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Karl Marx’s alternative to capitalism part 27 – forces and relations of production 10

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The endorsement of workers’ cooperatives by Marx with which the previous post in this series finished needs emphasis because all too many of today’s Marxists fail to acknowledge their place in Marx’s alternative to capitalism. To take just one example: the Irish Marxist Kieran Allen, in his ‘Karl Marx and the Alternative to Capitalism’, references workers’ cooperatives under the heading of ‘Marx and Utopianism’, and with a view that appears to see these cooperatives as ‘islands of socialism’ within a capitalist sea, that “could not break with the logic of capitalism.”  The endorsement of workers’ cooperatives by Marx is not referred to by him, which is more than remiss given the title of the book.

Instead trade union organisation is endorsed and the perspectives of Marx described thus:

“Marx’s approach, therefore, was not to build alternatives within the existing mode of production but to overthrow it”

This is a view common to many of today’s Marxists.  However, by using this example of this approach, a number of points can be made, by way of illustration how it may be contrasted to the approach set out so far in these posts.

First, it might be pointed out that while cooperatives may not break completely with the logic of capitalism, this was well understood by Marx, as the first sentence of the extensive quote from the last post makes plain – “The co-operative factories of the labourers themselves represent within the old form the first sprouts of the new, although they naturally reproduce, and must reproduce, everywhere in their actual organisation all the shortcomings of the prevailing system.”

Second, it may be noted that not only do trade unions enforce the logic of capitalism, by bargaining the price of labour power in the labour market, but they are obviously built within the existing system and generally do not seek to overthrow it, a criticism levelled at cooperatives.

In this sense, it is equally obvious that unless the alternative is built “within the existing mode of production” there will be nothing with which “to overthrow it”.   Something as true of a working class party as of cooperative workplaces.  Without material foundations for example, there will be no revolution, certainly not one that is successful.  This will be the case because it is not just a question of overthrowing capitalism but of replacing it, and the replacement cannot be conjured out of nothing.  It cannot arise from empowering the state to take control – because this is not socialism, as the series of posts on the Russian revolution demonstrated.  But it will also not arise from within the heads of the working class unless the real world outside their heads, the’being that determines consciousness’, propels them to it.

Both within workers’ consciousness and the real world that creates this consciousness there must be a viable alternative, one that the creation of workers’ cooperatives within capitalism can represent.  In this sense, such cooperatives can be made, if not islands of socialism, then sites of struggle to win workers to ownership of the means of production right across society, and a giant step towards it within the existing system.

Allen argues that “unlike the capitalist class, workers need direct political power to begin the process of liberating themselves” (emphasis added), but this confuses the requirement for revolution, and the conquering of political power by the working class, with the process to get there, and what the working class needs to do afterwards in order to rule, not just in the political sense but as a ruling social class.  Much of the Marxist movement has been handicapped by failure to properly understand the necessity to advance the economic, social and political power of the working class, in the way Marx sought to do, within capitalism, as a prerequisite of, and prior to, overthrowing and replacing it.

Since this is a necessity whether one believes it is required or not, the vacuum created by lack of such understanding is filled by reformist and statist conceptions of working class struggle and socialism, which are as routinely condemned as much as they are advanced in practice.  These statist conceptions of socialism were opposed by Marx, as by many Marxists today, but he had conceptions of the alternative, which many of today’s Marxists do not. They thus lapse into Keynesian remedies and calls for nationalisation, ignoring experience of the latter when it happens and results in enforcement of the logic of capitalism – as in Ireland with bank nationalisation and creation of an enormous property development company by the state – NAMA.

This yawning gap in the conception of how the working class prepares itself to be the ruling class, to carry out a revolution, has all sorts of other deleterious consequences, leading not just to reformist capitulation but alternatively to ultra-left isolation, and retreat into vanguardist conceptions that amazingly can include reformist politics as well.  Since the real prerequisites for socialist revolution are ignored, the experience of heightened episodes of class struggle are continually misapprehended as revolutionary outbreaks when they are not.  Their failure leads to a search for scapegoats, for villains who have betrayed, without pausing to ask how this betrayal could have been allowed if the working class was already revolutionary.

It means that even those parties with the purest revolutionary programmes will be compelled to retreat and betray their revolutionary beliefs because the working class they seek to lead, and may even succeed in leading for a time, is simply not in a position to make a revolution, a weakness inevitably reflected in their political consciousness.  Retreat in such circumstances is inevitable regardless of subjective wishes and intentions.

In practice, such realisation affects the most radical parties long before they are in a position to claim outright leadership of the majority of the working class, whereupon the left section denounces the right as betraying socialism and the right denounces the left as lacking in realism.  Meanwhile the decisive question is how the working class has prepared itself for political power, because it is the class that creates the party, not the other way round.

The prevailing general conception of many Marxists is presented by Allen this way:

“It was only in the process of revolution that the mass of people learnt to clarify their own interests and develop a different understanding of their society. In normal times, the majority accept the legitimacy of their rulers and at least some of their ideas.  This cannot be changed simply through preaching, teaching or good example.  A new consciousness cannot emerge on a mass scale by workers ‘waking up’ and then passively following the teachings of their intellectual masters or clever television presenters.  Experience of class struggle is the only way in which people can learn, and, as Draper put it, ‘revolution speeded up the curriculum and enriched the course.’”

What this says is that only revolution can bring about the consciousness within workers that a revolution is required, which is actually partly true but obviously hardly adequate; in other words inadequate.  Read in reverse, the paragraph quoted above makes the weakness of this conception clearer; for it reads – revolution becomes the means of ‘waking up’ the workers, while revolution is the result of their ‘waking up’.

As a more or less sudden and abrupt process, of greater or shorter duration, a revolution alone cannot equip the working class with the consciousness that society must be organised by themselves and that they have the capacity to do so.  Marxists often note that consciousness lags behind material changes in the real world, and stand firmly on the ground that such material reality is the soil upon which consciousness grows.  It is therefore the case that anticipations of the new socialist society must appear within capitalism for the consciousness of the new society to also appear and grow, and to achieve hegemony within the working class.  As we have noted, of all the developments of the forces and relations of production under capitalism, it is cooperative production, working class control of the means of production – even within the capitalist system – that Marx notes should be considered one of the“transitional forms from the capitalist mode of production to the associated one.”

The creation of workers’ cooperatives raises the potential for increasing numbers of workers to understand the possibility of working class ownership of the means of production.  Such ownership also has the potential to demonstrate the benefits of increasing the scale and scope of cooperative production within capitalism – the benefit of cooperative enterprises cooperating with each other.

It also has the potential to demonstrate the ultimate requirement to defend this working class control through rejecting a capitalist state that exists to defend capitalist ownership and control.   The need for the working class to have its own state can be demonstrated when it becomes clear that it needs it to defend its own cooperative property.

Cooperative production has the potential to burst asunder the existing relations of capitalist production and release the fetters on the forces of production increasingly under strain from the limitations imposed on the socialisation of production by capitalist property relations. So, for example, the savings of workers, including their pension funds, can be mobilised using the existing system of socialised capital to provide the funding for workers to create their own cooperatives.

Workers’ cooperatives are not however a ‘magic bullet’ and do not replace the various other means by which workers must organise, in trade unions and political parties etc. as the example of Marx and Engels’ own lives demonstrates.  Cooperative factories were however important for how they conceived of the transition from capitalism to socialism and clearly fit their conceptions relating to the forces and relations of production that we have reviewed in these last number of posts.

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Karl Marx’s Alternative to capitalism part 26 – forces and relations of production 9

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In the previous series of posts I have set out Marx’s views on the contradictions of capitalism, between its productive forces and the relations of production, and have gone to some length to explain the concepts involved.

Much of this might seem rather tenuously related to the issue of Marx’s alternative to capitalism.  Previously, however, I have explained that this alternative can only arise out of existing society, and not from any sort of blueprint, either based on high moral values of equality and justice etc. or more or less elaborate plans for the a society, for example how a planned economy might be made to work more efficiently than capitalism.

More particularly, this alternative cannot be conceived as simply political revolution, for such a revolution presupposes the grounds for its success – on the development of the forces and relations of production as set out in these previous posts, this one and the next one.

The development of the forces and relations of production explains how the alternative that grows within capitalism and will supersede it might be conceived, and on these grounds that political revolution might be considered a reasonable objective.

In this way, Marx explains how the development of capitalism creates the grounds and tendencies of development of an alternative society:

“The conditions for production become increasingly general, communal and social, relying less on the individual capitalist. We have seen that the growing accumulation of capital implies its growing concentration. Thus grows the power of capital, the alienation of the conditions of social production personified in the capitalist from the real producers. Capital comes more and more to the fore as a social power, whose agent is the capitalist. This social power no longer stands in any possible relation to that which the labour of a single individual can create. It becomes an alienated, independent, social power, which stands opposed to society as an object, and as an object that is the capitalist’s source of power.”

“The contradiction between the general social power into which capital develops, on the one hand, and the private power of the individual capitalists over these social conditions of production, on the other, becomes ever more irreconcilable, and yet contains the solution of the problem, because it implies at the same time the transformation of the conditions of production into general, common, social, conditions. This transformation stems from the development of the productive forces under capitalist production, and from the ways and means by which this development takes place.”

Marx sets out “Three cardinal facts of capitalist production:

1) Concentration of means of production in few hands, whereby they cease to appear as the property of the immediate labourers and turn into social production capacities. Even if initially they are the private property of capitalists. These are the trustees of bourgeois society, but they pocket all the proceeds of this trusteeship.

2) Organisation of labour itself into social labour: through co-operation, division of labour, and the uniting of labour with the natural sciences.

In these two senses, the capitalist mode of production abolishes private property and private labour, even though in contradictory forms.”

Marx notes that the bigger, more concentrated and centralised capital becomes, the less important is the role of the capitalist himself, while this process simultaneously involves the centralisation of capital in a few hands including through the decapitalisation of many.  Although “this process would entail the rapid breakdown of capitalist production, if counteracting tendencies were not constantly at work alongside this centripetal force, in the direction of decentralisation.” (Capital Volume III, p 354 – 355)

Ernest Mandel, in his introduction to Volume III of Capital, sets out a flow-diagram putting forward the elements of Marx’s analysis and placing them within separate boxes, with the end point being ‘socialism’, and with the penultimate box the ‘tendency towards collapse of capitalist system’.

While useful as a graphical presentation of the elements of Marx’s analysis, it is misleading if it is assumed that socialism is simply a result of capitalist collapse, rather than capitalist collapse being the result of socialism, in other words the actions of the working class.

It is however useful to sum up the last few posts by itemising these different elements that are  included in Mandel’s schematic, with the understanding that socialism is not the result of the automatic working out of any or even all of these factors, but rather the conscious intervention of the working class, not in a voluntarist way, but arising out of (at least some of) the factors set out below, and in particular ways that we shall later explore.

  • Growing difficulty of maintaining market economy, value realisation, under conditions of growing automation.
  • Periodic crises of overproduction.
  • Tendency to growing centralisation of capital in fewer and fewer hands.
  • Tendency of average rate of profit to decline.
  • Tendency to growing objective socialisation of labour.
  • Growing contradiction between socialised labour and private appropriation.

The contradiction between capitalist relations of production and its productive forces is evident every day, in the inability of capitalism to secure permanent full employment, in fact its inability to function without a reserve army of labour that helps regulate its functioning.

The tendency to the socialisation of production through, for example, the growth of monopoly might be seen as anticipation of socialism, which in a negative fashion it is, but while it entails increased planning within enterprises, it does not otherwise prevent capitalist crises.

Likewise, increased state ownership and intervention also anticipates resolution of the contradiction between the forces and relations of production, but does not resolve it and does not represent a model of future society.  As Engels notes:”

“But, the transformation — either into joint-stock companies and trusts, or into State-ownership — does not do away with the capitalistic nature of the productive forces. In the joint-stock companies and trusts, this is obvious. And the modern State, again, is only the organisation that bourgeois society takes on in order to support the external conditions of the capitalist mode of production against the encroachments as well of the workers as of individual capitalists.”

“The modern state, no matter what its form, is essentially a capitalist machine — the state of the capitalists, the ideal personification of the total national capital. The more it proceeds to the taking over of productive forces, the more does it actually become the national capitalist, the more citizens does it exploit. The workers remain wage-workers — proletarians. The capitalist relation is not done away with. It is, rather, brought to a head. But, brought to a head, it topples over. State-ownership of the productive forces is not the solution of the conflict, but concealed within it are the technical conditions that form the elements of that solution.”

The true anticipation and herald of the new mode of production is contained in the development of workers’ production, anticipation of the associated workers’ mode of production, through the growth of workers cooperatives, as argued by Marx:

“The co-operative factories of the labourers themselves represent within the old form the first sprouts of the new, although they naturally reproduce, and must reproduce, everywhere in their actual organisation all the shortcomings of the prevailing system. But the antithesis between capital and labour is overcome within them, if at first only by way of making the associated labourers into their own capitalist, i.e., by enabling them to use the means of production for the employment of their own labour.”

“They show how a new mode of production naturally grows out of an old one, when the development of the material forces of production and of the corresponding forms of social production have reached a particular stage. Without the factory system arising out of the capitalist mode of production there could have been no co-operative factories. Nor could these have developed without the credit system arising out of the same mode of production. The credit system is not only the principal basis for the gradual transformation of capitalist private enterprises into capitalist stock companies, but equally offers the means for the gradual extension of co-operative enterprises on a more or less national scale.”

“The capitalist stock companies, as much as the co-operative factories, should be considered as transitional forms from the capitalist mode of production to the associated one, with the only distinction that the antagonism is resolved negatively in the one and positively in the other.” (Capital Volume III)

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Karl Marx’s Alternative to capitalism part 25 – forces and relations of production 8

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For Marx in the 1859 Preface “the material productive forces of society come into conflict with the existing relations of production or – this merely expresses the same thing in legal terms – with the property relations within the framework of which they have operated hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an era of social revolution.”

At this stage, it is useful to let Marx’s writings themselves set out what he means.  Explaining the nature of this conflict in Capital Vol III: “the contradiction in this capitalist mode of production consists precisely in its tendency towards the absolute development of productive forces that come into continuous conflict with the specific conditions of production in which capital moves, and can alone move.”

“On the other hand, too many means of labour and necessities of life are produced at times to permit of their serving as means for the exploitation of labourers at a certain rate of profit. Too many commodities are produced to permit of a realisation and conversion into new capital of the value and surplus-value contained in them under the conditions of distribution and consumption peculiar to capitalist production, i.e., too many to permit of the consummation of this process without constantly recurring explosions.”

“Not too much wealth is produced. But at times too much wealth is produced in its capitalistic, self-contradictory forms.”

“The limitations of the capitalist mode of production come to the surface:

“1) In that the development of the productivity of labour creates out of the falling rate of profit a law which at a certain point comes into antagonistic conflict with this development and must be overcome constantly through crises.”

“2) In that the expansion or contraction of production are determined by the appropriation of unpaid labour and the proportion of this unpaid labour to materialised labour in general, or, to speak the language of the capitalists, by profit and the proportion of this profit to the employed capital, thus by a definite rate of profit, rather than the relation of production to social requirements, i.e., to the requirements of socially developed human beings. It is for this reason that the capitalist mode of production meets with barriers at a certain expanded stage of production which, if viewed from the other premise, would reversely have been altogether inadequate. It comes to a standstill at a point fixed by the production and realisation of profit, and not the satisfaction of requirements.”

The barriers to development of the forces of production that would threaten its continued existence are explained.

“The rate of profit, i.e., the relative increment of capital, is above all important to all new offshoots of capital seeking to find an independent place for themselves. And as soon as formation of capital were to fall into the hands of a few established big capitals, for which the mass of profit compensates for the falling rate of profit, the vital flame of production would be altogether extinguished. It would die out. The rate of profit is the motive power of capitalist production. Things are produced only so long as they can be produced with a profit. . . . Development of the productive forces of social labour is the historical task and justification of capital.”

“At any rate, it is but a requirement of the capitalist mode of production that the number of wage-workers should increase absolutely, in spite of its relative decrease. Labour-power becomes redundant for it as soon as it is no longer necessary to employ it for 12 to 15 hours daily. A development of productive forces which would diminish the absolute number of labourers, i.e., enable the entire nation to accomplish its total production in a shorter time span, would cause a revolution, because it would put the bulk of the population out of the running.”

“This is another manifestation of the specific barrier of capitalist production, showing also that capitalist production is by no means an absolute form for the development of the productive forces and for the creation of wealth, but rather that at a certain point it comes into collision with this development. This collision appears partly in periodical crises, which arise from the circumstance that now this and now that portion of the labouring population becomes redundant under its old mode of employment. The limit of capitalist production is the excess time of the labourers. The absolute spare time gained by society does not concern it. The development of productivity concerns it only in so far as it increases the surplus labour-time of the working-class, not because it decreases the labour-time for material production in general. It moves thus in a contradiction.”

Marx contends “that the bourgeois mode of production contains within itself a barrier to the free development of the productive forces, a barrier which comes to the surface in crisis and, in particular over-production – the basic phenomenon in crisis.”  (Theories of Surplus Value Vol !!)

“In world market crises, all the contradictions of bourgeois production erupt collectively; in particular crises (particular in their content and in extent) the eruptions are only sporadical, isolated and one-sided.  Over-production is specifically conditioned by the general law of the production of capital: to produce to the limit set by the productive forces, that is to say, to exploit the maximum amount of labour with the given amount of capital, without any consideration for the actual limits of the market or the needs backed by the ability to pay . . . “

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Karl Marx’s alternative to capitalism part 24 – forces and relations of production 7

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Not only do increases in production often require machines to replace living labour but the increase in productivity necessarily increases the share of materials purchased and incorporated into the increased number of products produced.  Materials which pass only their own value into the final product and no new surplus.

Marx is explicit on this general point – “Moreover, it has been shown to be a law of the capitalist mode of production that its development does in fact involve a relative decline in the relation of variable capital to constant, and hence also to the total capital set in motion.” (Capital Volume III p 318)

Of course, there are often efficiencies created in the use of materials and also in the value and cost of machinery, which again is also a result of increased productivity in the industries that produce them. As Marx says “We see here once again how the same factors that produce the tendency for the rate of profit to fall also moderate the realisation of this tendency.” (Capital Volume III p 343)  And, of course, while the number of workers may reduce, the time they spend creating value purely for the capitalist will increase.

These all offset any fall in the share of surplus value in the total value of production but irrespective of this, the compulsion to increase productivity and reduce the employment of labour and its cost, impels individual capitals to seek these improvements because individually they will be able to undercut costs in relation to rivals, while perhaps selling at the same or slightly lower price than competitors while making a more significant profit.

Should their new methods of production become generalised among the majority of capitalists in their sector of production, or the less productive ones fail and exit production, then the overall share of labour in that sector of production will fall and so will the share of surplus value and of profit.  What makes sense for an individual capitalist reduces the share of profits for everyone in the sector – the development of the forces of production conflict with the relations of production which are based on seeking the greatest possible expansion of surplus value.

Such a fall in the amount of living labour in production can be offset by increased levels of exploitation but a rise in level of exploitation can check but may not cancel the fall in the rate of profit, and this is particularly so at high levels of organic composition of capital; although the latter assumes technological development that can do this across more and more industrial sectors, and increasingly so to new sectors and any new independent capitals thrown up.

A falling rate of profit may also be compensated by growth in the absolute size of surplus value although augmentation of this would decline if the absolute amount of living labour (variable capital) declines, or much more likely, its augmentation declines relatively if the quantity of living labour fails to grow at the relatively high rate commensurate with the growth of constant capital – machinery and materials etc.

While the rate of profit may fall, it may thus be the case that the mass of profit still rises, indeed given that capitalism involves the accumulation of more and more capital this mass must increase.  Marx allows that the absolute size of variable capital and surplus value may rise – in fact it “must be the case . . . on the basis of capitalist production.” (Volume III pp 322 – 324) This is certainly the reality of capitalism since Marx developed his analysis.

“Capitalist production is accumulation involving concentration of capital is simply a material means for increasing productivity.  Growth of the means of production entails growth in the working population and creation of a surplus population. (p324 – 325)

“As the process of production and accumulation advances, therefore, the mass of surplus labour that can be and is appropriated must grow, and with it too the absolute mass of profit. . . The same laws , therefore, produce both a growing absolute mass of profit for the social capital, and a falling rate of profit.”  (p 325) “A fall in the profit rate, and accelerated accumulation, are simply different expressions of the same process, in so far as both express the development of productivity. . .” (p349)

“Thus, the same development of the social productiveness of labour expresses itself with the progress of capitalist production on the one hand in a tendency of the rate of profit to fall progressively and, on the other, in a progressive growth of the absolute mass of the appropriated surplus-value, or profit; so that on the whole a relative decrease of variable capital and profit is accompanied by an absolute increase of both. This two-fold effect, as we have seen, can express itself only in a growth of the total capital at a pace more rapid than that at which the rate of profit falls.” (p329 – 330)

It will also be the case, to a greater or lesser extent, that new industries develop that require large amounts of living labour for their production, labour that can only be displaced by technology and machinery over a future, longer or shorter period of time.

New industries widen the range of commodities that capital can produce, and that can be used to produce them, which can create profit, i.e. that can become capital.  The mass of material labour that capital can command depends not only on the value of capital but on the mass of use values that can act as consumption for workers or as means of production and materials of production.  If the latter grows so can the quantity of labour employed, and therefore the accumulation of capital that can proceed, allowing capitalism to continue to develop the forces and relations of production.

It is argued that the growth of these new industries, increasingly ‘service industries’ involve higher relative amounts of living labour than the more mature manufacturing or other industry.  Increased productivity in service industries does not generally involve increased consumption of raw materials even as productivity is increased, or at least not nearly to the same extent.  Increased consumption of circulating constant capital (materials), which simply has its value transferred into the final product and does not add any surplus value but must be advanced as capital, does not occur to the same extent and so does not lead to a reduction in the rate of profit on that account.

Of course, it must be understood that many industries are described as service industries that actually produce physical commodities and these are subject to the same tendencies of development as classical manufacturing industry.

Infrastructure industries are sometimes considered as service industries but the water and sewerage industry for example produces a physical product and then transforms it.  I recall visiting a new sewerage works that had a large bank of electronic equipment.  When I asked the manger how many staff worked at the plant he said there was five, but these were all going to be transferred elsewhere because the plant could work remotely and required only a regular visit by one member of staff to check everything was ok.

Even health services, which in the UK has traditionally had a budget in which over 60 per cent is spent on staff salary and wages, relies more and more on expensive drug treatments and the use of high-tech equipment.

No contradictions are therefore escaped by the development of new industries, even some ‘service’ industries, they are simply reproduced, but then any expansion of capitalism must by definition reproduce its essential nature, which is riven by contradiction.  However, it is not that nothing has thereby changed. The effect of these industries that develop upon a lower average organic composition of capital and higher rate of surplus value is to raise the average of both across the wider economy.

Marx at one point quotes six reasons why decline in the profit rate does not reduce accumulation. “Jones emphasises correctly that in spite of the falling rate of profit the inducements and faculties to accumulate are augmented; first, on account of the growing relative overpopulation; second, because the growing productivity of labour is accompanied by an increase in the mass of use-values represented by the same exchange-value, hence in the material elements of capital; third, because the branches of production become more varied; fourth, due to the development of the credit system, the stock companies, etc., and the resultant case of converting money into capital without becoming an industrial capitalist; fifth, because the wants and the greed for wealth increase; and, sixth, because the mass of investments in fixed capital grows, etc.”

At a recent meeting on Marx’s Capital, one speaker supported the view that the rate of profit did exhibit a tendency to fall and cited, among other reasons for this view, that such a situation confirmed the temporary character of the capitalist system in an objective way.  This, even if it were true, would not thereby equally confirm the inevitability of socialism or even that the seeds of socialism had grown equally as strongly as capitalism was gripped by its objective contradictions.

There are no absolute, predetermined limits which set the boundaries on the development of capitalism such that the contradiction between the development of the forces of production and relations of production just described can be said to lead to a terminal crisis or ending of the capitalist system.  The release of the forces of production from the fetters to their growth, arising from the requirement that such growth requires sufficient profitability that capitalism can no longer deliver, is not something that Marx foresaw as the resolution to the contradictions of capitalism.

The point rather is that the tendency for the rate of profit to fall is a fundamental one within capitalism that is inevitably associated with its equally fundamental drive to increase productivity through increasing relative surplus value.  Both stem from the combined development of the forces of production and relations of production and from the need for capital to accumulate by increasing the appropriation of surplus value. This includes new production with new sources of human labour as well as both increases in absolute and relative surplus value.

It is not necessary for a fall in the rate of profit to be evident at all times, the process by which it falls proceeds regardless and is important in this respect.  If the tendencies that counter this fall outweigh its effects this does not entail its unimportance, since the law exhibits the fact that new value is created only through labour power and the tendency for the fall in the rate of profit reflects this.  The expansion of capitalism, both in terms of the forces and relations of production, requires masses of additional labour, in other words expansion of the numbers and social power of the working class, the gravediggers of the system as Marx saw it.

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

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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.”

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Karl Marx’s alternative to capitalism part 22 – forces and relations of production 5

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In Capital Volume 1 Marx provides an example of how the productive powers of society have come up against restricted relations of production, how they have further developed and in so doing have consequently revolutionised the economic foundation of society.

This involved the movement from what Marx called the formal subsumption of labour under capital to real subsumption.  At first, the existing labour process, including the workers labour power, their technology, means of production, and markets, are taken under ownership by a capitalist; where previously individual workers’ families produced and sold (or not) on their own behalf.   This latter activity is, of course, not capitalist because no worker is exploited (except perhaps that they exploit themselves) and it is impossible to define a workers’ wage separately from any consideration of profit that the family may be considered to have made.

This, Marx calls “formal” subsumption, under which the whole labour process continues much as before, with previously independent workers now working for a capitalist, perhaps using the same methods, with the capitalist now monopolising the means of production and ownership of the product.  The typical example given is of hand-loom weavers, who continued working as before but did so on behalf of a capitalist who puts out the raw material to be worked upon and will take it back in finished form to sell, while the worker and their family carries out their labour in the home.

Considered at this stage, the workers’ means of subsistence may or may not be produced wholly or partly by the workers’ family itself, which if it is, may either give the worker some freedom to refuse demands from the capitalist if they are considered too onerous; or may entail very low wages which on their own would not be enough to maintain the subsistence needs of the worker and family without their own domestic production.  In either case the capitalist must be able to make a profit and may be greatly empowered to do so if he can compel the worker to submit to wage-labour through total reliance on it for his or her livelihood and that of the family.

This is therefore capitalism, or rather capitalism in a very limited and undeveloped form, because in its early forms it can either involve the workers’ reliance on their own production of subsistence needs and/or is based upon existing production techniques that are not developed by the capitalist to extract more surplus labour.

We do not yet have the social forces of production in the form of capitalism.  Such wage labour has existed for centuries without what we could recognise as something called capitalism as a system in existence. Indeed, pure wage labour has gone further than this without being generalised.  It is not therefore the case that we have prior or newly created and fully capitalist relations giving rise to capitalism itself.

Capitalism as such cannot develop on the limited basis it finds in the already existing forces of production. The pre-requisites for capitalism as a system, as a form of truly social production as we now know it, is a capitalist labour process that is the real subsumption of labour under capital, where the instruments of production can only be operated cooperatively and not individually as before.

Only when the forces of production, including the type of division of labour and its organisation, have been radically developed beyond the restrictions of the purely formal subsumption of labour can the whole social relations of production within society become thoroughly imbued with the nature and requirements of capital.  Only then does capitalism become generalised, obligatory and a totality.

Only when labour is combined together, and the potential technology appropriate to such combinations developed, can the productive power of capital be unleashed and we can move from more or less isolated, primitive and undeveloped forms of capitalist exploitation to a whole society of commodity production in which the vast mass of potential labour power is dependent on employment by capital.  In the words of Marx only then do capitalist relations achieve their “adequate form” and they gain their “totality and extent”.

The superior productivity – productive power – of the developing capitalist forces of production can then destroy less efficient methods of production (if it is allowed to) or it uses the state to enforce ‘free trade’ on less efficient productive arrangements. We then have a society in which every need of the worker and capitalist is provided by wage labour working for capital, and gone are the days when such needs were met by the product of one’s own labour or the trading by oneself of one’s own products for those not self-made.  While the latter limits the organisation and division of labour including the application of technology, the employment of wage labour cooperatively together in one place opens up an enormous vista of expanding productivity.

With the real subsumption of labour the expansion of capital involves enormously increased accumulation of labour and the instruments of labour; a previously inconceivable increased division of labour; the centralization and concentration of capital on an gigantic scale and the development of specifically capitalist forms of crisis, which no longer involve a shortage of production but are the result of too much production, overproduction of commodities that cannot be sold profitably.

Before long the exploitation of labour increases not because the working day is extended and its intensity increased, although tendencies to this never cease to be the case under capitalism, but because the division of labour and technology increases labour productivity, so cheapening the products of labour consumed by the worker and therefore reducing the time the worker must labour to reproduce her own wage while increasing the time in which she works to create profit for the capitalist.

By such a process new products and methods of production are created, adding to workers’ needs and the means by which these needs are satisfied, with the latter determining the former.  The versatility required of the working class is much increased and the ‘civilising’ process of capitalism can be seen to operate, while the exploitation of labour increases at the same time. In fact, within the massive increase in the productivity of social labour they are aspects of the same process.

The productive forces are developed enormously under the spur of the prevalent relations, these relations having been given full reign by the power of the productive forces corresponding and adequate to their particular form.

But it is Marx’s contention that such correspondence and adequacy is historically limited, just as the previous relations of production were adequate to a certain level of productive forces, but which had to give way when these subsequently became fetters.

Previous isolated wage-labour relations were limited because the productive forces were not sufficient for any further development and/or the production based on wage labour was not for profit but for the increased consumption of the ruling classes.

A society based on generalised commodity production requires productive forces more powerful than were then employed.  It is not therefore possible to consider internal contradictions within relations of production as adequate to an explanation of historical development and certainly not of historical progress.  The contradiction in feudalism between feudal lord and peasant did not develop a new mode of production (peasant or otherwise); when this new mode did arise it involved development of productive forces that neither class could become the bearer of.

A theory of historical development that considered only relations of production, and subsumed what may be considered the forces of production within them, would efface the reality that production is a result of material processes and constructions that social relations assume but do not define.  It leads to a view that the social relations of capitalism are embodied in the material elements of production so that what is materially required for production is already assumed to be capitalist in nature.

So, capital for example, becomes machines and equipment, and people have ‘human capital’, when capital is really a relation between capitalist and worker in which the latter works for the former and the former owns what has already been assumed to be ‘capital’ – the machines and equipment, product of labour and use of labour power.  Such a view distorts the fact that worker ownership of this ‘capital’ does not necessarily mean they also become capitalists. A society in which the means of production are owned by those who work it is a socialist one, in which the working class ceases to be a class because they no longer work for capitalists.  Incomplete development of such a society may be one considered to be in transition and considered just such a transitional society.

Neither should workers be confused that the skills and knowledge they acquire and with which they may acquire higher wages makes them in any sense a capitalist, earning any profit on their skill – this skill does not allow them to make any money out of other people’s work.

The distinction between forces and relations of production are therefore necessary to understanding capitalism and the possibility of an alternative to it.

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Karl Marx’s alternative to capitalism part 21 – forces and relations of production 4

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I noted in part 18 of these posts that different views exist on the relationship between the forces and relations of production.  For some, the forces of production have primacy in explaining historical development and changes in the relations of production arise from the development of the productive forces, in the manner Marx describes in the 1859 Preface.

An alternative view is that it is the relations of production, in capitalism the capitalist ownership of the means of production and the competition among them, that is the motor of development.  Yet another view considers that it is contradictions within the relations of production alone that drives historical development, and not between these relations and the forces of production.

The latter two views lend themselves to the possibility that overthrowing of capitalist relations, no matter what the level of development of the productive forces, can lead to socialism, and the last can even encompass the view that simple changing from capitalist relations involves socialism in toto.  This is not a purely theoretical view but is one advanced by various varieties of Stalinism and left nationalism.

This still leaves us with the necessity of showing that Marx is correct to advance the argument the forces of production have primacy in explaining historical development and change in the relations of production arise from the development of these forces.

We have already defined the forces of production and stated that they always exist in a particular social form, that is, always exist within and as part of certain relations of production.  Marx says that these relations, that include the drive to exploit labour more intensively and in greater quantities, driven also by the requirements of capitalist competition, show that these relations of production are forms of development of the forces of production.  However, relations of production do not fetter themselves even if in certain senses they could be considered to develop themselves.

This can be seen for example in a geographical sense – through the growth world-wide of capitalism in previously non-capitalist societies, but also to the degree to which commodity production has penetrated previously non-commodity labour – pre-cooked food and restaurants replacing unpaid domestic labour for example.

These however also require productive forces that allow the practical and material possibility of the massive geographical spread of capitalism, including transport and communications, and the technology for the production of massive quantities of pre-cooked food, itself relying on a level of development of the productive forces that allows significant numbers of workers in many countries a standard of living that allows consumption of food not prepared by themselves.

Neither can it be said that the forces of production fetter the relations – the material forces of production, including division of labour, does not act to restrict commodity production or limit the exploitation of workers.  Rather technological development, modes of labour organisation and division of labour are restricted in their existence due to their employment in commodity production or as aspects of the exploitation of workers as wage labour.  How this evidences itself will be shown in a later post.

So, the contradiction in the mode of production cannot lie solely within the relations of production.  The contradictions within capitalism cannot be understood as purely involving unintended consequences both positive and negative, but as immanent and inherent in the system.  For example, the civilising function of capitalism that has been extensively discussed in these posts is not a by-product of some essentially reactionary character of capitalism.  “The simple concept of capital has to contain its civilising tendencies etc. in themselves; they must not, as in the economics books until now, appear as external consequences.  Likewise the contradictions which are later released, demonstrated is already latent within it.” (Marx, Grundrisse)

The alternative translation of what we have denoted as ‘productive forces’ – Produktivkräfte – is that of productive powers (not forces). Whereas a ‘force’ can be conceived as a thing, independent and standing alone, a power is always an attribute of something else and for Marx, the power in question is specifically that of social labour. Productive forces are thus an attribute of human beings in association, their collective capacities, not merely a set of things such as machinery, raw materials, technology or buildings.  It is the human being itself which is the main productive force and concrete labour (as opposed to labour in its exchange value creating role) that expresses this productive power, most powerfully as the cooperative labour of the whole working class.

The mode of cooperation that labour always involves, including the division of labour, is therefore itself a productive force that can be considered to be developed or fettered by the relations of production.  Marxists insist that the nature and scope of conscious cooperation between the direct producers in society, the working class, is retarded and restricted by capitalism in such a way that the productive powers of society are fettered and limited.

In capitalism, the mode of cooperation of labour and the application of technology are closely tied together so that technology can set the requirements for, and limits of, the division of labour.  This is true not just within the workplace or even between different workplaces:

“The relations of different nations among themselves depend upon the extent to which each has developed its productive forces, the division of labour and internal intercourse. This proposition is generally recognised. But not only the relation of one nation to others, but also the whole internal structure of the nation itself depends on the stage of development reached by its production and its internal and external intercourse. How far the productive forces of a nation are developed is shown most manifestly by the degree to which the division of labour has been carried. Each new productive force, insofar as it is not merely a quantitative extension of productive forces already known (for instance, the bringing into cultivation of fresh land), causes a further development of the division of labour.” (Marx and Engels, The German Ideology)

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