Marx describes the concept of The Civilising Mission of Capital, in The Grundrisse. Capitals are driven to compete. Initially, this competition takes the form of price competition, as each firm seeks to undercut others in the industry, and, thereby, to grab market share. In order to obtain this advantage, each firm is led to innovate, to raise the level of productivity, so as to reduce its costs. As every other firm follows suit, and introduces new machines, new techniques and so on, to obtain this higher productivity, so the level of productivity, in the industry, and across the economy, is raised. Those firms that do not manage this, and go bust, then see their market share taken over by the more efficient firms so that, again, the average level of productivity rises. But, as productivity rises, for each industry, there comes a point where the capital and labour, thereby released, moves to some other new sphere of production, instead of being used to simply produce more of the given product.
“On the other side, the production of relative surplus value, i.e. production of surplus value based on the increase and development of the productive forces, requires the production of new consumption; requires that the consuming circle within circulation expands as did the productive circle previously. Firstly quantitative expansion of existing consumption; secondly: creation of new needs by propagating existing ones in a wide circle; thirdly: production of new needs and discovery and creation of new use values. In other words, so that the surplus labour gained does not remain a merely quantitative surplus, but rather constantly increases the circle of qualitative differences within labour (hence of surplus labour), makes it more diverse, more internally differentiated. For example, if, through a doubling of productive force, a capital of 50 can now do what a capital of 100 did before, so that a capital of 50 and the necessary labour corresponding to it become free, then, for the capital and labour which have been set free, a new, qualitatively different branch of production must be created, which satisfies and brings forth a new need.”
(Grundrisse, Chapter 8)
So, as productivity rises, the value of commodities falls, which is manifest, also, in a fall in their price of production. Living standards rise, because, even though wages fall, i.e. the value of labour-power falls, and profits rise, these wages buy an increasing quantity of wage goods. However, there is a limit to how much of any particular wage good workers want to buy, no matter how cheap it might become.
“The same value can be embodied in very different quantities [of commodities]. But the use-value—consumption—depends not on value, but on the quantity. It is quite unintelligible why I should buy six knives because I can get them for the same price that I previously paid for one."
So, it is inevitable that all consumers, including workers, will only buy more of any type of commodity, as it becomes cheaper, up to a point. After that, they will prefer the general commodity, money, to any or all of these other commodities, and keep it in their pocket, meaning that all of these other commodities have been overproduced.
“At a given moment, the supply of all commodities can be greater than the demand for all commodities, since the demand for the general commodity, money, exchange-value, is greater than the demand for all particular commodities, in other words the motive to turn the commodity into money, to realise its exchange-value, prevails over the motive to transform the commodity again into use-value.”
(TOSV2, Chapter 17, p 505)
At such a point, the rate of profit, on all of this production, would also drop suddenly. This is particularly the case, given that its often where the demand for labour-power has risen so much that wages are pushed up, so that workers, with these higher wages, are able to buy more of these commodities, and so reach a point where they do not demand more, that also means that these higher wages reduce relative surplus-value, thereby, creating an overproduction of capital as well as an overproduction of commodities. Producers, need to find new types of production to engage in, to attract consumers to buy their output, rather than hold on to money. These new types of production are also, usually, ones where the rate of profit is high, where the organic composition of capital is low.
“...new lines of production are opened up, especially for the production of luxuries, and it is these that take as their basis this relative over-population, often set free in other lines of production through the increase of their constant capital. These new lines start out predominantly with living labour, and by degrees pass through the same evolution as the other lines of production. In either case the variable capital makes up a considerable portion of the total capital and wages are below the average, so that both the rate and mass of surplus-value in these lines of production are unusually high. Since the general rate of profit is formed by levelling the rates of profit in the individual branches of production, however, the same factor which brings about the tendency in the rate of profit to fall, again produces a counterbalance to this tendency and more or less paralyses its effects.”
(Capital III, Chapter 14, p 237)
Whilst, some of these new lines of production are luxury goods, only affordable to the capitalists and other exploiters, others are types of commodities that are affordable to workers, some are commodities that are affordable by the middle-class, and so on. Similarly, former luxury products only affordable by the exploiters, become cheaper, as productivity in these industries rises, and as demand for these products rises, more capital engages in those sectors, raising the level of supply, but, also, increasing competition, and stimulating more rapid innovation, so that prices of these commodities falls, making them, too, accessible to much larger layers of society. Motor cars were initially only accessible to the rich, but, by the early 20th century, the revolution in production brought about by Fordism reduced their value, and, with consumer credit, meant that they became affordable by members of the middle class. Further revolutions in productivity meant that, by the 1960's, some workers could afford to buy cars, and by the 1970's, many working-class households had more than one car.
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