As I have set out elsewhere, the objective driver for accumulation is competition. When the monopoly of private capital gives way to socialised capital, this objective driver of accumulation remains. But, the private capitalist, now reduced to the role of money lender, of shareholder or bondholder, is thereby relieved of that objective driver for accumulation. They can now let rip with their desire to engage in conspicuous consumption, so long as it does not result in a diminution of their assets below a level required to sustain their revenues, sufficient to cover their lavish lifestyle. And, this applies also to those executives they appoint to Boards of Directors to represent their interests, and whose income is derived from the surplus value, rather than from variable-capital. In fact, in the 18th and 19th centuries, landlords, consumed above these levels, borrowing against the value of their estates to do so. In the last two decades of the 20th century, and first two decades of the 21st century, the owners of fictitious capital did a similar thing. They borrowed recklessly against massively inflated asset prices, so as to consume unproductively. The same was done by pension funds, and the state.
It is why, as described earlier, we have seen an increasing proportion of profits paid out as dividends/interest, and other forms of capital transfers, which convert capital into revenue. But, this ultimately undermines itself, both as a result of causing falling yields on these assets, and as a result of diverting capital away from productive investment. In so far as these revenues have simply gone back into speculation, in these revenue producing assets, the process has actually been more destructive than previous forms of using up surplus value in unproductive consumption. The money may as well have been used to gamble at the race track or at the casino. In fact, it would have had fewer negative consequences had it been used in that manner.
The problem is that if the surplus product exists in the form of a vast quantity of necessaries, the capitalists cannot consume them personally. They have the option then of selling them to workers, but this is essentially to increase the size of the variable-capital, to raise wages, and equally diminish profits. Instead, the surplus production can be exported, in exchange for luxuries, and the capitalists then simply consume these luxuries.
“Here is the real secret of the necessity for increasing consumption by “the rich”, advocated by Malthus, in order that the part of the product which is exchanged for labour and converted into capital, should have great value, yield large profits, absorb a large amount of surplus labour. He does not however propose that the industrial capitalists themselves should increase their consumption, but [allots] this function to landlords, sinecurists, etc., because the urge for accumulation and the urge for expenditure, if united in the same person, would play tricks on each other.” (p 242)
It is also, as described elsewhere, the basis of the Keynesian solution, with the state occupying this function of buyer of last resort.
The author of the pamphlet does, here, however, expose the fallacy of the argument of Ricardo and Barton, and others, in regard to wages. The level of wages is not determined by quantity of means of consumption that are available as variable-capital but by the quantity that are actually transformed into variable-capital. Capitalists can use these additional means of consumption to employ unproductive labour as retainers, domestic servants and so on, or they can export this surplus of necessaries in exchange for luxuries. The level of wages is set as a minimum by what is required for the reproduction of labour-power. If wages rise above this level, it is not because higher productivity has created a surplus of necessaries – as for example Carey had argued – but because the demand for labour-power itself, relative to the supply, rises, and so competition drives wages higher. In short, it is the demand for labour-power, driven by accumulation, that causes wages to rise.
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