Capital III, Chapter 15 - Part 45

But, its not just the small capitals that are affected by the larger scale, longer-term structural changes that necessarily occur within the economy. On the one hand, some industries reach a size whereby further rapid growth is more or less impossible, at least for long periods. A few oligopolies dominate the global market and plan gradual increases in output more or less in line with population growth. For some, like the car industry, this may change as a result of whole new economies developing, as has happened in China, but for long periods outside such events, they simply grow organically, concentrating on raising profits by reducing costs via technical innovations.

The consequence of this is that capital in these areas cannot accumulate faster than the limits the market imposes on it. That doesn't mean the capital employed in these industries does not amass significant profits, but those profits are then used to pay out dividends, to diversify the firm's activity into other areas and so on. These industries, therefore, naturally decline as a proportion of the total social capital, and the number of workers employed in them will tend to fall in absolute terms, as they are replaced by machines.

In fact, this process can be witnessed throughout the global economy, as manufacturing industry declines whilst service industry rises, as a proportion of the total social capital.

A look at the history of, for example, coal mining, in the UK, illustrates this. At the start of the last century, around 1.2 million people were employed in the industry. Already by the 1950's that had shrunk to 700,000, as energy usage became far more efficient, and as new fuels such as electricity, oil and gas replaced coal. In fact, where such huge industries have to be rationalised (often effectively out of existence) that task is frequently handed over to the capitalist state, which nationalises them, and then proceeds with the drawn out procedure of slimming it down. The biggest period of pit closures in the British coal industry, for example, occurred more or less immediately following nationalisation. Starting in the mid 1950's, employment fell from 700,000 to just 300,000 by 1970. It had already fallen to just 400,000 by the mid 1960's.

A similar thing happened in the 1970's and 80's after the nationalisation of the shipbuilding industry, and the car industry, and steel industry. The railways nationalised after WWII, were already being massively cut back by the early 1960's.

“This collision appears partly in periodical crises, which arise from the circumstance that now this and now that portion of the labouring population becomes redundant under its old mode of employment.” (p 264)

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