“Given the necessary means of production, i.e., a sufficient accumulation of capital, the creation of surplus-value is only limited by the labouring population if the rate of surplus-value, i.e., the intensity of exploitation, is given; and no other limit but the intensity of exploitation if the labouring population is given.” (p 243)
The reason we tend to confuse ourselves is that this money illusion causes us to think that the reason that capitalists do not invest more, and employ more people, is that they do not have enough money to do so. That is true, even where we understand that this money has to be in the form of money-capital resulting from the realisation of surplus value. In other words, its lack of profits that prevents accumulation. Underlying that is a misunderstanding of what profits or here potential profits really are, i.e. a potential for society to produce a social surplus.
The other side of this is the view of the Monetarists and Keynesians, each in their own way, that the provision of additional money tokens into the economy – by monetary or fiscal stimulus – can thereby create the required capital to bring about this expansion. Of course, under certain conditions, it can. It depends what is preventing the actual expansion. For example, in Capital I, Marx relates that the huge expansion of the Public Debt that occurred in the 18th Century, in Britain, was a powerful lever in the primary accumulation of capital. That expansion was essentially a huge Keynesian fiscal stimulus, financed by a massive increase in credit money. UK Public debt to GDP rose to 250% in 1800, having risen continually since 1700. That level is around four times the current level.
The real question is whether the expansion is being prevented because any such expansion would be destructive of surplus value, i.e. there is already an overproduction of capital, or whether it has other causes. For example, much of that expansion of public debt in the 18th Century, was to finance expenditure by the state that private capitals could not undertake, because they were too small, or would not undertake because, although the profit to be had might be great, the risks to capital from such ventures were even greater.
Marx refers, in Capital II, in similar vein, to ventures such as forestry, whose production times are so long that few private capitals would undertake them. We have seen the same kind of thing with, for example, space technology. No private capital, even with the advent of mammoth socialised capital, would take on the task of developing space technology. It fell to the state to mobilise the necessary capital, in the 1950's, to develop this industry. The same is true with the atomic energy industry.
Yet, today, space science is big business. Its not that the investment of capital in this arena was not very profitable, or that it suffered an over-accumulation of capital, which prevented capital being invested in it, only that huge sums needed to be invested for prolonged periods before those large profits began to flow.
In fact, many of the very profitable industries we have today, from mobile phones to the Internet, are the result of the investment of state capital in their development, or the development of the base technologies used in their components.
A similar thing is true in relation to commodities sold by the welfare state, such as education and healthcare. Capital needed workers to be better educated, for the reason Marx sets out later in Capital III. Setting out why, although the labour of the office workers etc. represents complex labour, their wages tend to fall even below those of the average worker, he writes,
“Secondly, because the necessary training, knowledge of commercial practices, languages, etc., is more and more rapidly, easily, universally and cheaply reproduced with the progress of science and public education the more the capitalist mode of production directs teaching methods, etc., towards practical purposes. The universality of public education enables capitalists to recruit such labourers from classes that formerly had no access to such trades and were accustomed to a lower standard of living. Moreover, this increases supply, and hence competition. With few exceptions, the labour-power of these people is therefore devaluated with the progress of capitalist production. Their wage falls, while their labour capacity increases.”
Marx refers, in Capital II, in similar vein, to ventures such as forestry, whose production times are so long that few private capitals would undertake them. We have seen the same kind of thing with, for example, space technology. No private capital, even with the advent of mammoth socialised capital, would take on the task of developing space technology. It fell to the state to mobilise the necessary capital, in the 1950's, to develop this industry. The same is true with the atomic energy industry.
Yet, today, space science is big business. Its not that the investment of capital in this arena was not very profitable, or that it suffered an over-accumulation of capital, which prevented capital being invested in it, only that huge sums needed to be invested for prolonged periods before those large profits began to flow.
In fact, many of the very profitable industries we have today, from mobile phones to the Internet, are the result of the investment of state capital in their development, or the development of the base technologies used in their components.
A similar thing is true in relation to commodities sold by the welfare state, such as education and healthcare. Capital needed workers to be better educated, for the reason Marx sets out later in Capital III. Setting out why, although the labour of the office workers etc. represents complex labour, their wages tend to fall even below those of the average worker, he writes,
“Secondly, because the necessary training, knowledge of commercial practices, languages, etc., is more and more rapidly, easily, universally and cheaply reproduced with the progress of science and public education the more the capitalist mode of production directs teaching methods, etc., towards practical purposes. The universality of public education enables capitalists to recruit such labourers from classes that formerly had no access to such trades and were accustomed to a lower standard of living. Moreover, this increases supply, and hence competition. With few exceptions, the labour-power of these people is therefore devaluated with the progress of capitalist production. Their wage falls, while their labour capacity increases.”
(Capital III, Chapter 17)
But, as Marx points out, most workers could not be counted on to buy such education for their children, who rather were seen as important sources of family income.
“The working man is no free agent. In too many cases, he is even too ignorant to understand the true interest of his child, or the normal conditions of human development. However, the more enlightened part of the working class fully understands that the future of its class, and, therefore, of mankind, altogether depends upon the formation of the rising working generation. They know that, before everything else, the children and juvenile workers must be saved from the crushing effects of the present system. This can only be effected by converting social reason into social force, and, under given circumstances, there exists no other method of doing so, than through general laws, enforced by the power of the state.”
(Instructions For Delegates To The General Committee of The First International).
So, capital began to provide public education, paid for from taxes deducted from workers wages. The US, whose industrialisation in the mid 19th century, was, from the beginning, based on this higher technological level, was one of the first to introduce such public education. But, there is no point devoting the kind of social capital to education that was required in the 20th century, to meet the needs of capital, if the educated workers still die young, or are too ill to work. So, its necessary to ensure that workers devote a minimum proportion of their wages also to healthcare. Again, they could not be counted on to do that voluntarily. For example, in Britain, when opticians charges were even just raised significantly, there was a large reduction in the number of people having regular eye examinations. The same is true for dentistry.
On that basis, private capital would not have been prepared to invest in anything like the scale required to create a national health service of the size and scope required to meet the needs of modern capital. So, every developed capitalist economy created its socialised healthcare systems paid for by social insurance of one form or another, usually deducted by the state by law from workers wages. Only by compulsory deduction of taxes and national insurance premiums from workers wages could capital guarantee that a sufficient proportion of workers wages, i.e. of the necessary cost of reproducing their labour-power, would be allocated.
But, as Marx points out, most workers could not be counted on to buy such education for their children, who rather were seen as important sources of family income.
“The working man is no free agent. In too many cases, he is even too ignorant to understand the true interest of his child, or the normal conditions of human development. However, the more enlightened part of the working class fully understands that the future of its class, and, therefore, of mankind, altogether depends upon the formation of the rising working generation. They know that, before everything else, the children and juvenile workers must be saved from the crushing effects of the present system. This can only be effected by converting social reason into social force, and, under given circumstances, there exists no other method of doing so, than through general laws, enforced by the power of the state.”
(Instructions For Delegates To The General Committee of The First International).
So, capital began to provide public education, paid for from taxes deducted from workers wages. The US, whose industrialisation in the mid 19th century, was, from the beginning, based on this higher technological level, was one of the first to introduce such public education. But, there is no point devoting the kind of social capital to education that was required in the 20th century, to meet the needs of capital, if the educated workers still die young, or are too ill to work. So, its necessary to ensure that workers devote a minimum proportion of their wages also to healthcare. Again, they could not be counted on to do that voluntarily. For example, in Britain, when opticians charges were even just raised significantly, there was a large reduction in the number of people having regular eye examinations. The same is true for dentistry.
On that basis, private capital would not have been prepared to invest in anything like the scale required to create a national health service of the size and scope required to meet the needs of modern capital. So, every developed capitalist economy created its socialised healthcare systems paid for by social insurance of one form or another, usually deducted by the state by law from workers wages. Only by compulsory deduction of taxes and national insurance premiums from workers wages could capital guarantee that a sufficient proportion of workers wages, i.e. of the necessary cost of reproducing their labour-power, would be allocated.
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