Saturday, 7 July 2018

Theories of Surplus Value, Part II, Chapter 17 - Part 9

Marx also dealt with this question of accumulation, in Capital III, in dealing with Ricardo's theory of rent. Ricardo argued that capitalist farmers would only accumulate capital, and extend their cultivation, if agricultural prices and profits rose, giving the incentive for additional investments. But, Marx says this is wrong. Capitalist farmers assume a year on year increase in population, and such increases in population imply increased demand for food etc. Each farmer is thereby incentivised to increase their output each year, so as to capture their share of this larger market. If they don't, their competitors will. Because each farmer expands their production they use a portion of their surplus product for this purpose. So, a portion of their surplus grain goes to increase the amount of seed sown; a portion of the surplus products goes to pay wages to additional labourers etc. Thereby, this very expansion that each farmer undertakes, provides the revenues to all of these additional workers that forms additional demand for agricultural products, arising from the increase in population, whilst also increasing the mass of surplus products and surplus value at the end of that year. 

One of the basic drivers for accumulation is then an increase in demand for consumption goods, which arises from the steady rise in population. This is one reason why GDP rises with population, and why, in recent times, when Germany took in large numbers of Syrian and other refugees, it saw such a large rise in its economic growth. But, increases in demand that prompt capital accumulation do not arise only from population growth. As Marx describes, in the The Grundrisse, in discussing The Civilising Mission of Capital, the market expands not only in terms of the quantity of existing products consumed, but by an extension of the range of products consumed. The market may expand because a range of new commodities become available, at prices that increasing numbers of consumers can afford, and as this demand rises, so an incentive arises for existing producers to expand their production, and new producers to enter that sphere. It may also be the case that other dynamics within the economy shift the allocation of revenues. 

If the demand for labour-power rises relative to supply, wages will rise, whilst profits will fall, and this may also mean lower revenues in the form of interest and rent. The recipients of profits, rent and interest may have a lower marginal propensity to consume than workers in receipt of wages. A shift towards wages, and away from these other revenues may then cause a rise in demand for wage goods, leading to increased capital accumulation in that sphere, combined with a fall in the savings ratio, as the recipients of profits, rent and interest have a smaller amount of excess revenue to use as savings. But, this very process may itself be a cause of capital accumulation. If wages rise, squeezing profits, firms may engage in attempts to accumulate via labour-saving technologies, i.e. intensive accumulation replaces extensive accumulation. 

No comments: