Capital class 6: Notes for ch. 25 – 33

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Notes for Class 6 (ch. 25-33)

Remember that these assumptions are in effect:

  1. Money buys means of production and LP in sphere of circulation.
  2. Production happens, so LP adds value and MOP transfers value to commodity, we end up with “commodities whose value exceeds that of their component parts” and contains a surplus.
  3. These C are put into circulation and sold.
  4. The C value realized in money, we return to step 1.

Chapter 25: The general law of capitalist accumulation

Here Marx presents two different models of capitalist accumulation.

Section 1: The increased demand for LP that accompanies accumulation, the composition of capital remaining the same.

Overall question: What effect does the growth of capital have on Labor as a class? To explore this, we need to understand three things:

  1. Technical composition of capital: The ratio of means of production consumed over wages.
  2. Value composition of capital: The values involved in production (i.e., the value of constant capital divided by the value of variable capital).
  3. Organic composition of capital: The value composition as it mirrors changes in the technical composition.

This is important in volume 3, but for now we can assume composition of capital is c/v. The specific formulation of the organic composition of capital indicates that Marx is limiting his considerations to changes in the physical productivity of capital.

Marx lays out a general tendency for the organic composition of capital to increase

Part of surplus-value must always be transformed into variable capital, or additional labor-fund. If we suppose the composition of capital remains constant (i.e., no changes in productivity), then the demand for labour and the subsistence fund of the workers clearly increase in the same proportion as the capital.

For capital to expand, new value needs to be created, and new laborers need to be employed. “The reproduction of a mass of labour-power, which must incessantly re-incorporate itself with capital for that capital’s self-expansion; which cannot get free from capital, and whose enslavement to capital is only concealed by the variety of individual capitalists to whom it sells itself… Accumulation of capital is, therefore, increase of the proletariat” (575-6). This is one way in which capital creates its own gravediggers, and it’s another dialectical moment (the unity of contradictions).

This is the “most favorable” accumulation model, for prices can rise (depending on pool of wage laborers). But remember, “Production of surplus-value is the absolute law of this mode of production” (580). Two things can happen.

On the one hand, wages can continue rising “because its rise does not interfere with the progress of accumulation” or “accumulation slackens in consequence of the rise in the price of labour… The mechanism of the process of capitalist production removes the very obstacles that it temporarily creates” (580-1). Remember in part 1 of this book Marx noted that because prices fluctuate around values capital can be extremely flexible and responsive. This is one such example.

“The law of capitalist production, that is at the bottom of the pretended ‘natural law of population,’ reduces itself simply to this: The correlation between accumulation of capital and rate of wages is nothing else than the correlation between the unpaid labour transformed into capital, and the additional paid labour necessary for the setting in motion of this additional capital” (581).

If there are not enough workers, wages rise (so as to encourage reproduction), but as soon as it is leveled of, wages decrease, and unpaid labor time increases in proportion.

Section 2: Diminution of Variable Capital, with accumulation and concentration of capital

Here Marx assumes increasing productivity of labor (technical and organizational improvements); these become “the most powerful lever of accumulation” (582-3).

This increase in productivity appears as a diminution of the mass of labour in proportion to the mass of means of production moved by it. In other words, re: organic composition of capital, constant rises.

Two different things can happen: “Accumulation, therefore, presents itself on the one hand as increasing concentration of the means of production, and of the command over labour; on the other, as repulsion of many individual capitals one from another” (586). Concentration of capital, in other words, can be counteracted by individual capitals forming (ex: new branches of production) – the credit system is key here, Marx acknowledges, but doesn’t address it—look in vol. 3 (587).

Marx distinguishes concentration of capital from centralization of capital. The key difference is this: Concentration of capital occurs when new capitals are accumulation; centralization has to do with existing capitals: “Centralisation may result from a mere change in the distribution of capitals already existing, from a simple alteration in the quantitative grouping of the component parts of social capital” (587).

Centralization pushes accumulation forward “by enabling industrial capitalists to extend the scale of their operations” (588).

These processes also lay the basis for communism: “Everywhere the increased scale of industrial establishments is the starting-point for a more comprehensive organisation of the collective work of many, for a wider development of their material motive forces—in other words, for the progressive transformation of isolated processes of production, carried on by customary methods, into processes of production socially combined and scientifically arranged” (588).

Centralization speeds accumulation; makes large ventures (like railways) possible (588). This tendency is inherent in capital; competition tends toward monopoly.

Section 3: Progressive production of a relative surplus-population or industrial reserve army

“Since the demand of labour is determined not by the amount of capital as a whole, but by its variable constituent alone, that demand falls progressively with the increase of the total capital, instead of, as previously assumed, rising in proportion to it” (590). In other words, as capital grows the demand for LP can grow but in a shrinking proportion.

Looking at capital accumulation as a whole, increase in variable capital (value) and the number of laborers employed (technical) “is always connected with violent fluctuations and transitory production of surplus-population” (590).

There is no “abstract law of population;” instead each mode of production has its own laws “historically valid within its limits alone” (592).

As capital develops so too does a surplus population, which “becomes… the lever of capitalistic accumulation, nay, a condition of existence of the capitalist mode of production. It forms a disposable industrial reserve army, that belongs to capital quite as absolutely as if the latter had bred it at its own cost” (592).

This population is necessary in case workers need to be absorbed in production.

“If the means of production, as they increase in extent and effective power, become to a less extent means of employment of labourers, this state of things is again modified by the fact that in proportion as the productiveness of labour increases, capital increases its supply of labour more quickly than its demand of labourers. The over-work of the employed part of the working-class swells the ranks of the reserve, whilst conversely the greater pressure that the latter by its competition exerts on the former, forces these to submit to overwork and to subjugation under the dictates of capital” (595).

Section 4: Different forms of the relative surplus-population.

Everyone belongs to relative surplus-population for a time, when they are out of work or only partially employed; this is the first—floating—form.

When capital takes hold of agriculture, the demand of agricultural labouring population falls absolutely, and this is the second of surplus population

The third category consists of those with irregular employment; the fourth is the “dangerous classes,” vagabonds, criminals, prostitutes, etc… (602). This fourth class has three categories (those who can work; orphans and pauper children; demoralized and those unable to work).

On page 603 we get to the “absolute general law of capitalist accumulation:” The greater the social wealth, the functioning of capital, the extent and energy of its growth, and, therefore, also the absolute mass of the proletariat and the productiveness of its labour, the greater is the industrial reserve army. The same causes which develop the expansive power of capital, develop also the labour-power at its disposal. The relative mass of the industrial reserve army inreasese therefore with the potential energy of wealth. But the greater this reserve army in proportion to the active labour-army, the greater is the mass of a consolidated surplus-population, whose misery is in inverse ration to its torment of labor. The more extensive, finally, the lazarus-layers of the working-class, and the industrial reserve army, the greater is official pauperism. This is the absolute general law of capitalist accumulation.”

What is key to note is that Marx immediately qualifies this law: “Like all other laws, it is modified in its working by many circumstances, the analysis of which does not concern us here” (603). Thus, this applies not only for the absolute general law of capitalist accumulation, but all laws. This is often missed when reading Marx and using his analysis. Laws are not hard and fast, but contingent on a host of elements.

“Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil slavery, ignorance, brutality, mental degradation, at the opposite pole, i.e., on the side of the class that produces its own product in the form of capital” (604).

Section 5: Illustrations of the general law of capitalist accumulation

Here Marx reads the general law through different examples. Here we note a few of the most interesting notes from these examples:

“If the working-class has remained ‘poor,’ only ‘less poor’ in proportion as it produces for the wealthy class ‘an intoxicating augmentation of wealth and power,’ then it has remained relatively just as poor. If the extremes of poverty have not lessened, they have increased, because the extremes of wealth have” (610).

Pauperism increases in general as capitalist accumulation does. It also fluctuates with economic cycles. Also, “the official statistics become more and more misleading as to the actual extent of pauperism in proportion as, with the accumulation of capital, the class-struggle, and therefore, the class-consciousness of the working-men, develop” (612).

“The intimate connexion between the pangs of hunger of the most industrious layers of the working-class, and the extravagant consumption, coarse or refined, of the rich… reveals itself only when the economic laws are known. It is otherwise with the ‘housing of the poor’… Every unprejudiced observer sees that the greater the centralization of the means of production, the greater is the corresponding heaping together of the labourers, within a given space” (615).

“The more rapidly capital accumulates in an industrial or commercial town, the more rapidly flows the stream of exploitable human material, the more miserable re the improved dwellings of the labourers” (619).

Nomad population: Referring to those who originated in agriculture, but who also migrate to industrial employment. “When they are not on the march, they ‘camp’” (621).

Best-paid workers: Industrial revolutions “affect even the best-paid, the aristocracy, of the working-class” (625) – think here of Lenin’s pamphlet on imperialism.

Part VII: The so-called primitive accumulation

Chapter 26: The secret of primitive accumulation

Important to note at the beginning that Marx is not describing primitive accumulation but rather a critique of primitive accumulation, which he says “plays in Political economy about the same part as original sin in theology… Its origin is supposed to be explained when it is told as an anecdote of the past” (667).

The story is familiar: Once upon a time one group of people was smart, diligent, and frugal, while the other was stupid, lazy, and wasteful. After time passed, the former saved wealth that could become capital while the latter did not.

Marx is going to show that it was actually “notorious that conquest, enslavement, robbery, murder, briefly force, play the great part” in this history (668).

The capitalist system itself doesn’t produce its own presuppositions (the separation of laborers from property and means of production). The process that precedes capitalism “transforms, on the one hand, the social means of subsistence and of production into capital, on the other, the immediate producers into wage-labourers” (668)In what ways did this happen? Throughout the next chapters Marx lays out the following:

  1. Taking property from the church and the state
  2. Expropriating common land, feudal and clan property
  3. Legislation
  4. Gold and Silver
  5. Slavery

Marx takes us through these in the next chapters, beginning with “the expropriation of the agricultural producer, of the person, from the soil,” which “is the basis of the whole process” (669).

Chapter 27: Expropriation of the agricultural population from the land

In this chapter Marx shows how in England this expropriation resulted primarily from the theft of land, but also from the disintegration of feudal retainers, which “hurled on the labour market” “a mass of free proletarians” (672).

Feudal lords conquered and privatized land (therefore driving peasants away). Previously, the peasants “had the same right [to the land] as the feudal lord.” Marx notes that (again, looking at England), “the rapid rise of the Flemish wool manufactures, and the corresponding rise in the price of wool in England, gave the direct impulse to these evictions” (672). They transformed the land for harvesting (which required more peasant labor) into pasture (which required less labor). The feudal lords accumulated massive money power through this process.

At first, legislation tries to halt this process but the power of money prevails over the law, and the law comes to serve money power. This accelerates with the reformation of the church: “The estates of the church were to a large extent given away to rapacious royal favourites, or sold at a nominal price to speculating farmers and citizens, who drove out, en masse, the hereditary sub-tenants and threw their holdings into one” (675).

William of Orange ultimately stole and gave away state lands. His government “inaugurated the new era by practicing on a colossal scale thefts of state lands, thefts that had been hitherto managed more modestly. These estates were given away, sold at a ridiculous figure or even annexed to private estates by direct seizure” (677).

Property held in common (which is distinct from state property) initially was expropriated “by means of individual acts of violence” (this is in the 15th-16th centuries), but by the 18th century parliament passes laws to enclose this land (677-8).

While the bourgeois political economists uphold the “sacred rights of property,” these rights were founded by “the grossest acts of violence to persons” (681). Not only theft and murder, but the destruction and burning of villages.

Marx summarizes the process on page 685: “The spoliation of the church’s property, the fraudulent alienation of the State domains, the robbery of the common lands, the usurpation of feudal and clan property, and its transformation into modern private property under circumstances of reckless terrorism, were just so many idyllic methods of primitive accumulation.”

Chapter 28: Bloody legislation against the expropriated

The processes described in the previous chapter threw the masses of peasants off the land. There was not yet enough industry to absorb them. This chapter details how these newly “freed” persons were dealt with.

Former peasants were forced off the land but legislation “treated them as ‘voluntary’ criminals, and assumed that it depended on their own good will to go on working under the old conditions that no longer existed” (686). Marx presents a series of grotesque laws aimed at disciplining the new jobless wage-laborers, including whipping, enslavement, branding, and execution” (688).

There are three kinds of legislation that discipline wage laborers:

1) Extending the working day (we saw this in chapter 10 too)
2) Driving down wages (wage ceiling)
3) Outlawing unions and coalitions

Once capitalist relations are established this overt violence fades a bit into the background as “capitalist production develops a working-class, which by education, tradition, habit, looks upon the conditions of that mode of production as self-evident laws of Nature” (689). Ideologies like meritocracy arise out of capitalist production relations.

Chapter 29: Genesis of the capitalist farmer

This again is a very particular story. In England farmers originate as serfs who become bailiffs, and then farmers who are basically serfs except they xxploit other wage labor, and then half-farmers who split capital investment between themselves and the landlord, and then “farmer proper, who makes his own capital breed by employing wage-labourers, and pays a part of the surplus-product, in money or in kind, to the landlord as rent” (694). This positioned them to accumulate capital during the “agricultural revolution” already described.

Chapter 30: Reaction of the agricultural revolution on industry

With the peasantry driven off the land, the raw materials and means of substance are commodified, turned into variable capital. “The expropriation and eviction of a part of the agriulcutral population not only set free for industrial capital, the labourers, their means of subsistence, and material for labour; it also created the home-market” (699).

Chapter 31: Genesis of the industrial capitalist

Industrial capital develops out of merchant and usurer capital. The former is the capital of the trader, the later of the lender. Merchant and usurer capital was “prevented from turning into industrial capital, in the country by the feudal constitution, in the towns by the guild organisation” (703). Industrial capital therefore developed outside of these towns and countrysides and instead “at sea-ports or at inland points” (703).

Marx makes an important observation (which we should keep in mind for the next chapter) that “revolutions are not made by laws” (703).

The formation of industrial capital is tied up with slavery and colonialism in the U.S., East Indies, and Africa. These are also “idyllic” moments of primitive accumulation. The state workers together with capital to conquer new markets and colonies, to transform feudalism into capitalism “and to shorten the transition. Force is the midwife of every old society pregnant with a new one. It is itself an economic power” (703).

The state propels capital by public credit (national debt). “The only part of the so-called national wealth that actually enters into the collective possessions of modern peoples is—their national debt” (706). This is exactly what we saw in 2007-2008. The profits of the bankers and real estate agencies were never distributed, but their bailouts were.

This debt “becomes one of the most powerful levers of primitive accumulation… it endows barren money with the power of breeding and thus turns it into capital, without the necessity of exposing itself to the trouble sand risks inseparable from its employment in industry or even in usury” (706).

In short, slavery, child labor, the “colonial system, public debts, heavy taxes, protection, commercial wars… increase gigantically during the infancy of Modern Industry” (708-9). The state and capital together conquer territories and “establish the ‘eternal laws of Nature’ of the capitalist mode of production” (711).

Capital thus “comes dripping from head to foot, from every pore, with blood and dirt” (712).

Chapter 32: Historical tendency of capitalist accumulation

In this chapter Marx weaves together the historical presentation and economic arguments outlined in the book so far into one sweeping narrative through the dialectic.

We begin with the private property of individual laborers, which is the basis of petty industry (agricultural or manufacture). This also exists under slavery and serfdom, but it “attains its adequate classical form, only where the labourer is the private owner of his own means of labour set in action by himself; the peasant of the land which he cultivates” (713).

This prevents the concentration of means of production, division of labor, and cooperation of labor (social labor), and so remains locked within the production and circulation of use-values.

In a certain moment, “it brings forth the material agencies for its own dissolution. From that moment new social forces and new passions spring up in the bosom of society; but the old social organization fetters them and keeps them down. It must be annihilated; it is annihilated” (714). Here we have the contradiction between productive forces and social relations; the productive forces—which are built up under a prior set of labor arrangements—lead the way to new set of relations of production.

This annihilation of private property combines individual “property of the many into the huge property of the few” (714). This is what we have just read about.

Eventually this process transforms all of society and capitalism stands on its own. At this point, what is expropriated are “private proprietors… no longer the labourer working for himself, but the capitalist exploiting many labourers… One capitalist always kills many. Hand in hand with this centralization, or this expropriation of many capitalists by few, develops, on an ever-extending scale, the co-operative form of the labour-process, the conscious technical application of science, the methodical cultivation of the soil, the transformation of the instruments of labor into instruments of labour only usable in common, the economizing of all means of production by their use as the means of production of combined, socialized labour, the entanglement of all peoples in the net of the world market, and with this, the international character of the capitalistic regime” (714-5).

The concentration and centralization of capital produces, in dialectical fashion, its opposite, its own negation, “the revolt of the working-class, a class always increasing in numbers, and disciplined, united, organised by the very mechanism of the process of capitalist production itself” (715).

At this point, there is again a disjuncture between the productive forces and the relations of production. “The monopoly of capital becomes a fetter upon the capitalist mode of production, which has sprung up and flourished along with, and under it. Centralisation of the means of production and socialization of labour at last reach a point where they become incompatible with their capitalist integument. Thus integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated” (715). Here we have the negation of the negation.

Marx makes one last note, which is that the capitalist revolution entailed the expropriation of the many by the few, and thus loads of violence. But the socialist revolution entails the expropriation of the few by the many, and so therefore (potentially) less violence.

It’s worthwhile noting the difference between this short chapter and the end of chapter 10 on the working day. There Marx ended with a call for organizing for an 8 hour work day (an “all powerful Magna Carta”). Here he describes the overthrow of the capitalist mode of production. Clearly Marx is thinking closely about reform and revolution not as antagonistic but as dialectically related.

Chapter 33: The modern theory of colonisation

After the revolutionary crescendo of the previous chapter, Marx returns to a tamer extrapolation of Wakefield’s theory of colonialism. The key to his discovery is “that capital is not a thing, but a social relation between persons, established by the instrumentality of things” (717). Colonialism establishes this relation in the colonies.

“So long,” he says on page 718, “as the labourer can accumulate for himself—and this he can do so long as he remains possessor of his means of production—capitalist accumulation and the capitalistic mode of production are impossible.” In other words, Marx is showing us how in the colonies as in the colonizing countries capitalism is build on “the annihilation of self-earned private property; in other words, the expropriation of the labourer” (724).

How to produce these relations? “The trick is to kill two birds with one stone. Let the Government put upon the virgin soil an artificial price, independent of the law of supply and demand, a price that compels the immigrant to work a long time for wages before he can earn enough money to buy land, and turn himself into a peasant” (722).

After focusing on the internal dynamics of capitalism, Marx is here gesturing to its outside. As capital is value in motion, value in expansion, it needs to go elsewhere. And as Lenin showed in capital, imperialism is one way capitalism is able to keep its contradictions at bay for a period of time.

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