Overproduction can refer to an overproduction of commodities or an overproduction of capital. An overproduction of commodities may be a planned overproduction or an unplanned overproduction. An overproduction of commodities is not, then, necessarily, an overproduction of capital, but may be a necessary requirement for an expanding population and market, and for the accumulation of means of production and capital accumulation. An unplanned overproduction of commodities may also not represent an overproduction of capital, because commodities are also produced by individual commodity producers, as well as by capitalists. An unplanned overproduction of commodities, by capitalist producers, is an overproduction of capital, because the commodities form part of the commodity-capital, whose value cannot now all be realised, and so cannot be metamorphosed into productive-capital, to renew the circuit of capital. It represents a rupture in that circuit. By contrast, an overproduction of capital is always, also, an overproduction of commodities, because the elements of capital are themselves comprised of commodities.
“Over-production of capital, not of individual commodities — although over-production of capital always includes over-production of commodities — is therefore simply over-accumulation of capital.”
(Capital III, Chapter 15)
An absolute overproduction of capital arises when any increment of capital does not result in an increase in the mass of surplus value produced, and a relative overproduction when the increase in surplus value is not proportionate to the increase in capital.
- Overproduction of Commodities
However, where products are overproduced, to a degree that was not anticipated, because of a bumper harvest, for example, this results in a boon for the society. They celebrate their good fortune by holding feasts to consume the surplus production, and so on. The wealth of such a society is measured in the quantity of use value it produces. Where commodities are overproduced to an extent that had not been anticipated, however, this can cause problems. The reason is that, particularly as production comes to be dominated by commodity production, these commodities are produced, not for their use value to the producer, but for their exchange-value, their ability to command a quantity of money, or other commodities. An unexpected surplus of commodities, means that the exchange-value of these commodities falls, which means that the producers of those commodities are unable to obtain the money or other commodities they expected to be able to obtain from the sale/exchange of their own commodities. The wealth of such a society is measured not by the quantity of use value but by the quantity of exchange-value.
Commodity production and exchange goes back around 10,000 years. It exists under a range of different modes of production. The primitive communes, and nomadic tribes engaged in the production and exchange of commodities; slave owning societies in Antiquity engaged in commodity production and exchange; it continued during the Dark Ages; it occurs under the Asiatic Mode of Production; it occurs under feudalism; finally it assumes its most developed form under capitalism.
As Marx says,
“Apart from the domination of prices and price movement by the law of value, it is quite appropriate to regard the values of commodities as not only theoretically but also historically antecedent (prius) to the prices of production. This applies to conditions in which the labourer owns his own means of production, and this is the condition of the land-owning working farmer and the craftsman, in the ancient as well as in the modern world. This agrees also with the view we expressed previously, that the evolution of products into commodities arises through exchange between different communities, not between the members of the same community. It holds not only for this primitive condition, but also for subsequent conditions, based on slavery and serfdom, and for the guild organization of handicrafts, so long as the means of production involved in each branch of production can be transferred from one sphere to another only with difficulty and therefore the various spheres of production are related to one another, within certain limits, as foreign countries or communist communities."
(Capital III, Chapter 10)
Initially, commodity production and exchange represents only a small element in the production of societies. It develops out of the sporadic exchange of products, as gifts, between tribes. As these exchanges increase and become regular trade, so each community begins to produce certain products specifically for the purpose of exchange, and these, thereby, become commodities. As the primitive commune dissolves, and the family develops, the individual peasant household produces commodities, even under direct production. It produces commodities, still for the purpose of meeting its own direct needs for consumption, but, now, it achieves this via the exchange of these commodities for the specific products it requires for consumption. In other words, the commodities produced are still produced primarily to meet some established social need. This is most apparent under systems of barter, but, even when money economy develops, the commodities produced and taken to market have often been produced to order, or else the producer knows that a customer for their commodity will be present.
This is not a condition that exists under capitalism, because it is premised upon mass production of commodities in anticipation of finding a market for them.
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