We've spent a large chunk of time, and Marx has spent many pages, reflecting on the nature of surplus-value and the two kinds of surplus-value: 'absolute', which arises from extending the length of the working-day and 'relative', which arises out of
increases in productivity which are given either by organizational transformations in cooperation of division of labor, or by the hardware in the form of machinery and the factory system and the like. As is typical with Marx, when he does a grand bifurcation of this kind— from saying 'the surplus-value, you've got to look at the two forms' he then wants to put them back together again— because in the end there is only
one form of surplus-value. And so he is going to insist that you couldn't have 'absolute' unless there was a technical basis for it and an adequate organizational form for it. You couldn't have 'relative' unless there was 'absolute'. So, clearly, they are interdependent, and in a sense we have to consider them as unified in the creation of surplus-value. But he insists on keeping the distinction because this helps us understand something about capitalist strategies as they're searching for surplus-value. That is,
their strategy can emphasize the absolute or it can emphasize the relative. And, so, that in terms of strategic possibilities for the capitalist in search of surplus-value, we have to always bear in mind this 'dual' character
of the way in which surplus-value can be gained. As usual with Marx, he does a couple of things in this chapter which are sort of summary points. But actually, both of the summary points he produces in this chapter have been the center of a great deal of controversy, and, therefore, I think we should explain a little bit what those controversies are and how those controversies have arisen. To begin with, he has several times in proceeding chapters introduced the idea of the 'collective laborer', so that the extraction of surplus-value is no longer an individual thing that goes on between a particular individual laborer and the capitalist, but is now seen as part of a collective aspect. And the difficulty with this is it raises the question: Where does the collective laborer begin, where does the collective laborer end? There was a simple, version of that which would say that if you see a factory you would say 'the collective labor is all of that that's inside of the factory', which would include the people making the stuff,
the people who are pushing the loads of cloth around or the people who are cleaning the floors, etc. So you could come up with a sense of saying 'everybody who's employed in the factory is a collective laborer, some of those people in the factory would not be doing the actual work of production, they would be ancillary to it in some way or other'. But, you can see immediately, then, issues arise when you say things like, what do you do with sub-contractors? Or: The sub-contracting parts into the factory: are they parts of a collective laborer or are they not? What about sub-contractors to the sub-contractors? What do we do about the outsourcing of, say, mental aspects in design and engineering forms, and so on? So, actually, there's a lot of controversy over exactly what is meant by collective labor and how to configure the idea of collective labor. Because if you decide to say 'it's just inside the factory', then you get one definition. If you start to proliferate it, you can end up with almost everybody who's employed in a capitalist society, including people employed in banks, and all the rest of it. So, there's a lot of controversy over what he means by 'collective labor'. But, nevertheless, it doesn't invalidate his point, which, I think, is a very important one, which is that you can only go so far in examining this dynamic of extraction of surplus-value by using this figure of the individual laborer in a capacity to labor contracting their labor-power to the capitalist. You can only go so far with that. You now have to move to a somewhat different perspective. And as we'll see in subsequent chapters he's much more interested in moving from what you might call the 'micro' perspective of the individual laborer to the whole field class relations. And, as you make that move from the individual laborer to class relations you could argue that the notion of the 'collective laborer' is a way of accomplishing that part of that transition. The second thing he does is to say that the notion of the collective laborer broadens our idea of what we're talking about but, when we reflect back on what we've done, we also have to narrow it to the idea that "productive labor" is productive labor only insofar as it produces or contributes to the production of surplus-value. Now, this also has been the object
of very considerable discussion. In part, it's kind of an emotive thing, because nobody likes to be called 'unproductive'. So, if you say to somebody 'you are in the unproductive laborer camp', people get kind of irritated, and they
don't like that. So they say 'well, no!' Marx tries to modify that point by saying 'but actually, under capitalism, to be a productive laborer is a misfortune'. So, not to be a productive laborer is something you should be really looking for, i.e. not to produce surplus-value for the capitalist. I think his point is very valid, which is: the definition of 'productivity' under capitalism is the capacity to produce surplus-value. This is not a normative statement! It's not a normative statement in the sense that says that's true for all times and all modes of production. In fact, you could argue that a revolutionary movement would try to do away with that particular definition of 'productivity'. And what it would seek for is another definition of 'productivity'; 'social worth' or something of that kind. Marx is saying 'you take this wide possibility of productive labor, but what capitalism does is to narrow it down to the point where if you don't produce
surplus-value for the capitalist, you are deemed not to be productive.' So, it is something which is defined by capital. But then here, too, the question is: who contributes to the production of surplus-value? And this will take us back to some of the debates which were
very strong in the early 1970s between socialists-feminists and some Marxists, saying 'actually, you have to see the domestic sphere as being productive in the sense that it actually reduces the cost of reproduction of labor-power, and by so doing actually allows a lower wage to be paid, and therefore, is productive within the whole system'. So, again, I want to signal to you, I'm not going to give you any answers to these debates, I want to signal to you both the concepts of the 'collective laborer'
and the 'productive laborer' are controversial historically, and
need a great deal of nuancing if you want to push the theory into practical realms of application. There is also one other point to be noticed here, and that is there is a connectivity between Marx's definition of 'collectivity' and the definition of 'productive labor'. In a sense you could argue that the definition of the 'collective laborer' — from the standpoint of a class definition — is going to be constituted by all of those people who contribute to — directly or indirectly — the production of surplus-value, which is going to be appropriated by the capitalist. So, you shouldn't necessarily see these two concepts as isolated from each other: they interact, intersect, with each other and create a way in which we
could start to think about the class relation which exists between capital and labor, in terms of what happens to the surplus-value at the class level. So, I see these two concepts as Marx trying to rather typically come out of this definition of absolute/relative surplus-value, and say there's obviously only one form of surplus-value with two strategies, but within that we also start to see these re-definitions occurring about what is 'productive' and what is 'collective', and that acts as a stepping stone, in a typical fashion, from the figure of the individual laborer to the notion of of class relations, which is going to be picked up on later. Now, the next two chapters are slightly (…) which deal with the way in which that the price of labor and changes in magnitude in the price of labor get set, form a transition to the discussion of wages. So, in chapter 17, for example,
he wants to point out that the mix of ways by which capitalists
can procure surplus-value — from the relative standpoint – this mix of ways is rather interesting. And, of course, he slips through and you get the point when you read the heading: “The length of the working-day and the intensity of labour constant;
The productivity of labour variable.” Then we go on to “The length of the working-day and the productivity of labour constant; The intensity of labour variable”, “The productivity and intensity of labour constant; The length of the working-day variable” And, in the final section: "Simultaneous variations in the duration, productivity and intensity of labour." Now, all of this is in a sense a little bit self-evident –that he's got 3 variables, if you like- and they contribute to the production of surplus-value in different degrees. Again, these are different strategic devices
which the capitalists have. I think the point to notice here which is a point which we're going to emphasize, and I've already emphasized it to some degree, is that Marx rarely takes any issue of this kind as if somehow or other there's a fixed outcome. That, actually, there are different ways
that capitalists can move. And, one of the themes, I think, which some people find surprising about 'Capital' is the degree to which Marx is emphasizing the flexibility of capital in relationship to the dynamics
of the situation they are in. And many of the 'external' views of Marx are 'he's a structuralist', 'he's talking about fixed structures', 'everything's fixed'. Well, when you see what he's doing here, he's saying, 'okay, I can unpack these different strategic possibilities, but how they work together in a particular situation, I can't predict. And, typically, what happens if capitalists get blocked in one direction they go in the other: if they can't do it by intensity they do it by lengthening the working-day; if they can't do it by lengthening the working-day they do it by intensity. If they can't do it by either of those,
what do they do: raise productivity. So, they have flexible strategies. And, this emphasis upon the flexibility seems to me to be one of the elements
you could take from this chapter. Even though I think the way he sets it up with three variables…you hold these two constant…and this one… is fairly self-evident. But, the flexibility that's implied in this, in terms of the dynamics of capitalism is important. But then, the chapter after that he, I think, got nervous about the idea that people would forget exactly how you define 'surplus value', so he gives you a reprise of that. This goes on several times, by the way, in 'Capital', and I think that probably what was going on was he was getting very (…) This was in his view, the great innovation of capital. And for those of us who seeped it up over the years and even those people who have not even understood it directly, some of that seems 'ok, all right, well, we know that, we know what "surplus-value" is', and so there's no issue about this… But Marx, I think, felt he really had to keep on coming back to it order to make sure we really understood it. And it's still today the case that people don't always get to the end of 'Capital' with having understood it. So, sometimes it's
a good idea that he does this. And, it's a good idea for you, if you feel uncertain in any way, to read these passages very carefully where he does this, and say: Have I really got it? Do I really know what's going on here? For instance, in these sections there's great emphasis on the difference between what labor gets, as a commodity, and what labor produces, in the way of value. So it's the difference between what labor produces and what labor gets for selling its labor-power as a commodity. That is the key difference which is there that the capitalists have to concentrate upon all the time it terms of trying to gain their surplus-value. Now, the chapters on wages,
there were 3 chapters on wages… Again, I'm not going to deal with these
in any great detail. Earlier in the chapter on the buying
and selling of labor-power, we dealt with the concept of the value of labor-power. And, the value of labor-power is the value of the commodities which are needed to keep the laborer alive at a given standard of living, at a given place, at a given time. So, we know about the value. On the other hand, wages are a price phenomenon. As Marx says of 'price': 'price' is the money name of 'value'. But, we know that the money _name_ and the money _representation_ is not the same as _value_. There is, as Marx has said several times, a distinction to be made between… there is he says a quantitative divergence between money and value, there's a qualitative divergence
between price and value. So, that the quantitative and qualitative divergence — if you go back to the chapter on money — becomes an important issue. And, it applies as much to the value of labor-power when it's converted into a money name called 'wages'. So, Marx is interested in what happens
through that 'convergence'. And, what we see immediately, is that this transformation in the money name brings us back to part of the argument that he made in the
chapter on money, where he made this kind of comment, if you remember, that, the fact that there's a quantitative divergence between the money representation of value and value is an advantage to a system which is based on anarchic market forces. And, in particular, if you go back and look at that passage, and commentaries that I was making on that passage, what you'd find me saying was that what the price system allows is tremendous fluctuations in
demand and supply to go on. And prices go up and prices go down depending upon demand and supply conditions. Value, however, is closer to what Marx there called 'natural price', i.e. the equilibrium value when demand and supply are in equilibrium. So, what does he say in this chapter? This is a place where he gets most explicit about that. This is on page 677-78. Where he says this: "It is not labour which directly confronts the possessor of money on the commodity-market, but rather the worker. What the worker is selling is his labour-power. As soon as his labour actually begins, it has already ceased to belong to him; It can, therefore no longer be sold by him." A very important sentence here which
you should always remember: “Labour is the substance and the imminent measure of value, but has no value itself.” To say that it has value itself would be a tautology. We'd be talking about the value of value. He then goes on to say: “In the expression 'value of labour', the concept of value is not only completely extinguished, but inverted; so that it becomes its contrary. It is an expression as imaginary as the value of the earth. These imaginary expressions arise nevertheless,
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from the relations of production themselves.” The expression 'value of labor' is, of course, an expression that comes from classical political economy, it's not Marx's. So he's critiquing that. He then goes on: "Classical political economy borrowed the category 'price of labour' from everyday life without further criticism, and then simply asked the question: how is this price determined? It soon recognized that changes in the relation between demand and supply explained nothing, with regard to the price of labour or any other commodity, except those changes themselves, i.e. the oscillations of the market price above or below a certain mean. If demand and supply balance, the oscillation of prices ceases, all other circumstances remaining the same. But then demand and supply also cease to explain anything. The price of labour, at the moment when demand and supply are in equilibrium, is its natural price, determined independently of the relation of demand and supply.” i.e., the 'natural price' is going to be the price of those bundle of commodities which the laborer needs to survive at a given standard of living at a given time. So this explains to you why it is that Marx does not believe that demand and supply is a crucial explanation of anything other than
all of the oscillations that go on in the market. As demand and supply converge on an equilibrium, so you get a natural price which is the price representation of value, and considered in classical political economy and also in Marx' theory as a reasonable representation of value in the monetary form. So, he's going to critique some of these phrases which you find in popular writing about the value of labor, and so on, and talk about some of the “inextricable confusions and contradictions”, as he puts it on p.679, which confuse us at the same time as they provide “a secure base of operations to the vulgar economists…” with their interest the world of appearance. What then follows is a summary of some of the argument in 'Capital'.
Now, chapter 20 and 21, really kind of say that once you get into this price form, again, go back to the chapter on money, and you'll see Marx talking about the 'price form' as not only the money name but, also,
being able to oscillate and to diverge in all sorts of ways. Which, of course, leads to the way in which prices and price movements mask fundamental relations. And, in exactly the same qualitatively, Marx says, as a soon as you can hang a price on anything, you can do it on conscience, and honor, and all these other things which are not commodities. So, you can actually partition labor up
in different ways, and say 'I'll pay you by the hour, I'll pay you by the minute, I'll pay you by the week, I'll pay you by the month, or, I'll pay you by the piece'. So, capital, once it gets into the price domain, has all kinds of choices to make those masks even more explicit. So, you hide the extraction of surplus-value behind all of these varied wages systems: time wages, piece wages, … and Marx writes about the qualities of both. And, again, I don't think there is anything particularly difficult about this, and I suspect most of you are fairly familiar with these differences. But, again, clearly, capital has a number of different strategies. It's not only stuck with exploiting the worker just like that. No, it has a system of time wages, different temporalities involved. It has piece systems and hybrid forms, and all the rest of it. So, again, Marx is looking at the way the different strategies that capital has in terms of determining what wages are about, and how wages are going to be allocated, in order to mask… in a sense, it's a deliberate fetishization of the social relation between capital and labor through both the setting up of the price system (which is a necessary fetishism) and then even using the fetishistic constructions, like value of labor and so on, to confuse you ideologically, and, at the same time using all of these mechanisms
in order to confuse you even further. So, what Marx is doing here is to take these issues and lay them on the table so
that we see very clearly what a capitalist mode of production is about. In the final section — National Differences in Wages — Marx is harking back to the argument he utilized in Chapter 17 — where he talked about the different strategies whereby you can produce surplus-value. And, those different strategies have different impacts upon those commodities which fix the value of labor-power. And what, we have to acknowledge is that those different strategies are likely to vary from one place to another: that in France they may be different from the United States, which is different from Britain. So, what Marx is here prepared to concede is that out of this, what you would get is, even in a situation where there's an equal standard of living in terms of material goods between those different places, you would get different values of labor-power because you'd have different prices of those products which determine the value of labor-power. In other words, if I go into a high productivity strategy in order to gain surplus-value in the production of shoes, because that's the best way I can go in Britain, then the value of shoes is going to drop. And, if the value of shoes is important in the value of labor-power then the value of labor-power is going to drop even though people have the same amount of shoes. If you didn't do that, and you had, say still an artisanal production of
shoes somewhere else, they would be of much higher value, and therefore you'd have to pay labor more, they'd have a much higher value. So Marx is really talking about the way in which uneven geographical development can arise out of these different strategies which capitalist have in different situations in different places in different times. in his instance he's talking about the difference between nation states but you could also find regional differences, within say the United States or regional differences within France. So these regional differences can start to become important. Again, he doesn't talk about this at great length, he indicates that it's an issue. There is a moment there where he also suggests that these differentials in the value of labor-power can in fact
lead to situations in which values starts to be transferred from one particular political space to another. That is, it's possible to get a hint here of what is called 'unequal exchange', and the unequal exchange between the nation states can then start to set up ways of extracting surplus-value through that unequal exchange, but he doesn't elaborate upon it, he barely hints at it. All he seems to want to do here is to talk about the way in which
wage rate determination in different spaces of the world economy are not only going to be confused by the temporal and the piecework stuff, it's not only going to be confused by all of that, it's also going to be confused geographically by these differences which can arise. Okay, let's go on then to look at the next section, which is part seven. Part seven, just to set the stage, is I think the culminating argument of
Volume One of Capital. It's here where he starts to put all of
the bits and pieces together and create an understanding of the dynamics of a capitalist mode of production. So we're now going to talk about the capitalist mode of production as a whole. In order to do that we have to move, as I've already suggested, to looking at class relations rather than individuals. And this shift to understanding the capitalistic mode of production as a totality is I think… you have to grasp what that shift is about. And the first thing Marx does is, in this two page prologue he lays out what could best be described as some key assumptions in terms of how he's gonna to unpack this capitalist mode of production. He starts off by saying,
bottom of the first paragraph, he's going to be talking now
about the circulation of capital in general and it's accumulation. but then he says: “The first condition of accumulation is that the capitalist must have contrived to sell his commodities, and to reconvert into capital the greater part of the money received from their sale. In the following pages, we shall assume that capital passes through its process of circulation
in the normal way. The detailed analysis of the process will be found in Volume 2.” Now, what does this mean? Throughout Volume 1 of Capital so far we've been assuming that all commodities are sold at their value and he's going to assume that in the argument that follows. What does that mean? It means there's always somebody somewhere or other who wants the commodities as use value, and somebody somewhere who has the money to pay for it. There is in effect no problem in the market, the market is always in equilibrium, there's never any overproduction or underproduction, because everything is being sold at its value, not less than its value, not more than its value, but at its value. Therefore he's going to assume
a market equilibrium situation, to put it in Keynesian terms: there is no problem of lack of effective demand. Now, is that a reasonable assumption? The answer is: not at all. There are a lot of problems in the market, in fact a lot of crises arise out of lack of effective demand, as Keynes described etc. And we will get into the forms of those crises when we start to do Volume 2 of Capital, but for purposes of Volume One he assumes those problems do not exist. This is a classic tactic of modeling anything, you assume something constant so you could look at something that's variable, and he is going to look at something that's varying, and I think what he looks at is extremely interesting. But that doesn't mean that what he's going to describe in the pages that follow is a full model of a fully operative capitalist mode of production. It's a partial model, and we're going to look at a capitalist mode of production
through a certain window and we're going to describe what we see from that window. And we're gonna see a lot of very interesting things but it's not the only window you can use. In Volume 2 he uses the consumption realization window and we see another lot of things. Volume 3 he tries to put those together and says these are in contradiction to each other therefore, when you go to the third window, as it were in Volume 3, you see another set of things, because you remember what you saw from the Volume 1 perspective and what you saw from the Volume 2 perspective, and you then start to get a better idea of the foundational contradictions of
a capitalist mode of production. But from this standpoint, he's going to assume this. The second thing he assumes is in the next paragraph, he says, well we know in practice “The capitalist who produces surplus-value… is by no means its ultimate proprietor. He has to share it afterwards with capitalists who fulfill other functions in social production taken as a whole, with the owner of the land, and with yet other people. Surplus- value is therefore split up into various parts. Its fragments fall to various categories of person, and take on various mutually independent forms, such as profit, interest, gains made through trade, ground rent, etc.” You could include taxes in the “etc.”. “We shall be able to deal with these modified forms of surplus-value only in Volume 3.” There on the next page he explains why… this (…) and the first assumption even further. What this means is that he's going to look at the way the system works without any consideration of the way
the surplus-value gets split up, between financiers, merchant-capitalists, landlords, the state etc. And he's going to assume that their activities really play no disturbing role on the capitalism he's going to describe. And again, by the time you get to the end of Volume 3 you realize that actually, particularly something like finance capital, money capital, plays an incredibly important role in the dynamics of what capitalism is about. If I tried to persuade you that actually Volume 1 is the only proper analysis in today's world, when Citibank is going down the tube, Merrill Lynch is falling apart, the stock market is crashing, you'd say this is an irrelevant analysis here compared to what is actually
going on in capitalist society. But Marx again wants to get a very clear perspective on the dynamics of capitalism from this one window, he's excluding these complications from his story. He's going to assume there's only one capitalist who extracts surplus-value and he's going to look at the relationship between the working class and the capitalist class as if the capitalist class is just a homogeneous entity, which it's not. And we know it's not and Marx knows it's not. If you go read something like “The 18th Brumaire” you'll find all of these factions, like industrial capital, the financiers, often at loggerheads with each other, actually doing all kinds of different things. Again, these assumptions are important. Now there's a third assumption which he doesn't introduce here, but which he introduces on p. 727 in a footnote. But I'm going to do introduce it here because this is also important, Footnote 2 on page 727, he says this: “Here we take no account of the export trade, by means of which a nation can change articles of luxury either into means of production or means of subsistence, and vice versa. In order to examine the object of our investigation in its integrity, free from all disturbing subsidiary circumstances, we must treat the whole world of trade as one nation, and assume that capitalist production is established everywhere and has taken possession of every branch of industry.” What this in effect says, what this assumption says is Marx is going to look at capitalism as if it is in a closed system. No colonies, no colonial trade, no export markets. It's a closed system. Now these three assumptions are very strong assumptions, no problems in the market no issues arise out of the way in which the surplus gets distributed and we're looking at a closed system.
They're very strong assumptions. What you then have to understand is that most of the analysis that follows, not all but most of the analysis that follows, is contingent upon those assumptions. so if he says, well this and this and this will happen, well he means this and this and this will happen in a situation of this sort where there are no problems in the market, where there's no issues of foreign trade and where the issues of the distribution of the surplus are irrelevant. Now the reason I emphasize this is because people who've criticized Marx, are very fond of
taking certain statements of his and saying 'well this is not true, so obviously the guy's an idiot, not worth reading' and some of their favorite passages that they do this with are the passages which come in the chapters that follow. They take it that Marx is talking about capitalism, he's not, he's talking about capitalism seen from one perspective, and when people say obviously he doesn't understand what capitalism is about because what he said on page 766 is totally wrong, and they cite it and say 'see, don't bother reading Marx, because he's obviously wrong'. Well, the answer is that he's not wrong, it's just that he's making a set of statements which are contingent upon these assumptions, and a full analysis of what a capitalist society is going to look like is going to have to wait till the end of Volume 3 or Volume 4 of Capital, unfortunately he never got there. But our task is maybe to get there if we can and at the same time recognize that Volume One, which is something he did complete for publication, has this quality to it. And not fall into the trap and actually some pro-marxists do this, to take some statement in here and turn it into a dogma, Marx says …, yeah, I know he said that but that is a contingent statement, it is not an absolute truth. In reading this please remember all the time that we're dealing with contingent statements, contingent on these assumptions, and these assumptions are clearly laid out.
I always find it odd that in a lot of readings of Capital people don't pay any attention to these couple of pages. But they're crucial for setting the stage for what is about to follow. And what follows are three chapters. The first of which is about simple reproduction, and Marx immediately poses the question: How does a society reproduce itself? how does capitalism get reproduced? and again we first look at this in simplified form, by imagining that all of the surplus-value which is produced is consumed away. so that all that happens is that capitalism reproduces itself in a stationary state. We know that's unlikely for all sorts of reasons and the next chapter we see why. But again we can construct a model, as it were, of simple reproduction and by simplifying the argument we can see certain critical elements in how a capitalist mode of production really works. So his task here he says is to look at this system “as a connected whole, and in the constant flux of its incessant renewal, every social process of production is at the same time a process of reproduction.” And so we are interested therefore in the capitalist system not only of production but of reproduction. When we start to look at it here from the standpoint of a class perspective, what simple reproduction suggests, as he says at the bottom of p.712, is a certain positionality of the working-class, of the worker, he says: “What flows back to the worker in the shape of wages is a portion of the product he himself continuously reproduces. The capitalist, it is true, pays him the value
of the commodity in money, but this money is merely the transmuted form of the product of his labour.” So having reproduced labor-power, the worker receives money equivalent of what the worker has actually already produced. Top of p.713: There is an “illusion” which is “created by the money-form” but this “vanishes immediately if, instead of taking a single capitalist and a single worker, we take the whole capitalist class and the whole working class.” Here comes I think the crucial passage: “The capitalist class is constantly giving to the working class drafts, in the form of money, on a portion of the product produced by the latter and appropriated by the former. The workers give these drafts back just as constantly to the capitalists, and thereby withdraw from the latter their allotted share of their own product. The transaction is veiled by the commodity-form of the product and the money-form of the commodity. ” Now what does this describe? This describes really the working-class is in a kind of company store relation to capital, I think that's the best image for it, right? That's where the worker is. The worker makes the product, and then is given money to buy part of their own product back. The result, says Marx, is that variable capital “is therefore only a particular historical form of appearance of the fund for providing the means of subsistence”. Now, variable capital is a form of circulation which goes through the body of the worker. But then on p.714, Marx makes some interesting gestures, this is going to come up again: “Variable capital, it is true, loses its character of a value advanced out of the capitalist's funds only when we view the process of capitalist production in the flow of its constant renewal.” When we thought of it individually, the capitalist had some money, advanced it to buy the labour-power, in order to do that the capitalist had to have an original concentration of money. So Marx here introduces the idea of primitive accumulation, that the capitalist must have gone out and found some way to get the right amount of money to be able to do this. So there must have been a beginning where the capitalist went out and stole or robbed or did something
or other to get the money. And that of course is going to be the topic of part 8 of Capital. Then Marx does a very interesting exercise: “If a surplus-value of £200 is generated every year by the use of a capital of £1,000, and if this surplus-value is consumed every year, it is clear that when this process has been repeated for five years, the surplus-value consumed will amount to 5 X £200, or the £1,000 originally advanced. ” Then he goes on in this vane to end up but at the bottom of p.715, long paragraph: “When a person consumes the whole of his property, by taking upon himself debts equal to the value of that property, it is clear that his property represents nothing but the sum total of his debts. And so it is with the capitalist; when he has consumed the equivalent of his original capital, the value of his present capital represents nothing but the total amount of surplus-value appropriated by him without payment. Not a single atom of the value of
his old capital continues to exist.” Marx is arguing here with John Locke, because John Locke took the view that private property arises out of the way in which individuals mixed their labor with the land, and to the degree that they mixed their labor with the land, they had a right to appropriate that land. But who is mixing their labor here with the land and the means of production? The laborer. So what Marx is doing is saying:
If you take the Lockean theory seriously, the capitalist who started out with £1,000 would lose £200 every year because they'd consume it away. If they consumed away the surplus it would be like consuming away £200 each year of the original £1,000. At the end of five years they consumed away their original wealth, they do not have the right to that wealth anymore. Because they didn't mix their labor with the land or with the means of production, the laborer did. Now what happens then is that surplus-value which is generated by the worker becomes capitalized, Marx says on p.715. What we're now beginning to see is a process by which labor produces capital. He started off with the argument, as if capital existed and then employed the worker and took on the worker, but we're now gonna look at the whole way in which the worker produces capital. This Lockean argument that erupts on p.714-15 or anti-Lockean argument that erupts there is I think a very useful starting point to go into what follows. Because it's the unpaid labour which is gonna form the capital down the down the line. On p.716 at the bottom Marx says: “Therefore the worker himself constantly produces objective wealth, in the form of capital, an alien power that dominates and exploits him; and the capitalist just as constantly produces labour-power, in the form of a subjective source of wealth which is abstract, exists merely in
the physical body of the worker, and is separated from its own means of objectification and realization; in short, the capitalist produces
the worker as a wage-labourer.” So there's a mutual co-production going on here, where the worker produces the capitalist and the capitalist produces the worker. On p.717 this leads to the formulation that says actually the worker consumes in two ways: there is productive consumption i.e. the way the worker consumes
materials in the labor process then there's the individual consumption which is the way in which the labor consumes in order to reproduce his or her own life. So when we start to look at that, again, not in terms of individuals, but in terms of the capitalist class and working class, as Marx proposed at the bottom of p.717, we get this company store thing laid out, he says: “By converting part of his capital into labour-power, the capitalist valorizes the value of his entire capital.” So the worker not only produces their own means of production, they also produce the capitalists'. he says: The capitalist “kills two birds with one stone. He profits not only by what he receives from the worker, but also by what he gives him. The capital given in return for labour-power is converted into means of subsistence which have to be consumed to reproduce the muscles, nerves, bones and brains of existing workers, and to bring new workers into existence. Within the limits of what is absolutely necessary, therefore, the individual consumption of the working class is the reconversion of the means of subsistence given by capital in return for labour-power into fresh labour-power which capital is then again able to exploit. It is the production and reproduction of the capitalist's most indispensable means of production: the worker. The individual consumption of the worker, whether it occurs inside or outside the workshop, inside or outside the labour process, remains an aspect of the production and reproduction of capital, just as the cleaning of machinery does, whether it is done during the labour process, or when intervals in that process permit.” And then Marx makes some comment about “The maintenance and reproduction of the working class remains a necessary condition… But the capitalist may safely leave this to the worker's drives for self-preservation and propagation.” p.719 this leads to the idea: “From the standpoint of society, then, the working class, even when it stands outside the direct labour process, is just as much an appendage of capital as the lifeless instruments of labour are.” Now you come up on this idea of the laborer as an appendage of capital inside the labor process, within division of labor and also even more spectacularly within machinery, but now we're seeing that the laborer is actually an appendage of capital outside, in the marketplace, in the reproduction process. And Marx then goes to one of his favorite figures, Mr Potter, not Harry but the other. Whereby, as he puts it on p.723: “Capitalist production therefore reproduces in the course of its own process the separation between labour-power and the conditions of labour. It thereby reproduces and perpetuates the conditions under which the worker is exploited. It incessantly forces him
to sell his labour-power in order to live, and enables the capitalist to purchase labour-power in order that he may enrich himself. It is no longer a mere accident that capitalist and worker confront each other in the market as buyer and seller. It is the alternating rhythm of the process itself which throws the worker back onto the market again and again as a seller of his labour-power… …In reality, the worker belongs to capital before he has sold himself to the capitalist. His economic bondage is at once mediated through, and concealed by, the periodic renewal of the act by which he sells himself…” So we come to the fundamental conclusion of this chapter: “The capitalist process of production, therefore, seen as a total, connected process, i.e. a process of reproduction, produces not only commodities, not only surplus-value, but it also produces and reproduces the capital-relation itself; on the one hand the capitalist, on the other the wage-labourer.” It's interesting here: Marx does not look on the reproduction of the capitalist order as primarily a technical problem or
a quantitative flow problem, but as a reproduction of the social relation problem, it's a reproduction of the social relationship between capital and labor which is at the heart of the issue. Let's look at this diagrammatically for a minute and see what we get. We have the capitalists who begin with money, they begin with money. What do they do? they go into the market and then they buy labour-power. and they buy means of production. And then bring these two things together in a labour process, the act of production. Out of this labor process there comes a commodity which is then sold for money plus surplus-value (profit). This money then goes back into production and you just go on and on and on in perpetuity. And what Marx is doing here it is to draw our attention to this dynamic, and then say 'look at what labor-power does', labour-power goes into the labor process and engages in productive consumption. In return for that labour-power is given a certain amount of money and that money then is used to purchase means of subsistence. So what you then see is that the worker, and we've mentioned this before, is involved in a C-M-C circulation process commodity-money-commodity circulation process. And the means of subsistence, when they come back into… allow the laborer to live, which allows them to enter back into… some of these commodities flow back. So what Marx is saying is that actually variable capital, if we look at the circulation process of labor-power in relationship to this, what we're actually seeing is
a circulation of variable capital. It's a distinctive form of circulation and there's a very distinctive reason why Marx calls it 'variable capital', because it is an appendage of capital and a form of capital that circulates through the body of the laborer. And you could say that's a very inhumane way to look at, yes it is, but that's how capital looks at it. As Dickens once put it in one of his novels, it's interesting what the industrialists do is they call their workers 'hands' 'cause they wish they didn't have brains and stomachs. So this whole terminology… and actually we have a contemporary terminology, for example, firms will talk about 'human resources' it's not about people, it's about 'human resources' it's about 'labor supply', all those kind of things. In fact we have a whole dehumanized set of words in which we would describe this circulation process, 'labor inputs' and all the rest of it. So there is a circulation process here, the circulation circuit of variable capital. And Marx is here arguing, well initially then what we've got is a reproduction of the system because the money that flows in, and this is where the john locke argument comes in, after a while that money should no longer belong to the capitalist, it should be along to the worker 'cause they're the ones who engage in all the productive consumption and also individual consumption up here. So the labourer is central to this whole process. That leads him in chapter 24 to say, well what happens to the surplus-value? if we assume that this goes on for another round of buying labour-power and production etc. a portion of this combines to come back in and this time you want labour-power, the original, but you need more labor-power, you need means of production, but you need more means of production. Part of this however is taken away as
revenue for capitalist consumption, And the big issue we then have to look at is what determines how much of the surplus gets converted into fresh capital for expansion of the system and how much of it gets converted into revenue and gets consumed away, and what is the relationship between reinvestment of part of the surplus, -this part- is reinvestment, and consumption of revenues. Marx says: “The employment of surplus-value as capital, or its reconversion into capital, is called accumulation of capital.” So the accumulation of capital is this process with part of the surplus-value reinvested as capital in the expansion of production. Bottom of 726: “Accumulation requires the transformation of a portion of the surplus product into capital. But we cannot, except by a miracle, transform into capital anything but such articles as can be employed in the labour process (i.e. means of production)… …Consequently, a part of the annual surplus labour must have been applied to the production of additional means of production and subsistence,
over and above the quantity of these things required to replace the capital advanced.” Where are your extra means of production going to come from? Somebody must have produced them somewhere last year, if they're going to be available to you this year. That is one of the problems and if you put into here the question that behind all of these means of production at some point or other there lies a relation to nature, means that you're gonna have to expand
natural resource extraction, somewhere down the line you're going to have to do a lot of that. Then comes, p.727, not only the question of where will be the means of production come from, but where do the extra workers come from? and Marx says “The mechanism of capitalist production has already provided for this in advance, by reproducing the working class as a class dependent on wages, a class whose ordinary wages suffice, not only to maintain itself, but also to increase its numbers.” So what he's looking at here is the idea that population expansion is part and parcel of answering that question as to where does the extra labor come from.
But as we're going to see, there are other ways in which that extra labor can be provided. On p.728-29 he goes back over the John Lockean myth, this time with a capital of ten thousand pounds, and two thousand pounds that comes from the surplus. And he says, well you know when we take that Lockean argument in this society, he says on top of p.729: “In every case, the working class creates by the surplus labour of one year the capital destined to employ additional labour in the following year. And this is what is called creating capital out of capital. ” You call it creating capital out of capital when it's actually the working class that produces it, and he then cites Wakefield, who's going to come up again in our analysis much later, right at the bottom footnote 5, approving saying “'Labour creates capital before capital employs labour'” Wakefield at least got it right. But, bottom of p.729: “each individual transaction continues to conform to the laws of commodity exchange, …” -there's no cheating going on- “with the capitalist always buying labour-power and the worker always selling it at what we shall assume is its real value.” i.e. the assumption that everything trades at its value. “It is quite evident from this that the laws of appropriation or of private property, laws based on the production and circulation of commodities, become changed into their direct opposite through their own internal and inexorable dialectic. The exchange of equivalents” becomes the non-equivalent of surplus-value. “The relation of exchange between capitalist and worker becomes a mere semblance belonging only to the process of circulation, it becomes a mere form, which is alien to the content of the transaction itself, and merely mystifies it.” “The constant sale and purchase of labour-power is the form;” -the market form- “the content is the constant appropriation by the capitalist, without equivalent, of a portion of the labour of others which has already been objectified, and his repeated exchange of this labour for a greater quantity of the living labour of others. ” Bottom of that paragraph: “property turns out to be the right, on the part of the capitalist, to appropriate the unpaid labour of others or its product, and the impossibility, on the part of the worker, of appropriating his own product. The separation of property from labour thus becomes the necessary consequence of a law that apparently originated in their identity.” The law that originated in its identity is that of Locke, but the perversion of that into this particular form of law is another matter. There then follows a reprise of the theory of surplus-value. If you want to read that carefully on p.731-732, you should do so, where you get the theory of surplus-value reiterated. He then says, well we've been looking at the theory of surplus-value from the standpoint of the individual worker At the bottom of 733 he says: “To be sure, the matter looks quite different if we consider capitalist production in the uninterrupted flow of its renewal, and if, in place of the individual capitalist and the individual worker, we view them in their totality, as the capitalist class and the working class… But in so doing we should be applying standards entirely foreign to commodity productions.” In other words, workers and capitalists do not approach each other in the marketplace as classes, they approach each other in the marketplace as individuals, individual capitalists and individual workers, so you're seeing this class system being perpetuated through the individualism of this. The result is the individual relations of that sort typically hide the class relations. And the class relation depends entirely on this dialectical inversion of the nature of private property rights,
from the Lockean view to the capitalistic system. And that has been accomplished, remember, through the way in which circulation on the market and what goes on in the realm of production are separate realms but integrated with each other, so that you could produce surplus in production, not in the market. And it's that inversion, he says on p.733 at the bottom: “This result (the inversion) becomes inevitable from the moment there is a free sale, by the worker himself, of labour-power as a commodity.” It is the commodity form of labor-power which is the issue. “But it is also only from then onwards that commodity production is generalized and becomes the typical form of production;” In other words, here's another one of those passages where Marx is saying: It's only when all of this becomes totally generalized, that we're going to have the system operating
in its perfected way. Then he goes on to say: “it is also true that only there does it unfold all its hidden potentialities. ….To the extent that commodity production, in accordance with its own immanent laws, undergoes a further development into capitalist production, the property laws of commodity production must undergo a dialectical inversion so that they become laws of capitalist appropriation.” Section 2, “The Political Economists' Erroneous Conception of Reproduction on an Increasing Scale” There are many stories that are told about why the system expands. One of them is: the capitalists spend their revenue on consumption, and they employ retainers and all that kind of thing, and this is where the expansion coming from. Marx will have none of that, it has nothing to do with expansion of the system. The second is the idea that somehow or other capitalists are going to save and hoarding has something to do with it, they're gonna take that surplus-value and save it and hoard it. Again, Marx says that's a popular idea but it's nonsense, and most political-economists recognized it as nonsense. On p.736: “The classical economists are therefore quite right to maintain that the consumption of the surplus product by productive, instead of unproductive, workers is a characteristic feature of the process of accumulation.” That is, you've gotta reinvest in this labor process which is generating the surplus. But you've not only gotta reinvest in that, and this is where he says not only does this mean advancing more wages, more variable capital, but you also want to have… you're gonna have to buy more means of production. so he says what this means is you have to put more money in purchasing labour-power and more money into purchasing extra means of production. You put those two together and that is where accumulation comes from. This imposes all kinds of complicated relations. I've already suggested that one of the issues is if for example I rely upon extra energy resources, somebody somewhere must have already produced the extra energy resources in order for them to be available in the market for me
to expand smoothly, freely. Somebody must have produced
the extra machinery or a new machinery, somebody must have… This is a very complicated time problem here, how does this dynamic actually work? Well, says Marx, it's a complicated issue and I will look at that in Volume 2 which he does, and you have to get used to the idea that he's gonna look at it in Volume 2 and he's gonna have some a pretty good ideas about it. He mentions here that one of those good ideas he has taken from the fysiocrats: the Tableau économique. In which they actually set up what we now would call something like an input-output system. So that there was an equilibrium of flows
of people making means of production in relationship to wage goods in relationship to… Marx takes that over and develops these ideas at length in volume 2. But he's going to push ahead and ask the question: Where does this division of surplus-value into capital
and revenue come from? He says on p.738 “One part of the surplus-value is consumed by the capitalist as revenue,” -just consume it away- “the other part is employed as capital,
i.e. it is accumulated.” So why does this occur? “it is the owner of the surplus-value, the capitalist, who makes this division. It is an act of his will.” The interesting question is why does a capitalist as an active agent decide to do this? Why don't they just consume it all away and have a good time? His answer comes on p.739, a very important passage: “Except as capital personified, the capitalist has no historical value, and no right to that historical existence which, to use Lichnowsky's amusing expression, 'ain't got no date' It is only to this extent that the necessity of the capitalist's own transitory existence is implied in the transitory necessity of the capitalist mode of production. But, in so far as he is capital personified, his motivating force is not the acquisition and enjoyment of use-values, but the acquisition and augmentation of exchange- values. He is fanatically intent on
the valorization of value; consequently he ruthlessly forces the human race to produce for production's sake. In this way he spurs on the development of society's productive forces, and the creation of those material conditions of production which alone can form the real basis of a higher form of society, a society in which the full and free development of every individual forms the ruling principle.” -again notice the positive potentiality in all of this- “Only as a personification of capital is the capitalist respectable. As such, he shares with the miser an absolute drive towards self-enrichment.” -go back to the passage about what separates the miser from the capitalist- “But what appears in the miser as the mania of an individual is in the capitalist the effect of a social mechanism in which he is merely a cog. Moreover, the development of capitalist production makes it necessary constantly to increase the amount of capital laid out in a given industrial undertaking, and competition subordinates every individual capitalist to the immanent laws of capitalist production, as external and coercive laws. It compels him to keep extending his capital, so as to preserve it, and he can only extend it by means of progressive accumulation.” A number of issues here, we've seen that money is a form of
social power which is appropriatable by private persons. So there's an incentive for those in search of social power to expand this system and gain more and more of it, as there is the incentive of the miser for self-enrichment. There are lots of reasons why people want to accumulate that social power, but the point is that anybody who is a capitalist is also impelled by the coercive laws of competition by other capitalists to reinvest a part of their surplus whether they like it or not. They don't have a choice. If I don't reinvest, you will, and if you reinvest and I have not, eventually I’ll no longer be a capitalist, you're gonna drive me out of business,
particularly if you reinvest in new machinery, new activities. So what Marx is saying here is that you have to see the capitalist as actually being embedded within the social relations of a capitalist system and no matter whether they're good people or bad people or greedy people or nice people or power-hungry people or decent people, that all of them at some point or other are faced with this choice: reinvest part of your surplus and stay in business or consume it away and cease to be a capitalist. Simple as that. So Marx is saying that this is the centerpiece of what a capitalist system is about. But the capitalists faced with that reality try to make a virtue out of what is actually a social necessity. So on p.740 we find him introducing the capitalist argument about abstinence, they're abstaining from consumption. They're trying to do good for society by abstaining from consumption, they're refraining from consumption. And 'oh what good people they are', the fact that they have no choice
in the matter is hidden behind the idea that they're
engaging in abstinence in order to reinvest and to build a different kind of society. Well Marx mocks that process and treats it
as a Faustian dilemma, as he puts it on p.741, “'Two souls, alas, do dwell within his breast; The one is ever parting from the other.' ” The one for enjoyment and the necessity of reinvestment for accumulation. And then he talks about Dr. Aikin and his different stages, where he says in the initial stages capitalists could not afford too much consumption of revenue, because the system was small, it was developing, all this kind of stuff and then as time went on they got more and more surplus, they could consume more and more of it, then you get to the fourth stage where they can start to be conspicuous consumers. It would be very hard in today's world to argue that somehow or other the capitalists are engaging in abstinence, but back then it was the tendency to do this,
so the point that Marx is making is: forget that abstinence argument, the only reason if you see something like abstinence it's only because capitalists don't have any option
except to do that. Vulgar economics supported
this notion of abstinence. So he goes on to sort of mock that, saying we can't really take this seriously and ends this section on p.748 saying: “Here, production and reproduction
on an increasing scale go on their way without any intervention from that peculiar saint, that knight of the woeful countenance, the 'abstaining' capitalist.” So you don't need the figure of
the abstaining capitalist to to look at this system. What this implies is this: back on p.742 he's laid out, I think, an extremely important idea: capital and capitalism by definition is about accumulation. It cannot be about anything else. As he says on the middle of 742: “Accumulate, accumulate! That is Moses and the prophets! industry furnishes the material which saving accumulates.' “Therefore save, save,
i.e. reconvert the greatest possible portion of surplus-value or surplus product into capital! Accumulation for the sake of accumulation, production for the sake of production: this was the formula in which classical economics expressed the historical mission of the bourgeoisie in the period of its domination. Not for one instant did it deceive itself over the nature of wealth's birth-pangs. But what use is it to lament a historical necessity? If, in the eyes of classical economics, the proletarian is merely a machine for the production of surplus-value, the capitalist too is merely a machine for the transformation of this surplus-value into surplus capital.” In other words, the theory that Marx is working here,
I've argued that this book is very much about what is socially necessary, and what is socially necessary for the survival of capitalism is accumulation for accumulation's sake, production for production's sake. and Marx says even the bourgeois economists understood that, bourgeois political economy understood that, which means of course the system has to grow. So what do we do? we start to think that growth is good, we start to say non-growth is a crisis. You go to the newspapers, you go to financial press or anything like that, 'oh my god what was the growth rate last year?' oh the growth rate is going down, we've to get it up again. Buy why do we have to grow? Marx is saying here it's a structural necessity, within the nature of a capitalist economic system, accumulation for accumulation's sake, production for production's sake. No matter what the social, political and ecological consequences might be. We are locked in. And in exactly the same way that capitalists back then used the abstinence theory to try to transformer a social necessity into a virtue, we've done the same thing by simply thinking that growth is good, lack of growth is a failure. If you can't grow, it's no good. Now there's a little quirk in here which is kind of interesting Because Marx mentioned on p.743
the ideas of Malthus. You see, Malthus had a very peculiar way of understanding the world and this theory of population… he explained the poverty of the masses as being due to the fact that they reproduced too fast in relationship to the availability of natural resources, food supply in particular. So therefore poverty, starvation…all the rest of it…was inevitable. But in his political economy he was studying the question of where does the effective demand come from? When you sell this at the end of the day for more money who's got more money in their pocket? This is another issue. Capitalists collectively start out with this amount of money and end up with more of it at the end of day which means somebody out there has to have more of it in order to buy what the capitalist has produced. This too is a real serious problem about the market. Malthus's solution was: the capitalists can't consume it, can't provide the market because they're reinvesting and saving, workers can't because… Malthus didn't say they're being exploited but obviously the wages can't do it. So there has to be a third class. And the third class are a bunch of consumers
who do nothing except consume and it was landlords, it was priests, it was a whole bunch of consumer classes which were doing a favour to capitalism by consuming as much as they possibly could, and if they didn't consume as much as they possibly could then the whole system would come crashing down. So Malthus was saying that's stabilizing the system. So on one end of the scale you have the poor who are dying like flies because they're reproducing too much in relation to natural resources, and the other end of the scale you have consuming classes, whose sole job to keep capitalism going is to consume to the hilt. Now this is, as Marx mentions, this is a slightly paradoxical kind of situation and as he says at the bottom of the page, well actually when we have things like the July Revolution and
you have Robert Owen and the socialists and Owenism and the Fourierists etc. and the socialists beginning to get a hold of all of this, people dropped the Malthus kind of argument, but one of the ways in which they dropped Malthus' argument was to do away with the whole effective demand problem, and as I've mentioned when we were discussing Say's law, remember the distinction between the general glut theorists, people like Malthus who said there could be a crisis of overproduction, general crisis of overproduction, and others who held to Say's law, like Ricardo says there can be no such thing because every purchase is a sale, and therefore there's equilibrium
in the system always. So they got away from the political consequences of Malthus’s very uncomfortable argument, by abandoning the question 'could there be a crisis in the system due to lack of effective demand?' Which of course is where
Keynes came in and said 'yes you could' in the 1930s. And we get a completely different set up. Section four starts p.747. notice what Marx is doing here, he suggested this isn't the only way
which you can get surplus-value, there's a whole bunch of different strategies the capitalists could use. Notice the flexibility he's talking about. First possibility for getting extra surplus-value: reduce wages below value. More surplus-value, there is a however one problem with that if you take that to far as he says on p.748: “ 'If labour could be had without purchase, wages might be dispensed with.' But if the workers could live on air, it would not be possible to buy them at any price. This zero cost of labour is therefore a limit in a mathematical sense, always beyond reach, although we can always approximate more and more nearly to it. The constant tendency of capital is to force the cost of labour back towards this absolute zero.” Are there reasons why that -again remember the contingency argument here- if you've got an effective demand problem it may not be wise to do that? But if that's not a problem then that's a direction you would move in. The other way is that you would actually get the workers themselves to economize, he talks about cookery books with recipes of all kind for replacing expensive food with various surrogates. This is no joke actually, this is what Ford did when he set up 5 dollar – 8-hour day, hired a bunch of social workers to go in and instruct the workers on exactly how to consume and actually a lot of bourgeois philanthropy back in the 19th century was precisely
about doing exactly this, which is learning to -and we still find it going on today- learn to do better with the money you've got. There are other ways in which you can go about things On p.751 he talks about saving on constant capital, more efficient uses of constant capital or different forms of constant capital. p.751 at the bottom, you can get something out of nature free of charge, so if you can substitute something which is natural and therefore not a commodity, you get something. And he says on p.752: “It is once again the direct action of man on nature which becomes an immediate source of greater accumulation, without the intervention of any new capital.” and he concludes this: “We arrive, therefore, at this general result: by incorporating with itself the two primary creators of wealth, labour-power and land, capital acquires a power of expansion that permits it to augment the elements of its accumulation beyond the limits apparently fixed by its own magnitude, or by the value and the mass of the means of production which have already been produced, and in which it has its being.” Then he gets into transformations in
productivity, which are again very important, scale and so on. He also gets into the way in which old machines which have amortized could be used in this process. At p.754 he talks about science and technology and improved methods, “Every time improved methods are introduced, therefore, this has an almost simultaneous impact on the new capital and the capital already engaged in its function. Every advance in chemistry not only multiplies the number of useful materials, and the useful applications of those already known, thus extending capital's sphere of investment along with its growth; it also teaches capital how to throw back the waste…” -this is recycling - “…from the processes of production and consumption into the cycle of the process of reproduction, and thus, without any previous outlay of capital, it creates fresh materials for it. ” “science and technology give capital a power of expansion which is independent of the given magnitude of the capital actually functioning.” Notice how those elements that we were talking about, those moments were talking about, in the chapter on machinery, when we were talking about technology and nature, mental conceptions, social relations, all those things are actually being employed here. By going around all those elements you can find ways in which you can improve on this, improve on that, and actually get extra surplus-value out of it. And then p.756 and 757 in particular, he starts to talk about past labour which gets disguised as capital. These elements he says are “partly consumed, to that degree do they perform, as we saw earlier, the same free service as the forces of nature, such as water, steam, air and electricity.” There's often a problem of capitalist production, of dual products, joint-products. You have cattle, and therefore you have hides and you have meat and you have milk. Joint-products. Maybe you're going after them because of their meat, and you find that there are all these hides lying around, and they're essentially a free good. Because you're really producing the cattle for the meat so the hides are there, so the leather goods can take off with the hides, so again it's a free good. So Marx is here talking about all the ways in which capitalists can utilize all of these ways to augment the accumulation process. And so in section five on p.758, he comes to something which again I think you really do have to emphasize in his treatment of capital he says: “It has been shown in the course of this inquiry” and I invite you to go back and think about where he has shown it- “that capital is not a fixed magnitude, but a part of social wealth which is elastic, and constantly fluctuates with the division of surplus-value into revenue and additional capital. It has been seen further that, even with a given magnitude of functioning capital, the labour-power, science and land (which means, economically speaking, all the objects of labour furnished by nature without human intervention) incorporated in it form elastic powers of capital, allowing it, within certain limits, a field of action independent of its own magnitude. In this inquiry we have ignored all relations arising from the process of circulation,” -remember the assumption- “…which may produce very different degrees of efficiency in the same mass of capital.” Then he goes on to say: “Classical political economy has always liked to conceive social capital as a fixed magnitude
of a fixed degree of efficiency. But this prejudice was first established as a dogma by the arch-philistine, Jeremy Bentham, that soberly pedantic and heavy-footed oracle of the 'common sense' of the nineteenth-century bourgeoisie.” well okay! but I always find it so fascinating the people who are around who conceived the world in a very fixed form are often let off the hook and Marx has always been accused of fixing things, when actually he's giving you one of the most fluid possible ways of thinking about how this damn system works. And you better watch out for how this works, if you wanna understand how it works and you think 'well you could put the bung in here and stop it dead', well, it'll go off over there! Tremendous flexibility in the system and Marx is very concerned I think to try to really both emphasize its fluidity and its flexibility and to identify all of those forms of flexibility and so on. So that we get a better understanding
of how this system works. This system would have come to a stop years ago if it had been as so fixed as many of the classical political economists supposed it to be. And it is its very dynamism in all senses which becomes critical. So he ends on that note, the accumulation of capital is a highly flexible process, but of course it's always still got its possible blockages. And interestingly, right at the end of this on p.761 he says: “The greater part of the yearly accruing surplus product, which is embezzled from the English workers without any equivalent being given in return, is thus used as capital, not in England, but in foreign countries. But with the additional capital thus exported, a part of the 'labour fund' invented by God and Bentham naturally also flows out of the country.” We have excluded by assumption foreign trade, but it's interesting that he brings it back in here, it's one of the other ways in which the system is able to adjust and be flexible. He's not gonna deal with it very much here, only later in the book will he come back to this. but again those assumptions work. So the accumulation of capital then works in this way. And when we start to look at it, we see a certain dynamism and then we can see all kinds of contingent things around which allow this system, new means of production, maybe they're free goods from nature,
maybe they're hides which are not being used maybe they're old machines that have been amortized and therefore are free goods, maybe they're urban infrastructures that have been amortized and are free goods. All those sorts of things. Science and technology allows you to recycle. So some of the waste that you get in production can go into being means of production in the next cycle. So you got all kinds of cycles which are possible here, like i've been emphasizing you have to see the flexibility and fluidity very much in the system. We're out of time here. Next week I wanna do the general law of capitalist accumulation - chapter twenty five, and we're going to spend a lot of time on the first four sections, section 5 is a very very long empirical thing like the working-day and some of the stuff on the factory acts and machinery and so on. Very rich and if you're interested in how Marx is viewing the Irish and their role in all of this, this is useful and important and you see how the reserve army is created and so on. But the heart of the argument is in the first four sections, which is a rather dense theoretical argument in which Marx brings together many of the elements he's just put in place in these two chapters, as well as many elements which were there earlier. And you'll see him putting it together in a dynamic model of the accumulation of capital, under the assumptions which he's laid out in the beginning of this part 7. Always remember that. It's a very important thing that you
really grapple very hard with, these first four sections of chapter 25. And see if you can get them straight on your own 'cause it's a very powerful and important culmination to the theoretical argument in Volume One of Capital. Okay so we'll do that next time.
