In the first section, we ascertained that Marx's diagram of accumulation
does not solve the question of who is to benefit in the end by enlarged
reproduction. If we take the diagram literally as it is set out at the
end of volume ii, it appears that capitalist production would itself
realise its entire surplus value, and that it would use the capitalised
surplus value exclusively for its own needs. This impression is
confirmed by Marx's analysis of the diagram where he attempts to reduce
the circulation within the diagram altogether to terms of money, that is
to say to the effective demand of capitalists and workers--an attempt
which in the end leads him to introduce the 'producer of money' as a
_deus ex machina_. In addition, there is that most important passage in
_Capital_, volume i, which must be interpreted to mean the same.
'The annual production must in the first place furnish all those objects
(use-values) from which the material components of capital, used up in
the course of the year, have to be replaced. Deducting these there
remains the net or surplus-product, in which the surplus-value lies. And
of what does this surplus-value consist? Only of things destined to
satisfy the wants and desires of the capitalist class, things which,
consequently, enter into the consumption fund of the capitalists? Were
that the case, the cup of surplus-value would be drained to the very
dregs, and nothing but simple reproduction would ever take place.
'To accumulate it is necessary to convert a portion of the
surplus-product into capital. But we cannot, except by a miracle,
convert into capital anything but such articles as can be employed in
the labour-process (i.e. means of production), and such further articles
as are suitable for the sustenance of the labourer (i.e. means of
subsistence). Consequently, a part of the annual surplus-labour must
have been applied to the production of additional means of production
and subsistence, over and above the quantity of these things required to
replace the capital advanced. In one word, surplus-value is convertible
into capital solely because the surplus-product, whose value it is,
already comprises the material elements of new capital.'[332]
The following conditions of accumulation are here laid down: (1) The
surplus value to be capitalised first comes into being in the natural
form of capital (as additional means of production and additional means
of subsistence for the workers). (2) The expansion of capitalist
production is achieved exclusively by means of capitalist products, i.e.
its own means of production and subsistence. (3) The limits of this
expansion are each time determined in advance by the amount of surplus
value which is to be capitalised in any given case; they cannot be
extended, since they depend on the amount of the means of production and
subsistence which make up the surplus product; neither can they be
reduced, since a part of the surplus value could not then be employed in
its natural form. Deviations in either direction (above and below) may
give rise to periodical fluctuations and crises--in this context,
however, these may be ignored, because in general the surplus product to
be capitalised must be equal to actual accumulation. (4) Since
capitalist production buys up its entire surplus product, there is no
limit to the accumulation of capital.
Marx's diagram of enlarged reproduction adheres to these conditions.
Accumulation here takes its course, but it is not in the least indicated
who is to benefit by it, who are the new consumers for whose sake
production is ever more enlarged. The diagram assumes, say, the
following course of events: the coal industry is expanded in order to
expand the iron industry in order to expand the machine industry in
order to expand the production of consumer goods. This last, in turn, is
expanded to maintain both its own workers and the growing army of coal,
iron and machine operatives. And so on _ad infinitum_. We are running in
circles, quite in accordance with the theory of Tugan Baranovski.
Considered in isolation, Marx's diagram does indeed permit of such an
interpretation since he himself explicitly states time and again that
he aims at presenting the process of accumulation of the aggregate
capital in a society consisting solely of capitalists and workers.
Passages to this effect can be found in every volume of _Capital_.
In volume i, in the very chapter on 'The Conversion of Surplus-Value
into Capital', he says:
'In order to examine the object of our investigation in its integrity,
free from all disturbing subsidiary circumstances, we must treat the
whole world as one nation, and assume that capitalist production is
everywhere established and has possessed itself of every branch of
industry.'[333]
In volume ii, the assumption repeatedly returns; thus in chapter 17 on
'The Circulation of Surplus-Value': 'Now, there are only two points of
departure: The capitalist and the labourer. All third classes of persons
must either receive money for their services from these two classes, or,
to the extent that they receive it without any equivalent services, they
are joint owners of the surplus-value in the form of rent, interest,
etc.... The capitalist class, then, remains the sole point of departure
of the circulation of money.'[334]
Further, in the same chapter 'On the Circulation of Money in Particular
under Assumption of Accumulation': 'But the difficulty arises when we
assume, not a partial, but a general accumulation of money-capital on
the part of the capitalist class. Apart from this class, there is,
according to our assumption--the general and exclusive domination of
capitalist production--no other class but the working class.'[335]
And again in chapter 20: '... there are only two classes in this case,
the working class disposing of their labour-power, and the capitalist
class owning the social means of production and the money.'[336]
In volume iii, Marx says quite explicitly, when demonstrating the
process of capitalist production as a whole: 'Let us suppose that the
whole society is composed only of industrial capitalists and wage
workers. Let us furthermore make exceptions of fluctuations of prices
which prevent large portions of the total capital from reproducing
themselves under average conditions and which, owing to the general
interrelations of the entire process of reproduction, such as are
developed particularly by credit, must always call forth general
stoppages of a transient nature. Let us also make abstraction of the
bogus transactions and speculations, which the credit system favours. In
that case, a crisis could be explained only by a disproportion of
production in various branches, and by a disproportion of the
consumption of the capitalists and the accumulation of their capitals.
But as matters stand, the reproduction of the capitals invested in
production depends largely upon the consuming power of the non-producing
classes; while the consuming power of the labourers is handicapped
partly by the laws of wages, partly by the fact that it can be exerted
only so long as the labourers can be employed at a profit for the
capitalist class.'[337]
This last quotation refers to the question of crises with which we are
not here concerned. It can leave no doubt, however, that the movement of
the total capital, 'as matters stand', depends in Marx's view on three
categories of consumers only: the capitalists, the workers and the
'non-productive classes', i.e. the hangers-on of the capitalist class
(king, parson, professor, prostitute, mercenary), of whom he quite
rightly disposes in volume ii as the mere representatives of a
derivative purchasing power, and thus the parasitic joint consumers of
the surplus value or of the wage of labour.
Finally, in _Theories of Surplus Value_,[338] Marx formulates his
general presuppositions with regard to accumulation as follows: 'Here we
have only to consider the forms through which capital passes during the
various stages of its development. Thus we do not set out the actual
conditions of the real process of production, but always assume that the
commodity is sold for what it is worth. We ignore the competition of
capitalists and the credit system; we also leave out of account the
actual constitution of society which never consists exclusively of the
classes of workers and industrial capitalists, and where there is
accordingly no strict division between producers and consumers. The
first category (of consumers, whose revenues are partly of a secondary,
not a primitive nature, derived from profits and the wage of labour) is
much wider than the second category (of producers). Therefore the
manner in which it spends its income, and the extent of such income,
effects very large modifications in the economic household, and
especially so in the process of circulation and reproduction of
capital.'
Speaking of the 'actual constitution of society', Marx here also
considers merely the parasitic joint consumers of surplus value and of
the wage of labour, i.e. only the hangers-on of the principal categories
of capitalist production.
There can be no doubt, therefore, that Marx wanted to demonstrate the
process of accumulation in a society consisting exclusively of workers
and capitalists, under the universal and exclusive domination of the
capitalist mode of production. On this assumption, however, his diagram
does not permit of any other interpretation than that of production for
production's sake.
Let us recall the second example of Marx's diagram of enlarged
reproduction:
1st year:
I. _5,000c + 1,000v + 1,000s = 7,000_ means of production
II. _1,430c + 285v + 285s = 2,000_ means of subsistence
-----
9,000
2nd year:
I. _5,417c + 1,083v + 1,083s = 7,583_ means of production
II. _1,583c + 316v + 316s = 2,215_ means of subsistence
-----
9,798
3rd year:
I. _5,869c + 1,173v + 1,173s = 8,215_ means of production
II. _1,715c + 342v + 342s = 2,399_ means of subsistence
------
10,614
4th year:
I. _6,358c + 1,271v + 1,271s = 8,900_ means of production
II. _1,858c + 371v + 371s = 2,600_ means of subsistence
------
11,500
Here accumulation continues year after year without interruption, the
capitalists in each case consuming half of the surplus value they have
gained and capitalising the other half. In the process of
capitalisation, the same technical foundation, that is to say the same
organic composition or division into constant and variable capital and
also the same rate of exploitation (always amounting to 100 per cent) is
consecutively maintained for the additional capital as it was for the
original capital. In accordance with Marx's assumption in volume i of
_Capital_, the capitalised part of the surplus value first comes into
being as additional means of production and as means of subsistence for
the workers, both serving the purpose of an ever expanding production in
the two departments. It cannot be discovered from the assumptions of
Marx's diagram for whose sake production is progressively expanded.
Admittedly, production and consumption increase simultaneously in a
society. The consumption of the capitalists increases (in terms of
value, in the first year it amounts to 500 + 142, in the second year to
542 + 158, in the third year to 586 + 171, and in the fourth year to
635 + 185); the consumption of the workers increases as well; the
variable capital increasing year after year in both departments
precisely indicates this growth in terms of value. And yet, the growing
consumption of the capitalists can certainly not be regarded as the
ultimate purpose of accumulation; on the contrary, there is no
accumulation inasmuch as this consumption takes place and increases;
personal consumption of the capitalists must be regarded as simple
reproduction. Rather, the question is: if, and in so far as, the
capitalists do not themselves consume their products but 'practise
abstinence', i.e. accumulate, for whose sake do they produce? Even less
can the maintenance of an ever larger army of workers be the ultimate
purpose of continuous accumulation of capital. From the capitalist's
point of view, the consumption of the workers is a consequence of
accumulation, it is never its object or its condition, unless the
principles (foundations) of capitalist production are to be turned
upside down. And in any case, the workers can only consume that part of
the product which corresponds to the variable capital, not a jot more.
Who, then, realises the permanently increasing surplus value? The
diagram answers: the capitalists themselves and they alone.--And what do
they do with this increasing surplus value?--The diagram replies: They
use it for an ever greater expansion of their production. These
capitalists are thus fanatical supporters of an expansion of production
for production's sake. They see to it that ever more machines are built
for the sake of building--with their help--ever more new machines. Yet
the upshot of all this is not accumulation of capital but an increasing
production of producer goods to no purpose whatever. Indeed, one must be
as reckless as Tugan Baranovski, and rejoice as much in paradoxical
statements, to assume that this untiring merry-go-round in thin air
could be a faithful reflection in theory of capitalist reality, a true
deduction from Marx's doctrine.[339]
Besides the analysis of enlarged reproduction roughed out in _Capital_,
volume ii, the whole of Marx's work, volume ii in particular, contains a
most elaborate and lucid exposition of his general views regarding the
typical course of capitalist accumulation. If we once fully understand
this interpretation, the deficiencies of the diagram at the end of
volume ii are immediately evident.
If we examine critically the diagram of enlarged reproduction in the
light of Marx's theory, we find various contradictions between the two.
To begin with, the diagram completely disregards the increasing
productivity of labour. For it assumes that the composition of capital
is the same in every year, that is to say, the technical basis of the
productive process is not affected by accumulation. This procedure would
be quite permissible in itself in order to simplify the analysis, but
when we come to examine the concrete conditions for the realisation of
the aggregate product, and for reproduction, then at least we must take
into account, and make allowance for, changes in technique which are
bound up with the process of capital accumulation. Yet if we allow for
improved productivity of labour, the material aggregate of the social
product--both producer and consumer goods--will in consequence show a
much more rapid increase in volume than is set forth in the diagram.
This increase in the aggregate of use-values, moreover, indicates also a
change in the value relationships. As Marx argues so convincingly,
basing his whole theory on this axiom, the progressive development of
labour productivity reacts on both the composition of accumulating
capital and the rate of surplus value so that they cannot remain
constant under conditions of increasing accumulation of capital, as was
assumed by the diagram. Rather, if accumulation continues, _c_, the
constant capital of both departments, must increase not only absolutely
but also relatively to _v + c_ or the total new value (the social aspect
of labour productivity); at the same time, constant capital and
similarly the surplus value must increase relatively to the variable
capital--in short, the rate of surplus value, i.e. the ratio between
surplus value and variable capital, must similarly increase (the
capitalist aspect of labour productivity). These changes need not, of
course, occur annually, just as the terms of first, second and third
year in Marx's diagram do not necessarily refer to calendar years but
may stand for any given period. Finally, we may choose to assume that
these alterations, both in the composition of capital and in the rate of
surplus value, take place either in the first, third, fifth, seventh
year, etc., or in the second, sixth and ninth year, etc. The important
thing is only that they are allowed for somewhere and taken into account
as periodical phenomena. If the diagram is amended accordingly, the
result of this method of accumulation will be an increasing annual
surplus in the consumer at the expense of producer goods. It is true
that Tugan Baranovski conquers all difficulties on paper: he simply
constructs a diagram with different proportions where year by year the
variable capital decreases by 25 per cent. And since this arithmetical
exercise is successful enough on paper, Tugan triumphantly claims to
have 'proved' that accumulation runs smoothly like clockwork, even if
the absolute volume of consumption decreases. Even he must admit in the
end, however, that his assumption of such an absolute decrease of the
variable capital is in striking contrast to reality. Variable capital is
in point of fact a growing quantity in all capitalist countries; only in
relation to the even more rapid growth of constant capital can it be
said to decrease. On the basis of what is actually happening, namely a
greater yearly increase of constant capital as against that of variable
capital, as well as a growing rate of surplus value, discrepancies must
arise between the material composition of the social product and the
composition of capital in terms of value. If, instead of the unchanging
proportion of 5 to 1 between constant and variable capital, proposed by
Marx's diagram, we assume for instance that this increase of capital is
accompanied by a progressive readjustment of its composition, the
proportion between constant and variable in the second year being 6 to
1, in the third year 7 to 1, and in the fourth year 8 to 1--if we
further assume that the rate of surplus value also increases
progressively in accordance with the higher productivity of labour so
that, in each case, we have the same amounts as those of the diagram,
although, because of the relatively decreasing variable capital, the
rate of surplus value does not remain constant at the original 100 per
cent--and if finally we assume that one-half of the appropriated surplus
value is capitalised in each case (excepting Department II where
capitalisation exceeds 50 per cent, 184 out of 285 being capitalised
during the first year), the result will be as follows:
1st year:
I. _5,000c + 1,000v + 1,000s = 7,000_ means of production
II. _1,430c + 285v + 285s = 2,000_ means of subsistence
2nd year:
I. _(5,428 4/7)c + (1,071 3/7)v + 1,083s = 7,583_ means of production
II. _(1,587 5/7)c + (311 2/7)v + 316s = 2,215_ means of subsistence
3rd year:
I. _5,903c + 1,139v + 1,173s = 8,215_ means of production
II. _1,726c + 331v + 342s = 2,399_ means of subsistence
4th year:
I. _6,424c + 1,205v + 1,271s = 8,900_ means of production
II. _1,879c + 350v + 371s = 2,600_ means of subsistence
If this were a true picture of the accumulative process, the means of
production (constant capital) would show a deficit of 16 in the second
year, of 45 in the third year and of 88 in the fourth year; similarly,
the means of subsistence would show a surplus of 16 in the second year,
of 45 in the third year and of 88 in the fourth year.
This negative balance for the means of production may be only imaginary
in part. The increasing productivity of labour ensures that the means of
production grow faster in bulk than in value, in other words: means of
production become cheaper. As it is use value, i.e. the material
elements of capital, which is relevant for technical improvements of
production, we may assume that the quantity of means of production, in
spite of their lower value, will suffice for progressive accumulation up
to a certain point. This phenomenon amongst others also checks the
actual decline of the rate of profit and modifies it to a mere tendency,
though our example shows that the decline of the profit rate would not
only be retarded but rather completely arrested. On the other hand, the
same fact indicates a much larger surplus of unsaleable means of
subsistence than is suggested by the amount of this surplus in terms of
value. In that case, we should have to compel the capitalists of
Department II to consume this surplus themselves, which Marx makes them
do on other occasions; in which case, and in so far as those capitalists
are concerned, there would again be no accumulation but rather simple
reproduction. Alternatively, we should have to pronounce this whole
surplus unsaleable.
Yet would it not be very easy to make good this loss in means of
production which results from our example? We need only assume that the
capitalists of Department I capitalise their surplus value to a greater
extent. Indeed, there is no valid reason to suppose, as Marx did, that
the capitalists in each case add only half their surplus value to their
capital. Advances in labour productivity may well lead to progressively
increasing capitalisation of surplus value. This assumption is the more
permissible in that the cheapening of consumer goods for the capitalist
class, too, is one of the consequences of technological progress. The
relative decrease in the value of consumable income (as compared with
the capitalised part) may then permit of the same or even a higher
standard of living for this class. We might for instance make good the
deficit in producer goods by transferring a corresponding part of
surplus value I to the constant capital of this department, a part which
would otherwise be consumed, since this surplus value, like all other
products of the department, originally takes the form of producer goods;
11 4/7 would then be transferred in the second year, 34 in the third
year and 66 in the fourth year.[340] The solution of one difficulty,
however, only adds to another. It goes without saying that if the
capitalists of Department I relatively restrict their consumption for
purposes of accumulation, there will be a proportionately greater
unsaleable residue of consumer goods in Department II; and thus it
becomes more and more impossible to enlarge the constant capital even on
its previous technological basis. If the capitalists in Department I
relatively restrict their consumption, the capitalists of Department II
must relatively expand their personal consumption in proportion. The
assumption of accelerated accumulation in Department I would then have
to be supplemented by that of retarded accumulation in Department II,
technical progress in one department by regression in the other.
These results are not due to mere chance. The adjustments we have tried
out on Marx's diagram are merely meant to illustrate that technical
progress, as he himself admits, must be accompanied by a relative growth
of constant as against variable capital. Hence the necessity for a
continuous revision of the ratio in which capitalised surplus value
should be allotted to _c_ and _v_ respectively. In Marx's diagram,
however, the capitalists are in no position to make these allocations at
will, since the material form of their surplus value predetermines the
forms of capitalisation. Since, according to Marx's assumption, all
expansion of production proceeds exclusively by means of its own,
capitalistically produced means of production and subsistence,--since
there are here no other places and forms of production and equally no
other consumers than the two departments with their capitalists and
workers,--and since, on the other hand, the smooth working of the
accumulative process depends on that circulation should wholly absorb
the aggregate product of both departments, the technological shape of
enlarged reproduction is in consequence strictly prescribed by the
material form of the surplus product. In other words: according to
Marx's diagram, the technical organisation of expanded production can
and must be such as to make use of the aggregate surplus value produced
in Departments I and II. In this connection we must bear in mind also
that both departments can obtain their respective elements of production
only by means of mutual exchange. Thus the allocation to constant or
variable capital of the surplus value earmarked for capitalisation, as
well as the allotment of the additional means of production and
subsistence (for the workers) to Departments I and II is given in
advance and determined by the relations between the two departments of
the diagram--both in material and in terms of value. These relations
themselves, however, reflect a quite determinate technical organisation
of production. This implies that, on the assumptions of Marx's diagram,
the techniques of production given in each case predetermine the
techniques of the subsequent periods of enlarged reproduction, if
accumulation continues. Assuming, that is to say, in accordance with
Marx's diagram, that the expansion of capitalist production is always
performed by means of the surplus value originally produced in form of
capital, and further--or rather, conversely--that accumulation in one
department is strictly dependent on accumulation in the other, then no
change in the technical organisation of production can be possible in so
far as the relation of _c_ to _v_ is concerned.
We may put our point in yet another way: it is clear that a quicker
growth of constant as compared with variable capital, i.e. the
progressive metamorphosis of the organic composition of capital, must
take the material form of faster expansion of production in Department I
as against production in Department II. Yet Marx's diagram, where strict
conformity of the two departments is axiomatic, precludes any such
fluctuations in the rate of accumulation in either department. It is
quite legitimate to suppose that under the technical conditions of
progressive accumulation, society would invest ever increasing portions
of the surplus value earmarked for accumulation in Department I rather
than in Department II. Both departments being only branches of the same
social production--supplementary enterprises, if you like, of the
'aggregate capitalist',--such a progressive transfer, for technical
reasons, from one department to the other of a part of the accumulated
surplus value would be wholly feasible, especially as it corresponds to
the actual practice of capital. Yet this assumption is possible only so
long as we envisage the surplus value earmarked for capitalisation
purely in terms of value. The diagram, however, implies that this part
of the surplus value appears in a definite material form which
prescribes its capitalisation. Thus the surplus value of Department II
exists as means of subsistence, and since it is as such to be only
realised by Department I, this intended transfer of part of the
capitalised surplus value from Department II to Department I is ruled
out, first because the material form of this surplus value is obviously
useless to Department I, and secondly because of the relations of
exchange between the two departments which would in turn necessitate an
equivalent transfer of the products of Department I into Department II.
It is therefore downright impossible to achieve a faster expansion of
Department I as against Department II within the limits of Marx's
diagram.
However we may regard the technological alterations of the mode of
production in the course of accumulation, they cannot be accomplished
without upsetting the fundamental relations of Marx's diagram.
And further: according to Marx's diagram, the capitalised surplus value
is in each case immediately and completely absorbed by the productive
process of the following period, for, apart from the portion earmarked
for consumption, it has a natural form which allows of only one
particular kind of employment. The diagram precludes the cashing and
hoarding of surplus value in monetary form, as capital waiting to be
invested. The free monetary forms of private capital, in Marx's view,
are first the money deposited gradually against the wear and tear of the
fixed capital, for its eventual renewal; and secondly those amounts of
money which represent realised surplus value but are still too small for
investment. From the point of view of the aggregate capital, both these
sources of free money capital are negligible. For if we assume that even
a portion of the social surplus value is realised in monetary form for
purposes of future investment, then at once the question arises: who has
bought the material items of this surplus value, and who has provided
the money? If the answer is: other capitalists, of course,--then, seeing
that the capitalist class is represented in the diagram by the two
departments, this portion of the surplus value must also be regarded as
invested _de facto_, as employed in the productive process. And so we
are back at immediate and complete investment of the surplus value.
Or does the freezing of one part of the surplus value in monetary form
in the hands of certain capitalists mean that other capitalists will be
left with a corresponding part of that surplus product in its material
form? does the hoarding of realised surplus value by some imply that
others are no longer able to realise their surplus value, since the
capitalists are the only buyers of surplus value? This would mean,
however, that the smooth course of reproduction and similarly of
accumulation as described in the diagram would be interrupted. The
result would be a crisis, due not to over-production but to a mere
intention to accumulate, the kind of crisis envisaged by Sismondi.
In one passage of his _Theories_,[341] Marx explains in so many words
that he 'is not at all concerned in this connection with an accumulation
of capital greater than can be used in the productive process and might
lie idle in the banks in monetary form, with the consequence of lending
abroad'. Marx refers these phenomena to the section on competition. Yet
it is important to establish that his diagram veritably precludes the
formation of such additional capital. Competition, however wide we may
make the concept, obviously cannot create values, nor can it create
capitals which are not themselves the result of the reproductive
process.
The diagram thus precludes the expansion of production by leaps and
bounds. It only allows of a gradual expansion which keeps strictly in
step with the formation of the surplus value and is based upon the
identity between realisation and capitalisation of the surplus value.
For the same reason, the diagram presumes an accumulation which affects
both departments equally and therefore all branches of capitalist
production. It precludes expansion of the demand by leaps and bounds
just as much as it prevents a one-sided or precocious development of
individual branches of capitalist production.
Thus the diagram assumes a movement of the aggregate capital which flies
in the face of the actual course of capitalist development. At first
sight, two facts are typical for the history of the capitalist mode of
production: on the one hand the periodical expansion of the whole field
of production by leaps and bounds, and on the other an extremely unequal
development of the different branches of production. The history of the
English cotton industry from the first quarter of the eighteenth to the
seventies of the nineteenth century, the most characteristic chapter in
the history of the capitalist mode of production, appears quite
inexplicable from the point of view of Marx's diagram.
Finally, the diagram contradicts the conception of the capitalist total
process and its course as laid down by Marx in _Capital_, volume iii.
This conception is based on the inherent contradiction between the
unlimited expansive capacity of the productive forces and the limited
expansive capacity of social consumption under conditions of capitalist
distribution. Let us see how Marx describes this contradiction in detail
in chapter 15 on 'Unravelling the Internal Contradictions of the Law'
(of the declining profit rate):
'The creation of surplus-value, assuming the necessary means of
production, or sufficient accumulation of capital, to be existing, finds
no other limit but the labouring population, when the rate of
surplus-value, that is, the intensity of exploitation, is given; and no
other limit but the intensity of exploitation, when the labouring
population is given. And the capitalist process of production consists
essentially of the production of surplus-value, materialised in the
surplus-product, which is that aliquot portion of the produced
commodities, in which unpaid labour is materialised. It must never be
forgotten, that the production of this surplus-value--and the
re-conversion of a portion of it into capital, or accumulation, forms an
indispensable part of this production of surplus-value--is the immediate
purpose and the compelling motive of capitalist production. It will not
do to represent capitalist production as something which it is not, that
is to say, as a production having for its immediate purpose the
consumption of goods, or the production of means of enjoyment for the
capitalists. (And, of course, even less for the worker. R. L.) This
would be overlooking the specific character of capitalist production,
which reveals itself in its innermost essence. The creation of this
surplus-value is the object of the direct process of production, and
this process has no other limits than those mentioned above. As soon as
the available quantity of surplus-value has been materialised in
commodities, surplus-value has been produced. But this production of
surplus-value is but the first act of the capitalist process of
production, it merely terminates the act of direct production. Capital
has absorbed so much unpaid labour. With the development of the process,
which expresses itself through a falling tendency of the rate of
profit, the mass of surplus-value thus produced is swelled to immense
dimensions. Now comes the second act of the process. The entire mass of
commodities, the total product, which contains a portion which is to
reproduce the constant and variable capital as well as a portion
representing surplus-value, must be sold. If this is not done, or only
partly accomplished, or only at prices which are below the prices of
production, the labourer has been none the less exploited, but his
exploitation does not realise as much for the capitalist. It may yield
no surplus-value at all for him, or only realise a portion of the
produced surplus-value, or it may even mean a partial or complete loss
of his capital. The conditions of direct exploitation and those of the
realisation of surplus-value are not identical. They are separated
logically as well as by time and space. The first are only limited by
the productive power of society, the last by the proportional relations
of the various lines of production and by the consuming power of
society. This last-named power is not determined either by the absolute
productive power or by the absolute consuming power, but by the
consuming power based on antagonistic conditions of distribution, which
reduces the consumption of the great mass of the population to a
variable minimum within more or less narrow limits. The consuming power
is furthermore restricted by the tendency to accumulate, the greed for
an expansion of capital and a production of surplus-value on an enlarged
scale. This is a law of capitalist production imposed by incessant
revolutions in the methods of production themselves, the resulting
depreciation of existing capital, the general competitive struggle and
the necessity of improving the product and expanding the scale of
production, for the sake of self-preservation and on penalty of failure.
The market must, therefore, be continually extended, so that its
interrelations and the conditions regulating them assume more and more
the form of a natural law independent of the producers and become ever
more uncontrollable. This eternal contradiction seeks to balance itself
by an expansion of the outlying fields of production. But to the extent
that the productive power develops, it finds itself at variance with the
narrow basis on which the conditions of consumption rest. On this
self-contradictory basis it is no contradiction at all that there should
be an excess of capital simultaneously with an excess of population. For
while a combination of these two would indeed increase the mass of the
produced surplus-value, it would at the same time intensify the
contradiction between the conditions under which this surplus-value is
produced and those under which it is realised.'[342]
If we compare this description with the diagram of enlarged
reproduction, the two are by no means in conformity. According to the
diagram, there is no inherent contradiction between the production of
the surplus value and its realisation, rather, the two are identical.
The surplus value here from the very beginning comes into being in a
natural form exclusively designed for the requirements of accumulation.
In fact it leaves the place of production in the very form of additional
capital, that is to say it is capable of realisation in the capitalist
process of accumulation. The capitalists, as a class, see to it in
advance that the surplus value they appropriate is produced entirely in
that material form which will permit and ensure its employment for
purposes of further accumulation. Realisation and accumulation of the
surplus value here are both aspects of the same process, they are
logically identical. Therefore according to the presentation of the
reproductive process in the diagram, society's capacity to consume does
not put a limit to production. Here production automatically expands
year by year, although the capacity of society for consumption has not
gone beyond its 'antagonistic conditions of distribution'. This
automatic continuation of expansion, of accumulation, truly is the 'law
of capitalist production ... on penalty of failure'. Yet according to
the analysis in volume iii, 'the market must, therefore, be continually
extended', 'the market' obviously transcending the consumption of
capitalists and workers. And if Tugan Baranovski interprets the
following passage 'this eternal contradiction seeks to balance itself by
an expansion of the outlying fields of production' as if Marx had meant
production itself by 'outlying fields of production', he violates not
only the spirit of the language but also Marx's clear train of thought.
The 'outlying fields of production' are clearly and unequivocally not
production itself but consumption which 'must be continually extended'.
The following passage in _Theorien über den Mehrwert_, amongst others,
sufficiently shows that Marx had this in mind and nothing else: 'Ricardo
therefore consistently denies the necessity for an _expansion of the
market_ to accompany the expansion of production and the growth of
capital. The entire capital existing within a country can also be
profitably used in that country. He therefore argues against Adam Smith
who had set up his (Ricardo's) opinion on the one hand but also
contradicted it with his usual sure instinct.'[343]
In yet another passage, Marx clearly shows that Tugan Baranovski's
notion of production for production's sake is wholly alien to him:
'Besides, we have seen in volume ii part iii that a continuous
circulation takes place between constant capital and constant capital
(even without considering any accelerated accumulation), which is in so
far independent of individual consumption, as it never enters into such
consumption, but which is nevertheless definitely limited by it, because
the production of constant capital never takes place for its own sake,
but solely because more of this capital is needed in those spheres of
production whose products pass into individual consumption.'[344]
Admittedly, in the diagram in volume ii, Tugan Baranovski's sole
support, market and production coincide--they are one and the same.
Expansion of the market here means extended production, since production
is said to be its own exclusive market--the consumption of the workers
being an element of production, i.e. the reproduction of variable
capital. Therefore the limit for both the expansion of production and
the extension of the market is one and the same: it is given by the
volume of the social capital, or the stage of accumulation already
attained. The greater the quantity of surplus value that has been
extracted in the natural form of capital, the more can be accumulated;
and the greater the volume of accumulation, the more surplus value can
be invested in its material form of capital, i.e. the more can be
realised. Thus the diagram does not admit the contradiction outlined in
the analysis of volume iii. In the process described by the diagram
there is no need for a continual extension of the market beyond the
consumption of capitalists and workers, nor is the limited social
capacity for consumption an obstacle to the smooth course of production
and its unlimited capacity for expansion. The diagram does indeed permit
of crises but only because of a lack of proportion within production,
because of a defective social control over the productive process. It
precludes, however, the deep and fundamental antagonism between the
capacity to consume and the capacity to produce in a capitalist society,
a conflict resulting from the very accumulation of capital which
periodically bursts out in crises and spurs capital on to a continual
extension of the market.