The contradiction between the forces and relations of production is extreme under capitalism because the relations of production, while tending to promote the unlimited development of the forces of production, force the latter against the limits of these relations. Capitalism seeks to expand without limit through the creation and appropriation of surplus value expressed most immediately as the need to make profits. This is enforced through increased exploitation of labour and the competition of different capitals to capture market share. No previous mode of production has displayed such rapid development of its own logic of expansion, with such power, and with such effect across the world.
Since the material forces of production and the relations of production within which they are encased are simply two aspects of the same thing it is not the case that their contradiction sees one develop and the other not. The contradictions that develop within them lead to crises expressed both in the fettering of the forces of production and curbing of capitalist social relations, expressed in economic, social and political crises.
Capitalist forces and relations of production, once established, produce relative surplus value through increased productivity of labour that reduces the time required by workers to create the amount of value that is consumed by them through their wage, so increasing the (surplus) value created and appropriated by the capitalist. This relative increase is surplus value is consistent with rising living standards of workers because relative surplus value only exists by increasing the productivity of labour, increasing the amount of goods produced and a corresponding reduction in their costs.
The greater share of the value of production appropriated by capital allows still greater expansion of production under its control and yet greater appropriation of profit. Capitalist accumulation advances through investment in machines and hiring of labour: both the material forces of production and specifically capitalist relations of production between capital and wage labour increase in scale.
For each individual capital, the limit of production is presented by the whole of the market for its goods, although this cannot obviously be the case for all capitals in that market. While the goods and services produced are relevant to the capitalist pursuit of profit, this is only the case in so far as they have an exchange value and can be sold for money. But they must also have a use for their customer, and even with growing real incomes due to the price of goods having fallen, there are limits to how many of a whole range of goods any individual may want or be able to afford. The increased production arising from development of the forces of production can lead to the overproduction of commodities in relation to the effective demand available that can realise their sale at a profit, and this structure and limitation of demand is determined by the ownership of the means of production and appropriation of the fruits of production, including the surplus product.
This can lead to economic crises as the scale of commodities produced cannot be sold profitably and the contradiction between the greater development of the forces of production, and the capitalist relations within which they grow, is expressed in economic crises of overproduction, evidenced in the cyclical economic crises that have existed since 1825. If such crises encompass a number of vital or fundamental commodities, and if they severely affect the circulation of capital, for example either the extension of credit or purchase of labour power, recessions or depressions will result in bankruptcies and unemployment. Both the forces of production are held back or even reduced while some capitalists cease to be capitalists and workers cease to work. Periodic recessions leave productive forces unused while human needs, which these forces could fulfil, is unmet because the relations of production demand that these forces only be employed at the requisite profit.
Increased productivity of labour arises primarily through the application of science and technology, that leads more and more to the replacement of human labour with that of machines. While the capitalist pursuit of absolute surplus value continues even today, in forms such as a “long-hours” culture – especially notorious in Japan or “presenteeism” in many offices – there are social and biological limits to this that conflict with the possibilities contained through increases in relative surplus value. Increased productivity in the production of goods and services consumed by workers can allow their money wage to fall at least relatively, while maintaining or increasing their real wage in terms of the number of commodities they can buy.
In doing so the relative amount of living labour in the value of production may decline so that the source of surplus value in this human labour also declines relatively, which can produce a decline in the share of surplus value in relation to capital advanced, and therefore of profit. “The progressive tendency for the general rate of profit to fall is thus simply the expression, peculiar to the capitalist mode of production, of the progressive development of the social productivity of labour. (Capital Volume III p318 – 319)
“The rate of self-expansion of the total capital, or the rate of profit, being the goad of capitalist production (just as self-expansion of capital is its only purpose), its fall checks the formation of new independent capitals and thus appears as a threat to the development of the capitalist production process. It breeds over-production, speculation, crises, and surplus-capital alongside surplus-population. Those economists, therefore, who, like Ricardo, regard the capitalist mode of production as absolute, feel at this point that it creates a barrier itself, and for this reason attribute the barrier to Nature (in the theory of rent), not to production. But the main thing about their horror of the falling rate of profit is the feeling that capitalist production meets in the development of its productive forces a barrier which has nothing to do with the production of wealth as such; and this peculiar barrier testifies to the limitations and to the merely historical, transitory character of the capitalist mode of production; testifies that for the production of wealth, it is not an absolute mode, moreover, that at a certain stage it rather conflicts with its further development.”
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