But, Marx says, Sismondi does have some inkling that new forms of appropriation and distribution of this massive potential for an increase in social wealth are needed. Malthus, however, has no such thought, and simply wants to retard development, so as to keep the working-class suppressed, and so as to preserve the ability of the landed aristocracy to consume the surplus product.
Something similar has been seen particularly in the last ten years, after the 2008 financial crisis. The underlying cause of that crisis was 20 years of inflation of asset prices, fuelled initially by falling interest rates, caused by an excess supply of realised profits, as productivity rose sharply, resulting in sharp rises in the global rate of profit. It was kept going by central banks manipulating official interest rates, and the prices of government bonds, and by the state giving subsidies and other encouragements to speculation. The bubble burst as more rapid economic growth caused interest rates to rise, which collapsed the capitalised prices of revenue producing assets. The main means by which the parasitic classes today, the rentier capitalists who own property, shares, bonds and their derivatives, extract wealth and a share of the surplus product, has been through this continual inflation of asset prices. In order to keep those asset prices inflated, after 2008, not only was it necessary to introduce QE, so as to buy up bonds on an even more exaggerated scale, but it was necessary to impose austerity, so as to restrain real economic growth, hold back the demand for labour-power, and so restrain wages, thereby enabling interest rates to be held down, and asset prices kept inflated.
This appropriation of Sismondi's ideas is illustrated in even more nauseating form in the work of the Malthusian Thomas Chalmers, in his work, “On Political Economy in connexion with the Moral State and Moral Prospects of Society”, second ed., London, 1832.
Something similar has been seen particularly in the last ten years, after the 2008 financial crisis. The underlying cause of that crisis was 20 years of inflation of asset prices, fuelled initially by falling interest rates, caused by an excess supply of realised profits, as productivity rose sharply, resulting in sharp rises in the global rate of profit. It was kept going by central banks manipulating official interest rates, and the prices of government bonds, and by the state giving subsidies and other encouragements to speculation. The bubble burst as more rapid economic growth caused interest rates to rise, which collapsed the capitalised prices of revenue producing assets. The main means by which the parasitic classes today, the rentier capitalists who own property, shares, bonds and their derivatives, extract wealth and a share of the surplus product, has been through this continual inflation of asset prices. In order to keep those asset prices inflated, after 2008, not only was it necessary to introduce QE, so as to buy up bonds on an even more exaggerated scale, but it was necessary to impose austerity, so as to restrain real economic growth, hold back the demand for labour-power, and so restrain wages, thereby enabling interest rates to be held down, and asset prices kept inflated.
This appropriation of Sismondi's ideas is illustrated in even more nauseating form in the work of the Malthusian Thomas Chalmers, in his work, “On Political Economy in connexion with the Moral State and Moral Prospects of Society”, second ed., London, 1832.
“Here the parsonic element is more in evidence not only theoretically but also practically, since this member of the Established Church defends it “economically” with its “loaves and fishes” and the whole complex of institutions with which this Church stands or falls.” (p 56-7)
Marx then gives a number of quotations from Malthus' “Principles of Political Economy”, which set out Malthus' arguments in relation to the workers inability to create a sufficient demand for all they produce. For example,
““No farmer will take the trouble of superintending the labour of ten additional men merely because his whole produce will then sell in the market at an advanced price just equal to what he had paid his additional labourers. There must be something in the previous state of the demand and supply of the commodity in question, or in its price, antecedent to and independent of the demand occasioned by the new labourers, in order to warrant the employment of an additional number of people in its production” (op. cit., p. 312).” (p 57)
In short, if workers' wages were equal to the value of the commodities they produce, there would be no profit, and the capitalist only advances capital so as to produce profit. Malthus' argument is that in order to increase wealth its not sufficient to increase population or capital, or to revolutionise productivity, because all of this additional production is only of benefit if it can be sold at a profit. His aim is to show that, in order to do that, the landed aristocracy etc. fulfil a necessary role in enabling those profits to be realised. Without that, Malthus shows, there could be a generalised overproduction of the kind that Ricardo, Say, Mill etc. deny is possible.
So, for example, Marx quotes Malthus' comments,
““…both labourers and capital may be redundant, compared with the means of employing them profitably” (op. cit., p. 414 [note]).” (p 58)
And, Marx summarises the contents of a long paragraph, thus
““…Commodities are exchanged not only for commodities but also for productive labour and personal services and in relation to them, and also to money, there can be a general glut of commodities (loc. cit.).” (p 58)
These arguments against the ideas put forward by Mill, Say, and Ricardo - “Say's Law” - that overproduction is impossible, are developed in Theories of Surplus Value, Chapter 17.
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