Wednesday, 16 September 2015

Capital III, Chapter 15 - Part 7

But, there are other circumstances when the problem is not an adequate opportunity for the profitable investment of capital. For example, Marx speaks of that period after a crisis which is the “melancholy period”, when capital is “paralysed” and the investment of new capital is “out of the question”, not because profits are not to be had, but simply because fear continues to dominate after the crisis. Under these conditions, monetary and fiscal stimulus, or other forms of state intervention can be a means of capital formation.

But, to be so, the conditions Marx outlines above must exist. In other words, it is the existence of sufficient means of production and exploitable labour-power that is the real determinant of this capital expansion.

If we think about things in the way Marx did, in Capital I, so as to avoid the money illusion and commodity fetishism, this becomes clear. For Robinson Crusoe, the determinants of the extent to which he can expand his economy, expand both the quantity of use values and of value (the latter of which with the relevant adjustments is the expansion of capital) are precisely those set out by Marx above.

Robinson could work all day long and yet produce little in the way either of use values or surplus value, if the means of production available to him were scant. He might search all day long simply to find enough to eat to sustain his labour-power for another day. But, the same is true in reverse. Robinson may find that the means of production and consumption confront him in abundance, but he is limited in the extent to which he can exploit them by the constraints of his own labour-power. Then, an important question becomes the extent to which what is available is means of production as opposed to means of consumption.

As Marx set out in Capital I, one reason that Native Americans did not develop settled agriculture is that they didn't need to. They could simply move to where the food was in ample supply. But, if you want to move beyond simply having a sufficient supply of your current range of consumption, to having a much wider range, it becomes necessary to create a surplus over your current needs, in order to devote surplus time to the production of additional means of production. The limiting factors then become how much time has to be devoted to maintaining the level of existing means of production, how much time has to be devoted to at least maintaining current levels of consumption, and how much time is left over out of the total available social labour-time.

For Robinson, he may be able to meet his consumption needs by hunting for 8 hours per day. But, if he works for 10 hours per day, during this 2 hours, of surplus labour, he could build an animal pen, so that as he builds up a stock of animals, as means of production, the amount of time he needs to spend meeting his consumption needs falls – though the time he needs to spend maintaining his stock pen and animals (means of production) increases – but, overall, not only will his level of consumption rise, but the extent of his surplus labour-time will also rise as a proportion of his 10 hour working day, i.e. his rate of exploitation will rise.

That would only cease to be the case if the quantity of his means of production was increased to such an extent that the time he needed to spend on maintaining them increased to such an extent that having attended to his consumption needs, he had less time left over, or similarly that he increased his consumption at the expense of his surplus labour-time. Both of these situations arise under capitalism as a source of squeeze on profits and of potential crises. The first arises as overproduction of capital, and the second arises as the proportion of available social labour-time devoted to the consumption fund, (i.e. a rise in wages due to high demand for labour-power) causes a squeeze on produced surplus value.

For Robinson, the first situation is similar to a condition where he is confronted with a natural abundance. Some of it goes to waste, in the sense that he can't turn it into consumable products. But, its not a destruction of value because these are natural products that have no value. No labour-time has been expended on them. But, if he is left in a situation where he does not have sufficient time to properly maintain his animals and stock pens, so that animals die or escape, as the pens deteriorated, this is destruction of value, because the labour-time expended for the production of those pens and animals has been wasted. It has not resulted in final consumption.

In order to avoid that, he must use some of the surplus labour-time he would otherwise have had, to carry out this work. So his potential for expanding his production is reduced. If possible, he will use what surplus labour-time he has to build better pens that require less maintenance. He may also use some of his means of production, in the form of animals, as means of consumption, thereby reducing the time required for producing his means of consumption, and thereby increasing his surplus labour-time, which he might use to develop some different means of production or consumption.

This happens frequently with primitive peoples and peasant producers. Their stock of animals are means of production of milk, eggs, etc. But, they are also means of consumption in the form of meat. If there is an abundance, these communities often organised festivals where such animals would be consumed.

Of course, the problem of the existence of too many means of production could be resolved not just by extending his working day, or increasing his productivity, but by having additional labour to help him exploit it. There may be such abundance of means of consumption that some is wasted, but that situation is remedied if Man Friday comes along to also consume some of it. Provided there is sufficient means of consumption for two, Robinson's consumption is not diminished by Friday's consumption, but, on its own, it is not increased either.

But, if we consider this economy in terms of Marx’s statement, its clear that not only has the quantity of use values increased, but the quantity of value has increased too. If Robinson laboured for 8 hours per day, 8 hours of value was produced in the shape of his production to meet his consumption needs. If Friday does the same, now 16 hours of value is produced in their joint production. In other words, as Marx states, given any set of technological conditions, i.e. level of productivity of labour, the quantity of surplus value produced is dependent upon the labour employed. If Robinson worked a 10 hour day, so as to produce 2 hours of surplus labour, then if Friday does the same, the quantity of surplus labour doubles.

This is more important than it might seem. Suppose, the most that Robinson could work in a day is 10 hours. He needs 8 hours to produce his necessary consumption, leaving 2 hours surplus. Suppose that if he had 4 hours surplus he could build a dam that would be of benefit to him, but he must build it in that 4 hours or else it will be washed away. On his own, he can't do it, but with Friday's surplus labour-time, their economy does have the 4 hours of surplus labour-time required for this investment. This applies with businesses that may produce large amounts of surplus value, but still not enough to buy the additional productive-capital they need in the necessary proportions required.

But, the same is true in reverse. Given any set of technological conditions, the number of workers who can be productively set to work depends upon the quantity of means of production available. Robinson's consumption remained at its previous level, despite Friday's consumption, because there was an abundance of food that each just needed to gather. But, suppose that was not the case. Then the available means of production might not be sufficient to produce the means of consumption required by both Robinson and Friday, at least to sustain the previous level of consumption enjoyed by Robinson. That is precisely the reason, as Marx described in Capital I, that particularly in Northern Europe, primitive peoples were led to invest more of their available social labour-time in the development of the means of production in the form of settled agriculture and so on.

There is another important point here.  Both Marx and Engels point out that civilisation first developed in the Nile Delta, because the fertile soils and the climate, facilitated the development of settled agriculture.  A lot of surplus time was left over, after meeting the minimum consumption needs.  But, those same conditions, also determine the way any surplus is then consumed.  For one thing, as Marx points out, the reason that the ancient Egyptians developed astronomy, and mathematics, was that their agriculture depended upon understanding the seasons, and flooding of the Nile.  It made sense, to have some individuals who were able to specialise in such study.  But, this fertility, and ability to carry out agriculture on an extensive basis, also works against the need to invest in other means of production to make agriculture more intensive.  The large surplus is appropriated by the ruling caste, who use it not for investment in developing the means of production, but instead to finance the building of the pyramids and other forms of conspicuous consumption.

The creation of very large surpluses does not necessarily lead to correspondingly large accumulation, just as small surpluses, do not necessarily encourage less accumulation.  The North American Indians did not accumulate, the Ancient Egyptians engaged in conspicuous consumption, whilst the primitive inhabitants of Northern Europe, had to accumulate what they could out of their small surpluses, so as to develop their means of production, and level of productivity.  The same thing applies today.  As Marx points out the first industrial capitalists were hardly distinguishable from their workers, and often took lower wages, in order to maximise their accumulation, from their small profits.  But, when that accumulation results in a growth of their profits, they increasingly, have a dilemma, between needing to accumulate, and wanting to increase their own personal consumption.  As will be seen later, the shareholding capitalist has no such dilemma.  They have no objective need to continually expand their share capital.  So, increasing amounts of surplus can go to conspicuous consumption, and speculation rather than accumulation.

No comments: