Theories of Surplus Value, Part III, Chapter 19 - Part 42

UK Household Debt

One aspect of Malthus argument was valid, and also applies to more recent times. In addition to rent, the old landed aristocracy maintained their conspicuous consumption, by borrowing against their estates. This borrowing created no new value, it simply represented a conversion of wealth (dead labour) into revenue, and thereby a transfer of wealth out of one set of hands into those of another. It is one way in which the wealth of the old landed aristocracy was diminished, as they were supplanted by the bourgeoisie. In the period between 1950 to 1980, some workers were able to convert some of their revenue, as wages, into wealth, by being able to buy houses, accumulate savings in the form of pension funds, or ISA's and so on. In the 1980's and after, some of that wealth was liquidated, as workers, facing stagnant wages, converted this wealth into revenues, including by borrowing against these assets as collateral. By these means, by encouraging a sharp rise in household debt, capital was able to go some way to addressing the contradiction it faced between the need to raise the rate of surplus value, by depressing wages, and the need to realise that surplus value, as profit, by maintaining levels of household consumption, which was under attack from falling wages.

I discussed this process in my book, Marx and Engels Theories of Crisis.

Marx quotes Rousseau's statement that,

““The more monopoly spreads, the heavier do the chains become for the exploited.” (p 63)

Malthus has other ideas, he writes,

““We might even venture,” says Malthus, “to indulge a hope that at some future period the processes for abridging human labour, the progress of which has of late years been so rapid, might ultimately supply all the wants of the most wealthy society with less personal effort than at present; and if they did not diminish the severity of individual exertion” (he must go on risking just as much as before, and relatively more and more for others and less and less for himself), “might, at least, diminish the number of those employed in severe toil” ([Malthus, Principles of Population, p. 304,] Prévost, p. 113).” (p 63) 

On this basis, the middle class grows, whilst the working class, although growing absolutely in numbers, becomes a smaller proportion of the total population. Marx notes, 

“This in fact is the course taken by bourgeois society.” (p 63) 

In Capital III, Marx notes that the number of commercial workers, professional managers, technicians, administrators and so on necessarily rises, as the scale of socialised production and cooperative labour increases. And, this goes along with the growing technological nature of production, which also requires an extension of public education and so on. At the time Marx was writing, many of these professions were seen as middle-class, but today, we would class teachers, clerks, and other such people as workers. The day to day professional managers, or functioning capitalists are themselves drawn from the working-class and continue to live amongst other workers. As Marx himself says, in Capital III, Chapter 17, 

“The commercial worker, in the strict sense of the term, belongs to the better-paid class of wage-workers — to those whose labour is classed as skilled and stands above average labour. Yet the wage tends to fall, even in relation to average labour, with the advance of the capitalist mode of production. This is due partly to the division of labour in the office, implying a one-sided development of the labour capacity, the cost of which does not fall entirely on the capitalist, since the labourer's skill develops by itself through the exercise of his function, and all the more rapidly as division of labour makes it more one-sided. Secondly, because the necessary training, knowledge of commercial practices, languages, etc., is more and more rapidly, easily, universally and cheaply reproduced with the progress of science and public education the more the capitalist mode of production directs teaching methods, etc., towards practical purposes. The universality of public education enables capitalists to recruit such labourers from classes that formerly had no access to such trades and were accustomed to a lower standard of living. Moreover, this increases supply, and hence competition. With few exceptions, the labour-power of these people is therefore devaluated with the progress of capitalist production. Their wage falls, while their labour capacity increases.”

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