[OPE-L] Computerization and the TCC, VCC, & OCC

From: Jerry Levy (Gerald_A_Levy@MSN.COM)
Date: Wed Feb 15 2006 - 11:13:40 EST

> An interesting question is what the effect is, of an historic fall-off in
> fixed investment on the OCC, since the employed labour force continues to
> increase absolutely. Does computerisation lower the OCC?

Hi Jurriaan,

Re the last question,

As you know,  one of the features of computerization (especially after the
advent and mass production of the chip)  is *miniaturization*.  Modern
computers are  also generally more energy-efficient than the means of
production that they replace.  Both of these features lower the constant
circulating capital requirements for production.  These savings were
evidenced internationally especially during the 1990s with the coming of
"lean production" systems in industry (although, this was anticipated by the
kanban system in Japan in the early 1980s).  Computerized-aided
manufacturing also allowed for better inventory control which allowed
for smaller factories, less 'wasted' space on the factory floor, and hence
savings in energy, building, and land requirements.

Before considering the question empirically, let's think about the
consequences of the above logically.

1)  the technical composition of capital

The TCC  is the *material* side of capital: it measures the relation of
the *mass*  of means of production in relation to the *mass*  of
workers using those means of production.

*Miniaturization* (and the process of lean production alluded to above)
could *lower* the TCC, ceteris paribus, since it could mean that a
smaller *mass* of means of production could be used by workers to
produce the same commodity product. (I am assuming here for sake
of simplicity that the mass of workers using the m of p remains constant,
but I note your point about the mass of employed workers increasing

2) the value composition of capital

Although the TCC could go down as a result of miniaturization, etc., there
is no reason to suppose that constant capital as *value*  in relation to v
as *value* will move in the same direction.  E.g. *the VCC could go
up even while the TCC goes down*.   Hence, there could be a divergence
between the rate and direction of change of the material side of capital
vs. the rate and direction of change in the value side of capital.

3) the organic composition of capital

The OCC is neither the TCC or the VCC.  Marx asserted, though, that
there is a "close correlation between the two" (i.e. the TCC & the VCC).
This can't be empirically measured, though,  because of measurement
problems with the TCC (even supposing that mesurement problems with
the value side can be overcome). The "close correlation" is asserted as a
kind of long-term historical fact (a "stylized fact" if you will).  It
perfectly obvious, I think, to him that there was this close correlation

To express that correlation, Marx called the "value composition,
***in so far as it is determined by its technical composition and
mirrors changes in the latter***, the organic composition of capital"
(_Capital_, Volume 1, Ch. 25, Sec. 1, 2nd para, p. 762 Penguin/
Vintage ed., emphasis added).

So, what then happens to the OCC?  (which was, after all, your

If  TCC goes down, and the VCC goes up, then doesn't what
happen to the OCC (using Marx's definitions) then become

Indeed, it represents a *paradox* of sorts.  This paradox, though,
reflects/mirrors a _real_  possibility and process: it reflects the
contradictory -- dialectical  -- relation between the TCC and the VCC.
In other words, it represents a contradiction between the material and
value sides of capital.

In solidarity, Jerry

This archive was generated by hypermail 2.1.5 : Thu Feb 16 2006 - 00:00:02 EST