[OPE-L:3890] negative surplus-value

Gerald Levy (glevy@pratt.edu)
Mon, 30 Dec 1996 06:42:20 -0800 (PST)

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If profit is less than 0, does that mean that surplus-value is negative?

Negative profitability can occur when there is a *reduction in value*. In
none of the following instances could this process be described as
"negative surplus value."

(1) A surplus product is produced, but the commodities aren't sold on the
market (for whatever reason) and, thereby, commodity values and surplus
value aren't realized. In extremis, this could mean s = 0. Yet, since
capitalists have already advanced money-capital for c and v, profitability
could be negative even though s is *not* negative.

(2) there could be an extreme reduction in the value of commodities
produced (output) due to hyperinflation. Profitability could be negative,
then, as the cost of inputs (c + v) increases.

(3) the price of c used as inputs can rise (while the value transferred
by c remains constant) to such an extent that profitability is negative.
Again, this is not a case of "negative surplus value."

(4) there can be a reduction in the value produced per unit of v (for
example, through a "slow-down"). In that case, there would be an increase
in SNLT. This could lead to negative profitability (in part, because
capitalists must pay for a certain portion of c regardless of whether
production occurs).

(5) if s = 0 and the turnover time of constant fixed capital was
lengthened, then profitability could be negative even though s continues
to = 0. If the degree of capacity utilization of constant fixed capital
decreased, the result would be the same.

(6) Natural events can cause negative profitability. For instance, a
hurricane can blow away constant capital and/or output. Or, a plague could
reduce the value-creating ability of wage-labor (through an increase in
SNLT). Social events like wars could have the same consequences.

In none of the above cases is s a negative number. Indeed, it is very
difficult conceptually to understand *how* s could be negative. Unlike the
rate of profit, s is *not a ratio*.

In solidarity, Jerry