Contrary to Ganilh's belief, the fact that a capitalist was able to reduce the capital advanced, did not mean that this released capital would then be used as revenue. Marx notes that,
“Actually it is only in the case of State loans that we can speak of a direct transformation of capital into revenue.” (p 228)
Rather, each capital seeks to utilise the released capital for additional expansion, and where this cannot be used for expansion of the given capital, it can always be used as loanable money-capital, so as to be applied by some other productive-capital, or else used by the given capital for expansion in some other area. It is in this respect that the development of socialised capital, in the shape of the joint stock company, represents a significant advance over the “fetter on production” that the “monopoly of private capital” presented.
Marx then comes, via this discussion, again to the point raised earlier, in relation to the dichotomy that in order to raise productivity, machines are required to replace paid labour. But, in replacing paid labour, this machinery also appears to cause unemployment, and to reduce thereby the production of surplus value. As I indicated earlier, this is not the case, because this same process reduces the value of labour-power, as well as releasing capital. But, also the expansion of surplus value means that additional labour-power can be employed.
The overall result is that not only does capital expand, but the level of employment rises with it, despite the rise in productivity. That is born out by history. However, this process is not at all a smooth one.
“Among the economists (including Ricardo in part) we find the same antimony as there is in reality. Machinery displaces labour and increases the net revenue (particularly always what Ricardo here calls net revenue—the quantity of products in which revenue is consumed); it reduces the number of labourers and increases the products (which then are partly consumed by unproductive labourers, partly exchanged abroad, etc.). So this would be desirable. But no. In that case it must be shown that machinery does not deprive the labourers of bread. And how is this to be shown? By the fact that after a shock (to which perhaps the section of the population which is directly affected cannot offer any resistance) machinery once again employs more people than were employed before it was introduced—and therefore once again increases the number of “productive labourers” and restores the former disproportion.” (p 228)
That is what happens, Marx says. There are periods where the machines displace workers who cannot find work, because their particular skills etc. are not those required, and the same thing may apply because they are not living in the right location for the new industries that develop, but the fact remains that the release of capital, and the increase in surplus value is such that capital accumulates on such a scale as to expand the quantity of labour employed to an even greater extent to what it was before.
“That is in fact what happens. And so in spite of the growing productivity of labour the labouring population could constantly grow not in proportion to the product, which grows with it and faster than it, but proportionately [to the total population], if, for example, capital simultaneously becomes concentrated, and therefore former component parts of the productive classes fall into the ranks of the proletariat. A small part of the latter rises into the middle class. The unproductive classes, however, see to it that there is not too much food available. The constant retransformation of profit into capital always restores the same cycle on a wider basis.” (p 228)
The consequence for Ricardo is a contradictory position, in respect of the labourers, which can again be seen today in the position of social democracy. What do workers want? They want higher wages. What is the best way to obtain higher wages? It is that the demand for labour-power should rise. What causes the demand for labour-power to rise? It is that capital should accumulate more rapidly. What enables capital to accumulate more rapidly? It is that profits be high. What causes profits to be high? It is that wages be low!
“They must therefore themselves desire the lowering of wages, so that the surplus taken from them, once more filtered through capital, is returned to them for new labour and their wages rise. This rise in wages however is bad, because it restricts accumulation.” (p 228-9)
The same thing applies in relation to the workers' breeding habits. They should not produce more children because that only increases the supply of workers and reduces wages, but the fall in wages increases profits and accumulation, so raising the demand for labour, and so wages.
“But the labouring population must rise in the same degree as the accumulation of capital; that is to say, the labouring population must be there exactly in the numbers that the capitalist needs—which it does anyway.” (p 229)
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