An ongoing series going through Marx, Capital Volume 1. Access free electronic copies of Volume 1 here or here. [Capital Volume I, Chapter 25, pgs. 762-870 of Penguin Press]
Chapter 25: The General Law of Capitalist Accumulation This chapter is a behemoth: 100 pages, and lots of action. This chapter alone could take 3-4 posts. But we gotta keep it moving, so I’m going to pick out two important things to highlight.
1) What exactly gets “accumulated”, and why it matters
Every capitalist is DJ Khaled when it comes to capital. Capitalists and capitalism itself are both driven by one principle: more. That’s the secret behind C -> M -> C’ and its equivalent M-C-M’, that’s what’s being accumulated as we discussed in part 12. But the other secret that we’ve been talking about throughout is that capital takes different physical forms, and those forms matter (capitalists prefer their surplus value in dollars rather than in tons of cotton). So: more of what, exactly? Marx thinks this matters: “The most important factor in this investigation [of the “growth of capital on the fate of the working class”] is the composition of capital…” (762).
We can think of the composition of capital using our trusty distinction between the means of production and labor power. We can use that distinction two ways. If we’re thinking of capital as value, the composition of capital is split into the value of the means of production and the value of labor power, which we defined as constant capital and variable capital in part 6. That’s the “value-composition” of capital. If we’re thinking of capital as material, the composition is split into the actual physical means of production and labor-power. That’s the “technical-composition” of capital. Though this or that individual capitalist will use different proportions of these, we’re gonna average across all the capitalists in a nation to get what we need. (762-763) So a country starts the year with some amount of commodities and money C and M and ends it with C’ and M’ – that is, with some surplus value added by the labor of its workers. That surplus value will be composed of some constant capital (more factories, more tractors, etc.) and some variable capital (higher wages for workers, or maybe just hiring more). At first glance that seems like capitalism benefits workers, since they end up in a better position at the end of the year than at the beginning of the year, which is the basic principle of the defense of capitalism by many Marx-haters.
But remember: this is a system that reproduces itself, working every day to create or maintain the conditions for doing the same shit tomorrow. “Every accumulation becomes the means of new accumulation.” (776) The basis of the exchange of hours for wages between workers and capitalists is their dependence on this exchange to survive, which is made possible by alienating them both from the means of production and the means of subsistence. Increases in wages doesn’t alter that basic relationship of dependence in the same way that “better clothing, food and treatment” doesn’t lead to abolition “in the case of the slave” (769). Increases in wage at the end of the year means better lives for that country’s workers relative to the beginning of the year. But does this system of surplus value improve people’s lives in general – that is, relative even to alternatives to capitalism? Jury’s still out on that one. (763-770)
So we’ve got a few ideas to juggle here: the relation between capital, accumulation, and the rate of wages. That’s basically the relationship between unpaid labor that has already been transformed into capital (the surplus value materialized in constant capital) and the additional paid labor necessary to make that productive (surplus value materialized in variable capital).
One way that this could go: labor gets more productive because surplus value is turned into fancier and fancier machete making machines, with the help of the trusty combination of money and science. The MacheteFurnace™ 5000, unlike the 3000 model we were using years back, makes double the machetes per worker. This makes each individual worker more “valuable”, in a sense, which could be reflected in each surviving worker’s wages, but it also means you don’t need to keep as many to produce your machete production targets, which could be reflected in total costs spent on variable capital. If you prefer real world examples: technological advancements allowed a steel mine in Austria which had employed up to 1000 people in 1960 to slim down to a staff of a cool…14. (That would be a lonely picket line).
2) What’s a “surplus population”? What’s a “reserve army of the unemployed”?
“I fought the law of capitalist accumulation” is harder to fit into a line of lyrics
So we start off with the same ol story. We’re accumulating, which means there’s more money and stuff than before. That increase in money and stuff can be used to make even more money and stuff later. Some of that increase takes the form of means of production – constant capital, machines and technology and tools and shit. Some of it gets spent on labor power – variable capital, workers and their wages. But how much? It turns out that matters, a lot. If the increase in the amount of variable capital isn’t large enough, relative to the mass of people waiting for work, then there’ll be a lot of people left on the sidelines. It’s obvious that that’s happening when there are mass layoffs, but what’s the difference between that and hiring 10 people for positions that 1000 people are ready to do? In either case, it’s clear that there are more people ready to work than the country’s economy is ready to give work to. Marx predicts that that’s going to happen fairly regularly: capitalist accumulation will lead to more money spent on workers tomorrow than today, but that increase won’t be large enough enough to absorb all the potential workers. Capitalist accumulation creates a group of workers that aren’t needed to run all the machines and factories we have: that is, a “surplus” population.
This “industrial reserve army” then becomes important and useful for further capitalist accumulation. Think about it: how could a country survive a new sector of industry if there wasn’t a reserve army, like the surge of railroad construction in the 19th century? It couldn’t – either this new industry wouldn’t be able to find enough workers to get going at all, or it could only staff itself by pulling workers out of other industries that might also be important to the overall economy imagine if the railroad boom were made possible by a mass defection of hospital workers! That could go badly. You wouldn’t bother to do the research or groundwork to set up a new sector of the economy if that’s how shit would go down. But, on the other hand, if you knew there was a mass of people who weren’t tied down to any specific branch of the economy and were ready to respond even to quick and large changes, you just might. The reserve army of the unemployed is always on standby.
This fact cements the exploitation of workers who are employed: the reserve army is leverage against whatever strikes or other forms of resistance they could offer, since employers can use the disposability of their current workforce as leverage in negotiations. Things aren’t rosy for folks that aren’t employed either: they still don’t have the means of subsistence, or jobs to buy those means with, but have to make ends meet. The results are predictable: informal “gig” or “hustle” economies that operate in the shadow of capitalism but are, in fact, structurally built into the system, since accumulation itself builds and sustains the reserve army.
Whether these black markets sell goods or labor, they operate without many of the protections that (pretending to follow) the rule of law allow, and are magnets for extortion and violence. That extortion and violence comes from every conceivable direction: the state (police taking things, policymakers setting up the system of mass incarceration for political points); other members of the working class (pimps, mafias demanding “protection” money, the bad kinds of hustles); and private capital (check cashing services, bail bonds, agribusinesses that survive off undocumented labor); and of course the unholy alliances between these groups (the CIA collaboration to target Black communities with cocaine dealers, private prisons). To make things worse, the goods or labor being sold in the shadow economy themselves sometimes can have predictably harmful effects in the wrong historical contexts, like when the goods are crack or prescription opiates targeted at racialized communities with persistently high unemployment and low overall economic security, or when the labor is sex work done in the context of human trafficking and a larger patriarchal rape culture. The overall human and social cost of the reserve army is much higher than a few jobs. but on the other hand capitalism gave everybody refrigerators so, like, that’s pretty cool too.