approximately so; and furthermore, there is a somewhat more rapid wear of the bearings, or friction parts, but this is hardly worth mentioning. But in order to obtain more power with the same machine by speeding up the piston, more coal must be burned under the same steam boiler, or a boiler of a larger volume of evaporation must be employed, in short, more steam must be generated. This was accomplished, and boilers with a greater volume were installed with the old "accelerated" machines. These accomplished consequently as much as 100% more work. About 1842, the extraordinarily cheap generation of power with steam engines in the mines of Cornwall began to attract attention. The competition in cotton spinning compelled the manufacturers to seek the main source of their profits in economies. The remarkable difference in the consumption of coal per hour and horse-power shown by the Cornish machines, and likewise the extraordinarily economical performances of the Woolf Double Cylinder Machines, brought the question of fuel into the foreground, also in Nasmyth's district. The Cornish and the double cylinder machines furnished one horse-power per hour for every 33^ or 4 pounds of coal, while the machines in the cotton districts generally consumed 8 or 12 pounds per horse-power an hour.
Such a marked difference induced the manufacturers and machine builders of Nasmyth's district to accomplish by similar means just such extraordinary economies as were then the rule in Cornwall and France, where the high prices of coal had compelled the manufacturers to restrict this expensive branch of their business as much as possible. This led to some very important results. In the first place, many boilers, one-half of whose surface remained exposed to the cold outer air in the time of high profits, were then covered with thick layers of felt, or bricks and mortar, and other material, by which the radiation of the heat, which had been generated at such high cost, was prevented. Steam pipes were protected in the same way, and the cylinders were also surrounded by felt and wood. In the second place, high pressure came into use. Hitherto the safety-valve had been weighted only so slightly that it opened at 4, 6, or 8 pounds of steam pressure per square inch.
ii8 Capitalist Production.
Then it was discovered that considerable coal could be saved by raising the pressure to 14 or 20 pounds. In other v^^ords, the work of a factory was accomplished by a considerably lower consumption of coal. Those who had the means and the enterprise carried the system of increased pressure to its •full extension and employed judiciously constructed steamboilers, which furnished steam at a pressure of 30, 40, 60, or 70 pounds per square inch, which would have scared an engineer of the old school to death. But as the economic result of this increased steam-pressure soon made itself felt in the unmistakable form of so many pounds sterling, shillings, and pence, the high pressure boilers for condensing machines became very common. Those who carried out the reform radically used the Woolf machines, and this took place in most of the recently built machines. These were the Woolf machines with two cylinders, in one of which the steam from the boiler furnishes power by means of the excess of pressure over that of the atmosphere, whereupon, instead of escaping as formerly after each stroke of the piston into the open air, it passes into a low pressure cylinder of about four times the volume of the other and, after accomplishing there some more expansion, goes to the condenser. The economic result obtained by such a machine is the performance of one horse--power per hour for every 3^ or 4 pounds of coal, while the machines of the old style required from 12 to 14 pounds for this purpose. A clever device permitted the adaption of the Woolf system with double cylinders, that is to say, the high and low pressure machine, to already existing machines and thus the increase of their performance and at the same time a reduction in the consumption of coal. The same result was obtained during the last 8 or 10 years by a combination of a high pressure machine with a condensing machine in such a way that the steam used in the former passed into the latter and drove it. This system is useful for many purposes. It would not be easily possible to obtain any accurate statistics of the increased performances of the same identical steamengines supplied with some or all of these new improvements. -But it is certain that the same weight of steam machinery now Economics in Employment of Constant Capital. 119 performs 50% more service on an average, and that in many cases the same steam-engine, which yielded 50 horse-powers at the time of the limited speed of 220 feet per minute, yields now more than 100 horse-powers. The highly economical results of the employment of high pressure steam in condensing machines, and the far greater demands made upon the old machines for the purposes of business expansion, have led in the last three years to the introduction of pipe boilers, by which the cost of steam generation is again considerably reduced. (Eep. Fact, Oct., 1852, pages 23 to 27.)
What applies to power generating, also applies to power transmitting and working machinery. According to Redgrave's rejiort, on page 58 of the above-cited document, the rapid steps made in the development of improvements in machinery during the last years have enabled the manufacturers to expand production without additional motive power. The more economical employment of labor has become necessary through the shortening of the working day, and in most well-managed factories means are always considered by which production may be increased, and expenses decreased. Redgrave has before him a calculation, wdiich he owes to the courtesy of a very intelligent gentleman in his district, referring to the number and age of the laborers employed in his factory, the machines operated in it, and the w^ages paid from 1840 to date. In October, 1840, his firm employed 600 laborers, of whom 200 were less than 13 years old. In October, 1852, they employed only 350 laborers, of whom only 60 were less than 13 years old. The same number of machines, with very few exceptions, were in operation, and the same amounts were paid in wages, in both years.
These improvements of machinery do not show their full effects until they are used in new and judiciously built factories.
According to the testimony of a cotton spinner in the factory reports for 1863, page 110, great progress has been made in the building of factories in which such improved machinery is to be installed. In the basement of his factory he twin':^s all his yam, and for this purpose alone he installs 29,000 120 Capitalist Production.
doubling spindles. In this room and in the shed alone he saves at least 10% in labor. This is not so much the result of improvements in the doubling system, as of the concentration of machinery under one gearing. He can drive the same number of spindles with one single driving shaft, and thus he saves from 60 to 80% for gearing as compared to other firms. This furthermore results in a great saving of oil, grease, etc. In short, with perfected installations in his factory and improved machinery he had saved at least 10% in labor, not to mention great economies in power, coal, oil, grease, transmission belts and shafts.
IV. Utilisation of the Excrements of Production.
With the advance of capitalist production the utilisation of the excrements of production and consumption is extended. We mean by the former the refuse of industry and agriculture, and by the latter either the excrements, such as issue from the natural circulation of matter in the human body, or the form in which objects of consumption are left after being used. Excrements of production, for instance in chemical industries, are such by-products as are wasted in production on a smaller scale; iron filings collected in the manufacture of machinery and carried back into the production of iron as raw material, etc. Excrements of consumption are the natural discharges of human beings, remains of clothing in the form of rags, etc. The excrements of consumption have the most value for agriculture. So far as their utilisation is concerned, the capitalist mode of production wastes them in enormous quantities. In London, for instance, they find no better use for the excrements of four and a half million human beings than to contaminate the Thames with it at heavy expense.
The raising of the price of raw materials naturally leads to the utilisation of waste products.
The general requirements for the re-employment of these excrements are: A great quantity of such excrements, such as is only the result of production on a large scale; improvements in machinery by which substances formerly useless in Economies in Employment of Constant Capital. 121 their prevailing form are given another useful in reproduction; progress of science, especially of chemistry, which discovers the useful qualities of such waste. It is true, that great economies of this sort are also observed in small agriculture carried on like gardening, for instance in Lombardy, southern China, and Japan. But on the whole the productivity of agriculture under this system is obtained by great prodigality in human labor-power, which is drawn from other spheres of production.
The so-called waste plays an important role in almost every industry. The factory report for December, 1863, mentions as one of the principal reasons why farmers in many parts of England and Ireland do not like to grow fiax, or do so but rarely, the great waste occurring in the preparation of flax by small scutch-mills driven by water. The waste is relatively small in cotton, but very considerable in fiax. Good treatment in soaking and mechanical scutching may reduce this disadvantage considerably. In Ireland flax is frequently scutched in a very slovenly manner, so that from 28 to 30% are lost. All this might be avoided by the use of better machinery. So much tow fell by the side in the preparation of flax that the factory inspector reports having heard it said of some of the scutching mills in Ireland that the laborers carry the waste home and burn it in their fire-places, although it is very valuable. (Page 140 of the above report.) We shall speak of cotton later, in discussing the fluctuations of prices of raw materials.
The wool industry was carried on more intelligently than the preparation of flax. The same report states on page 10)7 that it was formerly the custom to veto the preparation of waste wool and woolen rags for renewed use, but this prejudice has been entirely dropped so far as the shoddy trade is concerned, which has become an important branch of the wool district of Yorkshire. It is doubtless expected that the trade with cotton waste will soon occupy the same rank as a line of business meeting a long felt want. Thirty years previous to 1863, woolen rags, that is to say pieces of all-wool cloth, etc., were worth on an average about 4 p.st. 4 sh. per ton. But 122 Capitalist Production.
a few years before 1863 they had become worth as much as •i-i p. St. per ton. And the demand for them had risen to such an extent that mixed stuffs of wool and cotton were also used, means having been found to destroy the cotton without injuring the wool. And thousands of laborers were employed in 1863 in the manufacture of shoddy, and the consumer benefited thereby, being enabled to buy cloth of good quality at very reasonable prices. The shoddy so rejuvenated constituted in 1862 as much as one-third of the entire consumption of wool in English industry, according to tlie factory report of October, 1862, page 81. The truth about the " benefit " for the " consumer " is that his shoddy clothes wear out in one-third of the time which good woolen clothes used to last, and become threadbare in one-sixth of this time.
The English silk industry moved on the same inclined plane. From 1839 to 1862 the consumption of genuine raw silk had somewhat decreased, wdiile that of silk waste had doubled. By the help of improved machinery it was possible to make this otherwise rather worthless stuff into a silk useful for many purposes.
The most striking instance of the iitilisation of waste was furnished by the chemical industry. It utilises not only its own waste in new ways, but also that of many other industries. For instance it converts the formerly almost useless gas-tar into aniline colors, alizarin, and more recently even into drugs.
This economy through the re-employment of excrements of production must be distinguished from economies through the prevention of waste, that is to say, the reduction of excrements of production to a minimum and the maximum utilisation at first hand of all raw and auxiliary materials required in production.
The reduction of waste depends in part on the quality of the machinery in use. Oil, soap, etc., are saved to the extent that the parts of a machine are constructed accurately and polished. This refers to auxiliary materials. In part, however, and this is the most important part, it depends on the quality of the emj^loyed machines and tools whether a large or Economics in Employment of Constant Capital. 123 small i^ortion of raw material is converted into waste in the process of production. Finally it depends on the quality of the raw material itself. This in turn is conditioned on the development of the extract industry and agriculture producing the raw material (the progress of civilisation strictly so called), and on the improvement of processes through which the raw materials pass before their entry into manufacture.
'' Parmentier proved that the art of grinding grain was very materially improved in France in recent times, for instance since tlie time of Louis XIV, so that the new mills, compared to the old, can make as high as twice as much bread from the same amount of grain. In fact, the annual consumption of an inhabitant of Paris was at first placed at 4 setiers of grain, then at 3, finally at 2, while nowadays it is only 1^ setier, or about 342 lbs. per capita...In the Perche, in which I lived for a long time, the crude mills of granite and trap rock have been rebuilt according to the rules of advanced mechanics as understood for the last 30 years. They have been provided with good mill stones from La Ferte, the grain has been ground twice, the milling sack has been given a circular motion, and the output of flour has increased by one-sixth for the same amount of grain. I can easily explain the enormous discrepancy between the daily consumption of grain among the Romans and among us. It is due simply to the imperfect method of milling and bread making. In this connection I must explain a peculiar fact mentioned by Pliny, XVIII, c. 20, 2:...' The flour was sold in Rome, according to quality, at 40, 48, or 96 as per modius.' These prices, so high in proportion to the contemporaneous prices of grain, are due to the imperfect state of the mills of that period, and the resulting heavy cost of milling." (Dureau de la Malle, Economie Politique des Romains. Paris, 1840, V. Economies Due to Inventions.
These economies in the utilisation of fixed capital, we repeat, are due to the application of the requirements of labor 124 Capitalist Production.
on a large scale, in short, are due to the fact that these requirements serve as the first conditions of direct co-operative and social production, a co-operation within the primary process of production. On the one hand, this is the indispensable requirement for the application of mechanical and chemical inventions without increasing the price of commodities, and this is always the first consideration. On the other hand, only production on a large scale permits those economies which are derived from co-operative productive consumption. Finally, it is only the experience of combined laborers which discovers the where and how of economies, the simplest methods of applying the experience gained, the way to overcome practical frictions in carr3ang out theories, etc.
Incidentally it should be noted that there is a difference between universal labor and co-operative labor. Both kinds play their role in the process of production, both flow one into the other, but both are also differentiated. Universal labor is scientific labor, such as discoveries and inventions. This labor is conditioned on the co-operation of living fellowbeings and on the labors of those who have gone before. Cooperative labor, on the other hand, is a direct co-operation of living individuals.
The foregoing is corroborated by frequent observation, to-wit: 1) The great difference in the cost of the first building of a new machine and that of its reproduction, on which see Ure and Babbage.
2) The far greater cost of operating an establishment based on a new invention as compared to later establishments arising out of the ruins of the first one, as it were. This is carried to such an extent that the first leaders in a new enterprise are generally bankrupted, and only those who later buy the buildings, machinery, etc., cheaper, make money out of it. It is, therefore, generally the most worthless and miserable sort of money-capitalists who draw the greatest benefits out of the universal labor of the human mind and its co-operative application in society.
The Effect of Fluctuations in Price. 125 CHAPTER VI.
THE EFFECT OF FLUCTUATIONS IN PRICE.
I. Fluctuations in the Price of Raw Materials, and their Direct Effects on the Rate of Profit.
The assumption in this case, as in previous ones, is that no change takes place in the rate of surplus-value. This assumption is necessary in order that this case may be analysed in its pure state. However, it would be possible that a certain capital, whose rate of surplus-value remains unchanged, might employ an increasing or decreasing number of laborers, in consequence of contraction or expansion caused by fluctuations in the price of raw materials such as we are about to analyse here. In that case, the mass of surplus-value might vary, while the rate of surplus-value remained the same. Still, it will be convenient to set aside also such a case as a side-issue. If improvements of machinery and changes in the price of raw materials simultaneously influence either the number of laborers employed by a certain capital, or the level of wages, one has but to tabulate 1) the effect caused by the variations of constant capital in the rate of proflt, and 2) the effect caused by variations in wages on the rate of proflt. The result then becomes apparent of itself. ■ But in general, it should be noted here, as in previous cases: If variations take place, either in consequence of economies in the constant capital, or in consequence of fluctuations in the price of raw materials, they alwaj^s affect the rate of proflt, even though they may leave the wages, and therefore the mass and rate of surplus-value, untouched. They change the magnitude of the C in s' -^, and thus the value of the whole fraction. It is therefore immaterial, in this case, in contradistinction to what we found to be the case in our analysis of surplus-value, in which sphere of production these variations 126 Capitalist Production.
take place, whether the lines of production affected by them produce articles of food for laborers, or constant capital for the production of such articles, or not. The deductions made here ajjply just as well if these variations occur in the production of articles of luxury, and by the production of articles of luxury I mean all production not serving for the reproduction of labor-power.
In the raw materials we include here also the auxiliary substances, such as indigo, coal, gas, etc. Furthermore, so far as machinery falls under this head, its own substance consists of iron, wood, leather, etc. Its own price is therefore affected by fluctuations in the prices of raw materials used in its construction. To the extent that its price is raised through fluctuations, either in the price of. the raw materials of which it consists, or of the auxiliary substances consumed in its operation, the rate of profit is lowered. And vice versa.
In the following analysis it will be necessary to confine ourselves to fluctuations in the price of raw materials, not so far as they go to make up the raw materials of machinery serving as means of production, or as raw materials in auxiliary substances applied in the operation of machinery, but in so far as they are raw materials contributing to the process in which commodities are produced. We make only this remark: The wealth of nature in iron, coal, wood, etc., which are the principal elements used in the construction and operation of machinery, presents itself here as a natural fertility of capital and becomes an element in determining the rate of profit, independently of the highness or lowness of wages.
Since the rate of profit is represented by -^, or ^-^, it is evident that everything which causes a variation of the magnitude of c, and thereby of C, must also bring about a variation in the rate of profit, even if s and v, and their mutual proportions, remain unaltered. Now, raw materials constitute one of the principal portions of constant capital. Even in industries which consume no raw material, in the strict meaning, it enters as auxiliary material, or as a component part of machinery, etc., and fluctuations in its price influence to that extent the rate of profit. If the price of raw material The Effect of Fluctuations in Price. 127 falls by the amount d, then -^, or ^, become ^A^, or (T^^v^, in other words, the rate of profit rises. On the other hand, if the price of raw material rises, then -^, or -~, become cfd> ^^ •(c+d)+v? ^^ other words, the rate of profit falls. Other circumstances remaining unchanged, the rate of profit falls and rises, therefore, inversely as the price of raw material. This shows, among other things, how important the low price of raw material is for industrial countries, even if fluctuations in the price of raw materials were not accompanied by variations in the selling sphere of the product, that is to say, quite aside from the relation of demand to supply. It follows furthermore that foreign trade influences the rate of profit, even aside from its influence on wages through the cheapening of the necessities of life, for it affects the prices of raw or auxiliary materials consumed in industry or agriculture. T| is due to the imperfect understanding of the nature of the rate of profit and its specific difference from the rate of surplusvalue that economists (like Torrens) give a wrong explanation of the marked influence of the prices of raw material on the rate of profit, as demonstrated by experience, and that on the other hand economists like Eicardo, who cling to general principles, misapprehend the influence of such factors as the world's trade on the rate of profit.
We may realise, then, the great importance of the abolition or reduction of tariffs on raw materials for industry. Already the first rational development of the protective system made the utmost reduction of import duties on raw materials one of its cardinal principles. This, and the abolition of th<^ duty on corn, was the main object of the English free traders, who took also, above all, care to have the duty on cotton abolished.
The use of flour in the cotton industry may serve as an illustration of the importance of a reduction in the price of an article, which, although not strictly raw material, is an auxiliary and, of course, at the same time one of the principal elements of food. As long ago as 183Y, E. H. Gteg ^^ " The Factory Question and the Ten Hours Bill. By R. H. Greg. London, 128 Capitalist Production.
calculated that the 100,000 power looms and 250,000 hand looms then operated in the cotton mills of Great Britain consumed 41 million lbs. of flour in the smoothing of chains. To this was added a third of this quantity for bleaching and other processes. The total value of the flour so consumed was placed by him at 342,000 p.st. per year for the preceding ten years. A comparison with the prices of flour on the continent showed that the raise in the price of flour forced upon the manufacturers by the corn-laws amounted alone to 170,000 p.st. per year. For 1837, Greg estimated it at a minimum of 200,000 p.st., and he mentions the fact that one firm had to pay 1,000 p.st. more per year for flour. In consequence ot this "Large manufacturers, careful and calculated business men, declared that 10 hours of labor per day would be enough, if the corn-laws were repealed." (Rep. Fact., Oct., 1848, page 98.) The corn-laws were repealed. Also the duties on cotton and other raw materials. But no sooner had this been accomplished than the opposition of the manufacturers to the Ten Hours Bill became more violent than ever. And when the ten hour day in factories nevertheless became a law soon after, the first result was an attempt to reduce wages all around.
The value of the raw materials and auxiliary substances passes entirely, and all at one time, into the value of the product in whose creation they are consumed, while the elements of fixed capital transfer their value only gradually to the product in proportion as they are worn away. It follows that the price of the product is influenced to a far higher degree by the price of raw materials than by that of fixed capital, although the rate of profit is determined by the total value of the capital, regardless of how much of this capital is consumed in the product. But it is evident — although we mention this merely incidentall}^ since we are still assuming that commodities are sold at their values, so that fluctuations of price caused by competition do not concern us here — that the expansion or restriction of the market depends on the price of the individual commodity and is inversely proportioned to the rise or fall of this price. For this reason we note in reality i The Eifect of Fluctuations in Price. 129 that a rise in the price of raw material is not accompanied by a corresponding rise of the price of the product, nor a fall in the price of the raw material bj a corresponding fall of that of the product. Consequently the rate of profit falls lower in one case, and rises higher in the other, than it would if products w^ere sold at their value.
Furthermore, the mass and value of the employed machinery grows with the development of the productivity of labor, but not in the same proportion as this productivity, in other words, not in the same proportion as the machine increases its output. Those lines of industry, which consume raw materials, so that the objects on which they expend their labor are themselves products of previous labor, express the growing productivity of labor precisely by the proportion in which a certain increased portion of raw material absorbs a. definite quantity of labor. In other words, this increasing productivity is measured by the increasing amount of raw material converted into products, worked up into commodities, for instance, in one hour. To the extent, then, that the productivity of labor is developed, the value of raw material forms an ever growing component of the value of the product in commodities, not only because it passes wholly into them, but also because every aliquot part of the aggregate product contains an ever decreasing share of that portion which represents the wear of machinery and that other which represents newly added labor. In consequence of this falling tendency the other portion of value which represents raw material increases correspondingly, unless this growth is counterbalanced by a proportionate decrease in the value of the raw material due to a growing productivity of the labor required for its production.
Again, we know that the raw materials and auxiliary sul> stances, the same as wages, form parts of the circulating capital and must be continually reproduced in their entirety through the sale of the product, while the machinery is renewed only to the extent that it wears out, a reserve fund being accumulated for that purpose. And it is not so essential that each individual sale should contribute its share to this reserve fund, so long as the total annual sales contribute their 130 Capitalist Production.
annual sliare. We see, then, once more that a rise in the price of raw material can curtail or clog the entire process of reproduction, since the price realised bj the sale of the commodities may not suffice to reproduce all the elements of these commodities. Or, it may render a continuation of the process on a scale fitting for its technical basis impossible, so that either a portion of the machinery remains idle, or the whole machinery works only a part of the usual time.
Finally, the expense due to waste varies in direct proportion to the fluctuations in the price of raw material, rises and falls with them. Of course, there is a limit also in this case. In 1850 it was still reported, in the factory reports for April, 1850, page 17, that one source of considerable losses through the raising of the price of raw material would hardly be noticed by any one who is not a practical spinner, namely losses through waste. The reporting inspector had been informed that a rise in the price of cotton implied a greater rise in the expenses of the spinner than is indicated by the difference in price. The waste in the spinning of coarse yams amounts to fully 15%. If this percentage causes a loss of -| d. per lb. when cotton is worth 3^ d., then the loss increases to 1 d. per lb. as soon as cotton rises to T d. per lb. But when, as a result of the American Civil War, cotton rose to a height not equalled in almost a century, the report read differently. We learn from the factory reports of October, 1863, page 106, that the price then paid for cotton w^aste, and the return of the waste to the factory as raw material, offered some compensation for the difference in the loss through waste between Indian and American cotton.
This difference amounted to 12^%. The loss in working up Indian cotton is 25%, so that really this cotton costs the spinner one-fourth more than he paid for it. The loss through waste was not so important while American cotton was quoted at 5 or 6 d. per lb., for it did not exceed f d. per lb. But it became a matter for serious consideration, Avhen cotton cost 2 sh. per lb. and the loss through waste amounted to 6d.-^^