1. Overproduction of Commodities
1.2 Capitalism
There are specific features of overproduction under capitalism compared to those that apply to other modes of production. All of the features described in relation to the overproduction of commodities in other modes of production apply, but, in addition another feature is that the produced commodities cannot be sold at a profit.
It is production for profit that is the defining characteristic of capitalist production. Where society engages in direct production, the determining feature is the production of use values so as to maximise social welfare. For the exploiting class, it is the production of a surplus product/use values that characterises the form in which surplus labour is pumped from the labourer. First that is via the performance of such surplus labour directly, then via the appropriation of the labourer's surplus product, as rent in kind, and then finally, as feudal rent dissolves, in the form of money rent. But, even this money rent is appropriated as a means of acquiring use values for consumption, rather than for the purpose of accumulating additional means of production/capital. Even where commodity production becomes generalised, as individual, independent producers produce commodities to be sold on the market, the primary goal of such production remains the production of, or acquisition of, use values for consumption. The blacksmith in such a society, for example, does not engage in their trade to produce a profit, but to be able to obtain, in exchange for the product of their labour, the other products required for their own consumption.
Its on this basis that, during all of the 10,000 years of such commodity production, commodities exchange at their values. The independent producer is concerned only to recover, in the price of their output, the value of the materials consumed in its production, plus the value added to it by their labour. If two independent labourers, in different spheres work the same number of hours, they produce the same amount of new value. This new value divides into their necessary labour, and surplus labour. They both produce the same amount of surplus value, therefore. Let us say, they produce £10 of new value, of which £2 is surplus value. But, labourer 1 might use means of production that has an exchange-value of £4, whereas labourer 2 uses means of production with an exchange-value of £8. The total exchange-value of labourer 1's commodity is then £14, and of 2's £18.
However, provided these exchange-values can be obtained, both producers will continue on this basis. Both produce only to be able to obtain the required exchange value, to be able to get the use values required to live and to continue production in their chosen sphere. However, if we translate this situation into that existing under capitalism, the surplus value of labourer 1 translates into a rate of profit of 2/12 = 16.66%, whereas the rate of profit of labourer 2 is 2/16 = 12.5%. For a capitalist, who only produces for profit, they would seek to move their capital out of the latter sphere of production, and into the former sphere. Its for this reason that, as soon as capitalist production commences, in the 15th century, commodities cease exchanging at their exchange-value, and begin to exchange at prices of production, i.e. cost of production plus average profit.
Wherever, the production of a commodity, under capitalism, is such that its supply relative to demand results in it producing less than the average profit, then it is relatively overproduced. It indicates that capital needs to move out of this sphere, and into some other sphere where the rate of profit is higher. But, for the reasons described previously, it can be that all commodities are relatively over produced, because any increase in their production results in the mass of profit not rising as fast as the mass of capital, so that the rate of profit overall is reduced. If the mass of profit does not rise at all, or even falls, then this means that there is absolute overproduction of capital.
Under capitalism, therefore, commodities are overproduced not just for the reasons that exist for other modes of production, but also because their increased production results in an overproduction of capital.
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