Thursday, 8 October 2015

Capital III, Chapter 15 - Part 29

For previous societies, the aim is the maximisation of consumption. Development of the means of production is merely a means to that end, and the surplus product is simply what is left over, and, therefore, available, after the non-productive classes have taken their cut, to develop the means of production further. But, for capitalism, it is the expansion of the surplus product, and the surplus value, which is the prime goal, as a result of competition.

Each capital is driven to maximise its surplus value in order to accumulate, so as to expand its production, because only by doing so can it be competitive and survive. But, in order to achieve this, it must sell ever more of the commodities it produces, at the highest values it can achieve. Yet, its own need, and that of every other capital, and so of the social capital, is to minimise its own consumption of the commodities that comprise its capital, and to minimise the value of those inputs. It is epitomised in the capitalist mantra “Buy low, sell high.”

The whole process is based on a series of contradictions. Every capitalist wants to sell as much as they can, but buy as little as they can get away with. On the other hand, every capital wants to expand as much as possible in order produce as much as possible, in order to make as much profit as possible. The expansion of capital requires the purchase of more means of production, and labour-power, so as to produce more, yet each capital seeks to minimise how much labour-power and means of production it buys, in order to reduce the costs of its production.

Every capital in order to sell more, of its production, wants the wages of workers to be high, yet every capital wants the wages of its own workers to be low, so as to reduce its costs.

In short, every capital seeks to drive production to the maximum, but restrict consumption to the minimum. As Marx points out, in Theories of Surplus Value 3, the secret basis of glut is high profits. The more capital devotes its surplus to the accumulation of means of production, the smaller the proportion of its revenue it spends on consumption. The more it reduces wages, to increase the proportion of surplus value, the less the workers have to spend on consumption, yet the only purpose of expanding the means of production is ultimately to increase the means of consumption.

If more is invested in building car production plants (means of production) the only purpose of this is to produce more cars (means of consumption). If wages are reduced, to increase profits, and/or a bigger portion of profits are devoted to such investment, rather than consumption, then supply of means of consumption is increased at the same time that the demand for means of consumption is being reduced – even if only relatively.

The result is that means of consumption – commodity-capital – is overproduced, and consequently the means of production used in its production had also been over accumulated. As the supply of means of consumption rises, whilst the demand falls relatively, the market prices of these commodities must fall below their prices of production.

At the least, not all the surplus value contained in these commodities is realised. At the worst, for the least efficient firms, as profit margins have fallen, they make losses.

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