Saturday, December 05, 2015

Flying Time

I was reminded by a comment from a reader that it has been years since I looked at the US Department of Commerce Annual Survey of Manufacturers. Two whole years?  Imagine that. Time flies when you're in the midst of the weakest, slowest recovery since WW2.   It seems like only yesterday, which come to think of it is pretty close to being an accurate description for review of this data. 

So today, a review, and comparison, of only yesterday, or yesterdays, as the new data set is from 2013:

Column 1-- sector and NAICS class
Column 2-- years
Column 3-- C/h: total value of product divided by production worker hours, in $
Column 4-- c/h: total cost of materials used in production + repairs to buildings, equipment and machinery per production worker hour, in $
Column 5-- v/h: production labor costs--  production worker wages + 30% fringe per production worker hour, in $.  The 30% addition is derived from the ratio total fringe to the total payroll costs
Column 6-- s/h: surplus value-- C minus (c + v) per production worker hour
Column 7-- s/v: ratio of surplus value per hour to production labor cost per hour
Column 8-- s/c+v:  ratio of surplus value per hour to (c +v)

Class          Year       C/h       c/h          v/h         s/h           s/v      s/c+v
Manuf 2011369.85 225.77 28.06 116.02 4.13 0.46
       31-33 2013 371.55 222.62 28.14 120.79 4.29 0.48

Petroleum 2011 5889.97 5101.11 48.31 740.56 15.33 0.14
324 2013 5855.75 5002.81 49.81 803.13 16.12 0.16

Food 2011 327.02 211.71 22.11 93.22 4.22 0.4
311 2013 345.91 225.84 22.43 97.63 4.35 0.39

Machine 2011 294.65 160.34 29.78 104.53 3.51 0.55
333 2013 285.87 149.03 29.54 107.31 3.63 0.6

Transp Eq 2011 416.78 261.92 35.97 119.19 3.31 0.4
336 2013 422.69 258.83 34.51 129.36 3.75 0.44

Computer 2011 445.75 188.89 33.63 223.23 6.64 1
334 2013 428.76 169.04 33.81 225.92 6.68 1.11

Chemical 2011 925.45 506.19 37.16 382.11 10.28 0.7
334 2013 901.04 486.43 37.12 377.49 10.17 0.72

Check the "growth" of  labor costs.  The layoffs, wage reductions, work-rule changes, givebacks have done their job.  Wage and benefit portions of the total product have been reduced even where the total value per hour has declined. The rate of surplus value has increased, even if only modestly, in all sectors save chemical production.

The sector wide declines in total value per hour, C, are the result of deflation in the cost of the materials required for production.  The  increased ratio of surplus value, i.e. the reduction in the time necessary for reproducing the value of the laborer, the wage and fringe,  and the reduction in the cost of materials have combined to boost the rate of production profit.  The offsetting tendencies generated by the earlier decline in the rate of profit itself have generated something that might look like recovery if only...

If only the decline in the cost of inputs into production was not a manifestation of the devaluation of capital; if only the decline in the cost of inputs was not the result of overproduction beyond capital's capacity for accumulation; if only the increase in the relative profit, under the previous two conditions, would not translate, in just one or two tomorrows (like 2015, and 2016) to a decline in the absolute profit, in the mass of profit, which it will, which it must. 

We have come to the point where the offsetting tendencies generated by the decline in the rate of profit have made manifest the chronic tendency of capitalism toward overproduction and devaluation.  

In his Grundrisse, Marx writes:
On the one side, then, it calls to life all the powers of science and of nature, as of social combination and of social intercourse, in order to make the creation of wealth independent (relatively) of the labour time employed on it. On the other side, it wants to use labour time as the measuring rod for the giant social forces thereby created, and to confine them within the limits required to maintain the already created value as value.(Notebook VII, p.706).
Sometimes I wonder if even Marx realized how right he was-- capital must confine the giant social forces created within the limits required to maintain the already created value as value.  Yet in these very, and various,  attempts devaluation is the "ultimate" commodity.

S. Artesian
December 5, 2015

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