Anti-Capital, Anti-Crisis

S. Artesian

Not that “crisis,” as in “crisis of capital” doesn’t or can’t exist.  Of course it can and does.  However while crisis is immanent, intrinsic, inherent, essential, to capital, it is not the imminent end to capital.  It might mean the imminent intensification of class struggle, in fact it is the imminent intensification of class struggle, but crisis,  capital’s self-disruption of its process of accumulation is neither the beginning nor the end of accumulation.  Capital may contract, it may implode, it may even collapse, but the capitalists don’t just disappear, or evaporate, like their profits.  They have to be overthrown, suppressed, and abolished.

Certainly crises can arise from multiple sources. Crises are posited in the very separations that are maintained by capital– production vs consumption; vs distribution; vs circulation; vs realization.  All these separations are secondary to and derived from the “primary separation” engendered and enforced by capital– the separation of the means of production from the producers; from those performing the social labor who are prevented from directing that social labor for the needs of… reproduction. The opposition of the means of production as private property — as the condition of labor– is to labor itself.

Marx defines crisis, and correctly so, as a short-lived phenomenon of capital, a moment or moments in the reproduction of capital.  In Capital Volume 3, Marx’s object is something other than the explanation of crisis.  Here he embarks truly on a synthesis of historical materialism with the critique of political economy by engaging  with the historical or structural tendency of capital.  That synthesis is expressed that as the means of production are accumulated as values themselves, the rate of profitability tends to decline. This for Marx is the “most important” law of capitalist production in that it a)identifies the historical limits to capital accumulation b)represents in condensed expression the conflict between means and relations of production that Marx identifies as the trigger to revolutionary struggle.

In fact, beneath the appearance of a disturbance within distribution, or consumption, or circulation or realization, one will find a deeper disturbance in the production field, so to speak, in the relation between the technical component and the living component of capital reproduction, which Marx says is the real root of every disturbance in the accumulation of capital.

In Volume 3  Marx aims at that point of intersection of the historical  tendency of the rate of profit to decline, and the short-term, cyclical eruptions of “crisis” that are manifested as overproduction.  He points out that overproduction is always overproduction of the means of production of capital, and if we look deeply enough into and beyond the surface of a “banking crisis” or a “liquidity crisis,” there is a change in the relation between the technical and living components of value production that gets manifested as a decline in the rate of profit.

In this, Marx is reprising the analysis he provides in the Grundrisse.  At the risk of producing a wall of text which, like most walls, acts as an obstacle rather than a pathway, here’s this from the Grundrisse:

The general laws developed previously here briefly summarized thus: The real surplus value is determined by the relation of surplus labour to necessary labour, or by the portion of the capital, the portion of objectified labour, which exchanges for living labour, relative to the portion of objectified labour by which it is replaced. But surplus value in the form of profit is measured by the total value of the capital presupposed to the production process. Presupposing the same surplus value, the same surplus labour in proportion to necessary labour, then, the rate of profit depends on the relation between the part of capital exchanged for living labour and the part existing in the form of raw material and means of production. Hence, the smaller the portion exchanged for living labour becomes, the smaller becomes the rate of profit. Thus, in the same proportion as capital takes up a larger place as capital in the production process relative to immediate labour, i.e. the more the relative surplus value grows – the value-creating power of capital – the more does the rate of profit fall. We have seen that the magnitude of the capital already presupposed, presupposed to reproduction, is specifically expressed in the growth of fixed capital, as the produced productive force, objectified labour endowed with apparent life. The total value of the producing capital will express itself in each of its portions as a diminished proportion of the capital exchanged for living labour relative to the part of capital existing as constant value. Take e.g. manufacturing industry. In the same proportion as fixed capital grows here, machinery etc., the part of capital existing in raw materials must grow, while the part exchanged for living labour decreases. Hence, the rate of profit falls relative to the total value of the capital presupposed to production – and of the part of capital acting as capital in production. The wider the existence already achieved by capital, the narrower the relation of newly created value to presupposed value (reproduced value). Presupposing equal surplus value, i.e. equal relation of surplus labour and necessary labour, there can therefore be an unequal profit, and it must be unequal relative to the size of the capitals. The rate of profit can rise although real surplus value falls. Indeed, the capital can grow and the rate of profit can grow in the same relation if the relation of the part of capital presupposed as value and existing in the form of raw materials and fixed capital rises at an equal rate relative to the part of the capital exchanged for living labour. But this equality of rates presupposes growth of the capital without growth and development of the productive power of labour. One presupposition suspends the other. This contradicts the law of the development of capital, and especially of the development of fixed capital. Such a progression can take place only at stages where the mode of production of capital is not yet adequate to it, or in spheres of production where it has assumed predominance only formally, e.g. in agriculture… The gross profit, i.e. the surplus value, regarded apart from its formal relation, not as a proportion but rather as a simple magnitude of value without connection with any other, will grow on the average not as does the rate of profit, but as does the size of the capital. Thus, while the rate of profit will be inversely related to the value of the capital, the sum of profit will be directly related to it. However, even this statement is true only for a restricted stage of the development of the productive power of capital or of labour. A capital of 100 with a profit of 10% yields a smaller sum of profit than a capital of 1,000 with a profit of 2%. In the first case the sum is 10, in the second 20, i.e. the gross profit of the larger capital is twice as large as that of the 10 times smaller capital, although the rate of the smaller capital’s profit is 5 times greater than that of the larger. But if the larger capital’s profit were only 1%, then the sum of its profit would be 10, like that for the 10 times smaller capital, because the rate of profit would have declined in the same relation as its size. If the rate of profit of the capital of 1,000 were only 1/2%, then the sum of its profit would be only half as large as that of the smaller capital, only 5, because the rate of profit would be 20 times smaller. Thus, expressed in general terms: if the rate of profit declines for the larger capital, but not in relation with its size, then the gross profit rises although the rate of profit declines. If the profit rate declines relative to its size, then the gross profit remains the same as that of the smaller capital; remains stationary. If the profit rate declines more than its size increases, then the gross profit of the larger capital decreases relative to the smaller one in proportion as its rate of profit declines. This is in every respect the most important law of modern political economy, and the most essential for understanding the most difficult relations. It is the most important law from the historical standpoint. It is a law which, despite its simplicity, has never before been grasped and, even less, consciously articulated. Since this decline in the rate of profit is identical in meaning (1) with the productive power already produced, and the foundation formed by it for new production; this simultaneously presupposing an enormous development of scientific powers; (2) with the decline of the part of the capital already produced which must be exchanged for immediate labour, i.e. with the decline in the immediate labour required for the reproduction of an immense value, expressing itself in a great mass of products, great mass of products with low prices, because the total sum of prices is = to the reproduced capital + profit; (3) [with] the dimension of capital generally, including the portion of it which is not fixed capital; hence intercourse on a magnificent scale, immense sum of exchange operations, large size of the market and all-sidedness of simultaneous labour; means of communication etc., presence of the necessary consumption fund to undertake this gigantic process (workers’ food, housing etc.); hence it is evident that the material productive power already present, already worked out, existing in the form of fixed capital, together with the population etc., in short all conditions of wealth, that the greatest conditions for the reproduction of wealth, i.e. the abundant development of the social individual – that the development of the productive forces brought about by the historical development of capital itself, when it reaches a certain point, suspends the self-realization of capital, instead of positing it. Beyond a certain point, the development of the powers of production becomes a barrier for capital; hence the capital relation a barrier for the development of the productive powers of labour. When it has reached this point, capital, i.e. wage labour, enters into the same relation towards the development of social wealth and of the forces of production as the guild system, serfdom, slavery, and is necessarily stripped off as a fetter. The last form of servitude assumed by human activity, that of wage labour on one side, capital on the other, is thereby cast off like a skin, and this casting-off itself is the result of the mode of production corresponding to capital; the material and mental conditions of the negation of wage labour and of capital, themselves already the negation of earlier forms of unfree social production, are themselves results of its production process. The growing incompatibility between the productive development of society and its hitherto existing relations of production expresses itself in bitter contradictions, crises, spasms. The violent destruction of capital not by relations external to it, but rather as a condition of its self-preservation, is the most striking form in which advice is given it to be gone and to give room to a higher state of social production. It is not only the growth of scientific power, but the measure in which it is already posited as fixed capital, the scope and width in which it is realized and has conquered the totality of production. It is, likewise, the development of the population etc., in short, of all moments of production; in that the productive power of labour, like the application of machinery, is related to the population; whose growth in and for itself already the presupposition as well as the result of the growth of the use values to be reproduced and hence also to be consumed. Since this decline of profit signifies the same as the decrease of immediate labour relative to the size of the objectified labour which it reproduces and newly posits, capital will attempt every means of checking the smallness of the relation of living labour to the size of the capital generally, hence also of the surplus value, if expressed as profit, relative to the presupposed capital, by reducing the allotment made to necessary labour and by still more expanding the quantity of surplus labour with regard to the whole labour employed. Hence the highest development of productive power together with the greatest expansion of existing wealth will coincide with depreciation of capital, degradation of the labourer, and a most straitened exhaustion of his vital powers. These contradictions lead to explosions, cataclysms, crises, in which by momentaneous suspension of labour and annihilation of a great portion of capital the latter is violently reduced to the point where it can go on. These contradictions, of course, lead to explosions, crises, in which momentary suspension of all labour and annihilation of a great part of the capital violently lead it back to the point where it is enabled [to go on] fully employing its productive powers without committing suicide. Yet, these regularly recurring catastrophes lead to their repetition on a higher scale, and finally to its violent overthrow.

Marx is not engaging in a linear cause and effect analysis.  He explains the law, the conflicts and contradictions that determine the law, and are, in fact, the source. Marx  isn’t concerned with the possible various origins of a momentary crisis in capital accumulation, but in the historical tendency of, and result of, such capital accumulation, and how it becomes its own obstacle.

Realization, distribution, circulation, are specifically excluded from Marx’s analysis because, as is clear from the above, realization, distribution, circulation, are derived, are dependent upon the fundamental determining relation of value production– the replacement of living labor with and by labor accumulated in the means of production as capital values.

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