Capital I. Chapter 25: The General Law of Capitalist Accumulation

In this chapter Marx introduces the key notion of the composition of capital. This again is a form of the dual character of labour within capitalism: the composition of a capital is both material and social. The material composition of a capital is its technical composition. The social composition of a capital is its value composition. Any capital is always both. Marx calls the value reflection of capital’s the technical composition its organic composition.

In the first section the technical composition is constant. In the second section Marx introduces—his favourite thing—labour productivity. This means that less labour-power can work up more means of production. As a result the technical composition is augmented; more means of production are conjoined with less labour-power. This is then reflected in the value composition: now the constant capital is greater in proportion to a smaller variable capital. Question: given labour productivity in the production of means of production, couldn’t the constant capital, the value of means of production, remain the same and still buy a greater material mass of means of production? The amount of the constant capital only refers to the social validity of the capital’s outlay, it doesn’t determine its material shape.

An important idea in this is that over time capital must refit. When they do refit, they refit at the present social standard. This means that before they refit, their organic composition may already be redundant: they may be investing more value in labour-power than is socially appropriate. Once they have refitted the composition of their capital will be new and distinct from what it was. This reflects the dynamism of capital and its inherent metamorphoses over time.

In the third section the diminishing variable capital is shown to result in a tendendeny of new capitals to attract fewer workers and for old capitals that are refitting to repel more and more of their existing workforce as superfluous. The variable capital itself doesn’t indicate a definite mass of labour-power or number of workers—this itself varies with technical change. In the fourth section Marx calls the absolute general law of capitalist accumulation pauperism. In the fifth section he returns to the style of the chapters on the Working Day, Chapter 10, and on Machinery, Chapter 15: he brings in masses of empirical information to show the law in action.

1. The growing demand for labour-power accompanies accumulation if the composition of capital remains the same

  • The composition of capital is the key factor in capital’s impact on the working class.
  • Value Composition: the ration of constant to variable capital as values. Technical Composition: the ration of means of production to labour power. Organic Composition: the equivalence of the value and technical compositions.
  • Compositions can be given for individual capitals, branches of production or countries—presumably this can be extended to society as a whole, viz. the total social capital humanity employs.

Marx’s focus on the composition of the total social capital of a country moves the discussion to classes.

  • The growth of capital implies an absolute expansion of the thechnical composition; the mass of means of production increases and mass of labour-power must also: “accumulation of capital is therefore multiplication of the proletariat” (764).
  • Mandeville and John Bellers say that there must be the poor.
  • Accumulation itself increases the dependence of the poor on the rich; making it an “eternal relation” (765). In other words, the investment in constant capital is inseparable from investment in variable capital.
  • As long as the composition is constant, the total social capital becomes more extensive.

Marx comments that workers forge themselves a ‘golden chain’, workers reproduce capitalism.

  • As wages rise, an “absolute movement” (770) is exposed, not an independent variable but a variable dependent on the composition of the total social capital: high prices = too much money; low prices = too little money in circulation (this parallels the view that there is too much labour when wages are low).
  • Capital sets into motion labour power, a portion of which has not been accounted for in the wage; there is paid and unpaid labour. A portion of the unpaid labour is set back into motion as new means of production and this in turn implies an increased investment in labour power. The dynamic of accumulation is the interaction of paid and unpaid labour. An increase in the paid part of labour is a diminution of the unpaid part. This impinges on capital’s reproduction, etc.

“The relation between capital, accumulation and the rate of wages is nothing other than the relation between the unpaid labour which has been transferred into capital and the additional labour necessary to set in motion this additional capital” (771).

2. A relative diminution of the variable part of capital occurs in the course of the further progress of accumulation and of the concentration accompanying it

  • Growth in wages is dependent on the pace of accumulation, even with a constant technical composition of capital.
  • Labour productivity . . .
  • . . . is means of production relative to labour power in a given time. Means of production are either consequence or condition of productivity. Subject and object. The increase in labour productivity “appears . . . in the diminution of the mass of labour in proportion to the mass of means of production moved by it . . . .” (773); that is, in a change in the material composition of capital.
  • The technical composition is reflected in the value composition. Labour productivity is reflected in the value composition.

“This law of the progressive growth of the constant part of capital in comparison with the variable part is confirmed at every step (as already shown) by the comparative analysis of the prices of commodities, whether we compare different economic epochs or different nations in the same epoch. The relative magnitude of the part of the price which represents the value of means of production, or the constant part of the capital, is in direct proportion to the progress of accumulation, whereas the relative magnitude of the other part of the prce, which represents the variable part of the capital, or the payment made for labour, is in inverse proportion to the progress of accumulation” (773-4).

  • How does this change in the value composition indicate the material composition of a capital? The technical composition increases to a greater degree than the value composition. “With the increasing productivity of labour, the mass of means of production consumed by labour increases, but their value in comparison with their mass diminishes” (774). The value of constant capital may increase by 75%, while the material mass of means of production may multiply by many hundred percent. At the same time the value of of variable capital has decline by 75%, while a greater nuber of workers may be employed. Thus, there is no direct correlation between the value and technical composition.
  • Accumulation and the capitalist mode of production:

“These two economic factors bring about, in the compound ratio of the impluses the give each other, that change in the technical composition of capital by which the variable component becomes smaller and smaller compared with the constant component” (776)

  • The increase of acumulation is limited by the increase of social wealth, for the former to rise the latter must. Accumulation involves many capitals “scattered over various points” (776).

Marx notes the two logics of class within capitalism:

“Accumulation, therefore presents itself on the onehand as increasing concentration of the means of production, and of the command over labour; and on the other hand repulsion of many individual capitals from one another” (777).

Robert Brenner has referred to the first as a vertical logic and the second as a horizontal logic.

  • Concentration is not centralisation. Concentration is the vertical accumulation of power agaginst labour; centralisation is the fusion of many capitals into a number of capitals.

Marx now makes one of his signature moves, and says that he has not yet developed the concepts appropriate to discussing the the horizontal logic—this is the topic of Captial II—but then makes “a few brief factual observations” (777).

  • Credit emerges to fuse those sums of money “scattered in larger or smaller amounts over the surface of society” in to a “ new a terrible weapon” of capital: ‘An enormous social mechanism for the centralisation of capital’ (778).
  • “Violent method of annexation” or the “smoother method of organising joint stock companies” (779).
  • Speed. Accumulation as a whole moves at a slower paces than the centralisation of capital.

“The world would still be without railways if it had to wait until accumulation had got a few individual capitals far enough to be adequate for the construction of the a railway. Centralisation, however, accomplishes this in the twinkling of an eye, by means of joint-stock companies. And while in this way centralisation intensifies and accelerates the effects of accumulation, is simultaneously extends and speeds up those revolutions in the technical composition of capital which raise its constant portion at the expense of its variable portion, thus diminishing the relative demand for labour” (780).

  • The “progress of social accumulation” assumes the acceleration given by the centralisation of capital, and thus the increasing masses of means of production a decreasing mass of labour-power can work up.
  • As old means of production become redundant they are replaced with means of production in a newly “perfected technical shape” (780).
  • The total demand for labour is reduced in both new and old capitals:

“On the one hand, therefore, the additional capital formed in the course of further accumulation attracts fewer and fewer workers in proporition to its magnitude. On the other hand, the old capital preiodically reproduced with a new composition repels more and more of the workers formerly employed by it” (780-1).

3. The progressive production of a relative surplus population or industrial reserve army

  • The accumulation of capital appears at first blush to be extensive, to be an increasing mass of wealth, but it is equally intensive. The composition of the total social capital tends constantly to increase its outlay on means of production in proportion to a diminishing outlay labour power; in value terms, an increase part of capital is constant and a diminishing part is variable.
  • Diminution of the labour incorporated in the total social capital increases the redundant section of workers; it creates surplus population. As old capital is refitted it adopts the latest technical validity:

‘The change in the technical composition of the additional capital goes hand in hand with a similar change in the technical composition of the original capital’ (781).

  • The social capital is always growing extensively and intensively.

“…capital continues to grow for a time on its existing technical basis, and attracts additional labour-power in proporition to its increase, while at other times it undergoes organic change and reduces its variable component…” (782).

Marx also makes the working class, again, responsible for the development of capitalism. The productivity of labour leads to its own superfluity:

“The working population therefore produces both the accumulation of capital and the means by which it is itself made relatively superfluous” (783).

  • The rapidity of expansion itself is dependent on a surplus population that can be quickly utilised in new projects without damaging existing projects.

“The expansion be fits and starts of the scale of production is the precondition for its equally sudden contraction; the latter against evokes the former, but the former is impossible without disposable human material…” (785-6).

  • Perodicity: capitalism, in his period, tends to ten year cycles of boom and bust; but suggest that with absolute acceleration of capital this period would contract.

‘Just as the heavenly bodies always repeat a certain movement, once they have been flung into it, so also does social production, once it has been flung into this movement of alternate expansion and concentration’ (786).

Again Marx refers to the,

“workers who have been thrown into the strees by their own creation of additional capital . . .” (787).

  • An industrial reserve army (788).
  • Again, the value composition doesn’t directly correspond to the technical compositon. The quantity of variable capital does not indicate a definite mass of labour-power, not a definite number of workers.
  • This is indicated by the emergence of overwork and underemployment:

“The overwork of the employed part of the working class swells the ranks of its reserve, while conversely the greater pressure that the reserve by its competition exerts on the employed workers forces them to submit to over-work and subjects them to the dicates of capital” (789).

Marx criticises the positive view that poverty, levels of employment or unemployment, etc, are a function of an absolute population and what production can or can’t support. Instead, the internal differentiation of this population needs to be attended to. The magnitude of value corresponding to variable capital determines the demand for labour, but this is itself determined by the flux of the woorking class:

‘The relative surplus population is in the background against which the law of the demand and supply of labour does its work’ (792).

  • There is no level playing field between capital and labour—les dés sont pipés (the dice are loaded). Yet the bourgeoisie says that trade unions violate the rules of the market. When capital cannot control the labour supply it uses force.

4. Different forms of existence of the relative surplus population. The general law of capitalist accumulation

  • Three forms of existence of the relative surplus population: floating, latent and stagnant.
  • Floating form relates pureply to the technical demand for labour.
  • The latent surplus population is found in the country-side as it moves to the towns. It refers to a spatial differentiation of the working class: as capital leaves one place this working class must follow it and thus join a pre-existing mass of workers. But from where this second mass of workers are the newly pauperised first group is invisible, hidden.
  • Stagnant—low paid.
  • Pauperism.

“The relative mass of the industrial reserve army increases with the potential energy of wealth. But the greater this reserve army in proportion to the active labour-army, the greater is the mass of a consolidated surplus population, whose misery is in inverse ratio to the amount of torture it has to undergoe in this form of labour. the more extensive, finally, the pauperised sections of the working class and the industrial reserve army, the greater is official pauperism. This is the absolute general law of capitalist accumulation. Like all other laws, it is modified in its working by many circumstances, the analysis of which does not concern us here” (798).

  • Appendage of a machine, etc…
  • Antagonistic character of capitalist accumulation.
  • Political Economy’s commentary on rich and poor. Marx tends to set out a law rationally, through argument, then show the political economists’ account of it. There is then a play of Marx’s obvious opposition to the apologetics of the latter.
  • Storch: the security of the poor is the security of civilisation.

5. Illustrations of the General Law of Capitalist Accumulation

  • England from 1846 to 1866
  • The badly paid strata of the British industrial working class
  • The nomadic population
  • Effect of crises on the best paid section of the working class
  • The British agricultural proletariat
  • Ireland
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