Karl Marx’s alternative to capitalism part 23 – forces and relations of production 6

Related imageThe 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.”

Back to part 22

Forward to part 24

6 thoughts on “Karl Marx’s alternative to capitalism part 23 – forces and relations of production 6

  1. As one of your readers I find it near on impossible to work out what you are intend by writing this lengthy account of the ‘contradiction’ between the forces and relations of production. In the 1970s there was a controversy over this same issue with the publication of Gerry Cohen’s book Marx’s theory of History a defence. Cohen had argued for the primary of changes in the productive forces as decisive with Marx. This primacy thesis of the productive forces over the relations of production was often taken by some ‘marxists’ to be sophisticated apologia of the long held Russian Soviet position. The European critics of Cohen’s primacy thesis were often ‘Maoists’ and they turned the thesis the other way about, arguing for the the primacy of the relations of production in Marx. Looking back one can see how both both could be right by collating requisite passages from the wide scope of the works of Marx and Engels.

    You seem to be reanimating the withered controversy not in the origin context of a general Marxist account of historical development but as your main title suggests within the context of An Alternative to capitalism’. There is no attempt so far to evaluate how far the older debate got or whether it was all just a waste of time. Other authors have went over the same material, most recently Ellen Meiksins Wood in her 1995 publication Democracy Against Capitalism : Renewing Historical Materialism. In there you can find lengthy overviews of the long standing disputes of the scholars, essay four for example is called ‘History or technological determinism’ chapter three is called ‘class as process and relationship’.

    Wood’s book itself was criticised by scholars and a few intellectuals attached to the British Socialist Workers, dubbing it Political Marxism, for coming down too much in favour of an emphasis on the
    primacy of class struggles in forcing historical development. The nub of the problem is that the term contradiction as utilised by Marx and Engels has several meanings. It can refer to both logical and ontological items. When Marx uses the term contradiction in the context of transition to socialism it seems to indicate an incompatibility between the forces and relations of production, but this incompatibility seems to be a logical one, it is a problem about a failure of rationality. However a breakdown in the rationality capitalism does not require socialism as the only solution. A breakdown in rationality does not logically entail a higher or better rational outcome as a solution as it seems to do for Hegel’s philosophy. Hegel can insist on a rational solution to every existential crisis because he makes an argument for the existence of an esoteric principle, he sometimes refers to it as the Absolute Principle, Hegel’s logical account of history is teleological because of his thesis concerning the Absolute, without this idealist notion of the Absolute the teleological direction of History falls to earth and this seems to be the younger Karl Marx was arguing for in the German Ideology, when he said that every philosophy of History had to be superseded by empirical and material studies.

    If the contradiction between the forces and relations is solely a logical one, indicating a breakdown in imminent rationality then there is no strong basis for a transition to socialism. If we think of contradiction as being something more than logical, that it is something ontological then we can move on to think about the historical episodes of real class struggles. As you know in Capital Marx says of his method of exposition he does not describe the opposition of capital and labour in terms of a chronologies of actual history of the development of the social classes, the classes appear as mere placeholders for logical constructions called capital and labour time. In today’s parlance Marx in his book ‘ Capital’ deploys a systematic dialectic in contradiction to a very specific historical dialectical. The historical dialectic are those specific parts in capital that read like empirical inserts documenting actual historical events, the most extensive one concerning the primitive accumulation of capital in England.

    The actual transition to socialism is brought into being only in a context of actual class struggles, the historical dialectic, with an understanding of specific class struggles, without specific class struggles the contradiction between the productive forces and relations of production remains a speculate one in the Hegelian sense, it belong to a systematic dialectic, it is internal to a rationality of concepts in contradiction. This does not require a socialist outcome, we can demonstrate this empirically by referring to how the breakdown in the rationality of capitalism resulted in Fascism or State Capitalism.

    Karl Korsch says in a short essay called Why I am a Marxist; ‘ I shall now enumerate what seems to me the most essential points of Marxism in a condensed form :

    1 All the propositions of Marxism, including those that are apparently general are in fact, specific.
    2 Marxism is not positive but critical.
    3 Its subject-matter is not existing capitalist society in its affirmative state, but declining capitalist society as revealed in the demonstrably operative tendencies of its breaking up and decay.
    4 Its primary purpose is not contemplative enjoyment of the existing world but its active transformation.

    If I reading your blog correctly you agree with points 2 and 4 only and strongly disagree with points 1 and 3. In fact on my reading at least you seem to think proposition number 3 to be especially objectionable.

    • I detect some impatience with the posts on the relationship between forces and relations of production, which is unfortunate because there is still more to come!

      Why am I writing them? You answer this question yourself by noting that different views have been held in the past of this relationship. These can lead to radically different perspectives of the nature of the period of capitalism we are living through, the potential for socialism and how that might be achieved. As you also note, the posts are written from the perspective of what this relationship implies for the alternative to capitalism and as you also note: crises for capitalism do not of themselves entail socialism as replacement. Despite protest to the contrary most Marxists proclaim capitalist crises as a sign of the coming of socialism but without looking to see where the development of socialism is arising from the circumstances giving rise to the crises.

      The posts generally do not cover the different disputes within Marxism since the death of Marx as this would obviously involve a much more significant project, and taking up specifically that of the 1970s and 1980s would make them longer than I would like them to be. This has not prevented me from reading various texts from this dispute but I find that if I touch on such issues explicitly it inevitably involves an attempt to grasp them in total and I have already made the mistake of going off on one. This series was meant to be a series of about five to ten posts on Peter Hudis’ book ‘Marx’s Concept of the Alternative to Capitalism’ and it has expanded well beyond a review of that book.

      As for the Karl Korsch definition of Marxism, I haven’t read the article and am loath to get into a direct engagement with it for reasons which will have become obvious from the above.

      • I don’t know the book by Peter Hudis, but I am glad to know what scripts you are working off, a few more references would be appreciated. There is a long standing
        practical issue over the productive relations and productive forces relation. In the past those Marxists who were productive force theorists were thought to be on the wrong side of the revolution, first there was Kautsky and even worse were the Stalinists who could maintain that the productive forces in most countries were too underdeveloped to allow for workers revolution, especially for permanent revolution, in short productive force primacy was thought to favour political stagism and collusion with the progressive bourgeois forces that had a certain mission to further develop the productive forces. Tricky isn’t it.

      • Yes, very tricky. Especially when you consider the fate of the Russian revolution and its degeneration, or even its deformities from the very start, as a result of insufficient development.

        Also, when you consider Stalinism which preached immutably limited stages in revolutionary development, with its claimed concomitant political perspectives of subordination of the working class to capitalist forces; as opposed to recognition of necessary limitations to what independent working class mobilisation could achieve.

        And again, that while insufficient development of the productive forces might be argued to deny the possibility of a workers’ revolution of any sort in less developed countries, this did not stop Stalinism claiming the Soviet Union had reached socialism on the basis of its own (distorted) level of industrialisation.

  2. Its necessary to bear in mind that although capital always tends to develop new technological solutions, so as to raise relative surplus value, it does not do so at an even pace, as Marx sets out in Capital III, Chapter 15. This is also important for understanding the so called productivity conundrum in Britain, and the discussion over wages.

    The general discourse currently by the bourgeois media is that wages are low due to UK productivity being low, and growing slowly. In fact, the reverse is the case. Productivity is low, because wages are low. Higher productivity certainly means that higher real wages can be paid, but as Marx responded to Carey, higher productivity does not at all map directly and mechanically on to higher wages. In fact, in the short term, it has the opposite effect.

    Marx in Capital I, talks about the fact that at a certain point the wages of women workers was so low that women rather than horses were employed to pull canal barges. As Marx says, Ricardo comments that it is only when the price of labour (power) reaches a certain minimum that capital is led to seek out alternative mechanical solutions, that labour and machines are constantly in competition, and Marx nots Adam Smith’s comment that wherever wages are low, the price of labour is high, meaning that productivity is low, so unit labour costs are high.

    It is only at the point of th cycle where the existing reserves of labour have been more or less used up, and all of the potential for absolute surplus value has been exhausted (extending the working-day, bringing in women workers, immigrants and so on), so that recruiting more workers leads to higher wages, and squeezed profits, that capital has an increased incentive not only to employ more machines, which means more workers to mind the machines etc., but to seek out new technological solutions so that fewer machines, but better machines can be employed, which in turn requires fewer workers to mind those machines, which thereby resolves the labour shortage, and enables nominal wages to fall, but which, as a result of higher productivity, creates the conditions, in the longer term for higher real wages.

    Fordism, as the material basis of social democracy, basically attempted to codify that, by things such as mutuality agreements, whereby workers were promised annual improvements in their real wages in return for accepting new productivity raising technologies. That worked for so long, as productivity could be raised sufficiently, on the basis of the new technologies developed in the 1930’s, 40’s, and so long as capital could continue to produce new ranges of commodities that workers wanted to buy, at prices that enabled the capital consumed in their production to be reproduced. Glyn and Sutcliffe, have described how the exhaustion of the labour reserves after WWII, led to the rise in wages in the 1960’s and 1970’s, which created the profits squeeze of that time, and led to the innovations of the mid 1970’s, through to the mid 1980’s, whose application has been rolled out, in a whole host of labour saving technologies in the period since.
    In the 1970’s, the second element of the point you have made also thereby manifested itself. That is, by the 1970’s, many families in the UK already had a car, whereas in the 1950’s, very few did. Nearly all had a TV, and the same for fridges, washing machines, vacuum cleaners, and so on, all of which you only need to buy once every 5-10 years. So, profits got squeezed because productivity rose, but not at a faster pace, whilst wages rose faster as relative labour shortages arose, and at the same time, profits got squeezed, because more and more of these commodities were being produced, but as their lower values, and prices meant more workers already had enough of them, and so the elasticity of demand meant prices had to fall by ever larger amounts to bring about the same increase in demand, profit margins got squeezed to a point whereby any change in demand and supply conditions – a drop in demand, a rise in the cost of inputs – meant that these commodities were overproduced, leading to partial and then generalised crises of overproduction.

    Capital need technology to rescue them, therefore, in two ways. Firstly, it need labour saving technology to create a relative surplus population, and thereby reduce wages. Similarly, it was expected to reduce input costs, by reducing the value of raw materials etc. But, secondly, technology was required to produce whole new ranges of commodities, so that the market itself could be expanded, by producing commodities that could be sold to workers at higher prices, rather than having to continually try to sell to them more and more of the same commodities, they already had.

    But, the immediate consequence of those technologies in the 1980’s was precisely to replace labour, leading to the period of falling wages, as unemployment rose. Under Thatcher and her successors, that was used to create a low wage economy, rather than to use the increased surplus value to invest in modernising the UK infrastructure and so on. The profits were diverted into financial speculation,a and property speculation, which is why the UK today has low levels of productivity, and a greater difficulty in raising real wages. Ironically, the low level of productivity, as Britain is dragged along in the new global upswing, means that relative labour shortages will appear here sooner than elsewhere, because to increase output by any given amount will require relatively more labour than where productivity levels are higher. Brexit and the fall in the Pound will exacerbate that trend.

    The high level of poor quality, low paid employment in the Uk is already evidence of that. As I’ve pointed out before, in a slave economy its easy to have full employment, but its of no benefit to the slave, and less benefit to the slave owner, than is the relation of wage labour to capital, for the capitalist. So, as labour supplies are used up more quickly in the UK, than say other EU countries, we should see UK money wages rising more quickly, but with low productivity, that means a greater squeeze on profits, which with all the liquidity sloshing around from QE, is likely to lead to sharply rising inflation, as firms seek to raise money prices to reduce the impact on their money profits.

  3. Pingback: Karl Marx’s alternative to capitalism part 23 – forces and relations of production 6 | Sráid Marx – seachranaidhe1

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