constant capital and variable capital

constant capital and variable capital

(MARXISM) the distinction between capital embodied in raw materials and plant and machinery, termed constant capital because it can bring no more to the value of output than its own value, and capital expended to purchase labour power, termed variable capital which, since it alone involves new work, is seen by Marx as possessing the capacity to create VALUE. See LABOUR THEORY OF VALUE, SURPLUS VALUE, ORGANIC COMPOSITION OF CAPITAL and CAPITALISM AND CAPITALIST MODE OF PRODUCTION.
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In turn, as surplus-value passes through the circuits of industrial, money and commodity capital, it takes the form of profit of enterprise, of interest, and, in the case of land-based production, of ground-rent, whereby a quite stable absolute ground-rent is secured by holders of title to land and a differential ground-rent arises from variations in the productivity and profitability of mineral deposits once constant capital and variable capital are applied to them.
As the ratio between constant capital and variable capital shifted in favour of constant capital, this led to the associated tendency for the rate of profit to fall, as evidenced in lower extraction of gold per unit of labour-power from mechanised mining than from surface mining.
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