Share capital . Set of individual capitals in their intertwining and interaction. The circulation of social capital consists of the set of rotations of the interrelated and interdependent individual capitals (but that operate independently). The movement of global social capital carried out in the sphere of production and in that of circulation characterizes the process of its reproduction.
Summary
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- 1 The global social product
- 1 Social capital and social product
- 2 Sections I and II of social production
- 2 Simple Playback and Extended Playback
- 1 Scientific abstractions
- 2 Simple Playback
- 3 Extended Play
- 3 National income
- 1 Definition
- 4 Sources
- 5 External links
The global social product
Social capital and social product
As a result of the social production process, the global social product is created. Since capitalist production is a commodity production, this product is shown as a certain mass of commodities.
For its value, the global social product of capitalist society, like the product of individual capital, is divided into three parts: consumed constant capital (c), variable capital (v) and surplus value (p). The first part is the value of the consumed means of production transferred to the new product created by the concrete work of the workers. The second and third parts (v + p), taken together, form the new value created or the national income.
Due to its natural and material form, the global social product is made up of productive consumer goods, destined to satisfy the demands of production (raw materials, auxiliary materials, machines, instruments, production facilities, etc.) and personal consumer goods or individual workers and capitalists (food, clothing, footwear, luxury items, etc.).
For the process of reproduction to be continuous, the global social product must be realized. The problem of this realization, both for its value and for its natural and material form, is one of the important problems of the reproduction of social capital.
Explaining the essence of the problem of realization, Lenin expressed: “Now, instead, the problem lies precisely in this: from where will the workers and capitalists take the articles of their consumption? Where will the latter take the means of production? How will the product obtained cover all these demands and allow production to be expanded? We do not find here only, therefore, the “replacement of value, but also the replacement of the natural form of the product” … that is why it is absolutely essential to differentiate products, which play a completely heterogeneous role in the process of social economy . ”
Along with the reproduction of the global social product, capitalist relations of production are reproduced.
Sections I and II of social production
The set of sectors in which raw materials, auxiliary materials, machines, instruments, etc. are produced, that is, the means of production, was called by Marx the first section of social production. The set of sectors in which products are produced that satisfy personal demands, that is, consumer goods, Marx called it the second section of social production.
The two sections of social production differ from each other, first of all by the nature of the consumption of their products: the products of section I are destined for productive consumption, and those of section II, for personal consumption.
The division of social production into two sections is applicable to any society, because the fundamental exchange of substance in society occurs between these two sections.
The clarification of how the exchange between sections I and II takes place, how the integral parts of the global social product are replaced by their value and their natural and material form constitutes the basis of the theory of the reproduction of all social capital.
Simple Playback and Extended Playback
Scientific abstractions
To reveal the mysteries of the reproduction of social capital, it is necessary to make abstractions of the phenomena that, without exerting substantial influence on the content of the processes, make it difficult to understand.
First, it must be assumed that all companies start the production cycle at the same time and end it at the end of the year and that all the value of fixed capital is transferred to the new product within the year in question.
Secondly, capitalism must be considered as a society made up of only two classes: the salaried workers and the capitalists. Third, it is necessary to abstract from foreign trade. As a place, it must be assumed that the goods produced are sold and bought according to their value .
The share of surplus value (p ‘= 100%) will also be considered invariable for all the years during which reproduction is analyzed. Based on these scientifically based assumptions, Marx analyzed the process of simple and expanded reproduction of social capital.
Simple Playback
Simple reproduction is a repetition of the reproduction process in previous proportions. In this case, all surplus value goes to the personal consumption of the capitalist class and is not converted into supplementary capital. Marx illustrates the process of realizing the social product in simple reproduction through the following conventional scheme. All social capital is assumed to constitute 7,500 monetary units. Of these, in section I, which produces means of production, there is a capital of 5,000 units, constituting constant capital (c) 4,000 units, and variable capital (v), 1,000 units.
In the sectors of section II that produce consumer goods, there is a capital of 2,500 monetary units, 2,000 units corresponding to constant capital and 500 to variable .
In section I goods have been produced in the form of means of production for a value of 6,000 monetary units. For its value, this production disintegrates into:
- 4,000c + 1,000v + 1,000p = 6,000
In section II, goods in the form of consumer goods have been produced for a value of 3,000 monetary units. For its value, this production disintegrates into:
- 2,000c + 500v + 500p = 3,000
We will now see how the process of realizing the entire social product will pass. For this it is necessary to clarify what part of the product of sections I and II is used in the section that has been produced. Thus, in section I of the 6,000 monetary units materialized in the means of production, 4,000 can be used, which is equal to the amount of the constant capital consumed in this section. The remaining product of section I for a value of 2,000 monetary units, is equivalent to the value I (v + p), is the personal consumption fund of the workers (1,000 v) and the capitalists (1,000 p) of said section. Within the scope of this section, said product cannot be used, since section I does not produce articles for personal consumption.
Within section II, which produces articles for personal consumption, a product can be made for an amount equal to the wage of the workers and to the capital gains of that section, that is, to II 500 v + II 500 p. the remaining part of the production of section II is equivalent to 2,000 c, which by its value is equal to the value of the constant capital consumed in said section (II c). the need arises to change the product of section II, which constitutes 2,000 monetary units, for a product of similar value in section I. as a result of the exchange of production between sections I and II, in the following year production was resumes in the same proportions in both sections of social production, that is, simple reproduction is performed.
The fundamental condition for the realization of the social product in simple reproduction is the existence of the following proportion: I (v + p) = II c, that is, the sum of the annual income of the workers and capitalists in section I must be equal to the constant capital of section II consumed during the year.
Two derivatives emerge from this essential condition:
- a) I (c + v + p) = I c + II c, that is, the value of the annual production of section I must be equal to the sum of the constant capital of the two sections.
- b) II (c + v + p) = I (v + p) + II (v + p), that is, the value of the annual output of section II must be equal to the sum of the workers’ income and the capitalists of both sections.
Such are the conditions of realization of the social product in the simple reproduction of social capital.
Extended reproduction
Enlarged reproduction is the resumption of the production process on a larger scale. In this case, a part of the surplus value is converted into supplementary constant and variable capital . Marx illustrated the realization of the social product in enlarged reproduction with the following scheme:
In section I of social production, a capital of 5,000 monetary units (I 4,000 c + 1,000 v) has been invested. The capital of section II is 2,250 monetary units (II 1,500 c + 750 v).
With a degree of exploitation equal to 100%, the total global social product produced will be 9,000:
- 4,000 c + 1,000 v + 1,000 p = 6,000 II 1,500 c + 750 v + 750 p = 3,000
Assuming that section I capitalizes half of the surplus value, that is, 500 monetary units. The capitalized capital gain is divided into constant capital and supplementary variable capital in the same proportion that existed between constant capital and variable capital in the previous year, that is, 4: 1. In this case 400 monetary units of capitalized capital gain they will convert into supplementary constant capital and 100 units into supplementary variable capital. That is, in section I, the part of its production that replaces the constant capital of this section (4,000 c) and the part that is required for the increase of its constant capital (400 c) is carried out.
The remaining part of the production of section I in its monetary expression is equal to the sum of the wages of the workers previously employed (1,000 v), of the workers hired additionally (100 v), as well as the part of the surplus value personally consumed by capitalists (500 p) that cannot be made in section I.
In Section II, 1,500 monetary units of constant capital are required for simple reproduction. In addition, the capitalists in section I present a complementary demand for the production of section II (100 monetary units), necessary for the personal consumption of the complementary contracted labor. By increasing the constant capital by 100 monetary units the section II capitalists expand production. Thus, 1,600 units of production value in section I are exchanged for the same magnitude of production value in section II. The completion of section I production has been completed.
The production of section II for a value of 1,400 monetary units that was left unrealized, must be used within the same section. 750 monetary units of this sum are destined for the consumption of previously employed workers. But, since the constant capital of section II has increased from 1,500 units to 1,600, that is to say, in 100 units, the capitalists have to hire complementary workers. Since the [[Capital Composition | Organic Capital Composition] is invariable (in Section II it is 2: 1), by increasing the constant capital by 100 monetary units, you need to have variable capitalcomplementary to 50 monetary units. Therefore, for the personal consumption of the workers in section II, products worth 800 monetary units (750 v + 50 v1) will be needed. These products are made within the same section II.
Now in section II there is still a production worth 600 monetary units, which is the part of the surplus value that remains after accumulation (100 c2 + 50 v2). This part is used for the personal consumption of the capitalists of said section. Thus, all the production in Section II is completed.
From this follows the fundamental condition of expanded reproduction: the sum of the variable capital and surplus value of section I must be greater than the value of the constant capital of section II consumed during the year, that is, I (v + p)> II c.
From the fundamental condition the second condition of extended reproduction is derived: the value of the production of section I must be greater than the value of the constant capital of the two sections of social production consumed the previous year, that is, I ( c + v + p)> I c + II c.
In other words, in section I an additional quantity of means of production must be produced which in the following year would ensure a constant capital increase in both section I and section II.
The third condition of enlarged reproduction: the national income of society must be greater than the value of the production of section II, that is, I (v + p) + II (v + p)> II (c + v + p). otherwise, with expanded reproduction, the national income created in sections I and II of social production is not entirely devoted to personal consumption; a part of it is dedicated to increasing the constant capital in the two sections.
Thus, at the end of the first year of production, on account of surplus value , the proportions of production were expanded in both Section I and Section II. At the beginning of the second year of production, the capital stock consists of:
- 4,400 c + 1,100 v II. 1,000 c + 800 v
At the end of the second year of production, the entire social product will grow from 9,000 to 9,800 (where p ‘= 100%).
- 4,400 c + 1,100 v + 1,100 p = 6,600 II 1,600 c + 800 v + 800 p = 3,200
As can be seen, expanded reproduction requires the interconnection between the two sections of social production with the leading role of section I. It is precisely she who ensures the material basis of expanded reproduction, since it provides complementary means of production to all production sectors. Therefore, the growth of production in section II depends on the growth of production in section I. However, in turn, section I cannot carry out the extended reproduction in isolation from section II, since it performs part of he sells his production to it and receives from it consumer goods that ensure the personal consumption of the workers and the capitalists.
National rent
Definition
National income is the new value created at the scale of the whole society in a certain period (a year for example). It is the part of the value of the global social product that remains after deducting from this the value of the constant capital (c) consumed. Expressed in value, national income comprises the value of variable capital plus surplus value, that is, (v + p); in its natural and material form, it consists, in simple reproduction, of consumer goods and, in the case of expanded reproduction, in addition to consumer goods, it includes the means of production destined to expand production.
The part of the national income, which remains after the value of the variable capital is deducted, constitutes the net income (p) of the company. Due to its magnitude it is equal to surplus value.
National income is created by living labor in the sphere of the production of material goods, that is, in the branches of the economy in which value and surplus value are produced. The magnitude of national income depends on the amount of work invested in the sphere of production of material goods and the level of labor productivity. The saving use of constant capital is also a growth factor in national income.
The growth of national income is a very important indicator that characterizes the state of a country’s economy.
