3) Progressive Production of a Relative surplus population or Industrial Reserve Army
The accumulation of capital appears at first as merely
a quantitative phenomenon, but as Marx describes it is also a
qualitative expansion, because it also involves a change in the
organic composition of capital, as constant capital increases faster
than the increase in variable capital.
The increase in capitalist production, the rise in
productivity and the consequent change in the organic composition,
proceeds more quickly than the rate of accumulation, because of the
role of centralisation.
The consequence is that now, with the increasing social
wealth in the form of a greater share of total capital, the demand
for labour becomes progressively smaller in proportion to the growth
of total capital. The total amount of labour employed continues to
rise, but forms a proportionately smaller part of total capital. For
periods, capital continues to expand on a purely extensive basis i.e.
technology is not revolutionised. But, these periods become shorter.
As a consequence, the total capital needs to expand by larger and
larger amounts, not just to absorb new workers, but just to keep
existing workers employed.
“This accelerated relative diminution of the
variable constituent, that goes along with the accelerated increase
of the total capital, and moves more rapidly than this increase,
takes the inverse form, at the other pole, of an apparently absolute
increase of the labouring population, an increase always moving more
rapidly than that of the variable capital or the means of employment.
But in fact, it is capitalistic accumulation itself that constantly
produces, and produces in the direct ratio of its own energy and
extent, a relativity redundant population of labourers, i.e.,
a population of greater extent than suffices for the average needs of
the self-expansion of capital, and therefore a surplus population.”
(p 590)
The total social capital goes through a series of
changes affecting sometimes all of it, and sometimes part of it. All
of these changes affect the demand for labour, frequently in dramatic
ways.
 |
| For years coal mining continued using the same methods that relied on large amounts of manual labour. One reason for it being nationalised was so the state could provide the necessary capital to produce the coal that industry needed at a lower price. After nationalisation, machines were introduced, and the majority of miners were sacked during the 1950's and 60's. |
“Considering the social capital
in its totality, the movement of its accumulation now causes
periodical changes, affecting it more or less as a whole, now
distributes its various phases simultaneously over the different
spheres of production. In some spheres a change in the composition of
capital occurs without increase of its absolute magnitude, as a
consequence of simple centralisation; in others the absolute growth
of capital is connected with absolute diminution of its variable
constituent, or of the labour power absorbed by it; in others again,
capital continues growing for a time on its given technical basis,
and attracts additional labour power in proportion to its increase,
while at other times it undergoes organic change, and lessens its
variable constituent; in all spheres, the increase of the variable
part of capital, and therefore of the number of labourers employed by
it, is always connected with violent fluctuations and transitory
production of surplus population, whether this takes the more
striking form of the repulsion of labourers already employed, or the
less evident but not less real form of the more difficult absorption
of the additional labouring population through the usual channels.”
(p 590-1)
A number of factors coincide. The increase in the
total social capital; the rate at which it accumulates; the increase
in the scale of production and masses of labour employed it brings;
the development of the productivity of labour; the increased scope
across the economy of capitalist production. All these things create
the conditions not only for an increased attraction of labour, but
also for its repulsion.
“... the rapidity of the change
in the organic composition of capital, and in its technical form
increases, and an increasing number of spheres of production becomes
involved in this change, now simultaneously, now alternately. The
labouring population therefore produces, along with the accumulation
of capital produced by it, the means by which it itself is made
relatively superfluous, is turned into a relative surplus population;
and it does this to an always increasing extent. This is a law of
population peculiar to the capitalist mode of production; and in fact
every special historic mode of production has its own special laws of
population, historically valid within its limits and only in so far
as man has not interfered with them.” (p 591-2)
This surplus population or reserve army of labour, is a
product of capitalist production, but in turn it becomes a condition
for capitalist production, and a lever for accumulation. Whatever
the limits of population, capitalism always generates this surplus
population, to meet its needs for expansion, by always having labour
available for exploitation.
 |
| Wedgwood and other North Staffordshire industrialists clubbed together, mobilising money hoards, to build the Trent and Mersey Canal. It meant they could bring in large amounts of clay, salt, flint, iron ore etc. much more cheaply, and could get their products to market much more cheaply. It was the basis of the massive expansion of the three industries of North Staffordshire - pottery, coal and steel. |
Capital, through accumulation becomes capable of huge
leaps in its size. It does so because of a number of factors. The
productivity of labour is continually raised. As Marx pointed out
earlier, after a certain point, capital becomes more “elastic”,
that is it has a number of means of quickly expanding. It can employ
more labour, employ it more extensively or intensively and so on. It
can introduce more and/or better machines, use shift systems and so
on. As social wealth increases, so capital as part of social wealth
can increase rapidly. For example, capitalists can divert resources
from revenue to accumulation. They can also mobilise money hoards,
or wealth held in other forms as capital. That is also facilitated
by the growth of credit, which enables the mobilisation of money
hoards and borrowing against other forms of wealth. But, also at a
certain stage, the technical basis of production facilitates the
accumulation of surplus value into the expansion of machinery,
transport and so on, that has a dramatic effect on increasing
production.
“The mass of social wealth, overflowing with the
advance of accumulation, and transformable into additional capital,
thrusts itself frantically into old branches of production, whose
market suddenly expands, or into newly formed branches, such as
railways, &c., the need for which grows out of the development of
the old ones. In all such cases, there must be the possibility of
throwing great masses of men suddenly on the decisive points without
injury to the scale of production in other spheres. Overpopulation
supplies these masses. The course characteristic of modern industry,
viz., a decennial cycle (interrupted by
smaller oscillations), of periods of average activity, production at
high pressure, crisis and stagnation, depends on the constant
formation, the greater or less absorption, and the re-formation of
the industrial reserve army or surplus population. In their turn, the
varying phases of the industrial cycle recruit the surplus
population, and become one of the most energetic agents of its
reproduction.” (p 592-3)
 |
| When it was short of labour during WWI, and during and after WWII, Capital turned to women workers as a Latent Reserve. |
In the early stages of Capitalism this does not occur
because the change in the organic composition is very gradual. As
capital expanded, the demand for labour expanded with it. So even
with the change in its organic composition, no surplus population is
created, because population itself grew only slowly. This in itself
had consequences for the ability of capital to expand, and for wages.
Capital dealt with these consequences, in its infancy by other means
i.e. the expulsion of the peasants from their land.
But, the more rapid growth of capital is only possible
if it finds a sufficiently large quantity of exploitable labour
available when it is required. The reserve army is then a necessary
element for capitalist expansion. But, the same frenetic behaviour
that leads to rapid expansion also leads to rapid contractions, which
in turn throw workers back into the ranks of the reserve army.
So, the process of accumulation, which brings about
changes in the composition of capital, continuously “sets free”
workers that swell the ranks of the reserve army. During periods of
rapid accumulation these are absorbed again by the extension of
existing capitals, and the creation of new ones. Even some of the
existing reserve can be absorbed during these periods. But, when
contraction sets in, this process is reversed.
“The whole form of the movement of modern industry
depends, therefore, upon the constant transformation of a part of the
labouring population into unemployed or half-employed hands. The
superficiality of Political Economy shows itself in the fact that it
looks upon the expansion and contraction of credit, which is a mere
symptom of the periodic changes of the industrial cycle, as their
cause. As the heavenly bodies, once thrown into a certain definite
motion, always repeat this, so is it with social production as soon
as it is once thrown into this movement of alternate expansion and
contraction. Effects, in their turn, become causes, and the varying
accidents of the whole process, which always reproduces its own
conditions, take on the form of periodicity. When this periodicity is
once consolidated, even Political Economy then sees that the
production of a relative surplus population — i.e.,
surplus with regard to the average needs of the self-expansion of
capital — is a necessary condition of modern industry.” (p 593)
Variable capital can increase even if the number of
workers stays the same or even falls. That is the case if those
workers perform more labour and receive more wages. So, Marx says,
its always in the interests of capital to get more work out of fewer
workers than to employ more workers.
“In the latter case, the outlay of constant
capital increases in proportion to the mass of labour set in action;
in the former that increase is much smaller. The more extended the
scale of production, the stronger this motive. Its force increases
with the accumulation of capital.” (p 595)
Once again this is a contradictory process. On the one
hand, an increased variable capital here does not employ more
workers. On the other, capitalist development replaces more skilled
with less skilled workers, a larger number of whom can be employed
for the same amount of wages. The same is true with replacing men
with women or children.
“The production of a relative surplus population,
or the setting free of labourers, goes on therefore yet more rapidly
than the technical revolution of the process of production that
accompanies, and is accelerated by, the advance of accumulation; and
more rapidly than the corresponding diminution of the variable part
of capital as compared with the constant. If the means of production,
as they increase in extent and effective power, become to a less
extent means of employment of labourers, this state of things is
again modified by the fact that in proportion as the productiveness
of labour increases, capital increases its supply of labour more
quickly than its demand for labourers. The overwork of the employed
part of the working class swells the ranks of the reserve, whilst
conversely the greater pressure that the latter by its competition
exerts on the former, forces these to submit to overwork and to
subjugation under the dictates of capital. The condemnation of one
part of the working class to enforced idleness by the overwork of the
other part, and the converse, becomes a means of enriching the
individual capitalists, and accelerates at the same time the
production of the industrial reserve army on a scale corresponding
with the advance of social accumulation.” (p 595-6)
But, we shouldn't think that this means that there is
any absolute tendency to unemployment. On the contrary, there is
unemployment on one side of the coin, overwork on the other. Marx
writes of England,
“Her technical means for saving labour are
colossal. Nevertheless, if to-morrow morning labour generally were
reduced to a rational amount, and proportioned to the different
sections of the working class according to age and sex, the working
population to hand would be absolutely insufficient for the carrying
on of national production on its present scale.” (p 596)
 |
| More years work to do yet? |
We see the same thing today. On the one hand we have
large scale unemployment and under employment. In addition to the
2.5 million unemployed, 3 million say they would like to work more
hours, and this probably understates the degree of under employment.
Yet, at the same time, workers are told they have to work until they
are 67 or 70, rather than 65. The government has demanded an opt-out
from the Working Time Directive and so on.
“Taking them as a whole, the general movements of
wages are exclusively regulated by the expansion and contraction of
the industrial reserve army, and these again correspond to the
periodic changes of the industrial cycle. They are, therefore, not
determined by the variations of the absolute number of the working
population, but by the varying proportions in which the working class
is divided into active and reserve army, by the increase or
diminution in the relative amount of the surplus population, by the
extent to which it is now absorbed, now set free.” (p 596)
Wages rise and fall in line with the demand for and supply
of labour but not in the way the economists suggested. They put
forward the idea that the demand for labour raises wages which causes
workers to increase their procreation, increasing the population and
supply of labour. This increased supply reduces wages, which in turn
decimates population, reducing the supply of labour. On this basis,
it is population not the needs of capital that is the determining
factor. Marx has shown why this is wrong.
Marx refers to the rise of agricultural wages between
1849-59. They rose by almost 30%, as workers escaped the land for
factories, mines, railways and the needs of war.
“Everywhere the farmers were howling, and the
London Economist, with reference to these
starvation-wages, prattled quite seriously of “a general and
substantial advance.” What did the farmers do now? Did they wait
until, in consequence of this brilliant remuneration, the
agricultural labourers had so increased and multiplied that their
wages must fall again, as prescribed by the dogmatic economic brain?
They introduced more machinery, and in a moment the labourers were
redundant again in a proportion satisfactory even to the farmers.
There was now “more capital” laid out in agriculture than before,
and in a more productive form. With this the demand for labour fell,
not only relatively, but absolutely.” (p 597-8)
This is not to be confused with the situation
determining the actual supply of labour to specific branches of
industry.
“If, e.g., in consequence
of favourable circumstances, accumulation in a particular sphere of
production becomes especially active, and profits in it, being
greater than the average profits, attract additional capital, of
course the demand for labour rises and wages also rise. The higher
wages draw a larger part of the working population into the more
favoured sphere, until it is glutted with labour power, and wages at
length fall again to their average level or below it, if the pressure
is too great. Then, not only does the immigration of labourers into
the branch of industry in question cease; it gives place to their
emigration. Here the political economist thinks he sees the why and
wherefore of an absolute increase of workers accompanying an increase
of wages, and of a diminution of wages accompanying an absolute
increase of labourers. But he sees really only the local oscillation
of the labour-market in a particular sphere of production — he sees
only the phenomena accompanying the distribution of the working
population into the different spheres of outlay of capital, according
to its varying needs.
 |
| Productive Capital over the last 30 years has moved from old style factory production towards service production. Industries such as health, education, finance have become significant sources of Surplus Value employing large and, increasing numbers of highly skilled and highly paid workers. But, alongside this expansion of Capital it has introduced new machines, like surgical robots, computers using neural nets to trade shares and so on. |
“The impulse that additional capital, seeking an outlet, would otherwise have given to the general demand for labour, is therefore in every case neutralised to the extent of the labourers thrown out of employment by the machine. That is to say, the mechanism of capitalistic production so manages matters that the absolute increase of capital is accompanied by no corresponding rise in the general demand for labour.” (p 599)
Capital influences both the demand for and the supply of labour at the same time. On the one hand, its expansion creates an additional demand for labour. On the other, that same expansion, because it also calls forth additional machines, technology and techniques etc. which raise productivity, also creates an additional supply of labour from the existing number of workers.
 |
| When Capital could not acquire sufficient workers at wages that enabled them to make profits, they abandoned the laws of Supply and Demand, and their supposed commitment to the principles of freedom and equality. |
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