ABSTRACT
A more precise analysis of surplus-value recognises that the capitalist is required to buy certain resources before production can take place. On the one hand, machines, buildings and raw materials are required (which Marx terms constant capital). On the other hand, labour power, or variable capital, must be bought. Marx argues that the value of the constant capital is simply transmitted into the finished product. (Thus, if the capitalist buys linen for coat manufacture, the value of that linen must be included in the value of the finished coats.) As such, the surplus-value cannot be extracted from constant capital. This nice technicality leads Marx to prophesy the eventual collapse of the capitalist system, because as technology gets more powerful, the proportion of constant capital to variable capital will increase. If the capitalist can only extract surplus-value from variable capital, and that is an ever reducing proportion of his or her total capital expenditure, the capitalist can only continue to maintain the profitability (that is to say, maintain the level of surplus-value) of the capitalist enterprise by reducing payments to
labour (so impoverishing the proletariat). Much of the most interesting work in twentieth-century Marxism has focused on the problem of how late capitalism has avoided this fate. [AE] Further reading: Mandel 1972; Marx 1976.
