Rate of Profit

Capital Volume 3, Part 1

The Rate of Profit

Capital Volume 3, Part 1: The Conversion of Surplus-Value into Profit and of the Rate of Surplus-Value into the Rate of Profit

Marx begins Volume 3 as follows:

“In Book I we analysed the phenomena which constitute the process of capitalist production as such, as the immediate productive process, with no regard for any of the secondary effects of outside influences.

“But this immediate process of production does not exhaust the life span of capital. It is supplemented in the actual world by the process of circulation, which was the object of study in Book II. In the latter, namely in Part III, which treated the process of circulation as a medium for the process of social reproduction, it developed that the capitalist process of production taken as a whole represents a synthesis of the processes of production and circulation.

“Considering what this third book treats, it cannot confine itself to general reflection relative to this synthesis. On the contrary, it must locate and describe the concrete forms which grow out of the movements of capital as a whole. In their actual movement capitals confront each other in such concrete shape, for which the form of capital in the immediate process of production, just as its form in the process of circulation, appear only as special instances. The various forms of capital, as evolved in this book, thus approach step by step the form which they assume on the surface of society, in the action of different capitals upon one another, in competition, and in the ordinary consciousness of the agents of production themselves.”

In Chapter 21 of Volume 2 Marx had written:

“Let us note by the way: Once more we find here, as we did in the case of simple reproduction, that the exchange of the various component parts of the annual product, i.e., their circulation …does not by any means presuppose mere purchase of commodities supplemented by a subsequent sale, or a sale supplemented by a subsequent purchase, so that there would actually be a bare exchange of commodity for commodity, as Political Economy assumes, especially the free-trade school since the physiocrats and Adam Smith.”

Like that of the physiocrats and Adam Smith, the “ordinary consciousness of the agents of production themselves” is confined to “the surface of society”. In the journey through Volume 1 and Volume 2, from Marx’s point of departure in the first line of the entire work (“The wealth of those societies in which the capitalist mode of production prevails, presents itself as ‘an immense accumulation of commodities’") we have submerged among the deep and hidden workings of the system, so as to comprehend its true nature. Now, in Volume 3, we are going to emerge again into the visible world, and examine the phenomena that form the conscious narrative of politics, and which inform the subjective reactions of men and women from day to day and year to year.

But we must continue to hold in mind the revelations of Volumes 1 and 2. Marx is still exploring “the secret of the self-expansion of capital”.

In the beginning of Chapter 2 of Volume III, Marx again allows himself to be terse and direct:

“The general formula of capital is M-C-M'. In other words, a sum of value is thrown into circulation to extract a larger sum out of it. The process which produces this larger sum is capitalist production. The process that realises it is circulation of capital. The capitalist does not produce a commodity for its own sake, nor for the sake of its use-value, or his personal consumption. The product in which the capitalist is really interested is not the palpable product itself, but the excess value of the product over the value of the capital consumed by it.

“…he is a capitalist, and can undertake the process of exploiting labour only because, being the owner of the conditions of labour, he confronts the labourer as the owner of only labour-power. As already shown in the first book, (i.e. Volume 1) it is precisely the fact that non-workers own the means of production which turns labourers into wage-workers and non-workers into capitalists.”

Capital is more of a relationship than a thing. It is permanently a relationship. It may have a money-form as part of its cycle, but the relationship of labourer to capitalist is constant throughout the cycle.

Volume III is already divided into seven parts. We will take one part at a time, and choose one chapter from each part as a reading text.

Please download and read this text:

Capital Volume 3, Chapter 2, The Rate of Profit (3355 words)

Accumulation and Reproduction of Capital

Capital Volume 2, Part 3

Accumulation and Reproduction of Capital

Marx begins this third part of Capital, Volume 2 as follows:

“The direct process of the production of capital is its labour and self-expansion process, the process whose result is the commodity-product and whose compelling motive is the production of surplus-value.”

Here Marx is confirming, in direct terms, the order of things as explained in Capital, Volume 1. The motive of capital is the production of surplus-value and the commodity-product is the consequence. Some would call this production for profit and not for need; others might say that it is the creation and the reproduction of a power relationship of the bourgeois owners over the working class.

Marx continues to assist. In contrast to the end of the second section of Volume 2, where he left us with more questions than answers, at the beginning of the third section he lays out the scheme of Volume 1 (“ Book 1”) and all three sections of Volume 2 as follows (shortened; see Chapter 18 for the full text):

“In Book I the process of capitalist production was analysed as an individual act as well as a process of reproduction: the production of surplus-value and the production of capital itself. The only act within the sphere of circulation on which we have dwelt was the purchase and sale of labour-power as the fundamental condition of capitalist production.

“In the first part of this Book II, the various forms were considered which capital assumes its circular movement, and the various forms of this movement itself. The circulation time must now be added to the working times discussed in Book I.

“In the second Part, the circuit was studied as being periodic, i.e., as a turnover.

“…Especially money-capital came forward with distinctive features not shown in Book I. Certain laws were found according to which diverse large components of a given capital must be continually advanced and renewed — depending on the conditions of the turnover — in the form of money-capital in order to keep a productive capital of a given size constantly functioning.

“But in both the first and the second Parts it was always only a question of some individual capital, of the movement of some individualised part of social capital.

“However the circuits of the individual capitals intertwine, presuppose and necessitate one another, and form, precisely in this interlacing, the movement of the total social capital.

“We have now to study the process of circulation (which in its entirety is a form of the process of reproduction) of the individual capitals as components of the aggregate social capital, that is to say, the process of circulation of this aggregate social capital.”

There are four chapters in the third part of Volume 2. Chapter 18 is covered above. Chapter 19 doubles back to the Physiocrats and Adam Smith. Chapter 20 is very long, covering many kinds of ordinary and extraordinary circumstances, divided into four parts; but it begins with a useful schematic summary, as follows:

“The total product, and therefore the total production, of society may be divided into two major departments:

“I. Means of Production, commodities having a form in which they must, or at least may, pass into productive consumption.

“II. Articles of Consumption, commodities having a form in which they pass into the individual consumption of the capitalist and the working-class.

“All the various branches of production pertaining to each of these two departments form one single great branch of production, that of the means of production in the one case, and that of articles of consumption in the other. The aggregate capital employed in each of these two branches of production constitutes a separate large department of the social capital.

“In each department the capital consists of two parts:

“1) Variable Capital. This capital, so far as its value is concerned, is equal to the value of the social labour-power employed in this branch of production; in other words, it is equal to the sum of the wages paid for this labour-power. So far as its substance is concerned, it consists of the labour-power in action, i.e., of the living labour set in motion by this capital-value.

“2) Constant Capital. This is the value of all the means of production employed for productive purposes in this branch. These, again, are divided into fixed capital, such as machines, instruments of labour, buildings, labouring animals, etc., and circulating constant capital, such as materials of production: raw and auxiliary materials, semi-finished products, etc.

“The value of the total annual product created with the aid of this capital in each of the two departments consists of one portion which represents the constant capital c consumed in the process of production and only transferred to the product in accordance with its value, and of another portion added by the entire labour of the year. This latter portion is divided in turn into the replacement of the advanced variable capital v and the excess over and above it, which forms the surplus-value s. And just as the value of every individual commodity, that of the entire annual product of each department consists of c + v + s.”

Reading for Discussion

We shall use Part 1 of Chapter 21, the last chapter in Volume 2, for a reading text, downloadable via the link below.

It is called “Accumulation and Reproduction on an Extended Scale”, thus confirming what Volume 2 is about, namely these two words which feature very prominently in 21^st century South African communist literature: Reproduction and Accumulation. At seven thousand words, Part 1 of Chapter 21 is sufficiently short and sufficiently plain in its prose to be read as a discussion document.

Let it suffice, therefore, for this introduction, to point out that in Volume 2, Marx is examining the leads and lags in the full cycle of the accumulation and reproduction of capital, and discovering features that arise during this circulation (e.g. “…money-capital came forward with distinctive features not shown in Book I”) which have a material effect on the entire concrete social phenomenon which is Capital with a capital “C”.

One such feature is the “hoard” of money that is a necessary phenomenon within the cycle – the indispensible slack or easement without which the machinery could not move.

In Volume 1, Marx takes considerable pains to distinguish the miser (who hoards money) from the capitalist (who puts money into circulation). There is no contradiction, however, in Marx’s thinking. The hoard that arises in the cycle of capital is a transitional, usable and re-chargeable reservoir, and not, like the miser’s hoard of buried treasure, money that is permanently withheld from circulation and use of any kind.

Where one must be careful is with the unclear and conflicted representation of these matters that appears in the vulgar economics of “analysts” in newspapers and in the mouths of pundits and politicians today, where “capital” is invariably conceptualised in a limited sense as a hoard. For example the sentence “I need capital to start my business” always refers to a hoard, and only to a hoard.

In Marx, “accumulation” refers to the assembly, and the constant reassembly of all of the prerequisites for the extraction of surplus value, and not just to the pump-priming hoard of money.

These prerequisites for Capital also include the market, the proletariat, the bourgeoisie and the bourgeois state with its bourgeois constitution and laws, the means of transport and trade, and the subordination of all other classes to the rapacious needs of the bourgeois class. In the case of an individual business, the market for its goods or services is in particular a far more critical prerequisite than the prior possession of a hoard of money.

Please download and read this text:

Capital, V 2, Chapter 21, Part 1, Accumulation and Reproduction on an Extended Scale, Marx (7158 words)

Turnover of Capital

Capital Volume 2, Part 2

Turnover of Capital

In the fourth paragraph of Chapter 7, which is the first chapter of Part 2 of Capital Volume 2 (“The Turnover of Capital”), Karl Marx quotes Chapter 23 of “Capital”, Volume 1 as follows: ‘We have seen previously: “If production be capitalistic in form, so, too, will be reproduction. Just as in the former the labour-process figures but as a means towards the self-expansion of capital, so in the latter it figures but as a means of reproducing as capital — i.e., as self-expanding value — the value advanced.”

Capital Volume 2 is an elaboration, and not a contradiction or a supersession, of Capital Volume 1. Far from the latter being the case, the concepts of “accumulation” and of “reproduction” are rather strongly confirmed and reinforced in the same sense as they were introduced in Volume 1.

Part 2 proceeds to cover variations from the simple, typical cases, so as to prove the validity of the general theory advanced in Volume 1.

For the purpose of stimulating discussion on Part 2, we offer for reading its final chapter, Chapter 17 (linked below as a downloadable file).

Note that Marx continues to reference back to “Buch I” (i.e. Capital, Volume 1).

Here is a typical paragraph from the early part of this chapter:

“The simplest form in which the additional latent money-capital may be represented is that of a hoard. It may be that this hoard is additional gold or silver secured directly or indirectly in exchange with countries producing precious metals. And only in this manner does the hoarded money in a country grow absolutely. On the other hand it may be — and is so in the majority of cases — that this hoard is nothing but money which has been withdrawn from circulation at home and has assumed the form of a hoard in the hands of individual capitalists. It is furthermore possibly that this latent money-capital consists only of tokens of value — we still ignore credit-money at this point — or of mere claims of capitalists (titles) against third persons conferred by legal documents. In all such cases, whatever may be the form of existence of this additional money-capital, it represents, so far as it is capital in spe, nothing but additional and reserved legal titles of capitalists to future annual additional social production.”

This is followed by a very lengthy quotation from William Thompson in an 1850 book, and then this summary of Marx’s:

“For reproduction only two normal cases are possible, apart from disturbances, which interfere with reproduction even on a fixed scale.

“There is either reproduction on a simple scale.

“Or there is capitalisation of surplus-value, accumulation.”

This is what Capital Volume 2 is about: Reproduction, Accumulation, and the relation between these two.

Later on, Marx writes directly:

“None of the laws established with reference to the quantity of the circulating money in the circulation of commodities (Buch I, Kap. III), [English edition: Ch. III. — Ed.] are changed in any way by the capitalist character of the process of production.”

Yet then he develops a question in various ways, expressed most simply as follows:

“The capitalist class remains consequently the sole point of departure of the circulation of money. If they need £400 for the payment of means of production and £100 for the payment of labour-power, they throw £500 into circulation. But the surplus-value incorporated in the product, with a rate of surplus-value incorporated in the product, with a rate of surplus-value of 100%, is equal in value to £100. How can they continually draw £600 out of circulation, when they continually throw only £500 into it? Nothing comes from nothing. The capitalist class as a whole cannot draw out of circulation what was not previously thrown into it.”

Marx continues to problematise this question until the end of the chapter, and leaves some of his questions unanswered.

For example, on the question of the substitution of credit for gold in the process of circulation, Marx writes:

“…so far as the expediencies developing with the credit system have this effect, they increase capitalist wealth directly, either by performing a large portion of the social production and labour-power without any intervention of real money, or by raising the functional capacity of the quantity of money really functioning.

“This disposes also of the absurd question whether capitalist production in its present volume would be possible without the credit system (even if regarded only from this point of view), that is, with the circulation of metallic coin alone. Evidently this is not the case. It would rather have encountered barriers in the volume of production of precious metals. On the other hand one must not entertain any fantastic illusions on the productive power of the credit system, so far as it supplies or sets in motion money-capital. A further analysis of this question is out of place here.”

We must look for those answers in Capital Volume 3, which we will come to immediately after dealing with the third and final Part of Capital Volume 2.

Please download and read this text:

Chapter 17, The Circulation of Surplus Value, from Capital, Volume 2, Karl Marx (13208 words)

Metamorphoses of Capital

Capital Volume 2, Part 1

Metamorphoses of Capital

Having completed our course on Volume 1 of “Capital” here on “SADTU Political Education”, we now begin Part 2. We will proceed in ten parts through to the end of Part 3 before the end of 2011.

“The Metamorphoses of Capital and their Circuits” is the title of Part 1 of Karl Marx’s “Capital, Volume 2. A “metamorphosis” (plural “metamorphoses”) in science is a profound change in form, such as from a tadpole to a frog or from a caterpillar to a butterfly. [The illustration above refers to the story “Metamorphosis”, by Franz Kafka, wherein a man turns into a beetle].

Skimming through the first chapters of Volume 2, even though they contain some rather obscure formulas, it quickly becomes clear that what Marx is describing are the changes and movements that take place during the repeated acting-out of the capitalistic relationship (i.e. sale by the working proletarian and purchase by the capitalist of commodified labour-power, extraction of surplus value, and sale of the commodified product of labour).  These changes and movements are somewhat  invisible to the actors, or else are only visible to them in an illusory form.

From Chapter 2:

“So long as the product is sold, everything is taking its regular course from the standpoint of the capitalist producer. The circuit of capital-value he is identified with is not interrupted. And if this process is expanded — which includes increased productive consumption of the means of production — this reproduction of capital may be accompanied by increased individual consumption (hence demand) on the part of the labourers, since this process is initiated and effected by productive consumption. Thus the production of surplus-value, and with it the individual consumption of the capitalist, may increase, the entire process of reproduction may be in a flourishing condition, and yet a large part of the commodities may have entered into consumption only apparently, while in reality they may still remain unsold in the hands of dealers, may in fact still be lying in the market. Now one stream of commodities follows another, and finally it is discovered that the previous streams had been absorbed only apparently by consumption. The commodity-capitals compete with one another for a place in the market. Late-comers, to sell at all, sell at lower prices. The former streams have not yet been disposed of when payment for them falls due. Their owners must declare their insolvency or sell at any price to meet their obligations. This sale has nothing whatever to do with the actual state of the demand. It only concerns the demand for payment, the pressing necessity of transforming commodities into money. Then a crisis breaks out. It becomes visible not in the direct decrease of consumer demand, the demand for individual consumption, but in the decrease of exchanges of capital for capital, of the reproductive process of capital.”

Different capitals compete with one another, says Marx. The fundamental type of capital has been described in Volume 1. Here we see “capitals”, plural, interacting with each other to produce a secondary phenomenon – a crisis.

Later in the same Chapter (under Part 3), Marx is very clear about the difference between “accumulation” and “hoarding”. This is a crucial point in terms of recent SACP theory, which has at times leant heavily on the term “accumulation”, or alternatively “accumulation path”. Marx says:

“Hence the accumulation of money, hoarding, appears here as a process by which real accumulation, the extension of the scale on which industrial capital operates, is temporarily accompanied. Temporarily, for so long as the hoard remains in the condition of a hoard, it does not function as capital, does not take part in the process of creating surplus-value, remains a sum of money which grows only because money, come by without its doing anything, is thrown in the same coffer.”

“Accumulation” for Marx is always the assembly of the prerequisites for the relationship “Capital” to appear, or reappear. Anything else, whether transitional or permanent, is “hoarding”.

For a reading of part of the original text, we offer Chapter 6, the last chapter in Part 1 of Volume 2 of Capital (see below for a link to download this chapter). It is clear from this chapter that in this Part 1, called “Metamorphoses of Capital and their Circuits”, Marx is dealing with the Reproduction and Accumulation of capital, where “reproduction” is accomplished by the reassembly (called accumulation) of the elements of production so that the cycle of extraction of surplus value can be re-enacted.

The following quotation can suffice to show that there is no question of Marx backsliding on the question of surplus-value being the source of “the self-increase of capital”, as expounded repeatedly in Volume 1:

“To the capitalist who has others working for him, buying and selling becomes a primary function. Since he appropriates the product of many on a large social scale, he must sell it on the same scale and then reconvert it from money into elements of production. Now as before neither the time of purchase nor of sale creates any value. The function of merchant’s capital give rise to an illusion.”

Please download and read the text via the following link:

Chapter 6, The Costs of Circulation, from Capital, Volume 2, Karl Marx (10037 words)

Introduction to the new course: Karl Marx’s Capital, Volumes 2 and 3

Capital Volumes 2 and 3

General Introduction to Karl Marx’s Capital, Volumes 2 and 3

What we are looking for is a way to pass through these works, which appear difficult, and long.

This will not be done by examining every detail, but it will be done in such a way as we can gain an idea of the scope and direction of Marx’s intentions.

Division

Fortunately, Marx’s division of Volume 2 into three Parts, and Volume 3 into seven Parts, will allow a convenient arrangement of the two volumes together into a “Generic Course” of ten parts, like the other eleven courses of the Communist University.

Each Part of the two books is further divided into several Chapters. We will not attempt to tackle each chapter, or to amalgamate chapters. Instead, as a rule, a suitable chapter will be chosen from each part to serve as basis for discussion, while the Introduction will attempt to relate the chosen chapter to the entire Part.

Thus, while we will not have completed an exhaustive reading of the two works, yet we will have a much better idea of their scope, their shape, and their trajectory, and with luck, a good understanding of some of their highlights, or “salient points”.

Those will be deemed suitable chapters for discussion which are short enough, and written in prose rather than relying on formulae. Otherwise, the content of the chapters will dictate.

The Puzzle of Volumes 2 & 3

The major question that arises with Volumes 2 & 3 of “Capital” is whether, as Engels wrote in his Preface to Volume 3, they contain “the most important parts of the entire work”, or whether Volume 1 remains the essential answer to the quest for “the secret of the self-increase of capital” - surplus value.  Marx’s words, also from the beginning of Volume 3, provide a clue:

“The various forms of capital, as evolved in this book, thus approach step by step the form which they assume on the surface of society, in the action of different capitals upon one another, in competition, and in the ordinary consciousness of the agents of production themselves.”

It is becoming a fashion to quote from Volume 3 in particular, in a manner that implies that a good knowledge of Volume 1 is not enough any more, or can be “trumped” by those with knowledge of Volume 3.

But if it is understood that Marx’s purpose was to challenge “economics”, and not to confirm it, and thereby to go beneath “the ordinary consciousness of the agents of production” to the real relations that exist, then Volume 1 must remain the ruling and determinant volume out of the three main volumes (Volume Four is Marx’s summarised reading notes, called “Theories of Surplus Value”).

If this is the case, then the purpose of Volumes 2 & 3 is to return to “the surface of society” so as to look at its surface phenomena in the light of the discoveries of Volume 1. Volumes 2 & 3 are then derivative of Volume 1 and do not supersede or surpass Volume 1’s “Critique of Political Economy”.

If this is the case, then the vogue for Volume 3 is clearly a retreat, and can only pass as a superior knowledge by virtue of the fact that relatively few of the “Marxian school” of today have actually studied Volumes 2 and 3, or in many cases, even Volume 1 of “Capital”.

This is a strong incentive towards covering these works. If it is the case that pseudo-Marxists and “Legal Marxists” are using the extrapolations of the great Volume 1 into the surface of society to re-present Marx as an economist of the surface, like themselves, then Marx needs defending. To construct that defence, it should be necessary to study more closely what is actually contained in Volumes 2 & 3.

To consult a different study guide mainly composed of questions but with some fruitful links, go to the MIA Study Guide for Capital Volume Two, and the MIA Study Guide for Capital Volume Three.

Colonialism

Marx’s Capital Volume 1, Part 10b

Mogadishu, 1993

Colonialism

Here we are, nearly at the end of Capital, Volume 1, the famous and huge book that so many people talk about and so few people read. We have read it. We are more fit to be cadres. We are more fit to be the vanguard. What remain are only the three last chapters, which are not difficult to read, although as always they challenge us to be brave and to act, and action will never be easy.

In Chapter 31 Marx states that the origin of the industrial (not farming) capitalist is in colonialism.

“The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the aboriginal population, the beginning of the conquest and looting of the East Indies, the turning of Africa into a warren for the commercial hunting of black-skins, signalised the rosy dawn of the era of capitalist production. These idyllic proceedings are the chief momenta of primitive accumulation. On their heels treads the commercial war of the European nations, with the globe for a theatre.”

“To-day industrial supremacy implies commercial supremacy. In the period of manufacture properly so called, it is, on the other hand, the commercial supremacy that gives industrial predominance. Hence the preponderant rôle that the colonial system plays at that time. It was "the strange God" who perched himself on the altar cheek by jowl with the old Gods of Europe, and one fine day with a shove and a kick chucked them all of a heap. It proclaimed surplus-value making as the sole end and aim of humanity.”

This last describes in a single sentence, the state of affairs that Marx's book was written to expose; and Marx did succeed in exposing “capital” as “surplus-value making”.

Yet it appears that Marx did not deal with Primitive Accumulation in the sense that the phrase would nowadays be understood. Marx does not establish that capitalism required a ready pile of money or its equivalent. What he establishes is how the requisite class forces were brought into being, in Western Europe, in the revolutions that overthrew feudalism.

It is a mistake to think that a capitalist business requires “capital” in advance, if by “capital” is meant money in the bank, or land, buildings, equipment et cetera. It does require such things, but they do not make it a capitalist business as opposed to any other kind of project. What makes a business work as capitalism is a dual relationship. The first part of it is the relationship between the worker and the capitalist. The second part is the relationship of the capitalist with his market. If these two relationships do not exist, or are faulty, then a capitalist business will not survive. But if they do exist, then the other means will probably be found without too much difficulty.

Marx shows clearly how the proletariat arose historically in Europe in the 16th century. He shows how the bourgeois class arrives on the scene. He shows how all the social building blocks including proletariat and market, are assembled, but not the money. In any case, capital is not money, it is a relation. Marx says so, directly, in Chapter 33. So the accumulation necessary for capitalism is not treasure, but is an accumulation of relationships; this is what we learn from the chapters in “Capital” on Primitive Accumulation.

Marx does not, in Capital, make a strong distinction between slavery and capitalism. He describes slavery candidly and without flinching from the horror of it. But he never discusses slavery in a comparative way, as distinct from surplus-value-extracting bourgeois-and-proletarian capitalism. Yet (bourgeois) slavery also started in the 16th century, or slightly before, and it ran on as a transcontinental Atlantic system for the next three hundred years, in parallel with the early development of capitalism proper, until Marx’s time, such that the last end of bourgeois slavery was the cataclysm of the American Civil War, that was happening while Marx was writing Capital.

Chapter 32 of Capital, Volume 1 contains about 1000 words in only four paragraphs. It is a full historical sweep from the past of slaves and serfs through present capitalism to the future, when the expropriators will be expropriated. It resembles the Communist Manifesto.

Chapter 33 is very interesting but in spite of its title, it is not really about colonialism. Instead, Marx uses the example of part of one colony of the time, Australia, to make points about capitalism and to “discover in the Colonies the truth as to the conditions of capitalist production in the mother country”. Also note the very last paragraph of the chapter (and the book), which says:

“We are not concerned here with the conditions of the colonies. The only thing that interests us is the secret discovered in the new world by the Political Economy of the old world, and proclaimed on the housetops: that the capitalist mode of production and accumulation, and therefore capitalist private property, have for their fundamental condition the annihilation of self-earned private property; in other words, the expropriation of the laborer.”

“...capital is not a thing, but a social relation between persons, established by the instrumentality of things,” says Marx.

In the next part, we will commence a ten-week course Capital, Volumes 2 and 3.

Please download and read the text via the following link:

Capital V1, C31, 32, 33, Capitalist, Accumulation, Colonialism (8277 words)

Further reading:

Capital V1, C28, 29, 30, Expropriated, Farmer, and Home Market (4804 words)

Capital V1, C26, 27, Primitive Accumulation, Expropriation, Capital (5993 words)

Home Market

Marx’s Capital Volume 1, Part 10a

Poverty map of part of London, 1889; darker areas show slums or “rookeries”.

Home Market

Marx's first concern in his description of Primitive Accumulation is to establish where the labour power came from, in the metropolitan countries where capitalism was established as a system for the first time, and where it eventually proved itself to be even more profitable than the slave trade that stole people from Africa and worked them to death on plantations in North and South America, and in the Caribbean islands.

The expectation that the reader brings, on seeing the phrase “primitive accumulation”, is therefore not necessarily fulfilled. It is not the case that a hoard of money was first created, whether by plunder or by any other means, so as to purchase the commencement of capitalism. Rather, it was a case of piecing together the component parts of the capitalist system, which were: the bourgeois class that had arisen from the peasantry; the dispossessed “free labouring” proletariat, also originally peasants; and the ready market for commodities constituted by both of these two new classes, together.

This new abundance of available labour power in the metropolis, personified in citizens without property, was the consequence of deliberate dispossession. It had the immediate consequence of producing what we now call “unemployment”, which was immediately criminalised as “vagrancy”. The unemployment was an essential precondition for capitalism to arise, yet the bourgeoisie in its eternal hypocrisy criminalised its own victims.

Our text today, downloadable via the link given below, is a compilation of Chapters 28, 29 and 30 from Marx’s “Capital”, Volume 1. It describes a time, long ago, when the slogan could have been “Capitalism is the future, build it now”. The elements of capitalism were being assembled then.

Chapter 28 is an easy read detailing the legal steps in the original case, that of England.

Having shown where their labour power came from, Marx at the beginning of Chapter 29 asks “whence came the capitalists originally?” This very short chapter answers the question in the case of the capitalist farmers, who were the necessary original capitalists, and who were already a historically-existing class in England by the late 16^th century (from which class later came, for example, Oliver Cromwell).

In Chapter 30, Marx turns his attention to the question of just how yet another of the necessary pre-requisites of capitalism came into being, namely the “home market”. The very same peasants who had been thrown off the land into the towns to live in shacks had to eat, whether they were working or not, and the farms that they had left were still the only source of food. Thus was set in motion the relation of demand and supply, and also of concentration of industries into “manufactories” as opposed to the family-scale production of earlier times. These kinds of changes can still be observed as they happen, in South Africa today.

Good images of the slums of England, also once known as “rookeries” (the equivalent of South Africa’s present-day “informal settlements”, less politely called “squatter camps”) are hard to find. The illustration above is from the “Poverty Map” of part of the East End of London, prepared by or on the orders of Charles Booth, a “philanthropist”. The red areas are "middle class, well-to-do", light blue areas are “poor, 18s to 21s a week for a moderate family”, dark blue areas are “very poor, casual, chronic want”, and black areas are the "lowest class...occasional labourers, street sellers, loafers, criminals and semi-criminals".

Booth’s 1889 survey found that 35% of London’s huge 1889 population was living in poverty.

Please download and read the text via the following link:

Capital V1, C28, 29, 30, Expropriated, Farmer, and Home Market (4804 words)

Further reading:

Capital V1, C31, 32, 33, Capitalist, Accumulation, Colonialism (8277 words)

Capital V1, C26, 27, Primitive Accumulation, Expropriation, Capital (5993 words)

Expropriation

Marx’s Capital Volume 1, Part 10

Expropriation

In the first of the two vivid chapters on primitive accumulation (compiled together in one document downloadable via the link below), Karl Marx describes what is required before the system of surplus value can start pumping and reproducing itself.

As Marx says, the myths around this origin are many, but the truth is written in blood and fire, the ruin of the feudal system, and the destruction of the semi-feudal, semi-bourgeois guilds in the towns of Western Europe.

These revolutions made possible the existence of “free labourers”, which is to say people with no means of production or subsistence, who must sell their only possession – their labour power – in order to survive from day to day. These are the working proletariat.

According to Marx, the capitalistic era began in the 16th century, but he does not say that capitalism was dominant or hegemonic at that time. Many of the bourgeois institutions that are nowadays taken as part of capitalism, such as double-entry book-keeping, banks, stock and bond markets, insurance, contract law and global freight navigation, were first developed under late feudalism, but especially in the 17^th century, in the service of the big, bourgeois, transcontinental business of slavery, which is very different from capitalism.

How the “free labourers” historically came into existence is exemplified in the second of the two chapters, where Marx takes the “classic form” of this process as being that of England, starting from the 16th Century (i.e. 1501 to 1600). Clearly, the creation of the proletariat was contemporary with the slave trade, while the latter was dominant. Capitalism only began to supersede and to actively suppress slavery after it had matured during the period 1500 to 1800, or in other words, not until after the “industrial revolution” of the late 18^th Century.

The process of eviction of people from the land is popularly known in England as “the enclosures” and in Scotland as the “Highland clearances”. To South Africans, one can say that the book describes processes of dispossession that are familiar even up to the present time. In the case of the Highlands of Scotland, one can also read that game parks (called deer forests) were replacing settlements of people from two centuries ago. The same thing is happening today in South Africa under cover of “green ecology”, and not only with game parks, but also with golf estates and horse-riding establishments.

With Chapter 27, it is not necessary to understand every local term, or to remember every local event. What is applicable still is the class struggle that underlay it all, the victorious bourgeoisie that came out on top, and the great, dispossessed, working proletariat that was left as the principal basis for capitalist extraction of surplus labour from then onwards - but also as capitalism’s inevitable gravedigger.

Picture: Brutal force, as in Sharpeville, 1960, is what has enabled the expropriation of land.

Please download and read the text via the following link:

Capital V1, C26, 27, Primitive Accumulation, Expropriation, Capital (5993 words)

Further reading:

Capital V1, C28, 29, 30, Expropriated, Farmer, and Home Market (4804 words)

Capital V1, C31, 32, 33, Capitalist, Accumulation, Colonialism (8277 words)