Wednesday, 22 October 2014

Capital II, Chapter 20 - Part 14

Our model is:

Department I c 4000 + v 1000 + s 1000 = 6000

Department II(a) c 1600 + v 400 + s 400 = 2400

Department II(b) c 400 + v 100 + s 100 = 600

In the above model, the more capitalists from 2a (production of necessities) spend on luxuries, the less they spend on necessities. That means higher demand for luxuries, and more capital allocated to this production. In turn that means more workers employed in luxury goods production, and fewer in producing necessities, but it doesn't change the fact that those workers continue to spend their wages on necessities.

“Every crisis at once lessens the consumption of luxuries. It retards, delays the reconversion of (IIb)v into money-capital, permitting it only partially and thus throwing a certain number of the labourers employed in the production of luxuries out of work, while on the other hand it thus clogs the sale of consumer necessities and reduces it. And this without mentioning the unproductive labourers who are dismissed at the same time, labourers who receive for their services a portion of the capitalists’ luxury expense fund (these labourers are themselves pro tanto luxuries), and who take part to a very considerable extent in the consumption of the necessities of life, etc. The reverse takes place in periods of prosperity, particularly during the times of bogus prosperity, in which the relative value of money, expressed in commodities, decreases also for other reasons (without any actual revolution in values), so that the prices of commodities rise independently of their own values. It is not alone the consumption of necessities of life which increases. The working-class (now actively reinforced by its entire reserve army) also enjoys momentarily articles of luxury ordinarily beyond its reach, and those articles which at other times constitute for the greater part consumer “necessities” only for the capitalist class. This on its part calls forth a rise in prices.” (p 414)

But, dismissing the arguments of the under-consumptionists, Marx demonstrates why crises are not the result of the working-class obtaining too small a share in wages.

“... one could only remark that crises are always prepared by precisely a period in which wages rise generally and the working-class actually gets a larger share of that part of the annual product which is intended for consumption. From the point of view of these advocates of sound and “simple” (!) common sense, such a period should rather remove the crisis. It appears, then, that capitalist production comprises conditions independent of good or bad will, conditions which permit the working-class to enjoy that relative prosperity only momentarily, and at that always only as the harbinger of a coming crisis.” (p 415)

One of the ideas that most Marxists have is a phrase used by Marx that capitalism is production for the sake of production. But, as Lenin comments, in reality, capitalist production itself has to be guided by the needs of consumption. Capitalists can only realise profit if the things they produce are saleable, if consumers want them.

Under simple reproduction, the surplus value is used simply in order that the capitalists can continue to live. As Marx says in Volume III, we should not let this distract us from the real purpose of capitalist production, which is the self-expansion of capital. Yet, as he also says, the more capital develops, and the more capitalists are separated from their social function, the more the allure of unproductive consumption influences them as individuals, even whilst the need to accumulate or die continues to exert its influence on capital itself. 

Capitalist production may be characterised by expanded reproduction, but simple reproduction remains an integral component of it. The circuit may appear M – C – M', and a portion of M' then being reinvested to expand capital, but the reality, Marx says, remains M – C – M. M – C – M' with the accumulated m comprising an additional new capital, with its own circuit m – c – m'. 

“Simple reproduction is essentially directed toward consumption as an end, although the grabbing of surplus-value appears as the compelling motive of the individual capitalists; but surplus-value, whatever its relative magnitude may be, is after all supposed to serve here only for the individual consumption of the capitalist. 

As simple reproduction is a part, and the most important one at that, of all annual reproduction on an extended scale, this motive remains as an accompaniment of and contrast to the self-enrichment motive as such. In reality the matter is more complicated, because partners in the loot — the surplus-value of the capitalist — figure as consumers independent of him.” (p 415)

No comments: