Modern Capitalism – The Marxist View: Part 4 Treachery!! Предательство!! The feared “Soviet” secret service, the KGB, was always controlled by the the CIA (Central Intelligence Agency of the USA). As such, the CIA - KGB played an insidious and decisive role in the destruction of the Soviet Union. The KGB's successor in conspiracy, the “Russian” secret service FSB (ФСБ - Федеральная служба «безопасности» России) is likewise controlled by the CIA. Among the manifold CIA – FSB tasks in stifling Arnold Lockshin is to block almost all commentaries sent in response to my material on the internet. Arnold Lockshin, political exile from the USA living in Russia ФСБ - Федеральная служба «безопасности» России - по приказу своего секретного постоянного хозяина - американского ЦРУ блокирует почти все отправленные мне комментарии. И это далеко не всё. Арнольд Локшин, Политэмигранта из США /////////////////////////////////////////////////////////// Two departments of production. Two main sectors of the capitalist (or for that matter, socialist) economy are evident. Marx called these two main sectors “departments.” Deparment 1 is that part of the economy devoted to producing the means of production. Department 2 produces consumer goods. The aggregate social product of each department is composed of constant capital (c), variable capital (v) and surplus value (s) or c(1) + v(1) + s(1) and c(2) + v(2) + s(2). Simple capitalist reproduction. The process of production uses up raw materials and fuel (rapidly) and equipment and buildings (slowly). The products that are manufactured, whether capital or consumer goods, are consumed. All these must be reproduced for the economy to go forward. This process of renewal of production is called “reproduction.” Marx analyzed two types of reproduction: simple and extended. In simple production, in both departments capitalists aim to receive value greater than their input values (c + v) by virtue of their expropriation of the surplus value (s) from the workers' labor. Thus the basis of inequality in society is evident. The value produced by capitalist society in a cycle (or, for convenience, a year) are simply as follows: c(1)+ v(1) + s(1) Department 1 (producer goods) c(2)+ v(2) + s(2) Department 2 (consumer goods) How are the values consumed on a yearly basis? Taking Department 2 to begin with, v(2) is used by these workers to purchase consumer goods necessary for their existence. Thus, v(2) cancels itself out, as the variable capital invested to pay wages is returned to the capitalists of Dept. 2 as they sell consumer goods to the workers. In simple production, as the money spent as wages returns to the capitalists of Dept. 2, it will be reinvested the following year again as wages, or variable capital - v(2)). Furthermore, in simple capitalist reproduction the capitalists of Dept. 2, do not extend their production, but only continue at the previous year's level and invest no additional (compared to the previous year) money in c(2) or v(2). All their profits therefore go into their purchase of consumer goods, which their department itself produces, and thus s(2) also cancels itself out. Let us examine Department 1. These capitalists also invest the same capital for c(1) as they did the previous year (remember, we are describing simple, or one may say primitive reproduction). They are merely replacing the equipment and materials at the previous year's level. Thus c(1) cancels itself out. The money invested in equipment and materials in one year is returned to the capitalist when he sells the products, and the next year he simply reinvests this money in equipment and materials for that year. What remains? v(1) representing the wages of the workers producing the means of production and s(1) representing the surplus value s(1) – on average the profits - of the Dept. 1 capitalists – all go to buy consumer goods represented by the value of c(2). Thus a condition of simple capitalist reproduction is the following: v(1) + s(1) = c (2) In highly primitive or “simple” reproduction, there is no basis for an economic crisis, as there is no unsold surplus of goods. Everything produced is consumed. The workers use their wages for consumption and the capitalists use the surplus value (profits) for their consumption. However, society remains stagnant, producing each year what it did the year before. Simple capitalist reproduction is mainly a thing of the distant past.