Abstract
Turning to the next type of relation, structural relations, the author analyses how these relations form between functionally related categories within one or more economic events at the same stage of the circular flow of economic activity. Structural relations represent bridges that link various economic flows into a society’s unique manifestation of economic activity, Rohatinski says, and ease qualitative-quantitative homogenisation or diversification of partial economic flows and relevant economic categories.
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Notes
- 1.
This occurs because the part of the value of labour instruments transferred to commodities, which is transferred back into the form of money upon its realisation on the market, is at the onset of the following circuit of money capital (if labour instruments were not fully utilised) not advanced for the purpose of renewal of these instruments, but, according to Marx, accumulated into reserve funds of money.
- 2.
Marx believed the size and structure of demand were not determined exogenous to the structure of production and production relations in a society. In his view, demand does not represent the “social demand” that would a priori define the size and the purpose-related structure of production, but instead class relations in a society and, therefore, the ratio of surplus value to wages and relations in the distribution of surplus value essentially determine social demand. Marx acknowledges that demand for commodities appeared “at first sight” to be at a level set by society to sate its own desires, but then pointed out that this demand is very elastic and subject to the whims of factors such as changes in prices and wages. Beyond this, capitalists also influence consumer demand by, for instance, producing more cotton-based products as price or cotton drops to capture more surplus value (Karl Marx, Capital. Vol. 3, The Process of Capitalist Production as a Whole [New York: International Publishers, On-line version: Marx.org, 1996] 138).
- 3.
Relations in the purpose-related structure of production included in Marx’s schemes of extended reproduction have been discussed by many later theorists, who looked particularly at the causes of economic crises and whether the underlying “purpose” of capitalist production was production or consumption . The prevailing view leaned towards labour instruments of the first sector as the driving force behind production rather than the production of goods for consumption.
However, technological advances, along with changes in the rate of accumulation and societal structure (the development of hierarchical systems), have overtaken this perspective . For example, in 1976 Branko Horvat said the growth rate of the total production, r, was a function of the share of production of the first sector in the total production, s = P1/P; the share of material expenses and expenses of the replacement of labour instruments in the value of production, u=U/P; and the capital coefficient, k, and its change over time, k’. From this, the growth rate of the total production would be: r = (s − u)/k − k'/k. This result allowed for various combinations of production growth rates in the first and second sector, whether production were growing, falling, or stagnant. This combination depended on the features of the “technical parameters” and preferences of an organiser or moderator of the production process (Branko Horvat, Odabrane teme iz ekonomske analize (Selected Topics from Economic Analysis) [Zagreb: Faculty of Foreign Trade, 1976]).
- 4.
Marx uses this indicator with an assumption of the total advanced capital turned over in one circuit.
- 5.
Viewed in this context, the rate of depreciation , a', and relative size of capacity, k, for an average circular flow of reproduction of the total advanced capital, may be defined as:
$$ R={N}_S:D{T}_{\varnothing }, and\ \mathrm{therefore}\ {a}^{\prime }=R:{N}_S $$$$ k=\sum_1^{D{T}_{\varnothing }:D{T}_{T(PR)}}{N}_{T(PR)}:{N}_S $$
References
Horvat, Branko. 1976. Odabrane teme iz ekonomske analize (Selected Topics from Economic Analysis). Zagreb: Faculty of Foreign Trade.
Marx, Karl. 1956. Capital. Vol. 2, The Process of Circulation of Capita. Moscow: Progress Publishers.
———. 1996. Capital. Vol. 3, The Process of Capitalist Production as a Whole. New York: International Publishers. On-line version: Marx.org.
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Rohatinski, Ž. (2017). Structural Relations. In: Time and Economics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-61705-3_8
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DOI: https://doi.org/10.1007/978-3-319-61705-3_8
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