Thursday, 5 July 2018

Theories of Surplus Value, Part II, Chapter 17 - Part 7

[3. Necessary Conditions for the Accumulation of Capital. Amortisation of Fixed Capital and Its Role in the Process of Accumulation] 


Marx begins here to examine the conditions required for the accumulation of capital, as opposed to simply its reproduction. In the same way that the simple reproduction of capital requires that its individual components are physically available, to replace those consumed in the production process, on a like for like basis, so the accumulation of capital requires that those components are available in excess of what is required simply to replace those consumed in production.  In other words, for there to be accumulation there must be overproduction.

In the first instance, what is required is additional labour-power. Additional labour-power may be derived from a temporary lengthening or intensification of the working-day, though this may have to be paid for, including with overtime payments. Marx also lists all of those reserves of labour discussed in Capital I, from which capital periodically is able to draw additional labour-power. For example, women and children may be drawn into the workforce; in developing economies, new reserves of labour from the countryside may be drawn in. Besides the normal periods of frictional unemployment, suffered by the working-class, an absolutely growing, though relatively shrinking, portion of the population is structurally, or semi-permanently unemployed, but which, during periods of very strong growth, can itself be drawn back into the workforce. 

But, fundamental to the process of capital accumulation, Marx says, is the actual growth of the population itself. 

“Finally, together with the growth of the population in general, the labouring population can grow absolutely. If accumulation is to be a steady, continuous process, then this absolute growth in population—although it may be decreasing in relation to the capital employed—is a necessary condition. An increasing population appears to be the basis of accumulation as a continuous process. But this presupposes an average wage which permits not only reproduction of the labouring population but also its constant growth.” (p 477) 

This has been a feature of nearly all theories of economic growth, for example, with the Harrod-Domar model

Whether this holds true today, given the increasing pace of technological development, the introduction of robotisation into all areas of life, and the development of artificial intelligence, which increases the potential for creating relative surplus populations, I think is open to question. It certainly is the case that some small nations appear to have enjoyed strong growth and high living standards by focussing on areas of production that require relatively small numbers of very high value labour, in high value production. 

In addition to having the physical elements of the additional capital required for accumulation, the other thing that is required is a sufficiently large fund of surplus value, which enables a portion of this surplus to be set aside for accumulation, rather than simply funding unproductive consumption. That is why capital accumulation is easier for developed economies than for undeveloped economies. A capitalist that produces only sufficient surplus value so as to fund their own personal consumption is not able to use this surplus value for accumulation, and the same applies to an economy where those conditions apply. The greater the amount of surplus each capital obtains, the smaller the portion of it required to fund unproductive consumption, and the greater the proportion available for accumulation. 

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