In an economy of direct producers, each producing commodities only to exchange for other commodities required for their consumption, money circulates freely in the economy as it finances this succession of sales and purchases, C – M – C. But, now, both the merchants and usurers accumulate money from profits and interest. A large portion of the money in the economy no longer circulates freely to finance transactions, but, instead, becomes hoarded. It clumps together, as part of a natural process following on from simple laws. Today, chaos theory describes this phenomenon found throughout nature as self-organisation. It creates the potential to become money-capital so that it is used not as an intermediary between commodity owners to exchange commodities, for consumption, but is used as capital, with the purpose of expanding value, M – C – M`, or simply M – M`.
“Consequently, insofar as money does not circulate actively as currency, is not in movement, it is accumulated in their hands. They also hold some of the reservoirs of circulating money and to an even larger extent they hold and accumulate titles to products, but in the form of money titles, titles to commodities converted into money. On the one hand, usury leads to the ruin of feudal wealth and property; on the other hand, it brings about the ruin of petty-bourgeois, small-peasant production, in short, of all forms in which the producer is still the owner of his means of production.” (p 530)
In precapitalist modes of production, the forces of production, and method of production changes little. When the producers are dispossessed of their means of production, they can only become a slave or servant, or else become a serf working on the land. What transforms this situation is a slow transformation of the forces of production, which enables a transformation of the method of production, which becomes possible because of the growth of markets, both in depth and breadth, as a concentration of these markets in urban areas. The markets grow in depth as a greater volume of each commodity is traded and in breadth as an increasing variety of commodities are traded.
This process proceeds in proportion to the increase in the social division of labour. A larger market for any particular type of commodity, say linen, means that a larger supply can be absorbed by the market. A capitalist producer of linen, who produces at a lower cost than the independent peasant producers, is, thereby, enabled to grab an increasing share of that market, by undercutting the peasant producers. Even if, to begin with, the capitalist producer only brings together handicraft producers under one factory roof, they obtain economies of scale, but this new method of production also quickly brings about a division of labour inside the factory, which results in further reductions in production costs. And, the more this means that direct producers become wage workers, the more it means they become reliant on obtaining their consumption needs from the market, so that the market itself expands along with it. For a description of how this process unfolds in practice, see Lenin's “On The So Called Market Question”.
And, the changes in the forces of production bring about other transformations. The printing press is a good example. Prior to the printing press, the circulation of books and other literary material, required scribes to meticulously copy the material, each working individually. The printing press not only meant that one printer could print hundreds of copies of each work, but it meant that the task itself became one undertaken by cooperative labour, some involved in the actual printing, others in the compositing, others in machine maintenance etc.
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