>
> If the changed circumstances mean that twice as much
> time, or alternatively half as much, is required for the
> same physical capital to be reproduced, then given an
> unchanged value of money, THIS CAPITAL, IF IT WAS
> PREVIOUSLY WORTH $100, WOULD NOW BE WORTH $200
> OR ALTERNATIVELY $50. (C.III. 238)
>
>The original capital advanced is not "spirited away," but it is
>revalued.
By physical capital, I think Marx means only raw materials or more
generally circulating capital costs. In the previous chapter, esp. the
section on revaluation and devaluation of capital, he specifies that he is
analyzing how changes in the reproduction costs of raw materials can effect
the rate of profit, independently of changes in the rate of surplus value.
If the reproduction costs of a raw material fall, the more capital tied up
in this specific 'circulating' form, the more the profit rate will be
raised. Yes, in this case the cheapening of constant capital raises the
rate of profit on both old and new investment.
However, Marx is clear that the situation is more difficult "once machines,
factory, buildings or any other kind of fixed capital have reached a
certain degree of maturity, so that they remained unchanged for a long
while at least in their basic construction [and]a further devaluation takes
place as a result of improvements in the method of fixed capital." For
Marx, this devaluation induces the bankruptcy of smaller and/or older
firms--the destruction of value tied up in fixed capital, machines,
factory; larger firms "often flourish only under their second owners, after
the first have gone bankrupt. The second owner, by buying them cheaply,
starts production with a smaller outlay of capital." (C, III, p. 209). It
seems to me inconceivable that firms could go bankrupt if devaluations of
constant capital simply raised the rate of profit for all firms. It is also
inconceivable that the rate of profit for the second owners would be raised
if there was significant destruction to the use value of the fixed capital
they have picked up for a song.
Rakesh