If OCC isn't numerically equal to VCC, where does it come in to the decisions and calculations of the capitalists? If it doesn't come into these considerations what effect does it have?

I agree that these simultaneously but contradictory pressures exist but I would still say the capitalist only see a single number for their "fixed costs plus raw materials" and only try to minimize this.

Unless there's some concrete explanation of how the use-value of the means of production influence capitalist profits or other capitalist actions, I am not sure where this two-fold nature relates here (it may relate the final use value of commodities or how VCC changes or whatever but I can't see it in the above argument). And I'm sorry if my earlier rhetoric might have sounded snide. It was only intended as hyperbole to highlight the problem I saw.

am not sure Marx ever intended TCC to be a precise measure. the implication of considering it a relation of use values is it is not commensurable as the discussion above shows. I think the concept is a "qualitative" one designed to highlight the way in which improvements in labour productivity are achieved.

Red, I think it's a mistake to frame this discussion at the level of the perceptions of the individual capitalist. surely we accept that a capitalist's perception and reality may diverge?!

After we're done calculating TCC maybe we could discuss how to calculate the surplus-value contained in a shoe .

okay, well first you need to be clear on the toe-fold character of the labour involved in producing it....

interesting post, ocelot, will have to chew it over but soulds plausible. hadn't thought to approach it from that angle.

P.S. wasn't intending to belittle value theory. I get slightly uncomfortable with acronym laden discussions aimed at clarifying concepts alone without demonstrating their utility in explaining real-world phenomena, that's all. guess that is more about my painful awareness of my own lack of knowledge at that level than anything else though

I don't understand how Ocelot can speak of a "proof" without giving any numbers.

Still, digging into the claims...

I believe that I can disprove this (at least if we're sticking to what I understand to be Marx's assumptions). Suppose society produces a basket of goods, some of which are survival goods consumed by the workers and the rest are luxury good consumed by capitalists (or wasted in government programs or whatever). Call our initial total survival goods measured by labor value SG and similarly call total luxury goods LG. The rate of exploitation would be r = LG/SG. Society naturally produces enough survival goods for the survival of the workers and utilizes the remaining labor power for luxury goods. Now, suppose there is an increase in productivity of labor in the survival goods industries and the value (embodied labor power) of the survival goods decreases. This means that a smaller amount of labor is needed to support the survival of the same number of labors. We can see that total value of survival goods will drop and total value of luxury good increase. In our new cycle SG' < SG and LG' > LG. Dividing the two inequalities, we have LG'/SG' > LG/SG and so r' > r. IE, a decrease in the cost of survival should result in an increase in the rate of exploitation assuming the ordinary principles of a capitalist economy (that the price of labor sinks to its cost of reproduction).

I'm pretty sure Marx makes a similar argument somewhere out in the rugged wilds of Capital and I'd expect some of our Capital experts have jumped in with it fairly soon.

I see further problems with Ocelot's argument but I'll leave things at this proof (which does use honest-algebra guys).

As far looking at CPI and all goes, if we want to start arguing based on the dynamics of prices, that's fine. But remember surplus value is expressed as a ratio of quantities of labor power expended and not as a price. Arguing based on labor power one place and price in another results in confusion, sorry to say.

@ocelot Jul 4 2012 06:07

I am not sure how you reach this conclusion:

The relation implies greater quantities of use values are being produced with few living labor inputs at each stage of development. If anything, the opposite of what you said should be true -- greater quantities of material wealth should be produced with less living labor over time, or, what is the same thing, the rate of growth should be accelerating.

I also question this idea:

We might also see a rising quantity of labor time being expended in economic activities with no obvious productive aim. Many folks have been trying to nail down this effect. I have shown it is true.

I think the implicit argument is that if the fixed capital needed to industrialize a country embodied an increasing amount of living labor then it should have taken longer to produce this fixed capital each time a country was industrialized. I believe in your argument, you're talking about TCC, the use value of physical means of production rather than VCC, the quantity of labor embodied in that means of production (my God, I've been able to sort-out this forest of definitions - cut to our friends curtly correcting me).

Anyway, I still wouldn't say Ocelot's claim is necessarily true. Perhaps later industrialization efforts involved more labor but expended in a shorted period of time. I think we say that the industrialization of Soviet Union certainly did involve a massive requisitioning of labor on a crude level while China's recent industrialization involved a combination of external inputs and the existing low-tech but large industrial complex already built by the Maoists.

Anyway, I think the evolution of VCC/OCC is a complicated and important question that I don't think we can be glibly answer without both deep analysis and research.

@RedHughs Jul 11 2012 16:56

I would suggest this is not true. The relation implies less labor time is necessary to achieve a given level of industrialization, not more. As you argue, the division of the working day does become increasingly tilted toward the production of technical means of production, but the labor time expended on these technical means of production is more than made up for by the reduction of direct labor expended overall.

The result is that industrialization more than pays for itself, and its speed constantly increases at a compound rate, as Ocelot observes anecdotally. At least this is the argument Marx is making -- not the one Ocelot states.

ocelot said

this passage appears the weak link in your attempt at a rigorous demonstration of an iron inevitability in the rise of TCC imo. you depend on a number of assumption or statements of manifest empirical trends that a determined anti-anti-capitalist would object to. Juat like i did when referring to "history of technology" above.

should be obvious (I hope) I agree witht he argument you're making if noth the water-tightness of you demonstration. perhaps an a priori demonstration not possible and we have to rely on historical example?