Outline of Marx's Discussion:

Production must be continuous, i.e., repeat itself, as such it is also reproduction.
In capitalism reproduction is also reproduction of value advanced as capital, i.e., "self-valorizing value." (p. 711)

Reproduction requires all of the elements of production be replaced, i.e., the means of production and labor power.

• Reproduction of means of production = replacement of used up raw materials and worn-out machinery, buildings, etc.(MP) (p. 711)
• Reproduction of labor power = reproduction of workers and their labor power requires production of necessary means of subsistence (MS). (p. 712)
• Both MP and MS are produced by workers.

Labor fund =

• the means of subsistence required for reproduction of labor power (p. 712),
• variable capital (under capitalism); rare, 1/4 world's workers) (p. 714, footnote 4),
• product of peasants own land/labor (under feudalism) (p. 713).

Simple Reproduction

• ... is the "mere continuity of the production process" (p. 715)
• ... "converts all capital into accumulated capital" (p. 715)

Alienation

• =alienation of workers' labor, sold by them to capitalist (p. 716)
• =alienation of workers' product, owned by capitalist, an "alien power that dominates and exploits him." (p. 716)

Reproduction of the worker

Worker's consumption is of two kinds:

• Productive consumption of MP during work - allows capital to live
• Individual consumption of MS outside work - allows worker to live
• Abusive consumption: where individual consumption is merely the means to "keep his [the worker's] labor-power in motion, just as coal and water are supplied to the steam-engine." (p. 717)

At the aggregate level of the classes:

• Investment of variable capital = "reconversion of the means of subsistence . . . into fresh labor power which capital is then able to exploit."
• As such, "individual consumption" . . . remains an aspect of of the production and reproduction of capital."
• But, "the capitalist may safely leave this [individual consumption] to the worker's drives for self-preservation and propagation." (p. 718)
• With some exceptions, e.g., South American mine owners who force their workers to eat beans to increase their strength and work. (p. 718, footnote 9)
• Workers' consumption above what is needed for reproduction of labor power is unproductive consumption - from capitalist point of view.
• Reproduction of workers is also "transmission and accumulation of skills from one generation to another." (p. 719)

Capitalist Understanding

Marx gives a series of quotes from a spokesperson for English cotton textile industry who objects to any government subsidy to worker emmigration during cotton famine and high unemployment caused by American Civil War.

Spokesperson argues

• workers are machines that should be kept on hand and in order
• if they left, it would take a generation to replace them with a new batch of skilled workers
• therefore the cotton industry and other, related industries would suffer
• therefore the workers should be kept via forced public works (pp. 720-22)

The Times newspaper editorial also worried:

• that "human machinery will rust under inaction"
• that "human machinery will, as we have just seen, get the steam up of its own accord, and burst or run amuck in our great towns" (p. 722)

Marx concludes his example by noting Parliament passed an Act "empowering the municipal corportations to keep the workers in a state of semi-starvation, i.e., to exploit them without paying the normal wages." (p. 723)

Commentary

As Marx pointed out in a two-page introduction to this section of Capital, pp. 709-710, his analysis in this and the subsequent two chapters is based on a number of simplifying assumptions. The most important one in this chapter, and the one that differentiates this chapter and its discussion of simple reproduction from the discussion of expanded reproduction in the next two chapters, is that capitalists consume all of the value that their operations generate over and above that which is necessary to replace the used up means of production, e.g., raw materials, tools, and to replace their living workers. In other words this chapter deals with how production is also reproduction of all of the elements of the capitalist organization of production in abstraction from investment that generates growth, i.e., accumulation.

This said, most of what Marx writes in this chapter should already be familiar from the study of preceeding ones, especially chapter 6 that deals explicitly with the reproduction of labor power, and indeed he often refers back to previous discussions. There are, however, a couple of points, one minor and another major, that are worthy of examination.

Alienation

As discussed in my commentary on chapter 7 on the labor process, there has been a debate as to whether there was a fundamental change in Marx's analysis of capitalism from his discussion of alienation in the 1844 Manuscripts to the theory laid out in Capital. I have argued that there was no fundamental change and what we have in Capital includes an essentially a detailed elaboration of his earlier discussion of four forms of alienation, e.g., of how capital controls workers on the job thus alienating them from their labor, of how capital controls their product and uses it against them, of how capital pits workers against each other alienating them from each other and of how capital, by imposing its will, alienates them from their very species-being.

For the most part, the substantiation of this argument involves showing how the various moments of Marx's analysis in Capital are elaborations of these themes despite the absence of any explicit use of the term "alienation." In this chapter, however, he does use the term and his use deserves some attention.

On page 716 we find the following passage:

"Since, before he enters the process, his own labour has already been alienated [enfremdet] from him, appropriated by the capitalist, and incorporated with capital, it now, in the course of the process, constantly objectifies itself so that it becomes a product alien to him [fremder Produkt]."

Here we find two uses of the term "alienation." The first use clearly refers simply to the sale of labor power; sold, the labor power and its use value now belongs to the capitalist "before" production begins. This is a fairly vernacular use of the term "alienation", just meaning to go away from or be taken away from. Even though what is being described is integral to the creation of alienation, and indeed if the worker's labor becomes "incorporated with capital" then all forms of alienation obtain, the use of the term here does not seem to refer to any of the four forms that Marx discussed in the 1844 Manuscripts. The second use, however, refers to what happens "in the course of the [labor] process", i.e., during production: the capitalist utilization of the use value of the worker's labor power results in a product that belongs to the capitalist. This is the alienation of the product, the second form of alienation mentioned above. When Marx goes on to point out how that product is converted into "capital, i.e., into value that sucks up the the worker's value-creating power" and thereby becomes "an alien power that dominates and exploits him," we have, explicitly, all the elements of the second form of alienation discussed in the Manuscripts.

The Reproduction of the Worker

The second, and more important issue raised in this chapter, concerns the reproduction of workers and their labor power as an integral part of capitalist reproduction as a whole. The key passage concerns the reproduction of capital as a whole, i.e., "the capitalist class and the working class":

"The capital given in return for labour-power is converted into means of subsistence which have to be consumed to reproduce the muscles, nerves, bones and brains of existing workers, and to bring new workers into existence. Within the limits of what is absolutely necessary, therefore, the individual consumption of the working class is the reconversion of the means of subsistence given by capital in return for labour-power into fresh labour-power which capital is then again able to exploit. It is the production and reproduction of the capitalist's most indispensible means of production: the worker. The individual consumption of the worker, whether it occurs inside or outside the workshop, inside or outside the labour process, remains as aspect of the production and reproduction of capital, just as the cleaning of machinery does, whether it is done during the labour proces, or when intervals in that process permit. The fact that the worker performs acts of individual consumption in his own interest, and not to please the capitalist, is something entirely irrelevant to the matter." (pp. 717-718)

Let us examine this passage in some detail. First, "the capital given in return for labour-power" is the wage, the variable capital invested in the hiring of workers. As we have seen before, this can be represented, from the capitalist point of view, as M-LP, the exchange of money for labor power. Or, from the workers' point of view as LP-M, the sale of labor power for money. Second, the "conversion" of the wage into "the means of subsistence" refers to all those expenditures workers make on everything necessary to reproduce their labor power, e.g., food, clothing, music, transportation, housing, and so on. Third, all of those things are not just bought, but they "must be consumed" in order "to reproduce the muscles, nerves, bones and brains of existing workers, and to bring new workers into existence." In other words, individual consumption must reproduce the labor power of existing workers and produce the next generation and its labor power. That individual consumption can include everything from cooking and eating to learning a skill to various amusements that re-creates the ability and willingness to return to work for the capitalist. The key point is that their consumption is, from the capitalist point of view, production - the production of labor power.

Now as we have seen, the industrial circuit of capital can be represented by the following sequence, what Marx calls the circuit of money capital:

M-C(LP,MP)...P...C'-M'

where ...P... stands for the production process. Nowhere in Marx's writings, not even in Part I of Volume II of Capital where he sketches a detailed analysis of that circuit and also analyses it from two other points of view, is there a parallel symbolic representation for consumption qua production of labor power, but there is nothing to prevent us from using his same notation to represent a parallel process. Thus, I have suggested in my comments on chapter one (in Reading Capital Politically) that we can represent what Marx is saying in the above passage by:

LP-M-C(MS)...P...LP*

where ...P... represents consumption as production of labor power and LP* is the labor power produced. The sense of this "circuit of the reproduction of labor power" is the same as his circuits of industrial capital: it represents a sequence of processes through which a key element of capital is reproduced: labor power. [I have given the final LP* an asterisk instead of a prime (e.g., LP') because in Marx's notation primes are used to designate increases in value but the impact of the work of consuming in ways that produce labor power has ambiguous effects, e.g., procreation by generating new workers may increase the value of labor power, but more housework that substitutes for purchased goods or services may reduce the value of labor power.]

Leaving it to the workers?

Now Marx's final comment in this passage notes that "The fact that the worker performs acts of individual consumption in his own interest, and not to please the capitalist, is something entirely irrelevant to the matter." In other words, from the workers' point of view we could represent their entry into the labor market as merely a means toward their "own interest", i.e., the elaboration of their own lives, as LP-M-C(MS). Here consumption is not production, it is simply living! Here is the passage from Chapter 1, Volume II of Capital:

"It is also the sale of labour-power - we may here say of labour, since the form of wages is assumed - by the laborer who owns it. What is M-C(= M-L) for the buyer is here, as in every other purchase, L-M(= C-M) for the seller (the laborer). It is the sale of his labour-power. This is the first stage of circulation, or the first metamorphosis, of the commodity (Buch I, Kap. III, 2a).[English edition: Ch. III, 2a-Ed.] It is for the seller of labour a transformation of his commodity into the money-form. The laborer spends the money so obtained gradually for a number of commodities required for the satisfaction of his needs, for articles of consumption. The complete circulation of his commodity therefore appears as L-M-C, that is to say first as L-M(= C-M) and secondly as M-C; hence in the general form of the simple circulation of commodities, C-M-C. Money is in this case merely a passing means of circulation, a mere medium in the exchange of one commodity for another."

But this "little circuit" fails to capture the central point of this part of chapter 23: from the capitalist point of view working class consumption must involve the production of labor power.

This brings us to another important issue. A few lines after the passage quoted above Marx comments that "the capitalist may safely leave this [consumption qua production of labor power] to the worker's drives for self-preservation and propagation." (p. 718) Almost immediately, however, he gives a counter-example of South American mine-owners who force their workers to eat beans as well as bread to increase their strength and productivity. What are we to make of this contradiction?

On the one hand, Marx's comments here reflect what he was seeing around him in England in the years that he was writing, and what he was reading in the reports of the Factory Acts inspectors: a general tendency on the part of capital to minimize wages and all other costs related to the reproduction of the working class. Engels' book The Condition of the English Working Class upon which Marx drew repeatedly gave many vivid illustrations of such minimization and of the misery it imposed on British workers.

On the other hand, although Marx calls the South American mine-owner's oversight of the diet of their workers "crude", in historical retrospect we can see that they were actually harbringers of the capitalist future. That is to say, as those workers' struggles to reduce the working day, that Marx analyzed in chapter 10, were successful in driving the working day to 12 hrs, then to 10 hrs and then to 8 hrs, they were simultaneously successful in freeing more and more time from production under the eyes (and control) of the capitalists and gaining more and more time for living, i.e., for consumption that was not production of labor power. That working class success made the capitalist class more and more reliant upon two strategies, one that Marx analyzed extensively and one that he did not. The two strategies were those of relative surplus value and the management of working class consumption and free time to make sure that they resulted in the production and reproduction of labor power. We have already seen, in chapters 12-15, how detailed Marx's analysis of the former strategy became. The sketchiness of this chapter shows how limited was the attention he paid to the latter strategy.

As I suggested in my commentary on Chapter 10, today we must analyze not only capitalist strategies in the sphere of production, but also its strategies in the sphere of reproduction, indeed throughout the social factory. At the same time, we must also analyse workers struggles in both spheres to see how they rupture and force changes in capitalist methods and repeatedly repose the possibilities of revolutionary ruptures that capital can not handle and which lead to its replacement.

Carrying out such analyses requires study that goes well beyond what is provided in this chapter. First, it requires applying to capitalist strategies in the sphere of reproduction the same kind of close, analytical examination that Marx brought to production in chapters 7, 12-15, that is to say where he examined the basic outlines of the labor process (Chapter 7), some forms of co-operation (chapter 13), the division of labor in industry (Chapter 14) and the dynamics of technological change (in Chapter 15). We need to replicate this kind of analysis in all of the spheres of reproduction. Second, beyond such basic analytical theorizing, we need to examine all those concrete forms of such relationships that currently obtain and are relevant to our struggles, not just as "examples" to illustrate the theory, but as contributions to our understanding of those struggles and as one basis of deciding what future directions those struggles should take. Third, as the last point might suggest, our point of departure for such studies can be theoretical but current struggles should provide focus to our efforts because, as Marx said "the point is not to understand the world but to change it."

This is obviously not the place to undertake any systematic investigation of the sort outlined above, but just to illustrate a bit, let's recall the application of Marx's analysis of the labor process to the sphere of reproduction. In his analysis there were three elements: the workers, their tools and the raw materials upon which they worked to fabricate commodities. In the case of reproduction where the commodity being fabricated is labor power how are we to understand these elements? The workers include all kinds of people beginning with housewives and children-in-school and continuing through waged workers on and off the job, prostitutes, teachers, and so on. The tools would include everything used by those people to produce and reproduce labor power: kitchen and dining equipment, washing machines, irons, beds, computers, school books, training manuals, self-help books, playgrounds, footballs, condoms & sex paraphernalia, music cd's, film DVD's and so on. And the raw materials? Those are the people themselves: from ovulation, fertilization and conception through children to adults. As in Marx's very enlightenment view where the active, willing worker uses tools to transform passive, will-less, nature, the labor process that produces and reproduces labor power treats human beings as objects to be created and shaped according to the needs of capital. Procreation, child rearing, education and training are not shared activities of socially interactive human beings, they are alienated relations of power as some people are used to craft other people into useful tools of capitalist production and social control.

Bedroom Backlash It was not so long ago men had all the say at the end of a weary day. He'd make his moves with no regard for feeling she might have 'til in resistance she would claim the headache everyone laughs at. And it's Yes. No. Yes. No. Sorry I got a headache. Oh for the day when women get free. Oh for the day when men accept it. No more shames No more games Just yes, yes, yes! Women's liberation came along said men can't have all thesay of if and how and where and when at the end of a weary day. For woman wants her fair share too in pleasure as in pay but he still wants to be the boss so he turns away. With No. Yes. No. Yes. Damn it , woman, I've got a headache. Oh for the day when women get free. Oh for the day when men accept it. No more shames No more games Just yes, yes, yes! Carol Hanisch, Fight on sisters... and other songs for liberation,1978?.

Once we understand this we can see how so many of the nasty aspects of the patriarchal dimension of capitalist reproduction have the character that they do. Feminists have for years critized such things as the imposition of gender roles wherein, for example, in the absence of women's struggles, men dominate women sexually, e.g., they satify their desires for control and sexual release (orgasm) with no regard to the pleasure, or lack of it, experienced by women. One of the discoveries by feminists in the 1970s was how few of their mothers ever experienced any real pleasure in sex and mostly viewed it as an onerous obligation - sometimes tolerated and sometimes rejected (via appeals to fatigue, headache or nervous breakdown). Thus the labor process of reproduction involves dehumanization of people as they become passive, will-less objects of manipulation, and, of course, the alienation of those who are doing the manipulating because their manipulation prevents them from having any healthy human contact with those they are manipulating. The particular concrete forms of such dehumanization and alienation naturally vary with the many, many different labor processes included in the sphere of reproduction.

Schemas of Reproduction

In chapters 23 through 25 as Marx distinguishes between simple and expanded reproduction, his exposition is largely verbal. In Volume II of Capital, however, he reworks the French economiste Francois Quesnay's Tableau Economique to both model the requirements of reproduction and to distinguish between simple and expanded reproduction. Quesnay, the main theorist of the "Physiocrat" school of economics in the 18th Century, developed his Tableau to trace/demonstrate the interlinkages of the economy and to argue how, in his view, all expansion could be traced back to the work of farmers on the land - the only truly productive workers.

Like Adam Smith before him, Marx found Quesnay's approach to analyzing the "circular flows" of the economy useful, while disagreeing with his interpretation, especially his privileging of land/farming as the unique source of value. So, in Volume II of Capital, Marx suggests his own formulation of those flows, first for simple reproduction and then for expanded reproduction. In what follows I will only sketch his analysis of simple reproduction, holding a discussion of his parallel treatment of expanded reproduction over for chapter 25 that deals with that subject.

Marx's analysis breaks the economy down into two sectors, or "departments". All those circuits of industrial capital that produce the means of production are regrouped, or aggregated, into "Department I"; all those circuits of industrial capital that produce the means of subistence are aggegated into "Department II." Using his value theory, the value of the output of each department can then be represented by C+V+S such that we have:

Department I = C₁ + V₁ + S₁
Department II = C₂ + V₂ + S₂

Now, in order for the present organization of capitalist society - represented above - to reproduce itself, certain conditions must be met. First, Department I must produce enough of the means of production to replace those used up in its own activities plus enough of the means of production to replace those used up in the activities of Department II. Second, Department II must produce enough of the means of subsistence to sustain/reproduce the labor power employed in its own activities, plus enough means of subsistence to sustain/reproduce the labor power employed in Department I. Third, given the assumption that none of the surplus value is reinvested, but all is consumed by the capitalists, Department II must also produce enough consumer goods to sustain the capitalists of both departments. These conditions can be represented in the following manner:

Department I must produce C₁ + C₂
Department II must produce V₁ + V₂ + S₁ + S₂

If, and only if, these conditions are met can simple reproduction take place, i.e., can the system reproduce itself from period to period.

In the language of Chapter 23, what this says is simply that not only must capital organize its productive activities to maintain its raw materials, tools, machines at the current level of effectiveness, but it must also make sure that enough food, clothing, housing, etc. are produced to make possible the reproduction of the current number (and effectiveness) of workers. Meeting these requirements necessitates an appropriate balance between the activities of the two departments; failure to achieve that balance creates a crisis in the ability of the system to reproduce itself. Indeed, some Marxists have leaned heavily on these schemes in advancing the thesis that capitalist crises originate in such "disproportionalities."

For our purposes, this scheme of simple reproduction is useful merely to highlight the necessity for capital to organize itself to guarantee not only the means of production it uses to put people to work, but also the necessity for it to meet the needs of those people in so far as those needs result in the reproduction of them and their labor power.

We should note in passing a couple of the limits of this schema: first, there is no discussion of the labor processes in either Department, only their outcomes in terms of value. Nor is there any discussion of the labor processes of converting the output into functioning components of on-going production, neither the processes of replacing depreciated physical capital, nor the processes of maintaining labor power. These processes, and the parallels between them, are touched on in Chapter 23 but not in these schemas. Second, as Marx will make clear in Chapter 25, the ability of capital to keep its currently employed workers working (at profitable wages) also requires that it produce and reproduce what he calls the "reserve army" of the unemployed - unemployed workers whose demands for jobs and wages keep pressure on those with jobs to accept wages and working conditions that they might refuse in the absence of such pressure. Now what this is true whether we are talking about expanded reproduction (chapter 25) or simple reproduction (chapter 23), in both cases capital must reproduce not only those who are waged, but also those who are unwaged. Therefore, the output of the means of subsistence in Department II destined for the working class, i.e., V₁ + V₂ must be sufficient to feed, cloth etc. (to greatly varying degrees, of course) not only the waged but also the unwaged. But nowhere is this explicit in the schema. I will return to this in my discussion of Chapter 25.

Economists: "Productive" & "Unproductive" Consumption

Marx insists, pp. 718 - 719, on how both capitalits and their "ideologists", the political economists, have differentiated between working class consumption necessary to capital and any consumption that goes beyond that and only benefits the workers themselves. He sites James Mill, David Ricardo and Thomas Malthus as all considering any working class consumption over and above what capital requires as "unproductive." Their concepts of what constitutes "productive" vs "unproductive" consumption, whether of the means of subsistence or of capital itself, frankly express the view point of capital itself.

Adam Smith had insisted in distinguishing between the unproductive use of money, e.g., rich landlords hiring large numbers of retainers, and the productive use of money as capital, i.e., hiring workers who produced products upon which a profit could be earned. Marx, in Volume III of Capital retained a similar distinction between investments of money in mere mercantile buying and selling vs investments in industrial production.

Here in this discussion of working class consumption Marx accepts the economists' useage, even embracing Thomas Malthus' assertion (in footnote 12, p. 719) that workers' consumption is not even productive to themselves:

Malthus: "The workman . . . is a productive consumer to the person who employs him, and to the state, but not, strictly speaking, to himself."
Marx: "In reality, the individual consumption of the worker is unproductive even from his own point of view, for it simply reproduces the needy individual . . . "

However, in the very next sentence after the one quoted above, Marx also says "Even its [the working class'] individual consumption is, within limits, a mere aspect of the process of capital's reproduction." The caveat "within limits" refers, of course, to the degree to which workers are able to achieve some degree of life autnomous from capital over and beyond the simple reproduction of their labor power. This was the worry of the capitalists and of their economists: they knew that in periods of upturn and tight labor markets workers were sometimes able to achieve increases in wages from which they alone benefited, at the expense of the capitalists. Marx was well aware of this phenomenon, not only because the economists that he read were aware, but because such increases in wages were occurring around him during upswings in the business cycle and because there was debate among working class strategists about the importance of struggles that won such gains. Marx himself argued against those who thought that such struggles were a waste of time because downturns in the business cycle and rising unemployment would eventually hammer wages back down.

The important point here, I think, has nothing to do with the periodic fluctuations in the wage, and hence variations in the degree to which working class consumption became "unproductive" for their employers, but rather the simple fact that such consumption could, and has, occurred and that therefore, there is something like a counter-concept of "productivity" from our (the workers') point of view! To the degree that we are able to consume in ways that escape or go beyond simply reproducing our labor power, that consumption is "productive" from our point of view, even if "unproductive" from the point of view of capital. I am speaking, obviously, of what I have elsewhere referred to as "self-valorization".

Vocabulary: Their & Ours

Now, as I have also argued elsewhere, such terms as "productive", "unproductive", "self-valorization", as well as their roots (production, valorization) and even "consumption" are all terms derived from the vocabulary of capital, even if we use them in an inverse sense to express our own point of view. We do better, I think, to seek out, and use, a vocabulary untainted by such vile origins and associations. Capital may find it convenient to reduce our various life activities to the single category of "consumption" on the one hand, and to that of "production" etc. on the other hand, but we will find it more enlightening to break out of such reductionism and to contemplate our activities as irreducible and complex variety.

When we prepare food, serve food and eat food, especially in a social setting, we are not merely "consuming" - something the fast-food industry is organized to make quick and efficient, from capital's point of view. On the contrary, we can be engaged in a creative search for (as the ancient Chinese said) the harmonious combination of tastes, shapes, smells, colors, and textures; we can be engaged in the preparation of gifts for our friends and/or families, (in the language of Marx's 1844 Manuscripts) gifts of ourselves objectified in our dishes ; we can be engaged in cooperation and collaboration in that preparation, mutual aid (in the language of Kropotkin); in eating together we can be sharing the pleasures of food laced with love and the benefits of cooperation; our mealtimes can be moments of the sharing of our lives through conversation, stories, body language and facial expressions; eating together may have collective spiritual significance, and so on, and so forth. Let not the economist's reductionism (which is capital's) guide our language and our lives, but rather let us learn from poets and artists how to talk about and appreciate all the dimensions of every human experience, both individual and social.

Labor power & the "transmission of skills"

The chapter largely comes to an end with a discussion of how the reproduction of workers and their labor power must necessarily include "the transmission and accumulation of skills [especially] from one generation to another." (p. 719) This was already touched upon in chapter 6 on the buying and selling of labor power but here Marx takes the opportunity to illustrate how acutely aware capitalists are of this necessity. He quotes, at some length from one Edmund Potter who argues against allowing cotton mill workers to emmigrate away from English mills during the downturn in employment brought on by the cotton famine caused by the American Civil War. In his arguments he emphasizes that such workers "are the mental and trained power which cannot be replaced for a generation." Better than allowing them to emmigrate, Potter argues, for the state to spend the money necessary to force them locally to accept "some occupation or labour". While, in response, the Times of London mocks Mr. Potter's proposal to "sustain them by alms" and, most likely, "to keep down their discontent by force", it too worries about the loss of skill due to unemployment - "Human machinery will rust under inaction, oil and rub it as you may." - and the possibilities of such workers running "amuck in our great towns."

Over time, the protests of workers against the immiseration brought on by increases in unemployment and the kinds of concerns of capital laid out above led to increasing state intervention in the "the transmission and accumulation of skills [especially] from one generation to another." Whereas from pre-capitalist times well into the capitalist epoch, the transmission of skills was primarily accomplished by institutions such as apprenticeships, the state would gradually become more and more involved in the training of workers for jobs. As workers fought for an achieved (at least to some degree) the exclusion of child labor, the state would, as discussed in commentary on earlier chapters) reincarcerate them in schools of various sorts, schools that the state, generally under the influence of business and its needs, structure as to primarily produce, not enlightenment or the knowledge and skills needed for citizenship and political participation, but labor power of various sorts. There would also, of course, be private schools but in the United States widespread public schooling would become the norm in the 20th Century. Today part of the crisis of the school brought on by both student struggles and capitalist efforts to reoganize its labor force for better control has been a fierce debate over the relative role of private vs public schools. In that debate capitalists have sought to frame the debate, not surprisingly, primarily in terms of which kind of school, private or public, can best prepare young people for the labor market. That is a framing that obviously seeks to exclude other questions that we might well consider more important: such as which kind of school, if either, provides a better terrain for fighting to liberate learning from its subordination to "skill transmission" and the capitalist world of work?

RECOMMENDED FURTHER READING

If you don't remember the text well, from the study of chapter seven, you can reread the passage of the 1844 Manuscripts dealing with the issue of "estranged labor." You can also, if necessary, reread my commentary on the subject.

For some commentary on Francois Quesnay and his Tableau Economique you might look at my notes on the physiocrats (together with the links included in those notes) written up for my course on The History of Economic Thought, Eco 368.

You can examine Marx's treatment of simple reproduction in Volume II of Capital by going to the four sections covering Chapter 20 at the Marx-Engels Archive Webpage for Volume II.

My previous remarks on the need for new language to think about, and talk about, post-capitalist relationships mainly concerned "labor" and "work". Those remarks can be found in an essay titled "Work is Still the Central Issue!" (1999).

CONCEPTS FOR REVIEW

reproduction simple reproduction labor fund alienation consumption productive consumption individual consumption unproductive consumption skill transmission

QUESTIONS FOR REVIEW

1. What is the key assumption that Marx makes that differentiates his concept of simple reproduction from his concept of expanded reproduction?

2. Which of the four forms of alienation that Marx analyses in the 1844 Manuscripts shows up in this chapter?

3. In what ways is the "individual consumption of the worker" an integral and necessary part of capitalism's self-reproduction?

4. To what degree might you argue that Marx's comment that capitalists can "safely leave" individual consumption to the workers still true? To what degree, and in what ways, is it no longer true?

5. Why do you think Marx divides the economy into the two "departments" that he does in his reproduction schemas? Why not more departments, say, the way Leontief's "input-output" tables are constructed with up to a 100 sectors?

6. According to the schema of simple reproduction what criteria must be met for reproduction to be succssful? If you presented this schema to mainstream economists as a two-sector growth model, what forces do you think they would evoke as the means by which that criteria would normally be met?

7. To what degree, and in what way does Marx agree with the classical economists that working class consumption that goes beyond the reproduction of the workers' ability to work is "unproductive"?

8. The commentary offers some alternative ways of talking about "consumption". Suggest some alternative vocabulary for talking about the kinds of things that in capital are regrouped under the rubric "production."

9. How does an elementary and secondary school education differ from more traditional forms of training such as apprenticeships?

10. To what degree do you think elementary and secondary school education actually involves the "transmission of skills"? If you think that degree is not very high, then what do you think is/are the primary purpose(s) of those levels of education in contemporary society?

Section 1: Capitalist Production on an Progressively Increasing Scale. The inversion which converts the property laws of commodity production into laws of capitalist appropriation.

Outline of Marx's Discussion:

The employment of surplus-value as capital = accumulation of capital.

Although net revenue (sales minus costs) = surplus-value, it takes the form of money. It only becomes capital when invested in more means of production and in the hiring of more labor.

For this to happen annual production must include: whatever new means of production that are needed to replace worn-out means of production (depreciation), new means of production that can be bought by the net revenue or surplus-value, new labor power (workers) that can be hired and new means of subsistence to sustain them.

The availability of new labor-power implies wages that "suffice, not only to maintain [the existing working class], but also to increase its numbers."

"The cycle of simple reproduction alters its form and, to use Sismondi's expression, changes into a spiral."

Thus laws of private property that assume equal exchange [and indeed often prosecute unequal exchange or cheating] thus hide the real relationship. Equal exchange (assuming wages = value of labor-power) is a mere semblance - a form that mystifies the real content of the relationship, i.e., money/surplus-value (=unpaid labor) is stolen from workers.

"Originally the rights of property seemed to us to be grounded in a man's own labor." [e.g., John Locke's theory of property](1)) But in capitalism property - of the means of production - "turns out to be the right . . . to appropriate the unpaid labor of others".

"General law of commodity production" = "law of exchange" = exchange of equal values. Marx assumes this to always hold, yet exploitation exists because workers produce more value than the value of their wages.

Generalization of commodity production only occurs when labor-power becomes a commodity - which happens only with the development of capitalism - thus capitalism includes this generalization.

Commentary

There are two basic points in this section. The first is that for capitalism to expand beyond simple reproduction the surpus-value earned through the exploitation of workers, and accruing to the capitalists as money realized through the sale of the commodities produced by those workers, must be invested rather than consumed. The second point is that such investment, wherein surplus-value is used to purchase new means of production and to hire new workers to expand production, doesn't
violate the "laws of exchange", i.e., we can continue to assume equality in exchange. But, because the extraction of surplus-value constitutes the very unequal exploitation of workers, the "laws of exchange" hide the reality of the situation.

Investment: by corporations, by philanthropies and by the state.

In simple reproduction - where the existing situation is merely reproduced - all surplus-value is consumed, either by the capitalist class to whom it belongs or, perhaps, by the beneficiaries of any charity the capitalists might distribute to the poor. Marx doesn't discuss charity but others of his time were well aware of this use of a little bit of surplus-value. Some, such as the Reverand Thomas Malthus whom Marx both draws upon and frequently mocks, argued against it. (2) Others, such as Emile Zola, the French novelist, drew biting portraits of such condescention on the part of capitalists. (see the description in Germinal (1885)(3) of the annual charity bestowed on coal miners by the wives of the mine owners.) Beyond charity, a few extremely wealthy capitalists have employed some of the surplus-value they have extraced from workers for "philanthropy." (see below)

In expanded reproduction, or accumulation, surplus-value is used to buy more means of production and to hire more workers in order to expand both the scale of production and to expand the amount of surpus-value/money realized from enlarged sales. Such expanded reproduction in industry, however, requires that both the new means of production and the new workers be available. Therefore, current production must produce not only the means of production necessary to replace worn-out or used up means of production but also new means of production available in exchange for surplus-value that can be used to expand production. At the same time, current production must produce sufficient means of subsistence to support the expanded reproduction of the working class, i.e., the procreation and rearing of children. Thus: in the case of accumulation "ordinary wages suffice, not only to maintain [existing workers] but also to increase [their] numbers".

In the language and symbolism of Marx's reproduction schemes, mentioned in my commentary on Chapter 23, in order for the present organization of capitalist society to reproduce itself on an expanded scale, certain conditions must be met.

First, Department I must produce enough of the means of production to replace those used up in its own activities plus enough of the means of production to replace those used up in the activities of Department II plus enough new means of production to be purchased by the surplus-value realized and invested in each department.

Second, Department II must produce enough of the means of subsistence to sustain/reproduce the labor-power employed in its own activities, plus enough means of subsistence to sustain/reproduce the labor-power employed in Department I, plus enough new means of subsistence to sustain/reproduce the new workers hired with the surplus-value realized and invested in each department.

These conditions can be represented in the following manner:

Department I must produce C₁ + C₂ + C_1new + C_2new
Department II must produce V₁ + V₂ + V_1new + V_2new.

If, and only if, these conditions are met can expanded reproduction take place, i.e., can accumulation occur from period to period.

While in Marx's exposition all of the production of new means of production and the expansion of the labor force is financed by businesses investments in machinery, raw materials and wages, the late 19th and early 20th Century saw a few, extremely wealthy capitalists discover a new way to achieve these same goals through expenditures of their surplus-value that went beyond the investments of their corporations. I am speaking here of the "philanthropy" mentioned above and thus of the "philanthropic" activities of "philanthropists". Here I want to distinguish between charity and philanthropy in the following way: whereas what most people mean by charity is small gifts, sometimes drawn from capitalist profits, but also often drawn from wages, that raise the income of a few of the poor - and may be deducted on one's personal tax returns - philanthropy is a much more extensive use, not of wages but of surplus-value for purposes of social engineering. Any close examination of such well-known philanthropies as those associated with the Rockefellers or with Henry Ford reveals that their expenditures amount to sizeable investments in either the shaping of labor-power, or in the development of new technologies. I will just give a few examples.

First: one early Rockefeller effort, undertaken by his General Education Board in the second decade of the 20th Century, involved support for the expansion of public schooling in the Southern States and attempts to transform the Southern family through the development of home economics. Similarly, in the same period, the Rockefeller Sanitary Commission financed an anti-hookworm campaign in the Southern States. Both of these "philanthropical" expenditures were investments, designed quite explicitly to transform and improve the quality of the Southern labor force. Unlike, say the corporate financing of a gym to help their own employees stay in shape, be productive and reduce health care costs, these philanthropic investments were aimed at improving the quality of the labor force in the region, no matter who their future employers might be. These were examples of individual capitalists financing social investments in the interests of their class as a whole. (To some degree, these investments also benefited those parts of the working class directly affected. Certainly this was true for the eradication of hookworm, even if the benefits of public schooling are less clear.)

Similarly, such philanthropies have often invested in technological changes aimed at improving productivity throughout much of society, far beyond any particular interests of those corporations that have supplied the funds underwriting such foundations and such research. One example are the agricultural research centers founded by the Rockefeller and Ford Foundations in the post-WWII era with the aim of finding new higher-yielding varieties of grain to boost food supplies in the Third World. The motivation for such investments, as in those previously discussed above, has been the desire for a more stable labor force that could be achieved in this case by reducing unrest and rebellion associated with hunger. Such were the sources of the new high-yielding varieties of rice and wheat developed in the 1950s and 1960s associated with the so-called "Green Revolution" - aimed at removing causes of "Red Revolutions." Again, in all these cases, we are talking about the expenditure of surplus-value not to improve the means of production or to expand labor force of particular corporations, and thus not aimed, directly, at expanded reproduction, but which, if successful, by providing a more stable and productive labor force, would result in the expanded reproduction of the labor force necessary for accumulation and/or improved productivity that would generate greater relative surplus-value and greater profits generally. Thus, social investmeent, and social engineering.

Not surprisingly, given the influence of powerful capitalists on public policy as well as the demonstration effect of successful private programs, these private philanthropic investments have often become the starting point for similar investments by the state. This is obvious in the case of public schooling where General Education Board lobbying in support of public education in the Southern States successfully led to the state organization of such schooling. Similarly, such private public health campaigns as those of the Rockefeller Sanitary Commission have led to broader government programs of public health. And, of course, there have been extensive government expenditures on productivity raising research of all kinds. As might be expected, for the most part all such government efforts have been financed with taxpayer money - mostly money drawn from the wages of workers. So these private social investments, designed to improve the quality of the labor force and the means of production, both of which facilitate accumulation have also resulted in a shift in the financing of such programs from surplus-value to wages.

Section 2: The Political Economists' Erroneous Conception of Reproduction on an Increasing Scale.

Outline of Marx's Discussion

The classical political economists were correct to emphasize how hired retainers, e.g., butlers, housemaids, were unproductive workers because they produced no new products on which a profit could be realized. Whereas industrial workers, who produce such profitable products, are productive workers.

They were also correct to distinguish hoarding where money or things are just piled up, from capital investment where money is spent to buy means of production and labor-power that are put to work producing new products and new profits.(4)

So, consumption of surplus product by productive workers is, indeed, "a characteristic feature of the process of accumulation."

BUT . . .

Adam Smith is wrong to pretend that accumulation is "nothing more than the consumption of the surplus product by productive workers." "In actual fact," Marx writes, "the surplus-value, like the value originally advanced, divides up into constant and variable capital, into means of production and labor-power . . . labor-power is itself consumed by the capitalist." While wages buy the means of subsistence "which are consumed, not by 'productive labor', but by the 'productive worker.'"

Commentary

The reason Marx dwells on this "error" of classical political economy is suggested at the end of the section where he writes, "it goes without saying that political economy has not failed to exploit, in the interests of the capitalist class, Adam Smith's doctrine that the whole of that part of the net product which is transformed into capital is consumed by the working class." What does he mean by the "exploiting" of this doctrine? Simply that it provides an ideological cover for the real exploitation of workers. Evoking this doctrine, business can pretend that it is greatly in the interests of the working class that capital invest - because, ultimately, the workers consume it all. In both this section and in the next, Marx both critiques an idiological ploy by the apologists of capital and, along the way, further clarifies his own analysis of how the normal functioning of capitalism involves the exploitation of workers.

Marx's acceptance of the classical political economy distinction between productive and unproductive labor can be found not only in this chapter but in many places, especially Volume III where he will apply it distinguishing between the productive labor of workers in industry and the unproductive labor of workers in commerce and finance. It turns out that Marx's retention of this distinction is much more problematic than its original use by Smith.

Working during the latter part of the 18th Century - the Wealth of Nations was published in 1776 - Smith was preoccupied with calling attention to how manufacturing industry was supplanting landed property as the major source of wealth. The traditional landed aristocracy in England maintained its huge country estates - opulantly furnished inside and surrounded by extensive and lavish formal gardens, tended inside and out by hordes of retainers, the kind of estates portrayed in many an 18th and 19th Century novels (and featured in the recent PBS mini-series Downton Abbey - with rents obtained from tenants on the owners' vast land holdings. Smith saw two trends in which capitalist profits were supplanting rents as the prevalent form of surplus and hence of wealth. One, to which Marx devotes by far the most pages, is the rise of capitalist manufacturing wherein surplus and wealth are produced by waged labor. A second, to which Marx devotes some, but far less, attention, is the gradual transformation in the managment of the great landed estates from mere rent-taking to the employment of capitalist techniques in agriculture. (See Marx's treatment in chapter 29 of volume I on the rise of the agrarian capitalist.)

Marx, on the other hand, working entirely in the 19th Century (from the 1840s until his death in 1883) is focused on understanding (and getting beyond) a fully developed capitalist system - one which has largely supplanted pre-capitalist methods in both city and countryside. As can be seen in the early chapters of Volume I of Capital Marx sharply distinguishes between the sphere of exchange/circulation and that of production. Indeed, we are not formally introduced to the sphere of production until chapter 7 on the labor process. Consistently, in the first section of this chapter 24, Marx draws the same sharp line between equality in the sphere of exchange/circulation and inequality in the sphere of production as he did at the end of chapter six:

The sphere of circulation or commodity exchange . . . is in fact a very Eden of the inate rights of man. It is the exclusive realm of Freedom, Equality, Property and Bentham . . . When we leave this sphere of simple circulation, or the exchange of commodities . . . a certain change takes place, or so it appears, in the physiognomy of our dramatis personae. He who was previously the money-owner now strides out in front as a capitalist; the possessor of labor-power follows as his worker. The one smirks self-importantly and is intent on business; the other is timid and holds back, like someone who has brought his own hide to market and now has nothing else to expect but - a tanning."

Despite this sharp distinction which is repeatedly employed, there are times when Marx recognizes what appear to be exceptions or situations where a simple appliction of the dichotomy is misleading. One example, that appears in part I of Volume II of Capital is transportation. On the face of it, the transportation of commodities would seem to be an obvious moment of circulation, a necessary moment of buying and selling because buyers can be found all over the place, most nowhere near the location of the seller. This is true whether the seller is the original industrial capitalist or wholesellers and retailers who have bought and then resell. In most cases, therefore, transportation is required for the final buyer to actually obtain the use-value purchased.

However, Marx recognizes that transportation is more than just a moment of circulation. He recognizes that while physically a commodity at point A may be pretty much the same after being transported to point B - whether that is a few miles or oceans away - in reality there is a real difference. A shirt, manufactured and warehoused in Manchester, England can have only zero use-value for a buyer located in the United States, Australia or India. For the seller to actually sell, the buyer must be able to realize the use-value of the item purchased and for that to happen the commodity must be transported to the buyer. When this happens, he writes, "the result . . . is a change in their whereabouts. . . What the transportation industry sells is change of location."(5) Therefore, he continues,

"The useful effect is inseparably connected with the process of transportation, i.e., the productive process of the transport industry. . . The exchange value of this useful effect is determined, like that of any other commodity, by the value of the elements of production (labor-power and means of production) consumed in it plus the surplus-value created by the surplus-labor of laborers employed in tranportation."

In Marx's time this meant that the labor of loading vehicles, driving or sailing them and unloading them all counted as productive labor. As transportation methods were improving rapidly in the 19th Century - railroads were being built, steam ships were replacing sailing vessels, trucks were getting bigger and capable of carrying heavier loads - whole new kinds of labor were appearing and counted, in Marx's view, as productive labor in very much the same sense as manufacturing labor. In both cases capitalists were investing in new kinds of machines and new kinds of labor in order to put people to work and exact surplus-value or profit.

In other words, the key questions for deciding whether any labor is productive are: 1) does that labor produce a new product? (be it a thing, a service or a "useful effect") and 2) does the sale of that new product realize a surplus-value (as a result of surplus labor being embodied within it)? It is entirely secondary, according to Marx in Volume II, whether such labor takes place within "the sphere of production" or "the sphere of circulation."

If this is true then we can ask the same questions of labor employed in other "spheres." A starting point - given the commentary above - might be to query the character of labor employed in the sphere of education and the sphere of finance.

The investment of the Rockefellers' General Education Board in raising the quality of the Southern labor force certainly appeared to be "productive" in so much as it successfully promoted state investment in public schooling to raise the productivity of the Southern labor force. But can investment in education be "productive" of surplus-value. This would seem to be possible in two senses. First, if raising the productivity of labor-power results in a rise in the relative surplus-value realized by businesses that employ that labor, then yes. Second, it is also possible for capital to be invested in education with the aim of the direct realization of surplus-value from the labor of teachers (and other school employees). Marx takes this issue up in the text that now constitutes the Appendix to the Ben Fowkes translation of Volume I of Capital. In the section of that text on "productive and unproductive labor" Marx writes,

A schoolmaster who instructs others is not a productive worker. But a schoolmaster who works for wages in an institution along with others, using his own labor to increase the money of the entrepreneur who owns the knowledge-mongering institution, is a productive worker. But for the most part, work of this sort has scarcely reached the stage of being subsumed even formally under capital, and belongs essentially to a transitional stage."

But as time passed, where and when the working class became powerful enough to force down the length of the working day (as Marx describes in Chapter 10 of Volume I) and to free their children from waged labor (something which has not been achieved by millions of families around the world even today), the number of "knowledge-mongering institutions" multiplied - often as the result of capitalist efforts such as those of the Rockefeller General Education Board described above. In retrospect what he saw as "transitional" turned out to be an early moment of a huge transition from a capitalism based primarily on manufacturing to one based primarily on services. The kinds of services that Adam Smith and Marx associated with unproductive retainers came to be provided by waged workers employed by capitalists. For example, where the valet of an aristocrat might look after his master's clothing - cleaning, brushing and polishing - more and more such work was done outside the home by dedicated businesses. Where the great estates of the landed gentry employed extensive kitchen staffs, housemaids and gardeners, more and more such work would be done by caterers, restaurant workers and landscaping services - all employing waged workers in order to realize surplus-value. Where the masters of such estates hired nannies and tutors for their children, more and more such work was taken over by for-profit day-care centers and schools. But, of course, on a lesser scale all of this held for the working class as well. Successful struggles to raise wages, as well as to reduce the working day, led to increasing expenditures of wages on various kinds of services. This has been especially true where working class women have fought to substitute purchased services for their own domestic labor (cooking, cleaning, childcare, etc.) - struggles that have intensified where women have entered the labor force and sought to avoid a "double working day" of waged work in one part of the day and unwaged work in the other.

When we turn to labor expended in the sphere of finance - a sphere that Marx quite pointedly considered "unproductive" in Volume III of Capital - we are obliged today to examine that sphere as carefully as he examined the transportation sector and schooling in his day.

To repeat: the key questions for deciding whether any labor is productive are: 1) does that labor produce a new product? (be it a thing, a service or a "useful effect") and 2) does the sale of that new product realize a surplus-value (as a result of surplus labor being embodied within it)? The most obvious response to the first question must be "yes", the financial industry does produce new products, products that it sells as "services." One product many workers find vital are mortgages - loans that allow them to buy homes today and pay for them over a long period of time. Another set of products are banking services: insured deposits where money can be safely stored and credit cards that, like mortgages, allow workers to obtain goods today and pay for them later. Like other products these loan services may turn out to be far more costly than the borrower intially realizes - even fraudulently marketed. But that can be true with many products from foods, supplements and drugs that don't supply the nutrition or health benefits advertized, to automobiles that don't perform as advertized. Beyond that the actual consumption of a great many products have proven dangerous. Yet for all that they are still new products produced by workers for their employers and sold by the latter with the object of making a profit.

What of the second question? Does the sale of financial services realize surplus value (as a result of surplus-value being embodied within them)? Once the services provided by the financial industry are identified, the labor processes that produce them can be researched and identified just as with industrial production or transportation or schooling. What we find traditionally are legions of "Bartleby's" scrivening away in the back rooms of financial houses creating and processing the paperwork involved in the provision of such services.(6) More recently, the development of and investment in computers has dramatically raised the organic composition of capital in the financial industry but a great many workers are still employed filling forms and shaping the final products. That all this labor has indeed proved profitable has been glaringly obvious to those who have followed recent financial crises - brought on, in part, by the particular ways in which the financial industry has fashioned and handled the marketing of its products. That a few have profited immensely and many have lost their jobs, wages and commissions in the crisis is characteristic of most capitalist crises.

So why, we must ask did Marx consider the financial industry, and the labor employed within it, to be "unproductive"? Basically, the answer he gave, especially in Volume III of Capital where he argued that the profits of the financial industry (summarized as "interest") were but a share of the surplus-value that resulted from the labor of workers in "productive industrial spheres" was similar to his reasoning about the "unproductive" nature of labor in commerce. In both cases, he argued, that to the degree that such labor merely contributed to buying and selling and thus took place uniquely in the sphere of exchange - where he assumed equality - it was "unproductive" and constituted merely the faux frais of circulation.

Obviously, the examples above show that a far closer examination of the financial industry is required than Marx provided and that cursory dismissal of all labor in that industry as "unproductive" just won't do.

Section 3: Division of Surplus-value into Capital and Revenue. The Abstinence Theory

Outline of Marx's Discussion

Surplus-value can be either consumed by the capitalist (as "revenue" spent on consumption goods - call the surplus-value diverted to consumption S_c) or invested (as "capital" spent on means of production and the hiring of laborers - call this part S_i).

Capitalists can do both: consume some of their surplus-value and invest some. Total S = S_i + S_c.

In the short run, this is a zero-sum game: "With a given mass of surplus-value, then, the larger the one part, the smaller the other." ↑S_i ⇒ ↓S_c.

As capital "personified", "his motivating force [of the individual capitalist] is not the acquisition and enjoyment of use-values, but the acquisition and augmentation of exchange-values." Any diversion of surplus-value into personal consumption "counts as a robbery committed against the accumulation of his capital."

Historically there is an evolution in the attitudes of capitalists toward this division of the surplus-value.

Early on "the capitalist of the classical type brands individual consumption as a sin against his function." "At the historical dawn of the capitalist mode of production . . . avarice, and the drive for self-enrichment, are the passions which are entirely predominant." "Accumulate, accumulate! That is Moses and the prophets!"

As capitalist development proceeds, as surplus-value grows and as the availability of luxury goods expands, capitalists's attitudes change. First, "a conventional degree of prodigality, which is also an exhibition of wealth, and consequently a source of credit, becomes a business necessity." Second, with the expanding possibility of enlarged enjoyment comes the desire for it. Thus, "there develops in the breast of the capitalist a Faustian conflict between the passion for accumulation and the desire for enjoyment."

Marx quotes Dr. Aikin at length on this historical evolution.

An historical turning point in discussions of these tensions came with the July Revolution in France, rebellion on both sides of the channel, Owenism in England, Saint-Simonism and Fourierism in France.

Senior's "abstinence theory" replaces "capital" with "abstinence".

But this is totally inappropriate in an epoch in which capitalists live in luxury by only diverting a tiny percentage of surplus-value to personal consumption, i.e., the ratio S_c/S_i is extremely low.

Rather it is the workers who are seriously forced to abstain from consumption due to their endless exploitation by capitalists.

Commentary

Marx's primary aim in this section is to critique and mock Nassau W. Senior's "abstinence theory" - a theory Senior concocts by replacing the word "capital, considered as a means of production" with the word "abstinence". Nassau's "theory", Marx shows, amounts to the ressurection and glorification of the attitudes and practices of the capitalists of a much earlier era when the individual capitalist struggled to accumulate, a stuggle that often did require personal sacrifice. But, he maintains, it is totally inappropriate for the more modern capitalism of the 19th Century when the expansion of capitalist enterprise and development has grown to such a degree that the "conventional degree of prodigality" mentioned above requires very little diversion of surplus-value and therefore has very little effect on the rate of accumulation. Senior would, Marx mocks, have us feel sorry for "the self-chastisement of this modern penitent of Vishnu, the capitalist" and rever "that peculiar saint, that 'knight of the woeful countenance, the 'abstaining' capitalist."(7)

This critique is prepared by devoting the first 4-5 pages of the section to what amounts to an historical sketch of the rise of capitalism, at least so far as the attitudes of capitalists and their apologists have concerned the degree to which capitalists have chosen to invest versus consume their surplus-value.

In the early period, or "dawn" of the capitalist era, it was easy to find emphatic rants against self-indulgence on the part of those who extracted surplus-value and diverted it into revenue. In a footnote, Marx provides a very long quote from Martin Luther (1483-1546) condemning usurers "that old-fashioned but ever-renewed specimen of the capitalist." Luther wrote:

"Whoever eats up, robs, and steals the nourishment of another, that man commits as great a murder (so far as in him lies) as he who starves a man or utterly undoes him. Such does a usurer, and sits the while safe on his stool, when he ought rather to be hanging on the gallows, and be eaten by as many ravens as he has stolen guilders, if only there were so much flesh on him, that so many ravens could stick their beaks in and share it."

He might also have quoted almost any of the merchant capitalists whose sage advice to their monarch almost always included tirades against consumption and calls for abstinence and investment. An example is Thomas Mun (1571-1641) who condemned:

"the general leprosie of our Piping, Potting, Feasting, Fashions, and mis-spending of our time in Idleness and Pleasure (contary to the Law of God, and the use of other Nations) hath made us effeminate in our bodies, weak in our knowledg, poor in our Treasure, declined in our Valour, unfortunate in our Enterprises, and contemned by our Enemies." (8)

In Marx's time, when "a conventional degree of prodigality, which is also an exhibition of wealth, and consequently a source of credit, becomes a business necessity. Luxury enters into capital's expenses of representation." This "necessity" can be understood in two senses. First, with the expansion of capitalist operations, both at home and abroad through colonialism and foreign trade, the ability to obtain credit from the ever more important but also every more unstable financial sector required a solid reputation in the business world for success - and alongside information about the success of various investments there was also the perception of success created by one's self-"representation."

At the same time, as Marx makes clear in his discussion of primitive accumulation, the rise of the capitalist class to ever greater power involved not only the creation and surbordination of a working class but also the displacement of the old landed elite, not only in terms of providing the "wealth of nations" but politically and socially. For a long time new capitalist money vied with old landed money for recognition and social valorization. Although the capitalist class would eventually displace the landed aristocracy as the ruling elite, it fought to do so not only in the formal political sphere (e.g., pushing the supremacy of the House of Commons over the House of Lords in England) but also in the social sphere, and for a very long time it did so by emulating many of the social practices and graces of the old aristocracy. Thus another need for luxury as an essential element of self-representation.

This theme was not only treated extensively in the novels and social commentaries of the 19th and early 20th Century but was taken up and made famous by the American economist Thorstein Veblen (1857-1929) in his analysis of "conspicuous consumption", one part of his Theory of the Leisure Class (1899). There is an on-going debate about the degree to which Veblen's ideas were derived from Marx but certainly there was continuity in their discussion of the propensities of capitalists to divert at least some of their profits from investment into "representation" that often involved "conspicuous consumption" for both business and social motives.

That said, it should be noted that Marx is quite clear that all of this discussion of "choices" made by individual capitalists all too often ignored the constraints that went far to determining those choices. Whatever an individual's personal proclivities, Marx insists,

"the development of capitalist production makes it necessary constantly to increase the amount of capital laid out in a given industrial undertaking, and competition subordinates every individual capitalist to the immanent laws of capitalist production, as external and coercive laws."

In other words, the capitalists who ignore the pressures of competition and divert too much of their surplus-value into personal consumption may soon find themselves out-competed and driven from the field by those who have devoted more attention and resources to accumulation. This is one of the reasons why Marx is, for the most part, only concerned with individual capitalists to the extent that their behavior accurately embodies the values and dynamics of the system.

Clearly, such an analysis provides the basis for judging the business and personal practices of individual capitalists as to the degree to which they accord with the demands of the system as a whole. Thus there are "good" capitalists who behave in accordance with the nature of the system - especially those who invest surplus-value to expand the means of production and the number of people put to work - and "bad" capitalists who behave as if they think the only purpose of being a capitalist is to get rich and flaunt one's wealth and often pursue money and wealth along paths of speculation and get-rich-quick schemes instead of contributing through real investment to the expansion of the social relations of capitalism.

I first came across economists critiquing such "bad" capitalists while I was in graduate school in the 1960s. The topic was Third World development and the critique was directed against W.A. Lewis' idea that development could be spurred by using artificially accelerated inflation of consumer good prices to transfer income from the consumers of commodities (mostly waged workers) to the capitalist owners of those commodities. The problem with the theory, it was suggested, was that it assumed that the capitalists who received the increased income would actually invest it and history had amply demonstrated that many so-called capitalists were more interested in buying expensive houses on the Italian Riviera or new race horses or fast cars than they were in investing in the expansion of production and employment. Indeed, for many years a great many "development" economists were convinced that in newly independent countries the state, whose policy makers had often been trained and groomed by their once-colonial masters, was the primary repository of the skills required for managing capitalist investment and accumulation. This was one source of the plethora of state enterprises which would, many years later, come under attack by neoliberal ideologs as being inefficient and deserving of privatization.

In the 1980s as union busting, attacks on wages, the deregulation of business, especially of finance, and the Reagan celebration of getting rich spead, such critques began to re-appear in American culture. One example was the movie Wall Street (1987) with Michael Douglas playing Gordon Gekko an unscrupulous corporate raider who became famous for uttering in the film a line that was already associated with the Reagan era: "Greed is good." Three years later came Pretty Woman (1990) in which Richard Gere played another corporate raider - only this time the raider was rescued and brought into the domain of "good capitalism" (actually putting people to work making things - in this case "big ships") by the intervention of a hooker-with-a-heart-of-gold played by Julia Roberts.

With the latest financial crisis (2007- ) also brought on by financial skulldugery and rampant unregulated speculation, we got new movies, ranging from the documentaries Capitalism: A Love Story (2009) by Michael Moore and Inside Job (2010) by Charles Ferguson, through HBO's drama Too Big to Fail (2011), a new Wall Street: Money Never Sleeps (2010) with Michael Douglas still playing Gordon Gecko, to Margin Call (2011) by J. C. Chandor featuring one typical set of speculators the night they discovered the deck of cards was coming crashing down.

In short, how one understands the nature of capitalism, what makes for successful accumulation, or expanded reproduction, and what undermines it, shapes one's understanding of both its successes and its failures, its periods of booms and its periods of crash and collapse.

Section 4: The circumstances which, independently of the proportional division of surplus-value into capital and revenue, determine the extent of accumulation, namely, [1] the degree of exploitation of labor-power, [2] the productivity of labor, [3] the growing difference in amount between capital employed and capital consumed, and [4] the magnitude of the capital advanced.

Outline of Marx's Discussion

Rate of of surplus-value (s/v) = f(the degree of the exploitation of labor-power)

↑ productivity of labor ≠ ↑ in the exploitation of labor

↑ in the exploitation of labor can be f(↑ productivity of labor)
↑ in the exploitation of labor can be f(↑ hours of work)
↑ in the exploitation of labor can be f(↓ wages)

Up to now we have assumed wages = value of labor-power, equal exchange of LP for M
BUT...
"In the practical movement of affairs" capitalist efforts to ↓ wages, even below the value of labor-power, have been common.

Capitalists in one country have often complained about local wages being higher than those in other countries.

Capitalists have examined diets to see how close wages could be pushed to the bare minimum of biological subsistence. Some have come up with recipes for cheap food, e.g., beggar-soups, as the basis for finding the lowest possible wage.

Adulteration of food and medicines have reduced their prices, and thus the minimum subsistence wage.

Wages have been kept below the value of labor-power when the difference could be made up from parish charity, the poor rate or the workhouse.

Where they have been able to force workers to work longer hours while keeping total wages constant, capitalists have been able to raise the amount of surplus product, the amount of surplus-value and the rate of surplus-value (s/v).

Longer hours with same tools reduces the cost of those tools (per unit of output) and this too raises the rate of profit and rate of accumulation. Especially in extractive industries (e.g., mining, quarrying) where tools are the only constant capital.

With increased productivity and s/v constant, mass of S rises. If S_i/S_c constant, then consumption of capitalist can rise with no decrease in the fund for accumulation - no more zero-sum game.

Moreover, with an ↑ in productivity a higher level of s/v means that real wages can rise, even as the value of labor-power falls.

But a fall in the value of labor-power ⇒ "the same value in variable capital therefore sets in motion more labor-power and consequently, more labor.

A rise in the productivity of labor also lowers the value of constant capital (c) as the application of science to industry improves technology, so old machines are replaced by newer and cheaper, but generally more productive ones.

Therefore, a given amount of surplus-value is able to generate more and more accumulation as time goes on.

As the # of workers and mass of capital increases, "the more does the sum of value increase that is divided into a fund for consumption (S_i) and a fund for accumulation (S_i)."

With the total mass of S_i + S_c growing, "The capitalist can therefore live a more pleasant life, and at the same time 'renounce' more." i.e., allow S_c/S_i to fall.

Commentary

The first part of this section is one of the rare moments in Capital - apart from Part 6 of this volume, chapters 19-22 - where Marx discusses the wage struggle, with the focus here being on the desire and sometimes the efforts of capitalists to lower wages in order to increase surplus-value/profits and accumulation. With his frequent quoting of various authors lamenting what they view as the high wages of English workers, as opposed to those in other countries, these paragraphs are reminiscent of Chapter 10 on the struggle over the length of the working day.

Among those quoted are an unnamed 18th Century writer who reveals, Marx says, "the innermost secret of English capital", i.e., the effort to "force down English wages to the French and Dutch level." That writer, in turn, quotes a Northhampshire manufacturer who points to how workers in France survive very well on a diet considerably more restricted than that of English workers.

Another writer he quotes is the American Benjamin Thompson (1773-1814) who goes so far as to propose a specific recipe for the preparation of a cheap soup - based on barley, Indian corn and herring - adequate, according to him, to feed 64 men.

What such quotations demonstrate is how carefully capitalists have calculated the minimum wage that could - imaginably - support workers at the level of bare subsistence. When the classical economists spoke of a "subsistence wage" they meant exactly that. That said, it is worth remembering Marx's discussion in Chapter 6 on the buying and selling of labor-power that what defines "subsistence" is socially and historically determined. This is obvious today when the economists and sociologists hired to determine "basic needs" or the "poverty line", i.e., the income below which one is declared to be "poor" or "in poverty", vary their estimates according to local requirements. Thus, to avoid being poor in New York City requires more money than avoiding being poor in Podunk, Mississippi because of differences in the cost of things like food, clothing, housing, heating and transportation.

One part of this discussion throws some light on the debates of the early 19th Century over the Corn Laws - laws introduced in 1815 at the end of the Napoleonic Wars to artifically sustain the high price of wheat which had prevailed during the wars when imports from the continent were cut off. The debates involved capitalists and their spokespersons, including David Ricardo, who wanted to remove the laws - and they sought to mobilize workers to the same end with promises of cheaper bread - while landlords, whose rents were high as a result of the laws, and their supporters, including Thomas Malthus, fought to keep the laws and their high rents intact. What the capitalists kept from the workers to whom they appealed to support their efforts to remove the laws and lower the price of wheat and bread, was how their calculations of the subsistence wage would drop with any fall in the price of bread. So the real objective of the capitalists fighting the Corn Laws was to reduce wages and increase profits.

But, as Marx goes on to show, wherever it was feasible capitalists would try to pay less than the bare minimum if they could get someone else to provide the difference between what they paid and that minimum. One source of such support was parochial relief, parish charity and the work house. So if, for example, local charities would provide workers with clothes, wages could be reduced accordingly.

The contempoary relevance of this material should be obvious. Millions of waged workers and their families in the United States are paid wages so low that they must obtain food stamps to survive. The children of poor working families also often obtain subsidized school lunches. Food banks all over the country provide food to waged families. In place of the parish relief of Marx's day we have a variety of federal, state and local programs that, by providing the difference between existing wages and a subsistence income make it possible for capitalists to hire workers for less than the value of their labor-power. As in Marx's time, the level of wages is determined by struggle, but among the least powerful sectors of the working class we find millions who cannot even earn a subsistence wage and depend on taxpayer-financed public subsidies to survive - subsidies as diverse as food stamps, food banks, school lunches, general hospitals for the indigent, homeless shelters, and so on. To such obvious subsidies we must add all of those that reduce the costs of basic subsistence goods, such as food and clothing. I am referring here to the vast Federal and state agricultural subsidies, paid for by taxpayers, not by capitalists, that keep down the price of food and such raw materials as cotton (used in clothing) not to mention subsidies to the energy sector that keeps down the costs of fertilizer, other agricultural chemicals and the raw materials of synthetic fibers. Just as the capitalists fought to eliminated the Corn Laws in the early 19th Century to reduce the price of bread, so have they fought for and obtained vast subsidies to keep the price of bread and many other consumption goods low in the 20th and 21st Centuries.

Of course, it is also true that reducing such subsidies (when they are able to hold money wages constant - or even lower them) is a weapon for attacking the real wage and forcing it down, not only for workers living with a subsistence income but for all workers. Such reductions have been common elements of the structural adjustment policies imposed by the International Monetary Fund and capitalist banks during the decades of the "international debt crisis" of the 1980s and 1990s as well as the current efforts to impose "austerity" - read reduce real wages and standards of living - on the working classes in Europe and the United States. All of these attacks can be understood as capitalist responses to earlier working class successes in fighting to increase wages, benefits and programs that have subsidized their income and standards of living. The dominant rationale for current attacks is the existence of "debt crises" wherein various governments have borrowed heavily from the international banking system to finance their expenditures (including those that support working class income and well-being). Naturally, when we examine the reductions demanded by these austerity policies we discover that the main cuts in government expenditures are those that benefit the working class.

Section 5: The So-called Labor Fund

Outline of Marx's Discussion

Marx has shown that "capital is not a fixed magnitude but . . . elastic, and constantly fluctuates with the division of surplus-value into revenue and additional capital."

Yet, "Classical political economy has always liked to conceive social capital as a fixed magnitude of a fixed degree of efficiency." This became dogma with Bentham.

This dogma has been used for "apologetic purposes", namely by arguing that the amount of capital that can be converted into labor-power is of fixed size. In other words "the mass of the means of subsistence . . ., or the so-called labor fund, was turned by this fable into a separate part of social wealth, [and} confined by natural chains."

This dogma justifies telling workers that there is no point in fighting for higher wages because at any point in time the amount of the labor fund (or wage-fund) is fixed and can only be redistributed over the number of available workers. This amounts to putting the division of the total capital into constant and variable capital off-limits to any discussion or negotiation.

It also justifies telling workers that if some workers fight for and succeed in raising their wages, the increase will just be taken from other workers because the total amount available is fixed.

Classical political economists, such as H. Fawcett, equated the "wages-fund" with the "circulating capital of a country." Whatever that amount is, the average possible wage will be determined by the size of the labor force over which it is distributed. For Marx, as he remarks in a footnote, fixed and circulating capital - categories derived from the analysis of circulation - are not at all the same as his constant and variable capital.

Commentary

Eventually bourgeois economists set aside the "Wages-Fund Doctrine" as it is mostly known today, in part because they came to recognize precisely the point that Marx made about the flexible and fluctuating character both of capital in general and of the part invested in hiring labor.

John Stuart Mill, for example, after having set out and embraced the doctrine in his Principles of Political Economy published in 1848, finally recanted his support in a 1869 book review article. (9) Let us examine Mill's recantation. First, he set out his understanding of the doctrine to which he had previously adhered:

The theory rests on what may be called the doctrine of the wages fund. There is supposed to be, at any given instant, a sum of wealth, which is unconditionally devoted to the payment of wages of labour. This sum is not regarded as unalterable, for it is augmented by saving, and increases with the progress of wealth; but it is reasoned upon as at any given moment a predetermined amount. More than that amount it is assumed that the wages-receiving class cannot possibly divide among them; that amount, and no less, they cannot but obtain. So that, the sum to be divided being fixed, the wages of each depend solely on the divisor, the number of participants. In this doctrine it is by implication affirmed, that the demand for labour not only increases with the cheapness, but increases in exact proportion to it, the same aggregate sum being paid for labour whatever its price may be.

"But is there," he then asks, "such a thing as a wages-fund, in the sense here implied? Exists there any fixed amount which, and neither more nor less than which, is destined to be expended on wages?" His answer? "There is not."

This is how he made his case:

If we choose to call the whole of what he possesses applicable to the payment of wages, the wages-fund, that fund is co-extensive with the whole proceeds of his business, after keeping up his machinery, buildings and materials, and feeding his family; and it is expended jointly upon himself and his labourers. The less he expends on the one, the more may be expended on the other, and vice versâ. The price of labour, instead of being determined by the division of the proceeds between the employer and the labourers, determines it. If he gets his labour cheaper, he can afford to spend more upon himself. If he has to pay more for labour, the additional payment comes out of his own income; perhaps from the part which he would have saved and added to capital, thus anticipating his voluntary economy by a compulsory one; perhaps from what he would have expended on his private wants or pleasures. There is no law of nature making it inherently impossible for wages to rise to the point of absorbing not only the funds which he had intended to devote to carrying on his business, but the whole of what he allows for his private expenses, beyond the necessaries of life. The real limit to the rise is the practical consideration, how much would ruin him, or drive him to abandon the business: not the inexorable limits of the wages-fund.

This, of course, was one of Marx's points published two years earlier!

Again, as with Marx, Mill very clearly sees how this doctrine has been used to undermine workers' wage struggles and how once we recognize the falsity of the doctrine we must also see that it cannot be used to justify arguing against those struggles. Mill wrote:

The doctrine hitherto taught by all or most economists (including myself), which denied it to be possible that trade combinations can raise wages, or which limited their operation in that respect to the somewhat earlier attainment of a rise which the competition of the market would have produced without them,—this doctrine is deprived of its scientific foundation, and must be thrown aside. The right and wrong of the proceedings of Trades’ Unions becomes a common question of prudence and social duty, not one which is peremptorily decided by unbending necessities of political economy.

Finally, Mill argues that this critique justifies the struggles of workers and their unions for a greater share of the wealth they produce:

It has made it necessary for us to contemplate, not as an impossibility but as a possibility, that employers, by taking advantage of the inability of labourers to hold out, may keep wages lower than there is any natural necessity for; and è converso, that if work-people can by combination be enabled to hold out so long as to cause an inconvenience to the employers greater than that of a rise of wages, a rise may be obtained which, but for the combination, not only would not have happened so soon, but possibly might not have happened at all. The power of Trades’ Unions may therefore be so exercised as to obtain for the labouring classes collectively, both a larger share and a larger positive amount of the produce of labour; increasing, therefore, one of the two factors on which the remuneration of the individual labourer depends.

Spreading rejection of the wages-fund doctrine in the latter part of the 19th Century was facilitated by the rise of a new economic doctrine that would also provide at least some weapons against workers' wage struggles. That new doctrine was "marginalism"; its rise often called the "Marginal Revolution"; and the name we know it by today is neoclassical microeconomics. The fruit of the work of several economists, of whom those most closely associated with its crafting are William Stanley Jevons (1835-1882), Marie-Esprit-Leon Walras (1834)-1910) and Carl Menger (1840-1921), although its spread to hegemony in the English speaking world was primarily due to its embrace by Alfred Marshall (1842-1924) who elaborated these new ideas in The Economics of Industry (1879) written with his wife Mary Paley and especially in his widely read Principles Of Economics (1890).

The weapon provided by the new neoclassical or marginalist doctrine that replaced the wages-fund doctrine was the doctrine of the "marginal productivity of labor", or, put more generally, was the neoclassical doctrine that to each factor of production is due the value of its marginal product. Whereas the wages-fund supposedly defined an absolute upper limit to what workers could possibly receive, so, according to this new doctrine, labor should neither expect, nor struggle to achieve any more than the value of its marginal product. Moreover,the doctrine argued that given free markets, labor would receive neither more nor less than the value of that product. (The only possibilities of "exploitation" in this theory were those few cases, due to imperfectly competitive markets, where labor received less than the value of its marginal product.)

The obvious question that flows from the above is "what is meant by the value of a factor's marginal product"? Well, an essential element of the marginal revolution was the replacement of labor as the source of value, first by utility and then by nothing at all. Jeremy Bentham (1748-1832) - the same Bentham Marx mocks in this chapter - was one of those who popularized the concept of "utility" as a replacement for labor as a source of value. But once the "marginal utility" of any commodity (including money) was seen to decline as the quantity of its consumption rose, that observation came to be used to argue for the redistribution of money from the rich to the laboring poor in order to increase the total utility of society. As a result, neoclassical theory was reworked in the 20th Century, to get rid of "utility", "marginal utility" and "declinging marginal utility" until the only concept of "value" that remained was market value, or price. So the value of the marginal product of labor (or of any factor) was the market value of that product. In short, the labor theory of value, some version of which was common to the classical political economists and Marx was excised from economics.

How then did this new doctrine provide a weapon against the struggles by labor to raise wages (and other benefits)? Let us examine the attitude of one of the innovators of this new doctrine and the policies he prescribed. William Stanley Jevon's saw great dangers to both workers and society of wage struggles by workers organized in unions. In a lecture given in 1866 to primary school teachers about the importance of teaching economics to working class children to avoid the evils of class struggle, we find the following:

"The best example I can give, however, of the evils and disasters which may accompany progress is to be found in trade unions and the strikes they originate and conduct. Of these I may say, in the words of a recent article of the Times, that 'every year sees these organizations more powerful, more pitiless, and more unjust. Such atrocities as that reported from Sheffield are but the extreme cases of a tyranny which is at this very moment paralzing the large part of the trades of the country . . . there is one great disaster almost the greatest that I can figure to myself. It is that our working classes, with their growing numbers and powers of combination, may be led by ignorance to arrest the true growth of our liberty, political and commercial." (10)

So strongly did Jevons fear such struggles that he untook to lecture trades unionists directly, two years later in 1868. While he approved the efforts by unionists to reduce working hours and improve working conditions, he deplored any effort by them to raise wages above the value of their marginal product and argued that not only would such efforts be doomed to failure but any success would be "injurious to the welfare of the community." If some workers succeeded, he argued, it would be at the expense of others as higher wages would lead to higher prices and thus a lower standard of living for other workers who had to consume the higher priced goods. If workers as a class succeeded it would raise all prices therefy undermining the value of whatever increase had been gained. Real wages would still be limited.

In short, Jevons interpretation of the new marginalist doctrine accepted - in a manner altogether parallel to the reasoning of those who had embraced the wages-fund doctrine - that wages had an upper limit, in the new theory this limit was set by the value of its marginal product. Any effort to exceed that limit was doomed. The implication that Jevons draws from this, for the edification of workers, is that the best way to achieve increases in wages is to collaborate with their employers in improving the productivity of labor - which will then, through market forces - be returned to them in the form of higher wages. Now it must be noted that Jevons not only saw, and argued, that this path was a better one for raising wages but that it was a path to the transcendence of the class struggle. He argued that as wages rose, workers could earn enough and save enough to become capitalists themselves and as they did, they would abandon their objections to what they call "the tyranny of capital." He evoked:

"But all this is changed for the man who has even a moderate amount of savings. Not only does he disarm sickness or misfortune of half its terrors, but he may also, by co-operation, become his own employer; and then he will, I presume, cease to complain of the tyranny of capital." (11)

Marx's analysis, of course, has demonstrated why such a path may work for this or that worker but it is delusional to think that it would work for all, or even for most - given the nature and dynamics of capitalism.

Ironically, or perhaps inevitably, there was a progressive insight at the core of Jevons' thinking, that would be largely ignored by capitalists for many years to come, namely, that increases in labor productivity made it possible for real wages to rise without undermining profits (the marginal productivity of capital) or provoking inflation. Over time a few capitalists, like Henry Ford, would recognize and accept this principle, but it would not be until John Maynard Keynes demonstrated that the principle was applicable at the level of the whole economy that capitalists would begin to see wage struggles and wage increases as not only compatable with the system but at least potentially a vital motor of its development.

All of this was implicit in Marx's analysis of relative surplus-value, but unlike these economists who were devoted to the promulgation of capitalism he was not preoccupied with discovering how workers struggles might be compatible with it but rather with how they might lead beyond it.

Notes

1 See John Locke, Second Treatise of Civil Government (1690), Chapter V: Of Property.

2 See Thomas Malthus, An Essay on the principle of Population (1798).

3 Emile Zola's novel Germinal is a realistic portrayal of coal mining and the struggles of coal miners in France in the 19th Century based on visits to a mining town on strike.

4 NB: temporary hoarding of some money as a reserve to deal with fluctuations in the need for money, is a natural part of the circulation of capital. Marx discussed this in Chapter 3 of Volume I and takes it up again in Volume II.

5 Today, with so many shopping online or from catalogs, we are all too familiar with the ways in which capitalists foist the costs of "shipping and handling" off onto the consumer. But whether it is the capitalist who pays for the transportation, or the consumer, matters not to the transportation industry that will do its best to profit either way.

6 The reference, of course, is to Herman Melville's short story "Bartleby, the Scrivener: A Story of Wall Street" published in 1853.

7 "Penitent of Vishnu" refers to those worshipers of the Hindu god who have contributed over a certain amount to the support of his priests and temples. The "knight of the woeful countinence" refers to Don Quixote de la Mancha who gave up all his fortune in the pursuit of doing good as a knight errant.

8 From Thomas Mun, Englands Treasure by Forraign Trade. Or the Ballance of our Forraign Trade is the Rule of our Treasure, a letter on economic policy addressed to the Lord High Treasurer of England. First printed by his son in 1664.

9 John Stuart Mill, "Thornton on Labour and its Claims," Fortnightly Review, n.s. V (May, 1869), pp. 505-18. Available in the on-line edition of The Collected Works of John Stuart Mill, where it is reproduced as part of Volume V - Essays on Economics and Soceity, Part II..

10 William Stanley Jevons, "The Importance of Diffusing a Knowledge of Political Economy," a lecture delivered on October 12, 1866.

11 William Stanley Jevons, "Trades Societies: Their Objects and Policy," a lecture delivered at the request of the Trades Unionists' Political Association in Manchester, March 31, 1868.

Overview of Chapter

Section 1: A Growing Demand for Labor-Power Accompanies Accumulation if the Composition of Capital Remains the Same
Section 2: A Relative Diminution of the Variable Part of Capital Occurs in the Course of the Further Progress of Accumulation and of the Concentration Accompanying it
Section 3: The Progressive Production of a Relative Surplus Population or Industrial Reserve Army
Section 4: Different Forms of Existence of the Relative Surplus Population. The General Law of Capitalist Accumulation
Section 5: Illustrations of the General Law of Capitalist Accumulation
(a) England from 1846 to 1866
(b) The Badly Paid Strata of the British Industrial Working Class
(c) The Nomadic Population
(d) Effect of Crises on the Best Paid Section of the Working Class
(e) The British Agricultural Proletariat
(f) Ireland

Section 1: A Growing Demand for Labor-Power Accompanies Accumulation if the Composition of Capital Remains the Same

Outline of Marx’s Analysis

Composition of Capital

– value composition: ratio of constant to variable capital, c/v
– technical composition: arrangement of means of production and living labor-power, MP/LP
– organic composition: value composition in so far as it is determined by the technical composition, c_o/v_o

Individual capitals and branches of production

– compositions differ within a branch
– average gives composition of branch

Total social capital of a country

– average of branch compositions = average composition of total social capital
– growth of total social capital means growth of the working class
– reproduction on an expanded scale = accumulation
– accumulation = expanded reproduction of the classes, multiplication of the proletariat
– proletarian = wage laborer

Classical political economists

– recognized essential role of labor in growth of capital
– argued workers had to be kept poor to have incentive to work, but not too poor
– Malthus’ “principle of population” blamed workers for their poverty

– rising wages, he said, meant more workers and lower wages
– policy conclusion: keep wages low, no Poor Laws
– Marx mocks him as a plagiarist and many of his fellow Protestant pastors as hypocrites

Business cycle?

– against Malthus blaming cycle on changes in workers’ wages
– Marx argues wages fluctuate primarily as a function of the demand for labor

– in periods of rapid growth, demand rises, wages rise
– in downturns, demand falls, wages fall

Commentary

Marx’s opening remarks on the “composition of capital” harken back to the analysis in Chapter 15 on relative surplus value. There we saw how efforts to offset reductions in the working day by raising productivity involved capitalists replacing troublesome workers with compliant machinery. He suggests that the introduction of more machinery per worker can be formulated as a rise in the technical composition of capital, something we can represent symbolically by MP/LP, the material configuration of means of production and labor-power.(1) Looked at from the point of view of of value invested, increased expenditure on machinery raises the value composition of capital, or c/v, a ratio of the value invested in constant capital, c, to that invested in variable capital, v. However, because the value composition can change independently of any change in the technical composition,(2) Marx calls the value composition—when changes are only due to changes in the technical composition—the organic composition of capital. To differentiate, we can represent the organic composition of capital as c_o/v_o. So, c/v can change, even if c_o/v_o does not; but any change in c_o/v_o is also a change in c/v. Therefore, whenever he refers to changes in the organic composition he is talking about a change in the technical composition, but in value terms. Eventually—especially in Volume III of Capital—we find that Marx’s analysis of some tendencies to crisis are formulated in terms of the organic composition of capital.(3)

Although we can analyze these various “compositions of capital” at every level of the economy, from individual enterprises through branches of industry to the total social capital, it is “with this [last] alone that we are concerned here”.(4) In other words, the subject is the expansion of the total social capital. It is therefore vital to be clear about what Marx means by accumulation.

Had he defined accumulation merely as an expansion of the total social capital, it would be easy to confuse accumulation with economists’ concepts of “growth”, or, taking qualitative changes into account, with concepts of “economic development”. But he doesn’t leave it at that; he carefully defines accumulation in social terms as the reproduction “of the capital-relation on an expanded scale, with more capitalists, or bigger capitalists, at one pole, and more wage-laborers at the other pole.”(5) In other words, what is being accumulated are the antagonistic class relationships of capitalism. Unlike economists who recognize neither classes nor class antagonism, and think of growth in terms of production functions such as Q = f(K, L), where factors of production K (capital) and L (labor) produce output (Q) that grows as the economy expands, Marx re-emphasizes here that his interest is precisely those antagonistic relationships within which K (MP or c), L (LP in action or v) and Q (C’ and M’) are only elements or moments.

He then proceeds to discuss the dynamics of accumulation in terms of the relationships between the classes. In this first section he assumes that the composition of capital (by each definition) remains the same, so that when capitalists invest, their money buys both more means of production (MP) and more labor-power (LP). (He relaxes this assumption in the next section.) Under this assumption, capitalist investment increases the demand for labor-power and puts upward pressure on wages as capitalists compete for available workers.(6)

Marx then brings this association between investment and the demand for labor to bear on the analysis of the fluctuations in business activity. He recognizes how downturns and upturns were recurring periodically, but his real interest lay not their periodicity but how major downturns constituted crises for capitalism. That is to say, large-scale layoffs, rising unemployment and increased poverty can lead to worker-led uprisings and a crisis for capitalist control. Unlike economists who prefer the term business cycle, optimiostically presuming that downturns will always be followed by upturns, for Marx each major crisis opened the possibility of the revolutionary overthrow of capitalism.

Assuming a constant composition of capital, as he does in this section, rapid accumulation was achieved by capitalists hiring more labor, sometimes buying new machines and processing more raw materials to produce more output, whether in agriculture, manufacturing or services. At some point, however, accumulation slows and then turns down; the boom becomes a bust, a crisis for capital, often a dramatic collapse with bank panics, firms going bankrupt or being taken over by others. Among a working-class population whose wages are already near subsistence, the associated rapidly rising unemployment and falling wages creates another kind of crisis: sickness, evictions and starvation. Forced to bear the human costs of such downturns, workers sometimes agree that they have "nothing to lose but their chains" and explode in revolt.

Such explosions were not just a theoretical possibility for Marx but part of his own experience. The dramatic, international economic crisis of 1847 was followed by the 1848 revolutions on the European mainland. Marx and Engels followed the crisis closely, analyzing it in their journalism.(7) When revolution erupted in Germany, both traveled there to participate in the uprising. Although the rising failed and both returned to England, Marx subsequently provided a detailed analysis of the parallel uprising in France in a series of articles later published under the title “The Class Struggles in France”.(8)

Among theories of the business cycle put forward by economists, that of Malthus became popular with business. He argued that two related phenomena caused downturns: 1) the emergence of a “glut”, more output being produced than the market could bear, resulting in falling sales, prices and profits; and 2) rising wages. Although rising wages might help absorb rising output, he warned, they would also result in workers having more children. The resulting expansion of the supply of labor, he argued, would soon reduce wages, reduce buying power and accentuate glut. His reasoning assumed workers breed like rabbits, that increased income would inevitably result in more children. In his theory, the only checks on population growth were hunger, disease or war. In short, his theory argued against wage increases and was wielded against both workers’ efforts to utilize tight labor markets to raise wages and against the “poor laws” of the time—supported by middleclass humanitarians —that sought to support the income of the unemployed through various forms of welfare.

Against this theory that blamed workers for their poverty, Marx argued that the primary determinant of the rise or fall of wages was fluctuations in the demand for labor-power. Accumulation, he reasoned, often tightened labor markets and facilitated workers’ battles for higher wages. But the fall in wages occurring during downturns were due to cutbacks in investment that reduced demand for labor-power, not an excessive growth of population. Eventually, demographers, studying the relationship between income and family size would provide support for Marx’s position on this issue. Identifying what they came to call the “demographic transition”, they would observe how rising income would lead people to reduce the birth rate and the size of their families—the exact opposite of Malthus’ assumption.(9)

The real source of downturns, Marx argued, was reduced investment in response to declines in profits. When, as a result of rising wages, “the surplus labor that nourishes capital is no longer supplied in normal quantity, a reaction sets in: a smaller part of revenue is capitalized [invested], accumulation slows down, and rising wages come up against an obstacle.(10) The rise of wages is therefore confined within limits that not only leave intact the foundations of the capitalist system, but also secure its reproduction on an expanding scale.”(11) Despite such limits on increases in wages, Marx supported struggles to raise wages and those that sought to limit their reduction during downturns. (12) Although he doesn’t discuss it at this point, Marx argues that Malthus’ “glut” lies in the tendency of capitalists to hold down wages, which in turn limits the ability of workers to purchase the goods they have produced. (13)

Marx ends this section by evoking how different things would be if “objective wealth” was “there to satisfy the worker’s own need for development” instead of capitalists’ need for profits and control.(14)

Section 2: A Relative Diminution of the Variable Part of Capital Occurs in the Course of the Further Progress of Accumulation and of the Concentration Accompanying it

Outline of Marx’s Analysis

As capitalists invest in machinery,

– MP/LP rises, so too does c/v
– but c/v rises less than MP/LP because per unit value of MP declines

Increase in social productivity of labor, via ↑MP/LP, involves:

– co-operation on a large scale
– creation of systems of machinery
– harnessing of gigantic natural forces

Accumulation evolves increased scale of production via two processes:

– the concentration of capital via investment that creates new capital
– the centralization of existing capital via mergers and takeovers of existing capital

Commentary:

In this section, Marx drops the assumption that the composition of capital remains the same and analyses some aspects of what is involved as the LP in MP/LP and the v in c/v experience a relative diminution in consequence of the relative surplus value strategy.

He notes how the value composition of capital, c/v, tends to rise less than the technical composition, MP/LP, because the introduction of productivity-raising machinery in the production of the means of production reduces their per unit value. So while labor-power is employed using ever more machinery and transforming ever more raw materials, the decline in the value of the means of production means that the “increase of the difference between constant and variable capital is therefore much less than that of the difference between the mass of the means of production into which the constant capital, and the mass of labor-power into which the variable capital is converted. The former difference increases less with the latter, but in a smaller degree.”(15) Clearly, as in Part Four, what motivated this analysis was Marx’s observation of the spreading use of machinery in factories, mines and agriculture and associated relative decline in the use of labor-power. Unexamined here, but previously evoked in his Grundrisse notebooks of 1857 and later implied in his comments in Volume III of Capital on the results of a rising organic composition of capital, is the dangerous consequence of this capitalist strategy: a declining need for labor to produce wealth, a decline that undercuts capital’s ability to impose work and can inspire the rejection of any need for capitalists as managers of production.(16)

As capitalists strove to cope with workers’ struggles for less work and to expand markets, the scale of production grew steadily. Marx examines two ways capitalists achieve greater scale. First, individual capitalists invest in expanding their operations. They build new factories, buy machinery for those factories, produce or contract for raw materials to work up and hire more workers. This process, he calls the concentration of capital. Second, one capitalist buys out, or takes over, the operations of another, combining existing production facilities, by. Such combining he calls the centralization of capital. This choice of words can be confusing because it became common for economists to speak of increasing industrial concentration when referring to what Marx calls the centralization of capital. Indeed, governments compile statistics on the degree to which various industries are “concentrated” as part of their effort to regulate the degree of competition and the need for anti-trust regulation. That preoccupation arose as the result of public opposition to monopolistic practices and the demand for anti-trust regulation, thanks in large part to the revelations of investigative journalists into the practices of large-scale business operations.(17)

Drawing on some changes introduced by Marx in the French translation of Capital, Engels rewrote some of Marx’s analysis to highlight the role of credit in the form of limited liability or “joint stock” companies. Throughout the 1850s and 1860s, Marx followed the rapid expansion of the financial industry—that specialized branch of industry that gathers and redistributes money, facilitating its conversion into capital—through processes of what economists call “financial intermediation”. As part of his journalism, he wrote many articles on the growing role of credit in financing both concentration and centralization. The issuance of “stock”, or the exchange of certificates of part-ownership in a firm for money, facilitated the “drawing together” of disposable money, whether from the retained profits of firms or the savings of individuals. This process enabled centralization “in the twinkling of an eye”, a vast speed-up in what had hitherto been a much slower process.(18) The preoccupation here, however, is not with the modes of centralization but only with their impact on the relationship between capital and labor.

Marx concludes his analysis by noting that whether achieved by concentration or centralization the increasing scale of production either “attracts fewer and fewer workers in proportion to its magnitude” or “repels more and more of the workers formerly employed.”(19) Both observations prepare the next section on the genesis of a reserve army of the unemployed.

Section 3: The Progressive Production of a Relative Surplus Population or Industrial Reserve Army

Outline of Marx’s Analysis

As total invested capital (c + v) rises, so does the demand for labor.
But, the organic composition, (c_o/v_o), of the total social capital rises quicker than social wealth.
– because simple accumulation is accompanied by centralization
– so, the demand for labor, determined by v_o, “falls relatively to the magnitude of the total capital”.
– as a result, while size of the working population grows, capital produces a “relatively redundant” or “surplus” population.
The growth in surplus population involves
– the “extrusion” of workers (laying off or firing)
– increased difficulty in “absorbing” a growing working class
– “violent fluctuations” in the economy
Law of Population in capitalism: workers produce both:
– the accumulation of capital
– the means of their redundancy
Accumulation = growth in number of waged workers + growth in “industrial reserve army”
Industrial reserve army is a vital component of capital
– provides a mass of workers available when needed
– cycle of expansion and contraction produces and absorbs the surplus population.
– duration of cycle is variable, will gradually shorten
Political economists and their popularizers recognized the need for an industrial reserve army.
Increases in c_o/v_o
– reduces MP’s capacity to employ workers
– increases the number of unwaged and enforces idleness
– facilitates increased intensity of labor and over-work

– partly by speed-up (machine driven work rhythms)
– partly by the pressure of the unwaged reserve army on employed waged workers
Therefore, the movements of wages are
– determined by fluctuations in demand for labor
– NOT determined by fluctuations in supply of labor as Malthus et al. claimed
– fluctuations in the supply of labor are much too slow to meet capital’s fluctuating demands
– labor moves in response to variation in wage rates,
– from low wage spheres of production to higher wage spheres
– a movement that eventually lowers higher wages
Apologetics of political economists—sycophants of capital
– prate virtues of supply and demand when they meet needs of capital
– abandon supply and demand and resort to force when they do not

Commentary

Marx’s analysis in this section makes unambiguously clear that accumulation, i.e., the expanded reproduction of the antagonistic social relationships of capitalism, includes both the waged and the unwaged sectors of the working class. This implies rejecting the standard, 20th Century position of orthodox Marxism-Leninism that defined the working class purely in terms of its waged components and sought to subordinate the struggles of the unwaged to those of the waged. Working through this section, the need to complement analysis of the waged with analysis of the unwaged becomes obvious.

Marx’s demonstration of why accumulation includes the unwaged consists of showing, first, how capital constantly regenerates an industrial reserve army and second, how that regeneration is vital to the dynamics of its development.

The regeneration of the industrial reserve army takes place as capital’s strategy of increasing the organic composition of capital results both in the expulsion of some waged workers and a reduction in the ability to absorb new unwaged additions to the growing labor force. Among both Marxists and economists, the emphasis has usually been on the expulsion—the laying off or firing—of workers and derived from concerns about the loss of wages and reduced standard of living of such workers and the potential for revolt. Such concerns have been recurrent during periodic crises, especially during severe ones with high levels of unemployment.

Concern with the ability of capital to absorb new unwaged additions to working class has been associated with several different phenomena. First, lengthy, slow, “jobless” recoveries from crises eventually worry economists not only because of the anger of those expelled who lost wages, but because of growing youth unemployment as new entrants to the working class are unable to find waged work. Having been subjected to fewer years of the discipline of imposed labor, young workers are less patient and more likely to revolt against the conditions in which they find themselves. Second, as Marx’s analysis in the next section (and in Part VIII on Primitive Accumulation) makes clear, new entrants to the labor market come not only from population growth, but also from new enclosures of subsistence agriculture. Where real investment has been weak and involving a high organic composition, accumulation has been unable to generate enough jobs to absorb rural-urban migrants who have formed a huge “informal sector” of largely unwaged workers who survive by organizing themselves in communities rather than being organized by capital in factories and offices. Capital’s control of such unwaged sectors has, therefore, required supplementary methods, e.g., police repression and urban planning (repeated physical destruction and dispersion of autonomous communities).(20) Where such methods have been severe, they have spurred both resistance and exodus, involving an often difficult-to-control level of working class mobility, including cross-border migration.

However difficult they are to manage, the fluctuations in capital’s demand for labor, both require (for increases in investment during upturns) and generate (through disinvestments and business failures during downturns) an industrial reserve army.

Along with his own analysis of the genesis of the industrial reserve army, Marx also highlights the recognition by political economists and historians such as Malthus and Merivale (1806–1874)—whom he quotes at some length—of the need for readily available unwaged workers. He also quotes the well-known popularizer for such political economic views, Harriet Martineau (1802–1876), who wrote literally hundreds of stories embodying the apologetics of economists with the aim of convincing her readers that workers should accept their sorry lot as the inevitable consequence of the natural dynamics of social development. It was undoubtedly because of this role that Marx dismissively refers to her as “an old maid” (she remained unmarried until her death). His dismissal was unfortunate because despite her role as an apologist for capitalism, a great many of Martineau’s writings called attention to and provided analyses of various aspects of the work of the unwaged. Indeed, in recent years she has been celebrated not only as the first woman sociologist but as an early analyst of the domestic labor of reproduction.(21) Instead of dismissing her, and her work, Marx would have done better to draw on it to amplify his own analysis of the reserve army.

Marx then returns to the issue of the causes of fluctuations in wages and reiterates his argument that they are primarily the result of fluctuations in the capitalist demand for labor (that changes over the periodical cycle) rather than the results of changes in labor supply. He makes this argument taking into account such phenomena as increases in the intensity of labor— associated as he showed in Chapter 15 with the subordination of work to the rhythm of machines—and the replacement of better organized workers by the more vulnerable.

Evoking his analysis of how machinery is used to impose more work—through speed-up and the intensification of labor—instead of freeing workers from labor, Marx points out the irony and injustice of the way capitalist development imposes over-work on some while denying others any chance at earning a wage. As he also made clear in Chapter 10, over-work is not just a theft of daily life-time and energy, it also kills. In Japan, where it is all too common, death-by-over-work has a name: karoshi. (22) It should have a name everywhere.

Unfortunately, however, his uncritical acceptance of the conventional vision of the jobless alternative to waged over-work as “enforced idleness” limits his analysis. Similarly, he readily uses the term “unemployed” to designate those without jobs. As I’ve indicated in my commentary on earlier chapters, the unwaged are rarely “idle”, the “unemployed” generally must employ their skills to survive; both those who have lost their jobs and those who have yet to find one must work at trying to stretch what little money they have or finding ways to get more, whether from welfare or a new waged job or some creative gig in the “informal economy”. When, in the next section, Marx offers an analysis of the composition of the industrial reserve army, the absence of this recognition becomes apparent. Fortunately, since he wrote, others have filled this gap in his work and often applied his ideas to the analysis of various domains of unwaged labor.

Marx ends this section by mocking the hypocrisy of economists and other priests of capitalism who preach the virtues of all those markets that capitalists impose on us, but quickly abandon their theology when force and state intervention serves them better. His examples we have seen before—crack downs on workers’ self-organization at home and violent colonization abroad. Recognizing such hypocrisy is particularly important today, when once again, in this era of neo-liberalism, market-worship forms the central ideological framework of contemporary economics and public policy, while the state wholeheartedly represses workers at home and abroad.

As Marx demonstrated in his analysis of primitive accumulation, markets and force have always gone hand in hand. The state has always been the enforcer and protector of capitalist markets, from their forcible imposition to the use of force to maintain them, against both efforts to escape them and any violation of their rules (property ownership). Along the way, the state has played as central a role in the shaping of markets as private capitalists. Perhaps not since overt colonialism has this been as clear as during this period of so-called “free trade” agreements among capitalist nation-states. Ostensibly negotiated by governments, and then overseen by such supranational state institutions as the World Trade Organization, such agreements are designed in secret and in collusion with capitalists, who desire arrangements that facilitate pitting weaker (generally lower waged) workers overseas against stronger ones at home. Only by being able to export back to the country from whose workers they have fled can companies take advantage of cheap labor abroad to produce for domestic markets.

Section 4: Different Forms of Existence of the Relative Surplus Population. The General Law of Capitalist Accumulation

Outline of Marx’s Analysis

Relative surplus population always possesses three forms:

– floating, latent, stagnant
Floating includes:
– dismissed male workers who have reached maturity

– some emigrate, following emigrant capital
– replaced by younger workers, often female, often children

– work in large-scale industry burns up lives, shortens them
– early marriages produce child replacements
Latent includes:
– those working in agriculture, not yet repulsed from the land
– as capitalist development in agriculture proceeds, it generates a constant flow of out-migration
Stagnant includes:
– those with extremely irregular employment
– typically, maximum of working time, minimum of wages
– chief form: so-called “domestic industry”
– constitutes a growing proportion of surplus population
– workers’ family size inversely related to income
– lowest sphere of stagnant exist in sphere of pauperism

– lumpenproletariat, i.e., vagabonds, criminals, prostitutes
– those able to work
– orphans and pauper children
– the demoralized, ragged and unable to work
– older people
– victims of industry: the mutilated, sickly, widows, etc.
– “Pauperism is the hospital of the active labour-army and the dead weight of the industrial reserve army.”
Absolute general law of capitalist accumulation:
– the greater social wealth, the greater the industrial reserve army
– the greater the reserve army, the greater the mass of surplus population
– the greater the surplus population, the greater pauperism
Political economists have recognized some of this
– Ortes, Townsend, Storch, Sismondi, Steuart

Commentary

This analysis of the composition of the unwaged industrial reserve army and surplus population not only details the conditions of life and situations facing various sectors but also argues their essential role as part of accumulation. Effectively, he shows, with few exceptions, how the surplus population is not really a surplus at all but necessary for capital to be able to meet its ever-changing demands for labor-power and keep in check those it does hire.

The Floating Form

Today, the floating form corresponds to the US Bureau of Labor Statistic's category of currently unemployed members of the labor force who are looking for waged work. Just as governments estimate the number of new hires— additions to the active labor army—as one index of the state of accumulation and the economy, so too does it estimate the number of the unemployed and their percentage of the labor force, the rate of unemployment. Drops in the rate are interpreted as a sign of accelerating accumulation and economic “health”, just as increases in the rate are taken as measures of deceleration or recession. These government-generated figures are regularly and dutifully reported by the capitalist media. Only outspoken critics of current government policies make a habit of pointing out how the rate of unemployment underestimates the degree of actual joblessness by ignoring those who have stopped looking for work and dropped out of the labor force, .

Underestimation serves the ideological needs of capital by hiding from frequent consideration all those sectors of the reserve army not included in the narrow definition of “looking for work”. The situation is akin to what we saw in Chapters 19–21, how the wage—when defined as payment for labor (as opposed to payment for labor-power)—hides the existence of surplus labor. Marx’s analysis reveals how, once you take into account the dynamics of their relationship to work, most members of the population—with the exception of the leisured few, living off the work of others, of the bedridden casualties of labor and of pre-school infants and toddlers—make up a working class, whether they receive wages or salaries or not. Despite this, officialdom treats all of those sectors of the reserve army of labor who are not currently looking for paid employment as entirely separate phenomena.

Although his treatment here is brief, his comments on how the over-work discussed in the last section burns up the lives of workers, shortening their life-expectancy is worth noting. So too is the correlation between short life spans and large families. When he speaks of the “premium” set on the production of children, he undoubtedly had in mind the growing tendency of capital to replace adult with child workers and the need of poverty-stricken working-class families to render up their children to exploitation. Today, thanks to considerable research, we know a great deal more about both of these phenomena.

As we saw in Section 3 of Chapter 10, not only can work kill quickly in industrial accidents, but also more slowly through continuous exposure to low levels of toxic chemicals and noxious substances, e.g., cotton dust in textile mills, rock and coal dust in mining that cause byssinosis, silicosis and pneumoconiosis respectively. Then there’s the poisoning of water, land and air by pollution from industrial factories, mining, factory-farming and energy generation. Added to such physical abuse, we also now know how stress, anxiety and depression weaken the body and lead to health-destroying behaviors outside, as well as within, working hours. Beyond such direct workplace-related dangers we are increasingly conscious of how the mining and burning of fossil fuels contribute not only to pollution and acid rain but to global warming, which affects not only those working but the larger environment and all of those living in it, human and non-human. Economists call such plagues by the euphemistic term of “negative externalities”.

The work of demographers revealing how the success of workers in raising their income generally results in smaller families—because fewer children are needed as income earners—must be complemented by more gender-specific considerations. Feminists have pointed out how the size of families is also determined by the degree of control that women are able to exercise over their own bodies. Against the patriarchal relationships that capital inherited, adopted and promoted, women have long organized for greater freedom and self-determination. Part of that self-determination is the choice of whether or to what extent to have children. Everywhere women have won access to various methods of birth control and abortion, they have reduced the average number of children they have been willing to bear and the size of families has dropped accordingly. To some degree, there has been a correlation between working class income and the success of such struggles. Where income is higher, and women win access to that income, their battles for self-determination are more easily financed, including their access to methods of contraception. Therefore, in those countries with higher average income and standards of living women have been more successful in gaining control over their own bodies, procreating and rearing fewer children.

The Latent Form

When we turn to the composition of the latent reserve army, it is evident that who can be considered a part of this sector varies historically. When Marx was writing, those still attached to the land, still being periodically driven off by the development of capitalist agriculture, constituted the larger part. Even today, a great many people are still subject to such repulsion. Enclosures, that once constituted primitive accumulation, have become a recurrent strategy of on-going accumulation. But even in that earlier period, there were parallels between the situation of those still in agriculture and the situation of women and children in the families of waged workers in manufacturing. They were not immediately and automatically available as members of the floating reserve any more than those attached to the land were immediately available for employment in factories. Although some women and children sought independent income, many had to be driven into the labor market—mostly by poverty—as others had to be driven off the land. Later, years after Marx died, when workers were successful in imposing not only further restrictions on the length of the working day but labor laws that liberated children from waged labor, they were effectively shifted from part of the active army or floating reserve into a position of latency. Typically, child labor laws forbid employers from hiring children, from birth to some legally determined age, usually in the teens. There were often exceptions, both legal, such as family and farm labor, and illegal, such as human trafficking, but vast numbers of children are only a latent source of potential labor-power.

As I have discussed in earlier commentaries, capitalists need those children, temporarily free from waged employment and exploitation, to be properly prepared to eventually enter the floating reserve. Thus, their incarceration in schools, schools structured and designed to produce compliant and exploitable future participants in both the reserve and active armies of labor. Although school children are not engaged in producing commodities on which a profit can be earned, they are put to work producing labor-power. So, although workers’ struggles have liberated most children from waged exploitation, their youth is still being poisoned by the forced labor of schooling through which they are disciplined into accepting authority—today of teachers, tomorrow of employers—and acquiring, to a greater or lesser degree, depending on their resistance, the skills and abilities required by those future employers. Although latent with respect to the active army of labor, capital still manages to impose unwaged work on children.

The position of women, vis-à-vis labor, has also varied over time, the result of both capital’s demands and women’s struggles. In Marx’s time, along with children they were being driven from work in the latent to work in the active army. Later, in the late 19th and early 20th Century United States, laws and rules were passed excluding women from certain jobs, pushing many back into the latent reserves, despite a wave of feminist-suffragette struggle when women marched out of workplaces and homes into the streets. In both the First and Second World Wars, women were drawn into waged labor to replace men mobilized as soldiers. Then, as soon as the wars were over, despite having demonstrated both their ability and willingness to work in industry, vast numbers of women had their wages snatched away and handed to demobilized soldiers as a “family wage”. With the rise of “second-wave” feminism in the 1960s, autonomously organized women fought for universal access to, and equal treatment in, whatever form of work they choose.

The Stagnant Form

The closest modern equivalent of what Marx calls the stagnant form is most often thought to be what economists call the “structurally unemployed”. This section, however, shows that to be a poor parallel. The structurally unemployed are defined as those who, having lost a job, discover it impossible to find another of the same kind. But the “chief sort” of the stagnant surplus population for Marx were workers actually at work in so-called “domestic industry”. As he explained in Section 8 of Chapter 15, the domesticity of this industry refers only to workers being employed in other workers’ homes. There, he provided details of the exploitation of women and children, here he largely evokes such conditions and points out how they favor large and pauperized families. Stagnant describes the social condition and immobility of persons caught in such circumstances. Whereas workers in the floating and latent forms may eventually, or periodically, find jobs in one industry or another, those in the stagnant form are largely stuck. If they can work, they work at the most miserable, low paying jobs. If they cannot work for wages—too old, mutilated by capitalist machinery or sickly because poisoned by working conditions—they may still contribute to the reproduction of labor-power. Although Marx refers to pauperism as the “hospital of the active labor-army”, it does not function like a real hospital where impediments to work may be repaired, but rather as a kind of obscene social-hospice to which some are condemned to slowly die.

The Lumpenproletariat

In this sub-sector of the surplus population, which Marx places within general category of pauperism, he includes vagabonds, criminals and prostitutes. We have already seen in Part VIII on primitive accumulation, how vagabondage and petty crime were, like begging, active alternatives to the meek acceptance of entering the labor market in search of waged labor. Since Marx touched only briefly on such alternatives, we have been fortunate enough to have several Marxist historians delve much more deeply into examples drawn from the same period to which he makes reference, including the authors of such books as Albion’s Fatal Tree (1976), Between the Devil and the Deep Blue Sea (1989) and The London Hanged (1992).(23) From such studies we have learned much about the complicated relationships that have existed between wage earning and alternative modes of survival. One thing that such studies have revealed is how individual lumpenproletarians, that in Marx’s brief treatment appear to be stuck in a stagnant state of pauperism, have actually often been quite mobile, moving among the alternatives available to them, including waged labor. Studies of more recent periods, including the present, have revealed much the same.

Prostitution is one survival strategy, which Marx includes among those of the lumpenproletariat, that deserves closer treatment than he accords it. In the 19th Century, the dominant image of the prostitute seems to have been “the fallen woman”—often a woman who had not “fallen” but been pitched into poverty and recourse to prostitution by being “gotten with child” and then abandoned by the man responsible. With the extended family rapidly disappearing under the pressure of expropriation and the need to seek wages wherever they could be found, such single-mothers often had few options for earning a living. These were the street-walkers and brothel sex-workers often portrayed in literature. But we know that, as in so many other domains, there has always been a hierarchy of prostitutes, both female and male, from the paupers evoked in Marx’s text to well-kept courtesans and mistresses living amongst the wealthiest in society. In Victorian England, such diversity was well-known but kept in the shadows, except in a more or less underground literature and salacious journalism. Elsewhere, say in mining towns and those with military barracks, brothels functioned with greater openness and often government sanction. In more recent times, feminist works, such as Simon de Beauvoir’s La Deuxième Sexe (1947), and success in overcoming obscenity laws have allowed a more open circulation of literary treatments of sexual relationships, and have forced a more general recognition of this diversity. Along the way, some authors, often feminists, have drawn parallels between formal prostitution—in which sex and other reproductive services are usually provided in what amount to short-term contracts—and marriage (formal or de facto) where those same services are provided in exchange for long-term contracts. Such observations harken back to Marx and Engels's early critiques of marriage in the Communist Manifesto that blasted its conventions within capitalism as exploitative of women.

Unfortunately, while describing these various strata of the reserve army or surplus population, Marx gives us little sense of the various forms of struggle undertaken by individuals and groups, nor of how movement from one strategy of survival to another might constitute such a struggle. Beyond the struggle for a wage, of movement from the reserve to active army, we must also study those unfolding within the various sectors of the surplus population and contributing to the political recomposition of the working class. Knowledge of all of these can inform useful strategies for circulating our efforts from one sector to another.

Section 5: Illustrations of the General Law of Capitalist Accumulation

Overview of Section

(a) England from 1846 to 1866
(b) The Badly Paid Strata of the British Industrial Working Class
(c) The Nomadic Population
(d) Effect of Crises on the Best Paid Section of the Working Class
(e) The British Agricultural Proletariat
(f) Ireland

(a) England from 1846 to 1866

Outline of Marx’s Analysis

– rapid growth, but slowing
– accelerating increase in income from profits and rents
– increasing concentration and centralization of land and production
– parallel increase in working-class poverty
– real wages undercut by rise in consumer prices, debt
– steady growth in pauperism, ill health and starvation
– must take into account situation of workers outside of production

Commentary

The bulk of this section presents statistics—mainly drawn from official government documents—illustrating the historical accuracy of Marx’s previous analysis of accumulation. He shows how the rapid growth, concentration and centralization of wealth in the hands of the rich was paralleled by an equally rapid spread of poverty and pauperism. Against evidence of some increase in wages, among some sectors of the working class, he provides evidence of increases in the prices of the means of subsistence that has undercut real wages. These kinds of statistics have also been used to attack Marx’s theory of the “pauperization” of the working class. Pro-capitalist economists and historians have used increases in real wages and various measures of standards of living in England (and in other industrialized countries) to argue that the pauperization that Marx illustrates here was soon reversed as capitalism continued to develop. Among Marxist responses to such attacks has been the argument that with the spread of colonialism and primitive accumulation abroad, the issue of pauperization has to be reframed in international terms. Following the early period of slavery for the production of industrial inputs, of colonial conquest, of the seizure of the best lands and their conversion from local food production to export agriculture and of mining operations, global capitalist accumulation displaced the locus of pauperism from industrial England, where concessions were granted to an increasingly well-organized and militant working class, to the colonies (and later neo-colonies). Even in this section, however, Marx is not arguing that all workers will be reduced to paupers, only that the dynamics of capitalist development, including downturns in business activity that cause many to lose their wages, continually produces paupers and on an expanding scale.

In one of the few passages in this volume where he brings up the issue of debt, he does so in a quotation from Henry Fawcett’s book on The Economic Condition of the British Labourer (1865). “They (the workers) become almost the slaves of the tradesman to whom they owe money.”(24) The increasing dependence of workers upon credit from tradesmen, Marx notes in a footnote to that passage, “is the consequence of the frequent oscillations and interruptions in their employment.” In other words, with wages at, or very near, subsistence, the loss of wages forces workers to pawn their few worldly possessions and to beg credit from local merchants who supply subsistence goods. Once in debt, the risk of near slavery—or what some economists and historians call “debt peonage”—lay in the way some tradesmen manipulated debt accounting to prevent workers’ escape, even if, and when, wages could once again be obtained. In a period in which workers’ income and wealth was so low as to make access to bank credit impossible, such were the limited legal possibilities open to them, short of being turned out into the street, starving or entering the prison-like workhouses.

To my mind, however, the most important point in this section is made in one sentence:

But for a full elucidation of the law of accumulation, [workers’] condition outside the workshop must also be looked at, his condition as to food and accommodation.(25) [my emphasis]

Just as Sections 3 and 4 of this chapter have shown how the unwaged are an integral and necessary part of the working class, reproduced on an expanding scale along with everything else being accumulated, so too must an analysis of accumulation take into account the character of the lives of workers, both waged and unwaged, outside of places of waged employment. This is a shift from Chapter 23 where Marx thought it sufficient to point out 1) that the reproduction of the class was part of the reproduction of capital and 2) that the capitalists mostly leave it to workers to take care of that reproduction. Here he examines the conditions of that reproduction, especially workers’ ability to eat, to clothe themselves and to find shelter. Largely missing from his analysis in the next few sections, however, is the kind of examination of work outside the workshop that he undertook inside it—discussion of the division of labor, of the organic composition of capital, of the subordination of workers to machines and so on.

(b) The Badly Paid Strata of the British Industrial Working Class

Outline of Marx’s Analysis

– illustrations from public health reports
– food intake often near or below biological subsistence
– working class housing is execrable, conducive to disease
– made worse by city “improvements” that benefit capitalists
– made worse by public health measures
– made worse by speculation
– made worse by overcrowding
– made worse by sudden influxes of workers

Commentary

Drawing on a series of Public Health Reports, commissioned in response to the appalling conditions in both cities and countryside, Marx cites statistics and comments by the authors of those reports as to the malnourishment of the waged, active labor army of the English working class. For present-day readers from middle and upper levels of the global hierarchy of working class income, where discussion of food intake has largely shifted from requirements to maintain biological subsistence to how to avoid overeating and obesity, the statistics Marx cites may seem quaint and passé. However, although advances in science have made such measurement more sophisticated today, estimates of nutritional requirements for the maintenance of life are not all that different from Marx’s time. Instead of calculating the intake of grains of carbon and nitrogen, requirements are now calculated for things like general energy intake and nutrients, e.g., amino acids, carbohydrates, essential fatty acids and a variety of vitamins and minerals. Moreover, whereas in the Public Health Reports of the mid-1860s that Marx cites, differentiation was only made between men and women, today nutritional requirements are calculated for males and females over their entire life-cycle, from gestation and infancy to old age, taking into account things such as activity and body characteristics.

As in the days of the reports cited here, those preoccupied today with fighting hunger, whether working in governmental or non-governmental agencies, study the close relationship between malnutrition and susceptibility to illness and disease. Marx’s analysis in this section makes clear that the situation was so dire among so many workers as to risk the spread of disease to “respectable people”, i.e., the bourgeoisie. As a result, public health measures were demanded, not out of any benevolent attitude towards workers but from self-defense. To this motivation must be added the demand by capitalists for healthy, productive workers. Often unwilling to implement costly changes within their own production facilities that would improve the health of their workers, or to pay wages sufficient to support a healthy life, capitalist support for public health measures always wanted the cost to be borne by other taxpayers. As capitalist investment moved into disease-ridden areas, either at home (the American South) or abroad (the colonies or otherwise subordinated nations), there too capitalists began to demand public health measure to reduce their own labor costs.(26)

When Marx turns from food to housing, the Public Health Reports upon which he draws are even more graphic in describing the terrible living conditions of waged workers, especially those in urban areas. (27) Poorly built, ill-maintained, often with little or no access to light, air, water or sanitation, the typical tiny apartments were often overcrowded, ill-furnished (especially when wages were lost and furniture was pawned); they were homes of the malnourished and breeding places of disease. Although it is still possible to find similar conditions in the ghettos and poor neighborhoods of the Global North, those conditions are more rampant in the sprawling shanty towns and slums of the Global South. Often created and then swollen by rural–urban migrants escaping the enclosure of their lands in the countryside, only through great effort and collective struggle are workers who dwell in such favelas, barrios or bidonvilles able to gradually convert their hovels into decent housing and obtain utilities such as electricity and running water. To what degree there was collective self-organization in the 19th Century slums of England’s great cities, such as London and Newcastle upon Tyne, we are not told; we are only offered an account of the dynamics of exploitation and impoverishment.(28)

Those dynamics include such familiar phenomena as urban renewal and real estate speculation. Urban renewal projects, which in Marx’s time were called “city improvements”, replaced the old with the new, and often at the expense of working class housing. Ill-built and ill-kept housing (tenement or row houses)(29) were demolished to make way for wider roads (for commerce), bigger, better buildings (for businesses and for homes for the wealthy), tramways (to bring workers to work from increasingly marginalized distant neighborhoods), sanitation systems (to protect the bourgeoisie from disease) and so on. That projects to improve “public” health should have such adverse consequences for workers is especially bitter. Subjected to the worst living conditions, they were displaced by such “remedies” only to find themselves in even worse conditions! Such reorganization of cities to meet capitalist needs has been going on ever since. As workers have become better organized in their communities, however poor, they have learned to fight back against such attacks. In recent years, pitched battles have been fought against such projects as new airports or sports stadiums intended to benefit commercial airline and sports industries at the expense of local people. Such conflicts erupt every time whole working-class neighborhoods are demolished to make way for World Cup or Olympic stadiums and associated buildings.(30)

Anticipation (or insider knowledge) of such projects also feeds real-estate speculation—buying cheap today, to be richly compensated tomorrow by the state for property subjected to imminent domain. Such speculation proceeds even in the absence of such large-scale projects because the growth of capitalist industry in cities, and the associated growth of the working class, increases the value that can be realized from rents and thus from land. As land rent rises, so too does the price of homes and the cost of rental housing, especially during periods of rapid growth. Today, when the middle- and upper-income strata of the working class have obtained access to bank credit and mortgages, the same phenomena—complete with speculation—puts upward pressure on the price of single-family dwellings. It was precisely such speculation—coupled with widespread fraud—that inflated the “bubble” in housing prices in the early 2000s, whose bursting triggered the great financial collapse of 2007-2008.

(c) The Nomadic Population

Outline of Marx’s Analysis

– the “light infantry” of capital
– they march from workplace to workplace
– they are execrably housed
– they spread disease
– they are exploited as waged labor and as tenants

Commentary

Despite its title, this section does not deal with traditional nomads, neither subsistence pastoral tribes who move their herds according to season and available forage, nor geographically restless, itinerant groups such as the Romani or the Irish Travelers. Instead, Marx analyzes the living conditions of workers only able to obtain temporary employment who are forced to move more frequently than most. High unemployment and rapid changes in industrial demands for labor, coupled with capitalist efforts to minimize the cost of labor, combine to result in horrible housing for such workers, even worse than that in cities surrounding factories, often in more isolated, more or less temporary, work spaces, such as construction sites and mining camps. In this section, he illustrates such conditions by drawing on the reports of official government inspectors. Typical are flimsy, overcrowded shacks (or even caves) with no running water, no sanitation, no ventilation, no drainage, no health services and often built in proximity to toxic wastes.

Because of these conditions, suffering and death proliferate as contagious diseases spread easily from worker to worker, from parent to child. The Public Health Reports are particularly scathing in their condemnation of the living conditions of such workers. At best, special houses are provided to separate those with diseases such as small pox, typhus, scarlet fever and cholera. But in the absence of medical care and sanitation, those diseases spread not only to other workers but to people in the surrounding areas. All of this unfolded in the absence of both modern understanding of the vectors of disease or of effective methods of treatment.

In these conditions, Marx notes, capitalists exploit their workers “in two directions at once—as soldiers of industry and as tenants”. Even among relatively highly paid workers, such as miners, employers minimize their costs by treating such things as housing, fuel and water—“be it good or bad”—as payments in kind, deducting their costs from wages. These patterns of abuse in living conditions parallel those at the point of production. The minimization of expenditure on life outside the mines or construction sites replicate the minimization of expenditures on “protective measures against dangerous machinery in the factory, from safety appliances and means of ventilation in the mines, and so on.”(31) Such consistent efforts to maximize profits have condemned workers to injury and ill-health.

Those familiar with the typical conditions of life available to contemporary “nomadic” segments of the working class will be struck by how uneven changes have been since the mid-1860s. In the Global North some workers have succeeded in escaping from such conditions. For example, through decades of arduous struggle, often against violent repression, miners, through collective resistance, have won recognition for their unions, collective barganing, higher wages and escaped from isolated mining camps into better living conditions. Another example has been the success of some migratory agricultural laborers. In the United States, in the 1960s, the United Farm Workers in California (UFW) evolved an innovative strategy that complemented strikes and protest marches with calls for consumer boycotts of farm produce. Their success forced grower recognition of the UFW and negotiations that have brought better wages, less dangerous working conditions and improved temporary living conditions. More recently the Coalition of Immokalee Workers’ (CIW) anti-slavery campaign has “uncovered, investigated, and assisted in the prosecution of numerous multi-state farm slavery operations across the Southeastern U.S., helping liberate over 1,200 workers held against their will since the early 1990’s.”(32) On the other side of the country, in Washington state, Familias Unidas por la Justicia (FUJ), an organization of mostly indigenous migrant farmworkers has recently won a collective bargaining agreement with Sakuma Brothers Farms.(33)

On the other hand, vast numbers of the estimated 150 million migrant workers in the world today continue to suffer all the ills described in this section of Capital. In construction sites around the globe, it is easy to spot crude shacks lacking all the same amenities as described here, thrown up to house temporary migrant labor, often imported from far away. Most recently, such practices have been revealed in the construction of sports facilities, e.g., those for the World Cup in Brazil in 2013 and currently in Qatar in preparation for 2022.(34) Similarly, while some agricultural workers, such as those who organized the UFW and CIW, have made substantial gains, millions of other workers, toil and continue to struggle against intolerable conditions of both work and life.

(d) Effect of Crises on the Best Paid Section of the Working Class

Outline of Marx’s Analysis

Example #1: Impact of Crisis of 1866 on English workers
– overproduction and speculation in shipbuilding fed by diversion of capital in response to cotton famine
– result: financial crisis and mass unemployment of skilled mecanics and artisans
– thousands out of savings, out of things to pawn, in workhouses, on parish relief or starving
Example #2: Impact of crisis on Belgian workers
– “workers’ paradise”? No unions, no factory acts!
– average worker income is less than that of soldiers, sailors or even prisoners!
– 1855 study shows most minimum subsistence
– any downturn, any loss of income = disaster

Commentary

Newspaper reports on the results of the crisis of 1866 in England illustrate the catastrophic effects of that downturn on even the highest paid workers, e.g., shipbuilders, who tended to be highly skilled mechanics or artisans. Those reports detail the miserable condition of workers, whether admitted to workhouses, where they break rocks or pick oakum for less than subsistence wages, or desperately besiege the gates in hopes of obtaining some relief, however little.(35) Marx also gives us an interesting analysis of the causes of the 1866 crisis. First, the crisis came in the wake of an industrial crisis in the textile industry caused by the “cotton famine”, which was itself caused by the American Civil War that cut off cotton exports to the United Kingdom causing a dearth of raw materials and a spike in cotton prices. Second, the financial panic that set off the crisis was due to the collapse of a speculative wave of investments, in shipbuilding among other industries, fed by capitalists throwing “much capital from its accustomed sphere into the great centers of the money-market”.(36) Thus, from a global perspective, the crisis was not merely due to financial speculation but also to workers’ struggles—those of slaves and those of waged workers in the Union Army—to end the Confederate use of slavery to undercut the income of waged labor. In Volume III of Capital, in an expanded, year-by-year analysis of the cotton famine and its consequences for workers, Marx also reports on the effects on British workers of the substitution of weaker, shorter fiber Surat cotton from India for stronger, longer fiber American cotton, a substitution made possible by the British conquest of the subcontinent and its annexation of the labor of Gujarati cotton workers.(37) In these two cases, we can see not only the global reach of capital, but the interconnectedness of workers' struggles in different parts of the world. The victory of the Union against slavery and the militancy of British workers, evident in the so-called Hyde Park Riot where thousands faced down police and government troops, resulted in the passage of the Reform Act of 1867 enfranchising most male English and Welsh male workers.

In the Belgium case, often admired by English capitalists, Marx quotes from an 1855 report by the inspector-general of prisons and charitable institutions whose data show that the average working-class family receives less real income than soldiers, sailors and even prisoners. Moreover, that data also revealed income so close to bare biological subsistence that even the slighted downturn in economic activity, any reduction of wages or employment, or any increase in the price of basic necessities throws the average family into destitution and pauperism.(38)

(e) The British Agricultural Proletariat

Outline of Marx’s Analysis

– wage and living conditions have steadily worsened
– wages often below subsistence
– housing execrable, gross overcrowding, conducive to illness and spread of disease
– worsening conditions parallel rapid investment and growth of agricultural productivity
– enclosures, evictions associated with primitive accumulation continue, produces surplus population
– reduces capitalist farmer and landlord contributions to poor rates
– subjects farm workers to housing at great distances, work of getting to work and back
– cheap hovels built in open villages, let at high rents to expelled farmers
– many examples drawn from various official reports
– both labor surpluses and dearth of labor during periods of peak need, e.g., harvests
– gang system of subcontracted labor, employing men, women and children

Commentary

The living conditions of agricultural workers differ little from that of the “nomadic” working class population discussed in section (c) above. The former are less mobile; the latter more so, but both were subjected to extremely low and precarious wages and forced to live under horrible conditions of overcrowded, often deteriorating huts with no sanitation, running water, rampant disease, etc. What this section shows is why at the very beginning of his discussion of proletarian nomads, Marx states that their “origin is rural”. Here he analyzes the forces that drive agricultural laborers off the land, into open villages and sometimes further afield in search of the kinds of jobs discussed in section (c).

Those forces are two-fold. First, a revolution in agricultural technology that dates from the mid-17th Century produced investments in new methods of land drainage and cultivation that often involved labor-displacing machinery. Second, far from sharing the resulting increased productivity of the land with those retained to work it, capitalist farmers transformed and reduced the cost of their labor force. Whereas in earlier times a great many agricultural workers were housed on the ever-growing estates, as this “revolution” progressed, the owners of those estates found it more profitable to evict their workers and force them to find worse housing many miles away in local “open” villages.

The various reports upon which Marx draws reveal a continuation of the processes that he analyzed in Part VIII on primitive accumulation: the expulsion from the land to distant villages or small towns and an ever-growing concentration of control over the means of production: both the land and the tools to work it. Yet, as with manufacturing, agricultural industries require workers—who must now walk miles to and from their assigned fields. As in the towns surrounding factories, the Poor Laws and those laws and police practices aimed at curbing resistance force them to remain in the local “labor market” and subject to exploitation by their employers in the countryside and by landlords and merchants in the villages.

These processes—complemented over time by other exploitative methods, such as debt peonage and taxation—have been constant elements of on-going accumulation ever since Marx wrote. The development of the American Midwest—the corn and wheat belt—enabled by railroads to serve far markets, was marked by the invention and deployment of first reapers, then threshers then combines, all labor-displacing machinery.(39) A parallel process of mechanization in American cotton-growing—of planting, picking and baling—displaced millions of Black farmers and workers from the land. A more recent great “revolution” in agricultural technology was the advent of the so-called Green Revolution in the 1950s and 1960s that involved the introduction of new high-yielding grains (mostly wheat and rice in the Global South. The nature of the new plants (short, with heavy heads of grain) and the switch to monocoluture required increased investment—in controlled irrigation, heavy use of fertilizers, pesticides and herbicides—and the profits from the resulting increased productivity permitted many better-off farmers in places like Mexico, India and Pakistan to purchase and use, for the first time, labor-displacing technologies such as reapers and threshers, once more depriving rural laborers of jobs. Not surprisingly, the “Green” revolution turned “Red” in many places as unemployed and destitute rural workers fought back against their worsening poverty.(40)

In other words, what is being revealed in this section is how capitalist development in agriculture paralleled its development in manufacturing; how the replacement of labor by machinery—investments that raised the organic composition of capital—contributed to the production of a “surplus population” that constituted parts of the “floating” reserve army of labor, and more broadly, elements of the “latent” reserve that, over time would gradually escape the poverty of fields and village to find employment elsewhere in construction sites, mines, factory towns or cities.

After giving abundant illustrations of these dynamics, Marx ends this section by focusing our attention on the way the increasingly precarious employment of agricultural workers came to be organized through processes of sub-contracting, known at the time as the “gang system”. Whether the gangs were of the “public, common or tramping” types, organized by an agricultural worker turned “gang-master”, or of the “private” type, organized by “some old farm servant”, the pattern is the same. The intermediary, gang-master or servant, negotiates with the farmer on the one side and the workers on the other. They work for him, not the owners of the land and his income derives from his leverage on both sides. This organization of labor proved highly profitable for capitalist farmers, by reducing their labor costs and because workers could be mobilized and moved from farm to farm as needed. In such movement, of course, they resembled that “nomadic population” discussed earlier.

This method of labor organization, while growing in Marx’s time, has exploded in recent years. An element of local “out-sourcing”, it is no longer confined to the countryside and the employment of farm labor, but has infected cities and industry where a wide variety of workers, e.g., custodial workers, clerical labor, domestic labor and so on, are organized through such mediation. It has been an essential element of the increasing precariousness of labor in recent decades as members of what has been dubbed the “precariat” are hired part-time, with few or no benefits and find themselves dependent on intermediaries for repeated employment and income.

(f) Ireland

Outline of Marx’s Analysis

Ireland = “merely an agricultural district of England”
– that provides “corn, wool, cattle and industrial and military recruits”
– run by a government “which is maintained only by bayonets and by a state of siege”
– dramatic decrease in population beginning with famine year of 1846, over 1 million died
– 14th Century plague
– increased poverty provoked massive emigration, over a million persons fled the country, mostly to America
– deaths plus emigration meant big increase in concentration of agricultural land
– decrease in population, decrease in production, but increased proportion of “surplus product”
– despite fall in population, decline in real wages as price increases outstripped nominal gains
– refutes Malthusian claims about decline in population raising wages – increased resistance to British rule both in Ireland and among emigrants
– increased surplus product + increase in prices = increased profits for capitalists and landlords
– forced from land, agricultural laborers formed a reserve army in towns for work on farms, similar to situation of British agricultural workers but with less possibility of escaping to cities and industry

Commentary

All commentary on conditions in Ireland in the mid-19th Century must keep in mind that Ireland, along with Scotland and Wales were the first colonies of the British Empire. From the early Norman invasion of the late 12th Century, through the invasion, conquest and rape of the country by Oliver Cromwell in 1849–50, just three years after the great famine, the mostly impoverished Irish population was subjected to systematic expropriation and exploitation by the British, and by local Irish capitalists and landlords who sided with them. The characterization by Marx of Ireland as being “merely an agricultural district of England” was not only correct but would be applicable to colony after colony as the British Empire expanded, annexing lands and peoples’ labor in the Americas, the Middle East, Africa, Asia and Oceania. Place after place was colonized to provide raw materials and the cheap labor to produce them for English industry, first and foremost the textile industry and then others.(41)

Never completely assimilated or subdued, the history of this colony was one of repeated rebellion against foreign control and exploitation. The consistency of that resistance, fueled partly by Gaelic nationalism, partly by Catholic refusal to accept Henry the VIII’s imposition of Protestantism, was the source of the government’s dependence on “bayonets and a state of siege”. English rule in Ireland was what historian Peter Linebaugh has called a thanatocracy, rule by death, whether the method by which capitalists retained control was starvation, local police and courts or military repression.(42)

Marx’s primary interest here, however, within the context of illustrating the character of accumulation and its impact on the working class, is how capitalists profited from the vast suffering caused not only by the potato blight that wiped out workers’ basic food stuff, bringing on the Great Hunger (an Gorta Mór) of 1842 to 1852, but by the conditions of colonialism that had made them dependent on that one food and by the response of the colonialists to their plight. Instead of helping the Irish cope, the colonizers, from local landlords (such as Lord Dufferin) to English economists (such as Nassau Senior) welcomed the famine and the exodus of emigration because it undermined resistance and increased the rate of exploitation. Despite the dramatic reduction of both population and agricultural output, capitalists and landlords managed to appropriate an increased proportion of output as “surplus” earning profit and rent for them.

Having already debunked Malthus’ analysis of the relationships among wages, changes in population and crises in the very first section of this chapter, Marx is happy to point to the way the evolution of events in Ireland illustrate the errors of the Malthusian argument, i.e., the dramatic decline in population, instead of raising real wages was accompanied by their fall and by a rise in profits and rents.(43)

This redistribution of income, from workers to capitalists and landlords, took place not only within the context of the vast suffering of Irish workers, but also through a massive reorganization of agriculture. Here Marx highlights two phenomena: the concentration of land and farms as families died off or moved away and a change in the composition of agricultural production. The reduction in the number of small farms meant a reduction in the production of food crops to support the local population. The abolition of the Corn Laws, which had encouraged the production of wheat for export to England, brought on the conversion of cultivated land to grazing land to provide meat and wool to British markets, and with it a reduction in the demand for agricultural labor and greater poverty for Irish farmworkers.

Footnotes

1 Because MP and LP are heterogeneous, as a representation of the arrangement of means of production and labor-power MP/LP might better be thought of as an array rather than a ratio.

2 For example, take the cotton textile industry. Fluctuations in weather can affect the value of a bale of cotton, changing c and thus c/v. Or, worker successes or failures in struggles over the value of their labor power, v, can change v and thus c/v.

3 In the voluminous literature interpreting Marx’s writings on crisis, differences in understanding the relationship between the value composition and the organic composition have led to differences in the interpretation of his analysis, especially that of “the tendency of the rate of profit to fall”.

4 Capital, Vol. I, p. 763.

5 Ibid.

6 Although he doesn’t discuss it at this point, he is well aware that capitalists have often sought to reduce such upward pressure on wages by importing cheap labor to expand the pool of available workers. In his day, Irish workers were brought over and pitted against English workers. In the years after decolonization, English capitalists imported workers from the West Indies and South Asia. Since the collapse of Soviet-style regimes in Eastern Europe, contemporary English capitalists have been hiring workers from Eastern Europe. Such pitting of foreign against domestic workers—widespread today—can escape capitalist control, either through immigrant/migrant worker struggle or through local worker efforts to limit competition in labor markets. Such efforts can be narrow, such as fighting for immigration reform, or broad as in the vote for Brexit that was, at least in part, a vote against further migration into the UK.

7 See, for example, Engels, F. "The Commercial Crisis in England—The Chartist Movement—Ireland," (written October 23, 1847) MECW, Vol. 6, pp. 307-309. (published in La Reforme, October 26, 1847)

8 “The Class Struggles in France, 1848 to 1850”, MECW, Vol. 10, pp. 45-145.

9 By admitting—in the second edition of his book on population—that workers could exercise “moral restraint” and limit the size of their families, Malthus effectively undermined his theory. This admission has largely remained unnoticed, or ignored, by all those who have enjoyed using his theory to attack workers’ wages and welfare support for those without wages.

10 Here he recognizes how worker success in raising wages can undermine profits. Those who have emphasized this phenomenon often speak of “profit-squeeze” as a source of crisis.

11 Capital, Vol. I, p. 771.

12 See his arguments against Weston’s opposition to wage struggles and trade unionism spelled out in his essay “Value, Price and Profit”, an address to the First International in 1865. MECW, Vol. 20, pp. 101-149.

13 Both Marxists and non-Marxists, e.g., John A. Hobson (1858–1940) and Albert F. Mummery (1855–95) in Physiology of Industry (1889), New York: Routledge/Thoemmes Press, 1992, who have emphasized this problem speak of “underconsumption” as a cause of crisis. Like Keynes who, years later, took Hobson to task, Marx recognized that consumption was only one element of aggregate demand, albeit the largest.

14 Capital, Vol. I, p. 772.

15 Ibid., p. 774. It is worth noting that in this analysis Marx ignores a key element of the argument he made in Part IV about capital’s relative surplus value strategy: namely, that the rise in productivity in the production of the means of subsistence lowers the value of variable capital, thus raising the rate of exploitation s/v and the rate of profit s/(c+v). Ignoring this parallel effect, as he does in this passage, only makes sense if you assume that the value per unit of c is declining faster than that of v.

16 The passage in the Grundrisse is the famous “Fragment on Machines”. The analysis in Volume III of Capital unfolds in Part III, Chapters 13-15.

17 Among the many highly critiqued “trusts”, whose behavior led to public outcry and eventually anti-trust regulation, was the “oil trust” of John D. Rockefeller—whose “philanthropic” investments in social engineering are cited in several of these commentaries. Counterparts today can be found in controversies surrounding mergers in telecommunications, such as that between Comcast and AT&T, and their consequences for consumer costs.

18 Both Marx’s original passage and Engels rewritten one can be found in Capital, Vol. I, p. 777-780.

19 Ibid., p. 781.

20 In the United States, such destruction is often rationalized under the euphemism of “urban renewal”. For one example of such struggles in Mexico, see Harry Cleaver, “The Uses of an Earthquake”, Visa Versa (Montréal) December/January 1987. Also published in Midnight Notes, (Boston) No. 9, May 1988, Wildcat, (Germany) Winter 1988, Common Sense (Scotland) No. 9, 1989 and available at: http://la.utexas.edu/users/hcleaver/earthquake.html.

21 See, for example, Michael Hill and Susan Hoecker-Drysdale (eds), Harriet Martineau: Theoretical and Methodological Perspectives, New York: Routledge, 2002.

22 National Defense Counsel for Victims of Karoshi, Karoshi: When the "Corporate Warrior" Dies, Tokyo: Mado-Sha, 1990.

23 E. P. Thompson, Douglas Hay, Peter Linebaugh, John G. Rule and Cal Winslow, Albion’s Fatal Tree, op. cit., Marcus Rediker, Between the Devil and the Deep Blue Sea: Merchant Seamen, Pirates and the Anglo-American Maritime World, 1700-1750, Cambridge University Press, 1989. Peter Linebaugh, The London Hanged, op. cit.

24 Capital, Vol. I, p. 807.

25 Ibid.

26 Thus, the efforts mentioned earlier of the GEB and Rockefeller Sanitary Commission in the Southern states. For an overview of capitalist responses to one disease—prevalent in the Global South— see “Malaria, the Politics of Public Health and the International Crisis”, op.cit. For a broader overview, see Peter Linebaugh, Lizard Talk; Or, Ten Plagues and Another: An Historical Reprise in Celebration of Boston ACT UP, February 26, 1989 and available online.

27 Marx's analysis was preceded by Engels' vivid portrayals of workers' housiing in his Conditions of the Working Class in England and followed by his more polemical 1872 analysis of "The Housing Question", MECW, Vol. 23, pp. 317–391.

28 A similar absence marked Upton Sinclair’s novel of immigrant life in Chicago’s meat-packing districts, The Jungle (1906). As James Barrett points out in his introduction to the University of Illinois edition of the book, Sinclair completely missed the networks of mutual aid in those communities.

29 Keep in mind that in Marx’s day, while some agricultural tenants lived in stand-alone single-family houses/farms, workers in urban areas had no access to bank credit or mortgages and the only housing they could afford was a room or two in a tenement.

30 For an example of community struggles against urban renewal in the Global South, see Cleaver, “The Uses of an Earthquake”, op. cit. For a discussion of resistance in the Global North see Anouk Belanger, “The Urban Sport Spectacle: Towards a Critical Political Economy of Sports”, in Ben Carrington and Ian McDonald (eds), Marxism, Cultural Studies and Sport, New York: Routledge, 2009, pp. 51-67.

31 Capital, Vol. I, p. 821.

32 See their webpage for a description of all their programs to improve agricultural workers’ rights, conditions of employment and conditions of life more generally.

33 One current example in the US are the efforts of those indigenous migratory farm laborers who have organized Familias Unidas por la Justicia (FUJ) in Washington state to mobilize—as the UFW did—a consumer boycott. See http://familiasunidasjusticia.org/en/home/

34 “Brazil World Cup workers ‘face slave-like conditions’”, BBC News, September 26, 2013. “Qatar 2022: World Cup project workers living in slum conditions behind glitz of oil-rich country”, ABC News, July 14, 2015.

35 “Picking oakum” refers to the tedious labor of picking apart old tarry ropes and cordage to make new materials for caulking the seams in wooden ships.

36 Capital, Vol. I, p. 822.

37 Capital, Vol. III, Chapter 6, Section 3: “General Illustration: The Cotton Crisis 1961-65”, pp. 228-229.

38 Capital, Vol. I, pp. 825-828.

39 While a graduate student at Stanford, I was employed as a research assistant to Paul David, who was researching the spread of the reaper in the Midwest. Although he framed his study using neoclassical theory of factor substitution, the results replicated Marx’s analysis that increases in wages spurred the adoption of labor-displacing machinery. See his "The Mechanization of Reaping in the Ante-Bellum Midwest," published in a 1966 volume edited by Henry Rosovsky, Industrialization in Two Systems: Essays in Honor of Alexander Gerschenkron, New York: John Wiley & Sons, 1966, pp. 3-39.

40 See Cleaver, "The Contradictions of the Green Revolution."

41 Colonization, of course, also provided export markets for English industry and investment options for its capitalists, both at home in the expansion of commercial and naval fleets and armies and abroad in conquest, the expansion of export production and infrastructure development. The raw materials acquisition that Marx treats here was only one element of British imperialism.

42 Peter Linebaugh, The London Hanged, op. cit., Chapter Two: ‘Old Mr Glory and the Thanatocracy”.

43 While he does cite evidence of a rise in some nominal wages, Marx doesn’t address the consequences of the famine on birth rates that fell an estimated 14% over this period. See Phelim P. Boyle and Cormac Ó Gráda, “Fertility trends, excess mortality, and the Great Irish Famine”, Demography, Vol. 23, No. 4, November 1986, pp. 543-562.