The expansion of the net revenue means that more can be spent on menial servants, but also on others who live off the revenue of the capitalists and landlords, and these elements thereby also come to associate their interests with those from whom they derive their own income. Along with this comes a refinement of the luxury commodities consumed by the capitalists and landlords. As the price of necessaries falls, the greater the proportion of profit and rent that can be used for the consumption of luxuries, and gradually the price of these luxuries also falls, whilst what were once luxuries become necessaries. It is not just that luxury consumption increases quantitatively but that it also increases qualitatively. We can think of the consumption of private jets, yachts and so on. Even as workers themselves increase their consumption of what were once luxuries, so the distance between the quantity and quality of the range of commodities they can consume grows wider.
Capital is faced with two contradictory requirements. On the one hand, it seeks to minimise the labour required for production, i.e. to maximise productivity, because this maximises the rate of surplus value. On the other hand, it seeks to maximise the amount of labour employed, for any given rate of surplus value, because in that way it maximises the mass of surplus value.
“The one tendency throws the labourers on to the streets and makes a part of the population redundant, the other absorbs them again and extends wage-slavery absolutely, so that the lot of the worker is always fluctuating but he never escapes from it. The worker, therefore, justifiably regards the development of the productive power of his own labour as hostile to himself; the capitalist, on the other hand, always treats him as an element to be eliminated from production.” (p 573)
Ricardo seeks to grapple with these contradictory tendencies, and in the process fails to take account of the constantly growing number in the middle classes who live off the revenues of the capitalists and landlords, and who, thereby, act as an important buffer, and prop for those exploiting classes.
“The middle classes maintain themselves to an ever increasing extent directly out of revenue, they are a burden weighing heavily on the working base and increase the social security and power of the upper ten thousand.” (p 573)
The rise in productivity, caused by the improvement in technology, first reduces the gross revenue, whilst increasing the net revenue, and then, out of this increased net revenue comes increased accumulation, and thereby an increase in employment and gross revenue. As I've described it elsewhere, in relation to the long wave cycle, new technologies are developed, in the Autumn/Crisis phase of the cycle, to deal with labour shortages, and the consequent squeeze on profits. They are employed and displace labour throughout the Winter/Stagnation phase of the cycle, thereby causing the net revenue to rise, whilst the gross revenue declines (or usually the former grows more rapidly than the latter), and this sets in place the conditions for employment to rise, and gross revenue to increase in the Spring/Prosperity phase of the cycle.
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