[15. Ricardo’s Views on the Different Types of Accumulation of Capital and on the Economic Consequences of Accumulation]
Marx examines what Ricardo says, in relation to accumulation. Ricardo's theory is flawed, because of his assumption that all accumulation is accumulation of variable-capital. The determinants of accumulation are not just the rate of profit, but the amount of profit. However, accumulation also depends upon the proportion of profit that is consumed productively as opposed to unproductively. As Marx describes, in Capital II, at the heart of expanded reproduction continues to be simple reproduction. In other words, the capitalist always continues to need to engage in an amount of personal consumption to ensure their own reproduction. Taken at a social level, there is always a proportion of surplus value that must be allocated to the personal consumption requirements of those who produce no additional value, but whose labour is still necessary.
The extent to which the proportion of this consumption is reduced, therefore, increases the proportion of the surplus value that is available for accumulation. Finally, as Marx has described in the previous chapters, the amount of accumulation that can occur physically depends upon the value of the elements of capital to be accumulated – and indeed, as Marx described earlier, on them physically being available in sufficient quantity.
In summary, accumulation depends on the rate of profit, and on the mass of profit. For any given mass of profit, accumulation depends on the proportion of productive-consumption to unproductive consumption. So, if the total profit is £100 million, and £80 million is required as revenue for personal consumption, £20 million is available for accumulation. But, if profit is only £80 million, whilst £50 million is needed for unproductive consumption, £30 million is available for accumulation. Finally, the actual degree of accumulation then depends upon the value of the elements of capital to be accumulated. If the value of machines and materials falls, due to a rise in productivity, £20 million of accumulation will buy more of these elements than it did previously, and it is this amount, via the technical composition of capital, which determines the mass of labour employed, and so the mass of surplus value produced by it.
Ricardo says, in Chapter VIII, “On Taxes”,
““When the annual productions of a country more than replace its annual consumption, it is said to increase its capital; when its annual consumption is not at least replaced by its annual production, it is said to diminish its capital. Capital may therefore be increased by an increased production, or by a diminished unproductive consumption” (l.c., pp. 162-63).” (p 535)
By unproductive consumption Ricardo means consumption by unproductive workers “who do not produce another value.”
“By increase in the annual production, therefore, is meant increase in the annual industrial consumption. This can be increased by the direct expansion of it, while non-industrial consumption remains constant or even grows, or by reducing non-industrial consumption.” (p 535)
In other words, if more workers are employed, who produce value, the total value of output will rise. Provided more of such workers are employed, relative to any increase in unproductive consumption, the value of output will rise, relative to the amount of unproductive consumption, thereby leaving a larger proportion of output available for accumulation.
“‘When we say,” writes Ricardo in the same note, “that revenue is saved, and added to capital, what we mean is, that the portion of revenue, so said to be added to capital, is consumed by productive instead of unproductive labourers” [l.c., p. 163, note].” (p 535)
But, there are two points to make here. Firstly, as Marx says, accumulation is not simply a matter of an accumulation of variable-capital, i.e. of employing more labour-power. Ricardo believes it is, because he follows Adam Smith's absurd dogma that the value of commodities resolves entirely into revenues. So, Ricardo believes that although capital may be accumulated also in additional machines and materials, etc. the value of these machines, materials and their components ultimately resolves into revenue, and thereby into labour. Ricardo continues,
““If the price of labour should rise so high, that notwithstanding the increase of capital, no more could be employed, I should say that such increase of capital would be still unproductively consumed” [l.c., p. 163, note].” (p 535)
And, herein lies the second point to make, because its clear here that the real issue is not simply about the labour being productive of value, but of surplus value. There would, indeed, have been an over-accumulation of capital, if the additional labour employed results in wages rising to a level whereby the surplus value did not rise, or even fell, as Marx describes in Capital III, Chapter 15.
“It is therefore not the consumption of revenue by productive workers, which makes this consumption “productive”, but its consumption by workers who produce surplus-value.” (p 536)
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