The Movement of Capital's Composition: Long Term Fluctuations and Trends

NOT FOR QUOTATION

WITHOUT THE PERMISSION OF THE AUTHOR

The Movement of Capital's Composition:

Long

Term Fluctuations

and

Trends

L o u i s F o n t v i e i l l e

November 1986 WP-86-71

Working P a p e r s are interim r e p o r t s o n work of t h e I n t e r n a t i o n a l I n s t i t u t e f o r Applied Systems Analysis a n d h a v e r e c e i v e d only limited review. Views o r opinions e x p r e s s e d h e r e i n d o n o t n e c e s s a r i l y r e p r e s e n t t h o s e of t h e I n s t i t u t e o r of i t s National Member Organizations.

INTERNATIONAL INSTITUTE FOR APPLIED SYSTEMS ANALYSIS A-2361 Laxenburg, Austria

Preface

A s p a r t of a c a t a l y t i c a c t i v i t y on t h e i s s u e s of long-term economic develop- ment, we t r y to p r e s e n t p a p e r s , t h a t in o u r b e l i e v e , would, f o r v a r i o u s r e a s o n s , ob- t a i n l e s s a t t e n t i o n t h a n t h e y d e s e r v e as t h e y p r e s e n t new i d e a s a n d a p p r o a c h e s .

This p a p e r by P r o f e s s o r Louis Fontvieille i s of t h i s c h a r a c t e r . I t p r e s e n t s t h e r e s u l t s of long-term r e s e a r c h t h a t p r o v e s a h y p o t h e s e s p u t f o r w a r d by t h e a u t h o r sometime ago. The main i d e a i s to t r a c k down t h e r o l e of l a b o r in economic development, a n d i t s r e l a t i o n to o t h e r economic f a c t o r s . Only few a t t e m p t s h a v e b e e n made to c o v e r t h i s issue. The major i n t e r e s t in long-term s t u d i e s i s given to t h e r o l e of raw m a t e r i a l s , p r o d u c t i o n p r o c e s s e s , technology at l a r g e , etc.

T h e a u t h o r ' s i d e a i s t h a t c a p i t a l a n d l a b o r a b s o r b e d in p r o d u c t s r e f l e c t s t h e p r o d u c t i v i t y of t h e s e components. T h e i r mutual s h a r e i s changing o v e r time, along with t h e i r p r o d u c t i v i t y which mediates t h e t r a n s f e r of t h e v a l u e of c a p i t a l a n d la- b o r to p r o d u c t . A s t h e a u t h o r points o u t , t h e s e s h a r e s ( r e l a t i o n s ) seem to show c h a n g e s with time t h a t a p p e a r to b e r e l a t e d t o t h e r e c e s s i o n of t h e economy as a whole, at l e a s t f o r d a t a d e r i v e d from t h e c o a l mining company.

T h e conclusions p o i n t to i n t e r e s t i n g i d e a s r e g a r d i n g t h e r e l a t i o n s h i p of t h e p r o f i t rate movement a n d t h e composition of c a p i t a l , a n d t h e possible mechanisms behind them. S e v e r a l o t h e r questions a l s o a r i s e t h a t w a r r a n t f u r t h e r s t u d y .

In r e a d i n g t h i s p a p e r i t i s useful to b e familiar with terms from Marxist economic t h e o r y .

This p a p e r was w r i t t e n in F r e n c h a n d t r a n s l a t e d by me i n t o EngIish

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ly n o t causing i t t o l o s e i t s a t t r a c t i v e n e s s . I would l i k e also to h o p e t h a t , with t h i s publication, we are r e n d e r i n g a s e r v i c e t o o u r c o l l e a g u e s working on long-term developments.

Tibor Vasko L e a d e r

Clearinghouse Activities

The Movement of Capital's Composition:

Long Term Fluctuations and Trends

L o u i s F o n t v i e i l l e

C e n t r e RBgional d e l a Productivitc?

et d e s E t u d e s Economiques Universitc? d e Montpellier I

3 9 r u e d e 11Universit6 34060 Montpellier CBdex

F r a n c e

1. Introduction

In 1 9 7 9 I p u t f o r w a r d t h e hypothesis1 t h a t Kondratieff c y c l e s e x p r e s s t h e movement in t h e r e g u l a t i o n of t h e r e l a t i o n in c a p i t a l i s t production. I understood by t h i s t h e f a c t t h a t long-term fluctuation, o b s e r v e d in a s e r i e s of production o r p r i c e d a t a , o r i g i n a t e d in t h e development of c o n t r a d i c t i o n s between t h e production r e l a t i o n s a n d t h e p r o d u c t i v e f o r c e s . This development poses t h e question of chang- ing t h e tendency a n d p a r t i a l or t o t a l t r a n s f o r m a t i o n of t h e s e v e r y r e l a t i o n s . F o r example, at a c e r t a i n s t a g e t h e tendency to i n c r e a s e t h e r e l a t i v e exploitation g e t s i n t o c o n t r a d i c t i o n with t h e development of material a n d human p r o d u c t i v e f o r c e s , a n d t h u s p o s e s t h e n e c e s s i t y of changing t h e tendency. The o r i g i n of fluctuation i s in t h e c o n t r a d i c t i o n a n d t h i s i s in t h e n a t u r e of c a p i t a l

If t h e hypothesis i s correct, a d e t a i l e d study a n d measure of production r e l a - tions should show f l u c t u a t i o n s d u r i n g which t h e regulation acts. This w a s t h e b a s i c d i r e c t i o n of t h e s t u d y o n c o a l t h a t s t a r t e d in 1980.

H e r e w e p r e s e n t a n a n a l y s i s of i t s p a r t i a l r e s u l t s , t h e s t u d y continues. The confirmation withheld, t h e y b r i n g a new insight i n t o t h e analysis of long-term fluc- t u a t i o n , at t h e same time posing questions on o t h e r important a s p e c t s of economic

t h e o r y . The s o u r c e s and methods t h a t helped t o c o n s t r u c t t h e s t a t i s t i c a l s e r i e s shown, and t h e description of t h e i r content have been published2, and w e r e f e r t h e r e a d e r t o them.

1.1. The Efficiency of Productive Forces

The efficiency of productive f o r c e s determines by t h e quantity of use value they are a b l e to p r o d u c e at a given moment. The efficiency determines, at t h e same time, t h e r e p r o d u c t i o n and development of t h e productive f o r c e s . A growing effi- ciency evokes t h e material development of production and creates t h e material b a s e of human development. This efficiency is widely r e l a t e d to a n a r r a y of social relations t h a t organize i t s cooperation. To t h e e x t e n t t h a t , man i s t h e main pro- duction f o r c e , t h e s e r e l a t i o n s cannot b e reduced to technical dimensions, f o r ex- ample, good use of machines.

The efficiency of a producing man i s widely r e l a t e d t o i t s own development and s o t o t h e consumption of t h e products of his work. If t h e organization of circula- tion relations, redistribution and consumption of produced p r o d u c t s leads t o such e x p r o p r i a t i o n of p r o d u c e r p r o d u c t s t h a t h e is unable t o s e c u r e his own develop- ment, his productive capacity i s influenced.

This is t h e key principle of historical materialism because i t is t h e inability of production relations t o s e c u r e t h e f u t u r e development of productive f o r c e s t h a t in a given moment puts them in question. The c o l l o r a r y t o o u r hypotheses i s t h e idea t h a t in t h i s p r o c e s s t h e movement in production r e l a t i o n s (in a g e n e r a l sense) at a c e r t a i n s t a g e c a u s e s a lower growth or a decline in t h e efficiency of t h e produc- tion f o r c e s . This decline i s t h e origin of s t r u c t u r a l c r i s i s , and e x p o s e s inap- p r o p r i a t e production r e l a t i o n s and t h e necessity f o r t h e i r p a r t i a l transformation.

The measurement of t h e efficiency of productive f o r c e s i s a p e r t i n e n t ques- tion f o r t h e analysis and understanding of t h e p r o c e s s e s leading to long-term fluc-

tuation. Unfortunately t h i s measurement i s n o t as simple as i t seems. I t would b e ideal t o r e l a t e t h e quantity of use value of t h e p r o d u c t t o t h e t o t a l quantity of (work) time s p e n t o n i t s production. Here o n e c a n e m b a r k o n questions of measur- ing t h e value a n d t h e problems t h e y pose.

Work c a n b e defined as a human a c t i v i t y t h a t i s determined by i t s r e l a t i o n t o t h e social a n d t e c h n i c a l conditions in which i t i s p e r f o r m e d . These conditions are evidently r e l a t e d t o t h e h i s t o r i c a l development of t h e p r o d u c t i v e f o r c e s . The qualifications, t h e physical a n d mental e f f o r t , t h e know-how, d u r a t i o n of working time a n d i t s intensity, are components of t h e social a n d t e c h n i c a l conditions of pro- duction at a n y moment. I t would b e just as u s e l e s s t o t r y t o find t h e a b s o l u t e value of work as i t would b e t o t r y t o m e a s u r e movement as anything o t h e r t h a n move- ment. The work d u r a t i o n on which t h e value i s based i s a g e n e r a l m e a s u r e of a l l kinds of work only in r e l a t i o n t o socially a n d historically determined conditions.

The d u r a t i o n of work i s measured r e g u l a r l y in y e a r s , days, o r h o u r s , especial- ly in t h e c o a l industry. This allows obtaining a f i r s t c l a s s p i c t u r e of t h e efficiency of t h e p r o d u c t i v e f o r c e s . On t h e o t h e r hand, p a s t work accumulated in p r o d u c t s a n d production equipment h a s not, as s u c h , been measured. This c a n only b e ap- p r o a c h e d by i n d i r e c t methods. Because t h e d i s t o r t i v e elements are permanently a c t i n g , t h e explaining v a r i a b l e s are n e v e r completely independent of t h e explained v a r i a b l e s .

1.2. The Productivity of Labor

C u r v e C 1 of g r a p h 1 shows t h e evolution of productivity in t h e Anzin Company between 1810 a n d 1897, a n d c u r v e C 2 shows t h a t of F r e n c h production as a whole, between 1870 a n d 1970. F o r t h e Anzin Company, e x t r a c t i o n i s r e l a t e d t o t h e t o t a l number of wage-earners, including employees a n d e x e c u t i v e s . F o r national pro- duction, only mineshaft a n d daylight w o r k e r s are t a k e n into account. The measure

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T h e dotted curves, visible o n this graph and o n those that follow, represent our interpretation of the long-terme cycle. We have been careful t o follow a s closely a s possible the long tendencies, while eliminating accidents of history.

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t h u s o b t a i n e d , e s p e c i a l l y f o r t h e Anzin Company, c o r r e s p o n d s to t h e a p p a r e n t p r o - ductivity of t h e "collective worker", t h a t i s , to t h e ensemble of qualifications used in t h e s o c i a l conditions of working time in o p e r a t i o n at t h e time t h e measure was t a k e n . I t i s n o t i c e a b l e h e r e t h a t t h e s e l e c t e d notion of time a n d n a t u r e of work i s p r a c t i c a l l y identical t o t h a t which e n t e r s i n t o t h e definition of t h e value.

By examining g r a p h 1 , i t i s possible to mark a long-term fluctuation, o u t of p h a s e by a q u a r t e r of a c y c l e , with a n i n c r e a s e in l a b o r productivity from t h e mid- d l e of t h e p r o s p e r i t y p h a s e t o t h e middle of t h e r e c e s s i o n p h a s e , a n d s t a g n a t i o n or d e c r e a s e from t h e middle of t h e r e c e s s i o n p h a s e t o t h e middle of t h e n e x t p r o s p e r - ity phase. The movement i s without any possible ambiguity from 1 8 1 0 t o 1905, b u t some supplementary e x p l a n a t i o n s are n e c e s s a r y a f t e r t h a t .

After 1905, i t may b e pointed o u t t h a t productivity p r o g r e s s e s only v e r y weakly, a n d t h a t t h e maximum l e v e l a c h i e v e d in 1889 i s not p a s s e d a g a i n b e f o r e 1952. Next, i t i s visible t h a t t h e w a r from 1914 t o 1 9 1 8 m a r k s a r u p t u r e , with a productivity d r o p o n t h e o r d e r of t h i r t y p e r c e n t .

The i s s u e of t h e 1914-1918 r u p t u r e evidently c a l l s f o r new r e s e a r c h to a c c u - r a t e l y d e t e r m i n e t h e c a u s e s . Among t h e possible hypotheses, t h e most r e a l i s t i c being t h a t of a breakdown of t h e o u t p u t norm, at t h e level of t h e a v e r a g e d u r a t i o n of working time a n d possibly at t h a t of socially t o l e r a t e d c a d e n c e s . A f t e r t h e w a r , p e o p l e did not work t h e same way t h e y h a d b e f o r e .

If t h e p r i n c i p l e of t h e 1914 breakdown i s a c c e p t e d , t h e n t h e fluctuation move- ment i s e n c o u n t e r e d again with growth from 1 9 2 0 t o 1934, stagnation from 1 9 3 5 t o 1952, a n d growth again a f t e r 1952.

The stagnation of productivity at t h e e n d of t h e r e c e s s i o n p h a s e a n d at t h e be- ginning of t h e n e x t p r o s p e r i t y p h a s e i s obviously astonishing with r e g a r d t o t h e i d e a of t h e r e v e r s a l o n e c a n have. In f a c t , t h e e way i t i s measured, productivity p a r t i a l l y m e a s u r e s t h e l a b o r f o r c e ' s position in production r a t i o s . I t t r a n s l a t e s

probably socially a c c e p t e d improvements of working conditions, given in cadency o r intensity o r in annual duration of work, and s o e x p r e s s e s t h e revalorizatiorl of l a b o r . On t h e c o n t r a r y , t h e i n c r e a s e of t h e a p p a r e n t productivity a t t h e end of t h e p r o s p e r i t y p h a s e and at t h e beginning of t h e depression would t r a n s l a t e in p a r t t h e r e l a t i v e decline of t h e position of labor.

1.3. The "Efficiency" o f Past Work

To m e a s u r e t h e efficiency of t h e material means used in production is not easy if one intends t o use t h i s a p p r o a c h t o find t h e t o t a l productivity of work in t h e s e n s e of t h e t o t a l quantity of work n e c e s s a r y t o produce a product. Such an ap- p r o a c h . even now, i s only in t h e r e s e a r c h stage. F o r more distant periods, t h e description of use and r e p a r t i t i o n of individual p r o d u c t s are missing. I t is, t h e r e - f o r e , only possible t o a p p r o a c h t h i s question through more o r less time indicators describing t h e various components of t o t a l productivity, without t h e possibility of merging them t o g e t h e r .

In r e a l i t y , o u r main i n t e r e s t h e r e is t h e r a t i o fixed capital/variable c a p i t a l (labor cost). F o r t h a t r e a s o n w e will focus on productivity of t h e fixed capital (productive p a r t ) . The intermediate consumptions play a n important p a r t in t h e value of t h e product, but t h i s does not r e l a t e in t h e same way to t h e variable capi- tal (live work). To a l a r g e p a r t , t h e i n c r e a s e in intermediate consumption t r a n s l a t e s into a n i n c r e a s e in t h e social division of work. When a f a c t o r y u s e s p r e - p r e p a r e d logs instead of having them sawed o r s q u a r e d at t h e f a c t o r y . what i t is doing is displacing t h e place where t h e live work is performed. From t h e p r o - duct point of view, i t does not modify t h e productive combinations. I t i s not s o when a new machine eliminates t h e live work. Of c o u r s e t h e intermediate consump- tion c a n also play a similar r o l e if, f o r example, when a new cutting scheme r e d u c e s t h e consumption of logs by one-third, but t h i s i s not what dominates t h e

movement of intermediate consumption.

To a p p r o a c h t h e "efficiency" of t h e p a s t work, one can use d i f f e r e n t t y p e s of indicators, t h e s a l e s value of equipment, s t a r t i n g with t h e evaluation of productive stock of fixed income. If w e assume t h a t t h e various problems connected with such a n evaluation a r e solved, i t can be t a k e n a s r e p r e s e n t i n g t h e quality of work under two conditions. F i r s t , t h e r e i s no inflationary distortion of p r i c e s , and second, t h e composition of capital in b r a n c h e s supplying t h e manufacturing equipment develops a s t h e a v e r a g e composition of all capitals. If t h e r e is a n inflationary distortion of p r i c e s , t h e value of s a l e s deviates f r o m value, and so from t h e value of t h e work i t r e p r e s e n t s . If t h e p r i c e deviates positively from value during t h e p r o s p e r i t y phase, and negatively through a depression, t h e measured productivity would b e diminished during p r o s p e r i t y and i n c r e a s e d during a depression.

The composition of capital h a s similar e f f e c t s as t h e value of sales. If t h e composition of capital in t h e equipment producing industry i n c r e a s e s f a s t e r t h a n t h e a v e r a g e , t h e p r i c e of t h i s b r a n c h will i n c o r p o r a t e a p a r t of t h e increased plus-value, and s o i n c r e a s e t h e value. In t h i s c a s e , t h e productivity measured on t h e basis of s a l e s value will i n c o r p o r a t e a diminished i n c r e a s e .

To eliminate t h e inflationary o r deflationary e f f e c t s one c a n evaluate t h e cap- ital stock in constant p r i c e s 3

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By doing t h i s w e also eliminate t h e p r i c e variations introduced by value variations, and s o t h e quantity of work r e p r e s e n t e d . One falls into a similar situation t h a t emerges with t h e use of physical indicators, with a n ad- ditional p i c t u r e of productivity differentials in c a p i t a l industries in comparison t o t h e whole assembly.

The two numbers t h a t follow give a p i c t u r e of productivity development calcu- l a t e d from t h e s e indicators.

The f i r s t indicator, based on t h e evaluation of c u r r e n t p r i c e s of c a p i t a l s t o c k , show long-term fluctuation with a p h a s e not in tune with t h e r e f e r e n c e cycle. The

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p h a s e of i n c r e a s e d productivity of c a p i t a l f a l l s approximately i n t o t h e p h a s e going from t h e c e n t e r of a d e p r e s s i o n t o t h e c e n t e r of t h e following p r o s p e r i t y p e r i o d ; t h e d e c r e a s e e x t e n d s from t h e c e n t e r of p r o s p e r i t y t o t h e c e n t e r of d e p r e s s i o n .

This movement is c l e a r l y s e e n in t h e p e r i o d 1750-1790. The Revolution p r o - voked important c h a n g e s , a breakdown of production a n d , at t h e same time, a not negligible inflationary deviation. The Companie d'Anzin was deeply d i s t u r b e d by t h e s e e v e n t s . Was i t t h e a t t e m p t t o nationalize? Was i t t h e emigration of most of i t s a d m i n i s t r a t o r s ? O r , was i t t h e c h a n g e in management t h a t followed? In a n y e v e n t , in t h e y e a r 1 8 1 7 i t was n e c e s s a r y t o a c h i e v e t h e production tonnage of 1789. The c a p i t a l t h a t normally should h a v e grown until 1 8 0 5 b r o k e down, a n d it was only in 1830 t h a t i t a c h i e v e d t h e level of 1790. From t h e n productivity a c h i e v e d a high rate of growth p r a c t i c a l l y from t h e beginning of t h e d e p r e s s i o n p h a s e . I t i s possible t o o b s e r v e t h a t t h e c o n s t a n t p r i c e d a t a s e r i e s shows t h e start of t h e i n c r e a s e in 1831, f o u r t e e n y e a r s a f t e r t h e start of t h e p r i c e f a l l (we always u s e p r i c e movements as fluctuation of r e f e r e n c e ) . The i n c r e a s e in t h e productivity continued high u p t o t h e beginning of t h e p r o s p e r i t y p h a s e (1855). a n d t h e n again in 1863-64. The d e c l i n e in productivity between 1855 a n d 1860 (approximately 25%) h a d s p e c i a l c a u s e s . These y e a r s c o r r e s p o n d t o t h e production i n c r e a s e in Pas-de-Calais. If, in t h e 1840s t h e Companie d'Anzin had been a b l e t o f a c e t h e chal- lenge of competition f r o m t h e N o r t h , i t could n o t h a v e r e s i s t e d t h e new exploita- tion in Pas-de-Calais. A f t e r t h r e e y e a r s of e x p l o r a t i o n s t h e C o u r r i e r e mines could c o v e r b a s i c e x p e n s e s from i t s income, a n d a l l new equipment was provided by auto- financment. The Companie d'Anzin h a d t o r e d u c e production at a time t h e y should h a v e a c c e l e r a t e d t h e modernization of equipment. By not doing t h i s t h e i r produc- tivity grew only up t o t h e beginning of t h e 1860s. If o n e a b s t r a c t s t h e c o a l , c r i s i s of 1 8 7 3

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productivity declined from 1 8 6 5 t o 1884, i t grew a g a i n in 1897, marking t h e e n d of t h e g r e a t d e p r e s s i o n , a n d a l s o t h e end of

o u r d a t a s e r i e s .

The c o n s t a n t p r i c e s e r i e s r e p r o d u c e s , in a more compressed form, t h e c u r r e n t p r i c e s e r i e s . The p e r i o d 1855-1960 i s h a r d l y touched, p r o b a b l y d u e t o t h e elimination of t h e inflation e f f e c t s . On t h e o t h e r hand, t h e deflation t h a t c h a r a c t e r i z e d t h e e n d of t h e d e p r e s s i o n did away with t h e growth of productivity between 1884 a n d 1897.

These long-term fluctuations of c a p i t a l productivity are v e r y important. The slowdown t h a t i n t e r v e n e d in t h e c e n t e r of t h e p r o s p e r i t y p h a s e i n d i c a t e s t h e limits o b t a i n e d by t h e development of production r e l a t i o n s . W e h a v e a l r e a d y identified symmetric fluctuations of work productivity with i n c r e a s e s from t h e c e n t e r of p r o s p e r i t y t o t h e c e n t e r of t h e d e p r e s s i o n . This movement of work productivity did n o t compensate f o r t h e i n v e r s e movement of c a p i t a l productivity, just t h e op- posite. i t r e v e a l e d i t s harmful n a t u r e . This double movement p r e s e n t s , in t e r m s of c a p i t a l composition, a blow-up of fixed-capital (in t h e p r o d u c t , t h e "past work"), a n d a c o n t r a c t i o n of live work (labor). The f i r s t c a u s e s t h e d e c r e a s e in t h e level of p r o f i t , a n d t h e s e c o n d c a u s e s unemployment.

2. Production Relations

The study of c a p i t a l a n d l a b o r productivity gives a f i r s t a p p r o a c h to t h e con- ditions of blocking t h e development of t h e p r o d u c t i v e f o r c e s . W e now h a v e to analyze t h e movements of production r e l a t i o n s in o r d e r t o show t h e development of c o n t r a d i c t i o n s between t h i s movement a n d t h e p r o d u c t i v e f o r c e s .

In t h i s way w e will examine, consecutively, t h e movement of t h e exploitation r a t i o , a n d t h u s a p p r o a c h t h e level of s u r p l u s value, a f t e r t h a t , t h e development of t h e capital-labor r a t i o , attempting t o i n t r o d u c e t h e c o n c e p t of t h e o r g a n i c compo- sition of c a p i t a l . From a l l of t h i s w e will d e d u c e t h e rate of p r o f i t movement.

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2.1. The Development of Exploitation Ratio

2.1.1. Wage costs and the product value

The importance of t h e wage c o s t s in t h e p r o d u c t value gives us a more a c c u - rate image of t h e p r o d u c t i v e s t r u c t u r e a n d i t s evolution. I t c r e a t e s a connection between t h e c o s t of t h e l a b o r f o r c e ( v a r i a b l e c a p i t a l ) , a n d t h e o t h e r elements con- s t i t u t i n g t h e value of t h e p r o d u c t : intermediate consumption (circulating c a p i t a l ) , d e p r e c i a t i o n (value t r a n s m i t t e d by fixed c a p i t a l ) , a n d t h e n e t t r a d i n g p r o f i t ( s u r p l u s value).

If i n t e r m e d i a t e consumption a n d d e p r e c i a t i o n are d e d u c t e d from t h e p r o d u c t value t o o b t a i n t h e n e t value-added, t h e n v a r i a b l e c a p i t a l a n d s u r p l u s value are connected, a n d a n image of t h e movement of t h e s u r p l u s value rate i s obtained.

The c o a l i n d u s t r y i s a p r i m a r y industry in which i n t e r m e d i a t e consumption c o n s t i t u t e s only a small p a r t of t h e p r o d u c t value. The p a r t of t h e wage c o s t s may t h e r e f o r e b e c o n s i d e r e d as a s a t i s f a c t o r y i n d i c a t o r of t h e movement of t h e s u r p l u s value rate.

The following g r a p h 4 confirms t h i s proposition. Curve C 1 shows t h e evolu- tion of t h e s h a r e of t h e wage c o s t s in t h e p r o d u c t value at t h e Anzin Company, a n d c u r v e C 3 shows t h e same evolution with r e s p e c t t o t h e n e t value-added. The two r a t i o s follow t h e same movement, both in tendency a n d annual c o n j u n c t u r s , t h e only d i f f e r e n c e being t h e d e g r e e of sensitivity t o t h e c o n j u n c t u r e .

The two c u r v e s r e v e a l t h e e x i s t e n c e of a long-term fluctuation i n v e r t e d with r e s p e c t t o t h e r e f e r e n c e fluctuation: t h e s h a r e of t h e wage c o s t s in t h e p r o d u c t value p a s s e s from 36% in t h e y e a r s 1810-1813 t o 27% in 1820-1923. Then, i t in- c r e a s e s t o more t h a n 55% in 1848-1852, coming down t o 41% in t h e e a r l y 1870s. I t r i s e s again in 1894-1897 t o r e a c h 60%.

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F o r t h e o v e r a l l F r e n c h p r o d u c t i o n , wages in r e l a t i o n to p r o d u c t i o n ( c u r v e C 2) s t a g n a t e d u r i n g t h e Second Empire, i n c r e a s e s t r o n g l y f r o m 1873 to 1897, a n d t h e n d e c r e a s e a g a i n until World War I. Between t h e t w o wars, t h e upward movement i s much l e s s obvious. In f a c t , f r o m o u r point of view h e r e , t h e d a t a o n wages, which i s t h e only o n e a v a i l a b l e o n a national level, t e n d s to d e v i a t e m o r e a n d m o r e f r o m t h e d a t a on wage costs b e c a u s e of t h e development of i n d i r e c t o r d e f e r r e d f o r m s of wages. However, t h e s e new f o r m s are principally developed d u r i n g r e c e s s i o n p h a s e s . F o r t h e Anzin Company, s o c i a l spending r e p r e s e n t e d 2.84% of d i r e c t wages in 1873, a n d 9.43% in 1897, with r e t i r e m e n t pensions a p p e a r i n g in 1884. W e h a v e n o f u r t h e r indications on t h e i m p o r t a n c e of s o c i a l costs in t h e c o a l i n d u s t r y . On t h e o t h e r h a n d , in t h e s t e e l i n d u s t r y , incidental costs from h o u r l y wages f o r s o c i a l in- s u r a n c e , family allowance a n d a c c i d e n t s , p a s s e s f r o m 8.73% in 1935 to 12.60% in 1939, t h e n to 27.03Z in 1945 a n d 28.71% in 194g4. U n d e r t h e s e conditions, i t is rea- s o n a b l e to b e l i e v e t h a t t h e t o t a l wage c o s t s , as a p a r t of t h e p r o d u c t , are in visible p r o g r e s s i o n in t h e 1920-1947 p e r i o d .

W e could h a s t i l y i n f e r t h a t t h e i n c r e a s e in wage costs d u r i n g t h e r e c e s s i o n p h a s e o r i g i n a t e d t h e c r i s i s . In t h i s c a s e , a n e x p l a n a t i o n would b e n e c e s s a r y f o r t h e f a c t t h a t t h e r e v e r s a l to p r o s p e r i t y h a p p e n s when t h e s h a r e of wages r e a c h e s i t s h i g h e s t l e v e l , a n d c o n v e r s e l y , t h e r e v e r s a l to r e c e s s i o n o c c u r s when t h i s s h a r e i s at i t s lowest l e v e l .

W e b e l i e v e t h e c o n t r a r y , t h a t t h e r e v a l o r i z a t i o n of t h e l a b o r f o r c e d u r i n g t h e r e c e s s i o n p h a s e i s t h e condition f o r t h e r e t u r n to p r o s p e r i t y . In t h e s e new condi- t i o n s of p r o d u c t i v i t y , i t i s t h e only f a c t o r likely to o p e n a n o u t l e t .

2.1.2. The cost of the labor force

T h e r a t i o of t h e a n n u a l wage costs to t h e number of staff g i v e s t h e a v e r a g e cost of t h e l a b o r f o r c e . This, evidently, c o n c e r n s t h e l a b o r f o r c e e f f e c t i v e l y em-

ployed in t h e mine. In t h i s case, i t i n c o r p o r a t e s a l l t h e elements of t h e s t r u c t u r e of t h e collective w o r k e r , t h e division of men-women-children, t h e r a n g e of qualifi- c a t i o n s , a v e r a g e s e n i o r i t y , etc. I t a l s o includes t h e c h a n g e s in t h e s o c i a l condi- tions of production a n d , more p a r t i c u l a r l y , t h e c h a n g e s in t h e annual d u r a t i o n of work a n d in t h e l a b o r intensity. Finally, i t t a k e s i n t o a c c o u n t t h e elements of t h e social r e p r o d u c t i o n of t h e l a b o r f o r c e , in t h e g e n e r a l meaning, s u p p o r t e d by t h e mine s u c h as pensions t o widows, o r p h a n s , a n d r e t i r e e s , health s e r v i c e s , i n s t r u c - tion, religion, e t c . , s p o n s o r e d by t h e company.

On g r a p h 5 , following, a n i n v e r t e d long-term fluctuation of t h e wage c o s t s i s n o t i c e a b l e , b u t h a r d l y p e r c e i v e d ( c u r v e C 1 ) . If t h i s i n v e r s e fluctuation were con- firmed in following r e s e a r c h , i t would t e n d t o p r o v e a c y c l i c a l s t r u c t u r a l t r a n s f o r - mation of t h e l a b o r f o r c e . Indeed, F. Simiand o b s e r v e d a normal fluctuation (in t h e same d i r e c t i o n as t h a t of p r i c e s ) in t h e nominal h o u r l y wages f o r most c a t e g o r i e s of wage-earners. If t h e long-term fluctuation r e v e r s e s in passing from hourly wage rates t o a v e r a g e c o s t , i t means t h a t t h e s t r u c t u r e h a s b e e n modified.

2.1.3. Purchasing power

The a v e r a g e c o s t of t h e work f o r c e i s a n important element in t h e management of t h e mine, b u t a r i s e in t h i s c o s t d o e s not n e c e s s a r i l y imply t h a t t h e work f o r c e ' s s i t u a t i o n i s improving. T h a t i s why w e t r i e d t o b a l a n c e t h i s a v e r a g e c o s t with a n index of r e t a i l p r i c e s .

F o r t h i s , w e used t h e Froment a n d Portzampac index5 f o r t h e p e r i o d 1815-1941, which w e e x t e n d e d t o 1970, with a t t e n t i o n t o indexes of r e t a i l p r i c e s successively p r o d u c e d by t h e National I n s t i t u t e of S t a t i s t i c s 6

.

I t i s c e r t a i n t h a n a n index c o n s t r u c t e d in t h a t manner l e a v e s a l o t t o b e d e s i r e d , from a t e c h n i c a l point of view. But i t a l s o must b e recognized t h a t t h e construction of indexes r e p r e s e n - t a t i v e of t h e v e r y long p e r i o d h a s n o t been r e s o l v e d , e i t h e r technically o r

t h e o r e t i c a l l y . What i s important t o us h e r e i s n o t s o much t o m e a s u r e t h e e x a c t amplitude of t h e r i s e in p u r c h a s i n g power between t h e t w o d a t e s , as i t i s t o point o u t t h e c h a n g e s in growth r h y t h m s a n d to s i t u a t e t h e i r inflections in time.

On g r a p h 5, c u r v e C 2 shows t h e evolution of t h e p u r c h a s i n g power of t h e a v e r a g e wage c o s t s at t h e Anzin Company, and c u r v e C 3 shows t h e p u r c h a s i n g power of t h e a v e r a g e d i r e c t wage of t h e F r e n c h c o a l i n d u s t r y as a whole.

The two c u r v e s r e v e a l t h e e x i s t e n c e of a n i n v e r s e long-term fluctuation, seemingly slightly o u t of p h a s e ; t h e i n c r e a s e in p u r c h a s i n g power i s prolonged f o r s e v e r a l more y e a r s in t h e beginning of t h e p r o s p e r i t y p h a s e s , in t h e same way as s t a g n a t i o n still remains in t h e beginning of r e c e s s i o n phases.

This, of c o u r s e , i s c o n t r a r y t o common s e n s e . One would n a t u r a l l y e x p e c t a n i n c r e a s e in p u r c h a s i n g power d u r i n g a p r o s p e r i t y p h a s e . This d i f f e r e n c e between t h e a p p a r e n t a n d t h e r e a l i s explained by t h e f a c t t h a t w e m e a s u r e t h e e f f e c t i v e u s e of t h e l a b o r f o r c e , with t h e v a r i a t i o n s in qualifications i t implies, as well as t h e c h a n g e s in t h e job s t r u c t u r e . Another e x p l i c a t i v e f a c t o r c e r t a i n l y involves t h e i m p o r t a n c e of a s p i r a t i o n s to access new p r o d u c t s , entailed in t h e development of p r o d u c t i v e f o r c e s .

The f a c t t h a t p u r c h a s i n g power p r o g r e s s e s s t r o n g l y when social production principally t e n d s t o s t a g n a t e , a n d t h a t i t s growth slows o r becomes nil when p r o - duction starts t o develop again, l e a d s o n e t o think t h a t t h e distribution of t h e so- c i a l p r o d u c t t e n d s to c h a n g e in f a v o r of t h e work f o r c e d u r i n g t h e r e c e s s i o n p h a s e a n d in f a v o r of c a p i t a l in t h e p r o s p e r i t y phase.

2.1.4. Purchasing puwer and productivity

If t h e p u r c h a s i n g power of wages p r o g r e s s e s as t h e productivity of l a b o r t h a t justifies i t , t h e r e l a t i v e position of l a b o r remains, in p r i n c i p l e , unchanged. In ef- f e c t , t h e s o c i a l p r o d u c t i n c r e a s e s b e c a u s e of t h e gain in productivity, a n d l a b o r

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r e c e i v e s a s h a r e of t h e supplementary production in a n identical p r o p o r t i o n t o t h e p a r t i t had in t h e initial production. If p u r c h a s i n g power i n c r e a s e s f a s t e r t h a n productivity, t h e r e l a t i v e position of t h e l a b o r f o r c e improves. If i t i n c r e a s e s slower, i t s r e l a t i v e position worsens, while, at t h e same time, t h e i n c r e a s e in p u r - chasing power objectively allows g r e a t e r consumption.

The movement of t h e r a t i o of t h e p u r c h a s i n g power of t h e annual wage c o s t s p e r job t o t h e l a b o r productivity, measured in t h e same conditions, should t h e r e - f o r e i n d i c a t e t h e evolution of t h e r e l a t i v e position of t h e l a b o r f o r c e in t h e s h a r - ing of t h e s o c i a l p r o d u c t .

G r a p h 6, which r e p o r t s t h e evolution of t h i s r a t i o f o r t h e Anzin Company ( c u r v e 1) a n d f o r a l l of F r a n c e ( c u r v e 2), makes t h e e x i s t e n c e of a n i n v e r t e d long- t e r m fluctuation, slightly o u t of p h a s e , c l e a r l y a p p a r e n t : p u r c h a s i n g power in- creases f a s t e r t h a n productivity between 1826 a n d 1856, t h e n a g a i n between 1880 a n d 1907, a n d finally between 1930 a n d 1950. The r e s u l t s , t h e r e f o r e , confirm t h e hypothesis of a r e v a l o r i z a t i o n of t h e l a b o r f o r c e d u r i n g a r e c e s s i o n p h a s e . Furth- e r m o r e , o v e r t h e v e r y long r u n , t h e g e n e r a l tendency i s upward. This t r e n d would b e e v e n c l e a r e r if t h e "all of F r a n c e " c u r v e took into a c c o u n t t h e t o t a l wage c o s t s , a n d n o t only d i r e c t wages. The r a t i o should b e c l o s e r to 9.2, instead of a 6.2, in t h e y e a r s 1948-1950. I t a p p e a r s t h a t , from o n e c y c l e t o a n o t h e r , t h e r e l a t i v e po- sition of t h e l a b o r f o r c e improves.

I t i s c l e a r t h a t t h e t h e o r e t i c a l impact of t h e r e s u l t would b e c o n s i d e r e d if t h e movement w e r e v e r i f i e d at t h e level of t h e economy as a whole.

Over t h e v e r y long t e r m , w e c a n assume t h a t t h e a v e r a g e wage c o s t s in c o a l i n d u s t r y d o not d e v i a t e much from t h e a v e r a g e wage c o s t s in t h e rest of t h e econo- my. In o r d e r t o b a l a n c e t h e r e l a t i v e upward tendency of t h e purchasing power, i t would b e n e c e s s a r y t h a t productivity i n c r e a s e s f a s t e r in t h e national economy as a whole t h a n in t h e c o a l i n d u s t r y . Indeed, productivity in c o a l mining companies d o e s

not improve between 1889 and 1952. But t h e measure performed c o r r e s p o n d s t o t h e annual productivity p e r job, and thus, does not t a k e into account t h e d e c r e a s e in working time. But during t h e same period, t h e l a t t e r p a s s e s from 3800 hours to approximately 2200 hours. Since t h e reduction of working time a f f e c t s o v e r a l l em- ployment, t h e annual productivity p e r job at a g e n e r a l level should not have in- c r e a s e d much faster in coal mining industries. The hypothesis of a n i n c r e a s e in purchasing power faster t h a n t h a t of productivity, on t h e level of t h e economy as a whole, i s t h u s v e r y possible.

The revalorization of t h e l a b o r force supposes a c o r r e l a t i v e d e c r e a s e in s u r p l u s value. The movement should b e found, even accentuated on t h e level of s u r p l u s value.

2.1.5. The surplus value rate

The n e t value-added, diminished by wage costs, gives t h e n e t product, under- stood as a surplus-labor produced by t h e l a b o r force. The r a t i o between t h i s n e t product and t h e wage costs i s t h u s equivalent to t h e surplus value r a t e , multiplied obviously by a coefficient proportional to t h e r e l a t i v e intensity of capital in t h e studied sector.

Graph 7 shows t h e evolution of t h i s r a t i o . In o r d e r to t r y to give a p i c t u r e of what happens l a t e r in t h e twentieth c e n t u r y , w e established, for F r a n c e as a whole, t h e r a t i o of t h e production value minus d i r e c t wages o v e r d i r e c t wages. Different from t h e f i r s t r a t i o , t h i s new r a t i o k e e p s depreciation, intermediate consumption, and indirect wages in t h e numerator. The denominator, however, does not include indirect wages.

The examination of t h i s g r a p h permits pointing o u t t h e existence of a long- t e r m fluctuation, with a n i n c r e a s e in t h e s u r p l u s value rate during t h e p r o s p e r i t y p h a s e and a d e c r e a s e during t h e recession phase. Moreover, t h e r e is a general

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downward t r e n d , at l e a s t until t h e end of t h e nineteenth c e n t u r y . The f a c t t h a t in- d i r e c t wages are n o t t a k e n into a c c o u n t in t h e "France as a whole" s e r i e s l e t s u s assume t h a t t h e downward tendency was maintained in t h e twentieth c e n t u r y , at l e a s t until World War 11.

2.2. Work. Capital, and the Level of Profit

2.2.1. The composition of capital

The technological composition of c a p i t a l e x p r e s s e s t h e s t r u c t u r e of t h e p r o - d u c t i v e f o r c e s ; t h a t i s t h e quantity of t h e means of p r o d u c t i o n n e c e s s a r y f o r work, t h e machines, a n d r a w m a t e r i a l on t h e o n e s i d e , a n d t h e work of l a b o r on t h e o t h e r . The r a t i o of fixed c a p i t a l value t o v a r i a b l e c a p i t a l value, t h e composition of capi- t a l value i s t h e p i c t u r e t h a t a c a p i t a l i s t i s drawing, b u t t h i s i s a deformed image b e c a u s e i t d o e s n o t t a k e i n t o a c c o u n t t h e live work in i t s t o t a l i t y , b u t only t h e value of t h e l a b o r f o r c e . The value image of t h e technological composition i s given by t h e o r g a n i c composition of c a p i t a l . I t p u t s i n t o r a t i o t h e v a l u e of t h e means of production, t h e c o n s t a n t c a p i t a l ( p a s t work), a n d t h e live work in i t s i n t e g r i t y whose value c a n b e decomposed i n t o v a r i a b l e c a p i t a l a n d s u r p l u s value.

In terms of commodity value, i t i s in p r i c e s , t h e r a t i o of i n t e r m e d i a t e consump- tion a n d t h e p r o d u c t i v e p a r t of fixed c a p i t a l t o value added give a p i c t u r e of t h e o r g a n i c composition of c a p i t a l e x p r e s s e d in value. If o n e knew t h e r e a l r o t a t i o n p e r i o d of t h e d i f f e r e n t components of c a p i t a l , o n e could make a r e a l p i c t u r e of t h e level. In t h e o p p o s i t e case, t h e p i c t u r e i s r e p r e s e n t a t i v e with a f a c t o r x (proxy).

As f o r t h e t r e n d , t h e p i c t u r e should b e s a t i s f a c t o r y u n d e r conditions t h a t t h e r e i s n o d i s t o r t i o n between t h e development of c a p i t a l composition in t h e b r a n c h u n d e r c o n s i d e r a t i o n a n d t h e development of t h e a v e r a g e composition of c a p i t a l (unifica- tion of p r o f i t rate l e a d s t o t h e n e c e s s i t y t o c o n s i d e r t h e d i f f e r e n c e s in t h e compo-

sition of c a p i t a l in t h e formation of p r o d u c t i v e p r i c e s ) . In p r i n c i p l e : t h e impact of inflationary o r d e f l a t i o n a r y d i s t o r t i o n s of p r i c e s in r e l a t i o n t o value should n o t h a v e a n d important impact f o r t h e development b e c a u s e i t acts both in n u m e r a t o r a n d denominator of a f r a c t i o n .

W e will f i r s t e s t a b l i s h s e p a r a t e l y t h e r e l a t i o n of i n t e r m e d i a t e consumption a n d t h e p r o d u c t i v e p a r t of fixed-capital s t o c k f o r t h e n e t value added. W e t h e n give a n evaluation of t h e o r g a n i c composition of c a p i t a l b a s e d on a p e r i o d of r o t a t i o n of i n t e r m e d i a t e consumption a n d t h e live work equal t o six months.

F i g u r e s 8, 9, a n d 10 show t h e evolution of t h e o r g a n i c composition c a l c u l a t e d t h i s way a n d i t s c o p r o d u c t s .

One c a n o b s e r v e , v e r y c l e a r l y f o r t h e o r g a n i c composition a n d f o r t h e r a t i o fixed capital/vaLue a d d e d , t h e e x i s t e n c e of long-term fluctuations, displaced with t h e t r e a d of d e c l i n e f r o m t h e c e n t e r of d e p r e s s i o n t o t h e c e n t e r of p r o s p e r i t y . One m e r g e s h e r e a n o b s e r v a t i o n made a b o v e on t h e development of a p p a r e n t l a b o r productivity a n d t h e p r o d u c t i v i t y of c a p i t a l . The r a t i o of t h e s e two productivities gives in r e a l i t y a p i c t u r e of technological composition of c a p i t a l . I t i s normal t h a t t h e o r g a n i c composition of c a p i t a l shows t h e same movement. An i n c r e a s e in o r - ganic composition of c a p i t a l at t h e e n d of t h e p r o s p e r i t y p h a s e shows t h e develop- ment of t h e "past work" at at t h e e x p e n s e of t h e live work a n d b r i n g s with i t s t r u c - t u r a l unemployment a n d i n c r e a s e d c o n s t r a i n t s r e l e a s e d . The e f f e c t s of t h e in- crease are m a r k e d by t h e p r o g r e s s i o n of t h e rate of s u r p l u s value, b u t in t h e d e p t h t h e s t r u c t u r e i s d e g r a d i n g . With t h e f i r s t d e c r e a s e of t h e surplus-value r a t e , t h e rate of p r o f i t i s permanently d e c r e a s e d .

To e x p o s e t h e Long-term fluctuations of t h e c a p i t a l composition i s o n e of t h e main c o n t r i b u t i o n s of t h i s r e s e a r c h . I t should b e p r o v e d on a l a r g e level t h e n t h e Compagnie dlAnzin. But i t seems t o u s t h a t i t i s e v e n more important t h a t t h e long- t e r m tendency of d e c l i n e h a s b e e n r e v e a l e d .

STOCK OF FIXED CAPITAL GRAPH : NET VALUE-ADDED

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The d e c r e a s e in t h e o r g a n i c composition of c a p i t a l i s evidently a s u r p r i s e , a n d i t s amplitude i s s u c h t h a t t h e c a u s e c a n n o t b e a t t r i b u t e d to a n e v e n t u a l b i a s in t h e c o n s t r u c t i o n of t h e d a t a s e r i e s . W e know t h a t Marx b a s e d t h e law of t e n d e n c i a l d e c r e a s e of t h e p r o f i t rate o n t h e i n c r e a s e of t h e o r g a n i c composition of c a p i t a l , a n d on t h e impossibility of i n c r e a s i n g t h e s u r p l u s v a l u e rates in a p r o p o r t i o n suffi- c i e n t to b a l a n c e t h i s i n c r e a s e . Indeed, t h e p r i n c i p l e w a s a c c e p t e d b e f o r e Marx, by R i c a r d o , a n d w a s n e v e r c o n t e s t e d a f t e r w a r d s , e i t h e r by t h e Marxists, or by h i s c r i t i c s . In t h e 1979 a r t i c l e , 1 c o n s i d e r e d t h e possibility of a fluctuation i n t h e or- g a n i c composition, b u t c a r r i e d by a g e n e r a l l y upward t r e n d . If t h e o r g a n i c compo- sition of c a p i t a l d e c r e a s e s , t h e whole p r o s p e c t i s o v e r t u r n e d .

I t i s t h u s e x t r e m e l y i m p o r t a n t to know if t h i s i s a g e n e r a l phenomenon or if i t is a phenomenon s p e c i f i c to t h e coal i n d u s t r y , or e v e n to t h e Anzin Company alone.

I t i s t r u e t h a t t h e c o a l i n d u s t r y p r e s e n t s t o t a l l y s p e c i f i c c h a r a c t e r i s t i c s , not- a b l y i t i s n e c e s s a r y to dig d e e p e r a n d d e e p e r to e x t r a c t c o a l , a n d t h a t implies t h e putting to work of i n c r e a s i n g m a t e r i a l means. This f a c t o r of e x h a u s t i o n of r e s o u r c e s d o e s n o t o c c u r in o t h e r i n d u s t r i e s . On t h e c o n t r a r y , t h e development of working t e c h n i q u e s , t h e improvements a c h i e v e d in t h e conducting of e x c a v a t i o n , in ventilation, in t h e p r o d u c t c i r c u l a t i o n s p e e d between t h e bottom a n d t h e s u r f a c e , a n d t h e i n c r e a s e in t h e a v e r a g e d u r a t i o n of l i f e of t h e p i t s , a l l allow i n c r e a s i n g in t h e number of m i n e r s e v e n f a s t e r t h a n i n c r e a s i n g in volume of equipment. The ma- j o r p a r t of t h e s e mutations o c c u r s b e f o r e 1870 a n d t h u s , e x p l a i n s t h e i m p o r t a n c e of t h e d e c r e a s e in t h e t e c h n i c a l a n d o r g a n i c composition of c a p i t a l in t h e begin- ning of t h e n i n e t e e n t h c e n t u r y . On t h e c o n t r a r y , a f t e r 1870, i t seems l i k e t h e f a c - tor of r e s o u r c e e x h a u s t i o n t e n d s to become dominant.

What i s t h e case in o t h e r i n d u s t r i e s ? The question will only b e a n s w e r e d by new r e s e a r c h . The working of s e v e r a l i n d u s t r i e s , t h e p r o c e s s of eliminating human l a b o r as a motor power, t h e r e l a t i v e expansion of equipment i n d u s t r i e s seem to act

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GRAPH 10 : ORGANIC COMPOSITION OF CAPITAL

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in f a v o r of a n i n c r e a s e in t h e organic composition of capital. But inversely, d o w e not underestimate t h e d e c r e a s e in value of t h e equipment, t h e changes in produc- tion p r o c e s s e s , t h e utilization of new products?

W e d o not have t h e evaluation of t h e productive p a r t of fixed-capital stock of o t h e r industries, but t h e physical indicators could give a f i r s t approximation. So, f o r example in t h e French r a i l r o a d one can o b s e r v e t h e following t r e n d . 7

1861 1900 1950 1965 N o . of employees/km of used r o a d 8.94 7.64 10.92 9.44

No. of employees p e r machine 25.6 27.4 34.7 58.1

No. of employees p e r personal

wagon (couches) 11.47 10.0 24.7 25.0

No. of employees p e r r a i l r o a d

car (load c a r r y i n g ) 1.27 1.05 1.13 1.20

2.2.2. The rate of profit

The long-term changes in t h e organic composition of capital and t h e rate of s u r p l u s value evidently poses t h e question of p r o f i t r a t e . The r a t i o between t h e s u r p l u s value (net value added- wage c o s t s ) and t h e t o t a l of advanced capital (stock of fixed c a p i t a l

+

intermediate consumption

+

wage c o s t s ) gives us a good approximation of t h e annual rate of profit. For t h i s calculation w e have assumed t h a t t h e intermediate consumption and wage costs h a s a six months period of rota- tion. The p r o f i t calculated t h i s way contains t a x e s and some expenses t h a t d o not have a productive c h a r a c t e r and specifically some expenses of commercializaiion.

One can o b s e r v e long-term fluctuation of p r o f i t r a t e with a tendency t o in- crease during t h e p r o s p e r i t y p h a s e and a declining tendency during t h e depres- sion. For v e r y long p e r i o d s t h e declining tendency of t h e p r o f i t rate are not evi- dent. The tendency i s t o i n c r e a s e in t h e period 1810-1873, on t h e o t h e r hand t h e d e c r e a s e a f t e r 1875 i s extremely strong.

9. Conclusion

The s t u d y p r e s e n t e d i s b a s e d o n t h e a n a l y s i s of t h e production r e l a t i o n , a n d p a r t i c u l a r l y o n t h e r a t i o s c a p i t a l

-

l a b o r . By limiting u s t o t h e a p p r o a c h using values of main p r o d u c t i o n r e l a t i o n s , bypassing t h e s p h e r e of c i r c u l a t i o n , t h e r a t i o of e x c h a n g e a n d consumption, t h e r e l a t i o n of a p p r o p r i a t i o n w e condemned u s t o see only a p a r t of t h e p r o c e s s e s a c t i n g in t h e long-term movement. I t would b e a n e r r o r t o c o n s i d e r t h i s a p p r o a c h as a global o n e . F o r s u r e , t h e s e r i e s shown h e r e , i t s complementarity give a n illusion of a closed system producing i t s c o n t r a d i c t i o n s a n d t h e n solving them. The measurement a c c e n t u a t e illusion!

One c a n n o t treat e v e r y t h i n g at t h e same time. W e h a v e t r e a t e d h e r e only a p a r t of t h e movement. Such fundamental a s p e c t s as t h e p r o c e s s e s of overaccumu- lation a n d s t r u c t u r a l devalorization h a v e n o t b e e n touched. W e h a v e p r e s e n t e d t h e state of production r e l a t i o n without mentioning what makes them develop a n d e s p e - cially t h e s u b j e c t i v e p e r c e p t i o n of t h e s e r e l a t i o n s , t h e consciousness of n e e d s and t h e possibility t o s a t i s f y them t h a t are preconditions of s o c i a l s t r u g g l e s . W e h a v e a l s o p a s s e d quickly o v e r t h e fundamental question of t h e q u a l i t a t i v e dimensions of p r o d u c t i v e f o r c e s , t h e knowhow a n d qualification of people, innovation, t h e crea- tion of new p r o d u c t s a n d p r o c e s s e s of production. S t u d i e s t h a t are s t i l l in t h e be- ginning s t a g e s a b o u t t h e s e questions should e n a b l e u s t o h a v e t h e s e t r a n s f o r m a - tions t a k e p l a c e .

These limits p a s s e d , t h e o b t a i n e d r e s u l t s confirm some of t h e h y p o t h e s e s f o r - warded in t h e a r t i c l e of 1979: t h e long-term movement emerged, p e r h a p s s t i l l m o r e c l e a r l y , as t h e p r o c e s s of misadoption a n d later r e a d o p t i o n of t h e p r o d u c t i o n r e l a t i o n t o t h e development of p r o d u c t i v e f o r c e s . But from h e r e t h e y p o s e new questions f o r t h e o r y . S o , from t h e long-term fluctuation t h a t a f f e c t them, t h e p r o - bability of declining long-term t r e n d s of o r g a n i c composition of c a p i t a l , a n d a semi-certainty of a n e v e n s t r o n g e r d e c l i n e of t h e rate of s u r p l u s value f o r c e s u s t o

re-think some s t e p s . I t i s evident t h a t t h e declining t r e n d of t h e s e r e l a t i o n s would lead t o a c h a n g e of views of Marx without modifying t h e b a s i c tendency: p r o f i t rate would n o t d e c l i n e b e c a u s e of a n i n c r e a s e in t h e o r g a n i c composition of capi- t a l , b u t i t would d e c l i n e b e c a u s e of r e v a l o r i z a t i o n of l a b o r .

W e c a n f u r t h e r a s k what w e make of c a p i t a l . Marx t h e r e evidently insists on t h e i n c r e a s e of t h e o r g a n i c composition of c a p i t a l as a b a s i c t e n d e n c y of t h e capi- t a l i s t production r e l a t i o n s . But i s t h i s c o n t r a d i c t o r y t o t h e v e r y long-term de- cline? S o , b e c a u s e h e w r i t e s "In o r d e r t o give i t a n e x p r e s s i o n completely gen- e r a l , h e r e i s what c o n s t i t u t e s t h e contradiction: t h e c a p i t a l i s t production system implicitly assumes a tendency of a b s o l u t e development of production f o r c e s , meanwhile t h e system h a s a goal t o p r e s e r v e t h e existing value-capital a n d i t s max- imal r e v a l u a t i o n (.

.

^.). I t s s p e c i f i c c h a r a c t e r i s b a s e d on existing value-capital consideration as a means to maximally r e v a l u e t h i s value. The method t h e capital- i s t production u s e s to a c h i e v e i t s goal contain: d e c r e a s e of t h e p r o f i t rate, d e p r e - ciation of t h e existing c a p i t a l a n d development of p r o d u c t i v e f o r c e s of l a b o r at t h e e x p e n s e of t h o s e t h a t h a v e been a l r e a d y produced". ⁸

Does t h i s not mean t h a t in s p i t e of i n h e r e n t tendency of c a p i t a l i s t production r e l a t i o n s to i n c r e a s e t h e composition of c a p i t a l , t h e development of p r o d u c t i v e f o r c e s impose i n v e r y long t e r m a n i n v e r s e movement? This c o n t r a d i c t o r y move- ment manifests itself in t e r m s of measurement by s u p e r p o s i t i o n of fluctuations, b o t h business as s t r u c t u r a l ones.

Certainly, o n e h a s t o b e c a r e f u l in generalizing r e s u l t s achieved still in a v e r y limited s c a l e . Should i t b e confirmed, t h i s r e v e r s a l of p e r s p e c t i v e would re- move a n important c o n t r a d i c t i o n between t h e t h e o r y of h i s t o r i c a l materialism and t h e t h e o r y of c a p i t a l as worked o u t by Marx ( a t l e a s t as w e h a v e i n t e r p r e t e d i t up t o now).

The i n c r e a s e in t h e o r g a n i c composition of c a p i t a l a n d in t h a t of t h e s u r p l u s value rate g a v e t o p a s t work, a n d t h u s t o c a p i t a l , a growing economic importance in t h e production r a t i o s . I t w a s t h u s difficult t o explain why a s o c i a l c l a s s , whose economic i m p o r t a n c e w a s i n c r e a s i n g , should h a v e c e d e d i t s p l a c e . The feudal p r o - duction mode would n e v e r h a v e d i s a p p e a r e d if t h e economic importance of t h e land r e n t had b e e n i n c r e a s i n g , r e i n f o r c i n g in t h a t manner t h e nobility's situation as a s o c i a l c l a s s .

The r e v a l o r i z a t i o n of t h e l a b o r f o r c e , with i t s r e s u l t i n g d e c r e a s e in t h e s u r p l u s value rate, as well as t h e d e c r e a s e in t h e o r g a n i c composition of c a p i t a l c a r r y within themselves t h e d e c r e a s i n g r o l e of c a p i t a l in t h e economic r e l a t i o n s , a n d t h u s , i t s d e c r e a s i n g p a r t as a social c l a s s . On t h e c o n t r a r y , t h e i n c r e a s i n g im- p o r t a n c e of t h e l a b o r f o r c e in t h e economic r e l a t i o n s gives i t a more a n d more im- p o r t a n t p a r t as a s o c i a l c l a s s . This double movement defines t h e h i s t o r i c a l n a t u r e of t h e c a p i t a l i s t i c mode of production.

I t i s c e r t a i n t h a t t h i s vision of development of t h e p r o d u c t i v e f o r c e s p l a c e s t h e man in a basically d i f f e r e n t position with r e s p e c t t o a machine. The r e v a l o r i - zation of l a b o r a n d t h e d e c r e a s e of o r g a n i c composition of c a p i t a l t h a t h a s at- t a c h e d t o i t , give a permanently i n c r e a s i n g r o l e t o p r o d u c t i v e men with r e s p e c t t o h i s tools. This i s completely o p p o s i t e t o t h e a p o c a l y p t i c visions t h a t p r e d i c t t h e man a r o l e as s l a v e of a machine. S u r e , i t i s t h e logic of c a p i t a l t o imagine a world made t o i t s own image. But t h e development of p r o d u c t i v e f o r c e s g o e s in diametri- cally o p p o s i t e d i r e c t i o n s and e s c a p e s i t more a n d more. I t p o s e s more s t r o n g l y t h a n e v e r t h e n e c e s s i t y of developing t h e p r o d u c t i v e r e l a t i o n s w h e r e t h e man would emancipate of non-conscientious a n d a n a r c h i c regulation of c a p i t a l in o r d e r t o b e d e p e n d e n t only on t h e will of c o n s i s t e n t p r o d u c e r s becoming themselves t h e o b j e c t of t h i s development.

NOTES

1. Fontvieille, Louis (1979). "Les mouvements langes d e Kondratieff et l a t h d o r i e d e l a regulation" I s s u e s , 4, 3e,4e trim., 13-36.

2. "Contribution d l'etude d e s fluctuations longues: Le c a d r e , l e s S o u r c e s et l e s methodes d e l'enguite s u r l'exploitation du c h a r b o n dans l e Nord. P a s d e Calais d e 1815 d 1914" C a h i e r s Recherches et t r a v a n z de l ' l n s t i t u t dJHistoire Economique et Sociale d e l J U n i v e r s i t e d e P a r i s I No. LO, November 1981. 'The l a b o r force in long-term fluctuations" Review, X , 3. Winter 1987. "Fluctuation longues et r a f f o r t s d e production" I s s u e s , 25, 2 trim 1986, p. 43-94.

3. Nous avons p o n d e r 6 l a F.B.C.F. p a r l'indice d e s p r i x d e g r o s d e 45 a r t i c l e s ,

eta-

bli p a r A. Sauvy pour 1'Institut d e l a Statistique. Nous l'avons r6tropol/*'e jusqu'en 1782 a v e c l'indice c o r r e s p o n d a n t pour lPAngleterre.

4. I.N.S.E.E., Annuaire Statistique d e l a F r a n c e 1966

-

Sum6 r d t r o s p e c t i f . p. 427.

5. Froment et Portzamparc, "Les i n t e r z t s r e e l s du c a p i t a l e n t r e l e s deux g u e r r e s et anterieurement", I n s t i t u t de l a C a n j o n c t u r e , E t u d e S p l c i a l e No. 1, P a r i s 1956 6 . 1942-1954: P r i x d e d e t a i l d P a r i s , 34 a r t i c l e s

-

I.N.S.E.E.

1955-1956: P r i x d e d e t a i l d P a r i s , 213 a r t i c l e s

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I.N.S.E.E.

1957-1963: P r i x d e d6tai1, agglomeration parisienne. 250 a r t i c l e s

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I.N.S.E.E.

1964-1970: P r i x d e detail, agglomeration parisienne, 259 a r t i c l e s

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I.N.S.E.E.

7. Insee. Annuaire Statistique d e l a France 1966

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RBsum/*'e r e t r o s p e c t i f p.

319-321.

8 . Le C a p i t a l , l i v r e troisieme. Loi d e la baisse tendancielle du taux d e profit.

Chapitre X V

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Conflit e n t r e l'extension d e la production et La mise e n valeur.