Even amongst animals there is overproduction. Birds collect more food than is required for their own consumption, in order to provide the food required by their chicks in the nest. Squirrels store nuts to provide for their requirements over the Winter. Bears store up food as fat, to last them through their hibernation. Primitive man also needed to engage in the same kinds of activity to provide stores over the Winter, to provide the additional food required by their children as part of an expanding population, as well as to provide the food for those members of the tribe that were unable to work.
By gathering in more nuts, roots, berries and so on than were required for immediate consumption, primitive communities could free some members of the tribe, usually males, to go and hunt. If they came back empty handed, the tribe still would not starve, because of its existing overproduction. On the other hand, if the hunt was successful, the tribe would have a wider range of foods to eat. In other words, the overproduction enables a wider range of use values to be produced and consumed. The skins of the animals caught in the hunt, can also then be used to provide clothing, to be used as insulation for the shelter and so on. A further range of use values are then added to the community's stock of products, and consumption. Overproduction is a basic requirement for this continual expansion of the range of use values available for consumption.
But, overproduction is required for another purpose. If more seeds are collected from natural grasses and cereals than are required for immediate consumption, then some of these seeds can be deliberately planted and cultivated. Instead of being produced for consumption, these seeds are then produced for production. They become not means of consumption, but means of production. The seeds, having been deliberately planted and cultivated, in turn, produce more grain. This development of settled agriculture, means that something approaching a guaranteed supply can be produced removing the need to have to search out the required cereals. The saving on time, the concentration of the crop in a given area, and ability to cultivate it, means that the quantity of use values produced increases substantially, whilst the labour-time required for their production is reduced substantially, so that the unit value of the product is thereby reduced. Once this settled agriculture is established, this means that production can be progressively increased, whilst unit values are progressively reduced.
Once production exceeds consumption by a given amount, the best seeds can be used for planting, so that the quality of the crop progressively improves, with each plant producing higher yields of grain. In addition, overproduction of crops, means that some animals once caught, instead of being eaten, can themselves be domesticated, and bred. They can be fed from the overproduction of crops. Now, time previously spent hunting can be used far more effectively in cattle breeding and rearing. The amount of overproduction, thereby, increases, but it is increasingly manifest, not in simply an increased output of a given range of products, but in the ability to produce an ever widening range of products, including products whose purpose is not for consumption, but to enhance production itself. As the range of products continually expands, so this means that different members of the tribe can concentrate on producing different products. In other words, it brings about a social division of labour within the community. That, in itself, raises productivity, as each member of the tribe becomes more proficient in those types of production in which they engage.
The greater the degree of overproduction, the greater the potential to expand the range of products produced, as smaller numbers of people are required to produce any particular type of product required by the community. Some can engage in creation of pottery, some in the creation of clothing, some in the production of rugs, some in the production of tools and weapons, and so on. In Egypt and Mesopotamia, near the dawn of civilisation, agricultural production depended greatly on understanding the rise and fall of the Nile and other rivers. It meant that some members of society specialised in understanding the laws that dictated these movements. It meant that these sages learned to map the stars, and thereby to calculate the time of year, and thereby the movement of tides, and so on. They could only concentrate on these functions, because they were freed from other types of labour, by the fact that the society overproduced. And, by better understanding the seasons, this scientific knowledge itself facilitated greater production, by setting out the times for planting and reaping etc.
But, this overproduction, by enabling some in society to consume without directly producing, also opens up another possibility; it means that some in society can separate themselves off as a ruling class, or caste, and can, also, thereby, consume without producing. Those that claim special knowledge in relation to nature can proclaim themselves as representatives of the Gods, as medicine men, priests and so on. Others may set themselves apart as being military leaders, who are able to further the interests of the tribe in battle. Indeed, the fact that, now, every individual producer can produce more than is required for their own consumption means that slaves can be taken in battle with other tribes, and these slaves will now produce more than is required for their own consumption, the surplus now being added to the tribe's overproduction.
This, as Engels describes in The Origins of The Family, Private Property and The State creates the conditions for the dissolution of these primitive communist societies, and the rise of class society. Once production rises above certain levels, the tribe, which has generally been consanguineous, and polyandrous, begins to divide into a series of families. Inheritance, which was limited, and ran in the maternal line, as the only certain line of parentage, becomes more significant, and begins to run in the paternal line. Consanguinity and elsewhere the Punaluan family, is replaced by polygamy, and monogamy. As production increases, and tools become increasingly significant, so these tools are passed down within families, land ownership becomes divided into family farms and so on. Those able to farm the better land, or which accumulate the better tools are able to produce more, and accumulate more. They are able to take on servants, as other families' fortunes decline. This is the story told in the Bible in relation to Joseph and the pharaoh. Out of this process, one group develops into a ruling class of slave owners, and the others are reduced into slavery, with a large number of small peasant producers in between, some of whom, also, become artisans, either in addition to their agricultural production, or else concentrated in towns, where they exchange their products and services for necessities. We know, now, for example, that much of the work done in building the pyramids was undertaken by skilled artisan builders, and not, as originally thought, by slaves.
Once again, these artisans are able to undertake the production only of these specific goods and services, because society as a whole overproduced. Peasant producers produced more food than they required, and were able to exchange this surplus product with the artisan producers of various goods and services. In other words, even whilst society is characterised by direct production, i.e. the production of use values for consumption, rather than to obtain money/exchange-value, or profit, a considerable amount of production is already a production of goods and services for exchange, just as within the primitive commune an extensive division of labour meant that production was already social. It is production of goods and services not required directly for the producers' own consumption, but to be exchanged for other goods and services that are required for their consumption. This first takes the form of barter.
As Marx, says, therefore, contrary to Adam Smith, it is the social division of labour that arises within the primitive commune that makes possible trade, and not trade that leads to the division of labour. The division of labour is both the result of, and the cause of an increased overproduction. Overproduction means that some individuals can specialise, whilst this increasing specialisation thereby results in higher levels of productivity, and greater overproduction. The increase in trade, which arises first between different communes, first takes the form of barter, as each community exchanges products it has in excess for other products it requires. This still reflects a condition of direct production, because the basis of the exchange is the acquisition of use values/products required for consumption, and not for the purpose of acquisition of exchange-value. But, the increase in trade, and the increase in the social division of labour inevitably results in the production of commodities.
Rather than simply exchanging products that have been overproduced, communities begin to deliberately produce them in excess of their requirements, for the specific purpose of exchanging them for other products. As trade expands further, and the range of other products that can be exchanged increases, so, in place of barter, the producers of commodities seek to exchange them for a commodity that can be exchanged for all other commodities, a general commodity, or universal equivalent form of value, i.e. a money commodity. This process, by which products become commodities, and value becomes expressed as exchange-value is described in Marx's value form analysis contained in Capital I, Chapter III.
At the point that communities produce use values/products for their own consumption, the value of these products can only be their individual value, i.e. the value of those products as measured by the actual labour time expended on their production by the commune. The value and use value of the product is inseparable. The commune determines which products it needs to produce, and also knows directly the value of those products, i.e. the labour-time required for their production. It continually balances the value of each type of product against its use value, so as to maximise welfare. As Marx says, in Capital I, Chapter I, this is exactly what Robinson Crusoe does, or the individual peasant household does in efficiently allocating available labour-time. As Engels says, in Anti-Duhring, it is also what a communist society would do. It is the way The Law of Value operates in these divergent societies.
But, this is also what leads to the development of the social division of labour within the commune. The members of the commune quickly realise that to produce more use values, they must reduce the value of each type of use value, i.e. they must reduce the labour-time required for its production. They soon learn that the best way to do this is for those with specific aptitudes to specialise in certain types of production. They also learn that the other way of reducing the unit value of products is to increase the instruments of labour that can raise the productivity of all labour. So, they spend time producing tools, collecting seeds, domesticating animals and so on. The two things go together as some specialise in producing these instruments of labour, and means of production, and others specialise in producing means of consumption.
When these primitive communities first exchange products, which takes the initial form of gifts exchanged at weddings and so on, it is a matter of one community handing over products it has in excess, and receiving products that the other community has in excess. The exchanges are not based upon any kind of measurement of equal values. However, as trade between communities increases, each community appoints its own representatives to act on its behalf. These merchants, themselves soon begin to understand that the 100 hours of labour represented in the 10 metres of linen it seeks to exchange, can be exchanged for 10 litres of wine produced by community B, 12 litres of wine produced by community C, and 14 litres of wine produced by community D. The reason for these different rates of exchange, it can then be discovered, is, because the individual value of wine produced by these different communities is different. Each requires different amounts of labour to produce a litre of wine. The merchant selling linen will then, obviously seek to exchange their linen with the merchant representing community D, from whom they can get 14 litres of wine. Competition, thereby transforms the individual values of these products into a social value, as the average labour-time required for production, and this average social value, or market value then forms the basis upon which all of these commodities exchange for each other, it becomes the basis of their exchange value.
The merchants have a vested interest in knowing precisely how much labour-time is required by each community to produce each type of commodity, because that now is the basis upon which they conduct exchanges, and from which, out of a process of arbitrage, they can secure the best deal for the community they represent. As Marx says, therefore, the merchant performs a central role in determining these market values and exchanges, as the range of commodities exchanged increases, and it becomes impossible for the producers, in one community, to know the value of commodities produced in other more remote communities. But, it is also on this basis that the merchants themselves are able to separate themselves from the producers, and constitute themselves as a separate merchant class, able to make profits from arbitrage, from buying low and selling high, and also, thereby, from these profits, to accumulate money-capital, and commodity-capital.
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