Capital Vol 1 Reading Group: Chapter 4-6

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Spartacus's picture
Joined: 20-09-03
Oct 20 2008 05:31
Capital Vol 1 Reading Group: Chapter 4-6

another two weeks, so time for a thread discussing these chapters. for any new people, discussion of aspects of the book unconnected to this chapter is here, discussion of the discussion is here, and an index of all threads to do with the reading group is here.

these chapters were fairly straightforward and more exciting after all the more abstract stuff. i did write my usual notes, but unfortunately they're on my computer which is broken, so i might have to wait a week or two to post them. here's an extra condensed version:

chapter 4:

capital is money thrown into circulation in order to get more money out, M-C-M, rather than C-M-C. obviously this is pointless if the first m is the same as the 2nd, so really it's M-C-M' where M' is the original M plus surplus value. value becomes self-expanding, enters into relations with itself etc.

chapter 5:

where does surplus value come from? assuming exchange of equivalents, no value is added. if everything sells above or below its value, the buyer loses or gains only what they gain or lose in sale, so no surplus value is being created. if A sells $40 dollars of wine to B for $50, surplus value only exists for A, since the same amount of alue is there before and after. so it can't come from exchange. outside of exchange, the owner is only in relation to their own commodity - if they add value to it by working on it, that still isn't self expanding value. so surplus value comes neither within nor without circulation. going to find where whilst still assuming real value paid for.

chapter 6:

need a commodity who's use-value is the production of value: labour power, which is the abilities, physical and mental, humans exercise each time produce a use value.

to be available for sale as a commodity labour power must legally belong to owner, be for sale for a deffinite period of time, and the owner have no other commodities to sell.

the value of labour power is the value of the commodities required to maintain and reproduce the labour power (and the labourer when they die). if the value in all these commodities averages to say 6hr social labour time for each day of labour-power, and is $3, then $3 is the value of one days labour.

that's all i have time to summarise now. i'll do my best to find time later in the week to contribute to any discussion.

darren p's picture
darren p
Joined: 5-07-06
Nov 5 2008 22:52

Just to send some words of encouragement. I'm reading vol2 at the moment but your notes are providing me with a good refresher on the first volume,

For the global co-operative commonwealth.

Spartacus's picture
Joined: 20-09-03
Feb 10 2009 11:59

nearly three weeks since i wanted to post, but here we are, my notes on these chapters. they're getting less dense, so my notes are able to summarise a bit better i think. anyway, anything you read differently, please point out, it can be a starting point for debate. as i said on the new thread for chapters 7-9, i would welcome revol68 coming back and seeing his take as we seem to be now getting into his point of contention brought up on the first thread.

Dave B
Joined: 3-08-08
Nov 9 2008 10:03

Hi all

As the capital reading group seems to be fizzling out I thought I would throw the following in. It was something I wrote a while ago just for myself as an exercise to sort out a problem that was bothering me at the time. Hence perhaps its peculiar nature.

I am by the way not looking for an argument over it.

I actually think all the hard work has already been done once we cracked the meaning of value in the discussion that even preceded the reading group. The rest is just a matter of hacking your way through the gothic literary style and converting it into plain English.

I am going to refer to one of the first expression of Karl's value
formulations as it appeared in Volume one, chapter IX;

"for example, if £500 is the capital advanced, its components may be
such that the £500 = £410 const. + £90 var. When the process of
production is finished, we get a commodity whose value = (c + v) +
s, where s is the surplus-value; or taking our former figures, the
value of this commodity may be (£410 const. + £90 var.) + £90
surpl. "

This can be translated into its more familiar form;

410c + 90v + 90s = 590

There are I believe several ambiguities in this expression that
although they may seem trivial at first can later on lead to error
in that two different things can be or are by Karl conflated. I also
believe this can lead to an understandable confusion as to what is
going on or what this type of formula is supposed to represent.

First of all we need to understand that Karl in analysing or
accounting for value in the production process, sets up an idealised
model based on a set of premises.

There is nothing wrong with this as it is a standard scientific
technique, to simplify the process, as a kind of thought experiment
if necessary, to get a handle on the basic process. You can then
afterwards start playing around with any complexities.

I am for simplicity, if not realistically, going to assume that
one `1' is or represents one once of gold that contains one hours of
(socially necessary) labour (time).

What happens in the model is that the capitalist starts of with 500
ounces of gold that contains 500 hours of human effort or labour,
hence that is its value, 500.

The capitalist then goes and purchases raw material, c, that
contains 410 hours of effort with 410 ounces of his gold that
likewise have 410 hours of effort in them. The 410 hours of gold and
the 410 hours of raw material `c' exchange at their values, 410
hours of embodied labour.

The next bit seems trivial but is in fact critical. The capitalist
takes the remaining 90 ounces of gold and puts it in the company
safe or strongbox. This 90 ounces which contains 90 hours of labour
is destined to pay the wages for his workers at the end of the week.
The workers for this 90 hours of gold will perform or add 180 hours
of labour to the 410 hours of raw material or commodity to produce
a `new' commodity which will then contain 590 hours of labour or
human effort and will therefore have a value of 590 hours or its
equivalent 590 ounces of gold.

To return to the formula;

410c + 90v + 90s = 590

The 180 hours that is worked by the labourers on the raw material is
conceptually or abstractly split into two. 90 hours that will be
paid for, and 90 hours that will not be paid for.

`V' can therefore now means two different things;

1) A portion or part of the newly added labour embodied in the
final product (that is going to be paid for)

2) And the capitalist's real `variable capital', the 90 ounces of
gold that he has invested in the business ( in the company safe
until the end of the working week or pay day).

This next bit is not important but; taking an idealised model again
and assuming that the workers get paid just after the work is
completed the capitalist is before paying the wages, briefly in
possession of in fact 590 + 90 =680 hours worth of labour. 590 hours
in the new commodity and the 90 hours which is embodied in the gold
in the safe.

However he unfortunately is obliged to hand over the 90 hours of
gold to the workers as wages so that they can use it to purchase
other commodities to refuel and restore their labour power.

The capitalist is then, minus his `variable capital', left with the
final commodity or finished product that has 590 hours of labour in
it which is therefore worth an amount of gold that has 590 hours of
labour in it. In other words it has an exchange value or value of
590 ounces of gold.

With an idealised quick sale before the next working week starts, he
obtains the said 590 ounces of gold for his product. He pockets 90
ounces for himself, puts another 90 ounces back in the company safe
(for the following weeks wages, variable capital) and ideally
purchases another 410 ounces of gold worth of raw material to repeat
the process the following Monday.

This then has an impact on the calculation of the rate of surplus
value, `s/v' or s'.

This s' can be calculated by the amount of labour time that the
labourer works, living labour or `labour power in motion', that he
will not be paid for divided by the labour time that he will be paid

But it needs to be born in mind that time spent working or time that
is going to be spent working or has been spent working is just that,
it isn't value in itself.

What is value or has value is a thing or a use-value on which that
living labour HAS been, past tense, been expended or incorporated or
embodied into.

`Human labour power in motion, or human labour,'

Or living labour

`creates value, but is not itself value. It becomes value only in
its congealed state, when embodied in the form of some object.'

Products and thus their value are or is the expended or dead labour
that is embodied or contained in them.

`Only because products ARE labour can they be measured by the
measure of labour, by labour time, the amount of labour consumed in

However s' expressed as the time spent working, the living labour,
that is not going to be paid for, s, divided by the time spent that
is going to be paid for, v.,is the same as the labour time or value
embodied in the product that the capitalist keeps for himself (the
surplus product or surplus value) or `s', divided by the value of
the product that the capitalist sells to pay his workers and replace
his variable capital `v' that, he has permanently invested in the

Karl actually makes a note of this `duality' of v ;

`the surplus-value is determined by the surplus portion of the
working-day, it follows that surplus-value bears the same ratio to
variable capital, that surplus-labour does to necessary labour, or
in other words, the rate of surplus-value, s/v = (surplus labour)/
(necessary labour).'

There is another ambiguity here as he seems to mean surplus living
labour time )/(necessary living labour time). Thus;

`Both ratios, s/v and (surplus labour)/(necessary labour), express
the same thing in different ways; in the one case by reference to
materialised, incorporated labour,'


`in the other by reference to living, fluent labour.'

(surplus labour)/(necessary labour)

He then goes immediately on to conflate these two things together in
the calculation of the rate of surplus value s/v or s' and continues
to do so throughout all three volumes of the book; eg.

Thus in the following footnote 5 pages into the chapter IX, The Rate
Of Surplus Value.

`Although the rate of surplus-value is an exact expression for the
degree of exploitation of labour-power, it is, in no sense, an
expression for the absolute amount of exploitation. For example, if
the necessary labour 5 hours and the surplus-labour = 5 hours, the
degree of exploitation is 100%. The amount of exploitation is here
measured by 5 hours.

If, on the other hand, the necessary labour = 6 hours and the
surplus-labour = 6 hours, the degree of exploitation remains, as
before, 100%, while the actual amount of exploitation has increased
20%, namely from five hours to six.'

It probably would have been a bit pedantic to make an issue of it at
this point in volume one but it has I believe an impact on how we
understand the formula as such and potentially on the rate of profit;

Thus with;

410c + 90v + 90s = 590

There is a tendency I believe to look at it in two ways as;

1) a kind of cake mix where 410 ounces of gold or hours worth of raw
materials plus 90 ounces of gold in wages plus 90 hours of unpaid
labour time produce a product that is worth 590 ounces of gold
and/or 590 hours of labour.

Or, better I think;

2) 410 hours of labour in the raw material is added to by 90 hours
that is to be paid for and another 90 hours that is or will be
unpaid for, to produce a product that contains 590 hours of labour
and is thus worth its equivalent in gold, 590 ounces.

If you equate the rate of surplus value or rate of exploitation with
s/v as we are encouraged to do by Karl. And we equate v, the
variable capital, with the amount that the capitalist has
permanently invested in his business to pay for wages, gold money in
the safe, what happens with a chef or cook in a capitalist

The capitalist owner of the restaurant lays out cash for his raw
material, in this case uncooked filet mignon, his constant capital.
Then a customer, Byron, places his order and gets Dave to expend his
labour power on the dead labour embodied in the filet mignon, `c'
thus adding value to the new commodity or product, the cooked filet

(Dave then adds a little extra surplus value gratis in the form of
bodily fluids that Byron will know nothing of, but this does not
really effect our economic calculation.)

The capitalist then sells the cooked filet mignon to Byron. The
money that the capitalist receives for the cooked filet mignon is
then divided by him into 3 portions. One portion of the money he
sets aside to replace or repurchase the used uncooked filet mignon,
another portion he pockets for himself as surplus value and the
remainder he looks after for Dave, the chef, until pay day at the
end of the week.

He has no variable capital invested in the business at all. The
variable capital is = 0, however s/v or my rate of exploitation will
not be s/0 or infinity and infinitely large.

It also has a particular impact on how modern capitalism operates
today with electronic money transfers etc as the capitalists no
longer have the problem of potentially shuffling gold money from one
place to another. When in the 19th century there was little time for
the capitalist to send the money set aside for wages, variable
capital or future wages, to the bank lend it to someone else and get
it back again all in a week.

It is also possible now as it was to some extent then in industrial
production to sell at least a proportion of the product to cover
wages before pay-day.

In fact if we take;

410c + 90v + 90s = 590

Half way through the week the capitalist could even then sell half
his product and receive in cash 295 hours of gold, in which case he
would not need 90 hours worth of gold set aside to pay wages. So
again variable capital, `v' could be zero.

But that would not mean that the value of the product would be;

410c + 0v + 90s = 490

As the product would still contain 590 hours of labour.

Highlighting I think the problem of conflating variable capital with
paid labour time or labour time that is going to be paid for.

Although Karl could legitimately accuse me of just moving away from
the original model and premise.

On the rate of profit; fortunately surplus living labour time is
always equal to surplus labour and surplus value.

The rate of profit, P', is designated;

P' = s/(c+v)

We now need two terms for v, Vi = capital permanently invested in a
business to cover wages and Vt = paid labour time.


P' = s/( c + Vi)

If we designate s as surplus living labour time, St and do the
Sweeney transformation and divide the numerator and the denominator
by Vt we get;

P' = (St/Vt) / {c/Vt + Vi/Vt}


P' = s'/(c/Vt + Vi/Vt)

Spartacus's picture
Joined: 20-09-03
Nov 13 2008 12:22

dave, i replied to your post on the chapter 7-9 thread where i think it belong, maybe an admin can delete the one on this thread.

i think these chapters were fairly straightforward in terms of what they address, the main point of discussion here is i think that of the value of labour-power, and the fact that it is this that the capitalist pays for and not labour-time. i'm not sure what we can say at this point though, since he goes into detail about this in the next five chapters, so i'll save it for next week when we have the chapter on the working day.