From the discourse of 'Prometheus'
No.29 / Spring, 1998
A Critique Of "Under-Consumption Theories"
How Should Crisis Be Explained, And Has Modern Capitalism Really Overcome Crisis?
(Written by Hiroyoshi Hayashi)
(Translated by Roy West)
Please send us your opinion and the impression about this
article without reservation!
- Crisis is Real
- Marx's Criticism of the Theory of Underconsumption
- Workers Under Other Capital
(workers as the sellers and purchasers of commodities)
- The Contradiction Between Production and Consumption Under Capitalism
(but not as the underconsumption theorists understand it)
- "The Cause of Crisis"-"Limited Consumption" and the Development of Unrestricted Productive Power
- Crisis and the Fate of the Capitalist Mode of Production
- The Stalinists' Concept of
Crisis-Mendelison's "Theory and History of Crisis"
- Modern Capitalism and Crisis
(This final chapter will be uploaded later)
1. Crisis is Real
The consecutive bankruptcies this past year of banks and security firms-certainly no small matter-shocked the bourgeoisie and conservative politicians, sending them into a state of near panic while reminding them that crisis is not a thing of the past. The immediate decision to again use "public funds" which had been so heavily criticized at the time of the Jusen (Savings and Loan Scandal)-but this time the sum was ten times larger-says a great deal about the bourgeoisie's bewilderment and sense of crisis. Since the end of the war they had continuously repeated that "crisis is a thing of the past which will no longer occur since the management of capitalism has become feasible with the development of Keynesianism."
Crisis, however, is indeed very real-this reveals that as long as capitalism remains capitalism the bourgeoisie will never be able to escape their fears. They have suddenly abandoned such slogans as easing restrictions, administrative reform and financial restructuring-these were adopted by the Hashimoto administration with great fanfare and were the "officially authorized" policy of the bourgeoisie-to fall back to Keynesian expansionist policies and enlarged programs to stimulate business. This happened at the time when a critical standpoint towards Keynesianism had begun to be established following the bubble period, and the effectiveness of "small government", financial restructuring, de-regularization and free competition (market economy) was beginning to be proclaimed. What a careless and irresponsible bunch they are!
It is not easy to say what will be the result of their change in standpoint, that is the expansionist policies to stimulate business, but it is certain that a bubble, financial collapse or a slip into inflation are all possible. The bourgeoisie believe that a bubble is of more use that a recession.
It was said after the war that crises were finished, and now there are cries that there is no escape from crises. But what is a crisis in the first place? Is it something which is inescapable under capitalistic means of production? Or can it be overcome through reforming capitalism to make it a little more humane?
Since the beginning of the 19 century when the cyclical and regular occurrence of crises became visible, many theories have appeared to explain crises and their cause. Of these explanations one which has been particularly emphasized is the so-called "under-consumption theory". This, in other words, is the theory which explains the cause of crisis as "insufficient consumption" under capitalism. This theory can be broadly divided into two currents. On the one hand there is the "humanistic" theoretical current represented by Sismondi, Narodiniki (and later Rosa Luxemburg). On the other hand there is the reactionary, bourgeois (parasitic class) view connected with Malthus and Keynes. (The Japanese Communist Party's position lies within these two currents, their view is "humanistic", on the one hand, and Keynesian on the other, and is therefore not consistent at all. In the end they return to the reactionary bourgeois standpoint, and this is probably inevitable. Already no essential difference can be found between their position and the Keynesian standpoint.
Simply put, the standpoint of the theory of underconsumption states that since capitalism is a society based on the exploitation of workers, the workers' consumption is also exploited and inevitably becomes "too small". If workers produce but don't consume how can surplus value be "realized" (be sold)? Under capitalism the value of a commodity appears as constant capital + variable capital + surplus value (C+V+M). The question is how is the part M realized (Luxemburg's awareness of the problem is a little different; that is, she asks: "where does the money come from for capitalists to realize the M part", and "isn't it impossible for capitalists to find this under 'pure' capitalism?" Of course this is nothing but a different kind of underconsumption theory.)
The theory of underconsumption, represented by Sismondi, is introduced to explain (criticize) the magnification of capitalist contradictions. Thus Sismondi and Narodniki had a certain positive significance in that they exposed one essential side of capitalism. However, even in their case, this theory is nonsense and is unable to grasp the essential content of capitalism. The theory of underconsumption was a reaction to and criticism of Say, Mill and Ricardo's theory of equilibrium. In other words, this was a reaction against the view that capitalism is a mode of production essentially without contradictions in which no essential limitations exist that internally deny the market economy, and since production is consumption, sales are purchases, supply is demand (and the reverse as well), general overproduction or a general crisis can not occur.
Marx, of course, was opposed to the theory of equilibrium, but he also counterattacked the theory of under-consumption. He showed that it was based on a completely narrow and superficial understanding of the capitalist mode of production, and firmly exposed its reactionary nature. Essentially Marx explained crisis in the following way:
"Crises are never more than momentary, violent solutions for the existing contradictions, violent eruptions that re-establish the disturbed balance for the time being." (Capital Volume 3, chapter 15)
"The world trade crisis must be regarded as the real concentration and forcible adjustment of all the contradictions of bourgeois economy." (MECW Vol. 32 p. 140)
For Marx, crisis was the explosion and concentrated expression of capitalist contradictions. Marx insisted that capitalist contradictions must break out in the phenomenon of the crisis or panic because this is precisely the true character of capitalism, here lies its cause. Moreover, Marx points out that crisis is not merely the expression, or explosion of capitalist contradictions, but at the same time a violent solution, a process of forceful readjustment and the dissolution of disequilibrium.
Along with the development of capitalism, the oppositions or contradictions between value and use value, production and consumption, the production and realization of value, supply and demand, etc, also necessarily develop and deepen. Simply put, at a certain stage in the development and movement of capitalism, a situation of over-production inevitably arises where the produced commodity is not sold, cannot find a market, and the market is too limited for the produced commodity.
2. Marx's Criticism of the Theory of
Underconsumption
We have seen that one example of an incorrect theory of crisis is the "underconsumption
theory", but what sort of theory is this exactly?
This theory explains crisis, i.e. the fundamental contradiction of capitalism,
from capital's exploitation of labor. Hence, this appears at first glance as a
very convincing explanation.
Since this theory has a simple appearance it is extremely accessible and has the
character of being easily connected with opportunism. Already during the period
of the Second International, the Social Democrat Tarnoff offered the proposal
that crisis could be overcome through achieving "high wages". Even
today this is the set phrase and common view of the JCP and trade union
opportunists.
The viewpoint of the advocates of the theory of underconsumption are simplistic.
Instead of the equilibrium theorists who, from the simple perspective that
production is consumption (demand) and sales are purchases (or purchases are
sales), deny general overproduction, they argue that under capitalist production
sales and purchases are not in agreement because the workers are unable to buy
all of what they produced, and thus over-production is inescapable. Therefore,
their solution is to expand the consumption of the workers and raise their
standard of living. It is probably a necessity that they adopted the particular
slogan: "overcome depression through raising wages". They argue that
as wages are increased crisis can be easily overcome. However, if this were
indeed so, the question arises why the bourgeoisie would be unwilling to employ
such a simple and effective method. This question is either treated as an
insolvable mystery, or is brushed aside with the arbitrary and nonsensical
explanation that "the bourgeoisie are stupid."
This theory at first seems quite reasonable. For example, a worker sells his
labor power to the capitalist for 8,000 yen a day. In four hours of labor the
worker produces products necessary to reproduce his own labor power. In other
words, necessary labor is four hours (the currency expression of products
objectified by one hour of labor is 2,000 yen). However, the capitalist
purchased the right to use one day of labor power, and has no reason to halt
labor after four hours. If he did this all of his profits would disappear and he
would probably cease being a capitalist. Thus not four, but eight hours of labor
are compelled and in this way the exploitation of labor is realized. Even though
the worker performs eight hours of labor in one day, he only receives a payment
for four hours. The capitalist appropriates, without compensation, one half of
the value the worker created. Since the worker only receives one half of the
value created (16,000 yen), the workers consumption is "too low"
compared to his production. The worker is definitely unable to purchase 16,000
yen worth of goods with his 8,000 yen wage.
However, it should be clear at a glance that the under-consumption theorists'
view that under capitalism surplus value would not be realized, and that this
portion (surplus) was in fact excessive, and so production exceeds consumption,
is complete nonsense.
The problem is easily solved (let's look at simple reproduction). The surplus
value, i.e. the part exploited from the worker, is consumed by either the
capitalist alone or by others. This part is definitely not something that
"cannot be sold" or find a market. Just consider the case of the
individual capitalist. For example, it does not arise that the capitalist who
invests one million yen and gets 1.2 million yen worth of commodities
"cannot sell" them. Of course the capitalist who invests one million
yen and through the exploitation of workers becomes a capitalist with 1.2
million yen worth of commodities, can through the mutual exchange of his
commodities-of course this includes the surplus value-realize the value of his
own commodities. This presents no theoretical-nor practical-difficulty. In
"actual" theory the problem (i.e. "conditions of
equilibrium"), as Marx clarified in the mode of reproduction, is only that
the V+M of the first department (productive department) can be exchanged with
the C of the second department (consumptive department).
This is also essentially the same thing for expanded reproduction. The
difference between expanded reproduction and simple reproduction is that in
expanded reproduction, i.e. accumulation, materially the conditions for
accumulation already exist. If these conditions have been satisfied in the
production of the previous year, theoretically it is possible for conditions of
complete "equilibrium" to continue to be satisfied, and it cannot be
demonstrated that the realization of expanded production is
"impossible".
For this reason Marx and Engels (as well as Lenin) necessarily criticized the
theory of under-consumption.
"It is a pure tautology to say that crises are provoked by a lack of
effective demand or effective consumption. The capitalist system does not
recognize any forms of consumer other than those who can pay, if we exclude the
consumption of paupers and swindlers. The fact that commodities are unsaleable
means no more than that no effective buyers have been found for them, i.e. no
consumers (no matter whether the commodities are ultimately sold to meet the
needs of productive or individual consumption). If the attempt is made to give
this tautology the semblance of greater profundity, by the statement that the
working class receives too small a portion of its own product, and that the evil
would be remedied if it received a bigger share, i.e. if its wages rose, we need
only note that crises are always prepared by a period in which wages generally
rise, and the working class actually does receive a greater share in the part of
the annual product destined for consumption. From the s!
!
tandpoint of these advocates of sound and 'simple' (!) common sense, such
periods should rather avert the crisis. It thus appears that capitalist
production involves certain conditions independent of people's good or bad
intentions, which permit the relative prosperity of the working class only
temporarily, and moreover always as a harbinger of crisis." (Capital Volume
2, chapter. 20)
In "Anti-Duhring" Engels states that although 'underconsumption' is as
old as mankind, overproduction is a phenomenon that only exists along with
capitalism.
In his "Theories of Surplus Value" Marx also writes:
"This was indeed also the case [underconsumption of the masses--Hayashi],
and to an even higher degree, in the ancient mode of production which depended
on slavery. But the ancients never thought of transforming the surplus produce
into capital. Or at least to a very limited extent. (The fact that the hoarding
of treasure in the narrow sense was widespread among them shows how much surplus
produce lay completely idle.) They used a large part of the surplus produce for
unproductive expenditure on art, religious works and travaux publics. Still less
was their production directed to the release and development of the material
productive forces-division of labour, machinery, the application of the powers
of nature and science to private production. In fact, by and large, they never
went beyond handicraft labour. The wealth which they produced for private
consumption was therefore relatively small and only appears great because it was
amassed in the hands of a few persons, who, incidentally, did not know what to
do with it. Although, therefore, there was no overproduction among the ancients,
there was overconsumption by the rich, which in the final periods of Rome and
Greece turned into mad extravagance. The few trading peoples among them lived
partly at the expense of all these essentiellement poor nations. It is the
unconditional development of the productive forces and therefore mass production
on the basis of a mass of producers who are confined within the bounds of the
necessaries on the one hand and, on the other, the barrier set up by the
capitalists' profit which [forms] the basis of modern overproduction." (MECW
Volume 32 pp. 157-8)
In ancient society, even though there was surplus consumption, there was no
surplus production. If the cause of surplus production were underconsumption, as
the underconsumption theorists claim, then there should have been more violent
crises in ancient society than in modern capitalist society. However, it is
common knowledge that there were no crisis phenomenon in ancient society. For
this reason it is clear that the theory of underconsumption is nonsense-this is
also what Marx and Engels said. Of course, this is only a negative criticism,
but for the moment it is sufficient to realize the meaninglessness of the
Communist Party's theory of underconsumption.
Furthermore, Marx writes of an anonymous author opposed to Malthus'
"principle concerning the nature of demand and the necessity of
consumption", whose work "contains the essential secret of glut"
even though he completely misunderstood Malthus' thought. This anonymous author
wrote:
"The very meaning of an increased demand by them" (the labourers)
"is a disposition to take less themselves, and leave a larger share for
their employers; and if it is said that this, by diminishing consumption,
increases glut, I can only answer, that glut is synonymous with high
profits".(MECW Vol. 32)
This writer is saying that a decrease in consumption is the magnification of
exploitation (i.e. high profit ratio), thus over-supply is synonymous with high
profits. With these words he gleefully imagines he has struck at Malthus'
logical contradictions. If one follows Malthus' argument, high profits can
signify over production, i.e. crisis, but since high profits mean prosperity for
capital, what Malthus is saying is a little strange.
This author is ironically saying that Malthus claims that workers are exploited
and consumption is reduced and that this is the source of surplus profit.
However, as exploitation increases, profits expand, and in a capitalist society
prosperity is the magnification of exploitation (i.e. it comes from the level of
the profit margin). Therefore, a market surplus has the same meaning as high
profits. It is said that the raise in the workers wages will solve the
contradiction through increased consumption, but increased wages means that
profits will be eroded and this will cause a dilemma for the solution of the
crisis. On the other hand, even if the markets for capital are expanded through
increased consumption, this would reduce surplus value and thus weaken and scale
back the motive for the activity of capital and accelerate the crisis.
Therefore, this method is contradictory and nonsensical. This is how this author
ironically comments. Within these critical words, Marx then sees the fundamental
contradiction of capitalistic production. The approach of the Communist Party is
the exact opposite, that is, they are forever stuck in the superficial
standpoint of the theory of underconsumption.
In a different place Marx said precisely the same thing where he criticized
Ricardo's "denial of the plethora capital".
"Secondly [he overlooks] that the output level is by no means arbitrarily
chosen, but the more capitalist production develops, the more it is forced to
produce on a scale which has nothing to do with the immediate demand but demands
on a constant expansion of the world market. He has recourse to Say's absurd
assumption that the capitalist produces not for the sake of profit, for exchange
value, but directly for consumption, for use value-for his own consumption. He
overlooks the fact that the commodity has to be converted into money. The demand
of the workers does not suffice, since profit arises precisely from the fact
that the demand of the workers is smaller than the value of their product, and
that it [profit] is all the greater the smaller, relatively, is this demand. The
demand of the capitalists among themselves is equally insufficient.
Overproduction does not call forth a lasting fall in profit, but it is lastingly
periodic. It is followed by periods of underproduction etc. Overproduction
arises precisely from the fact that the mass of the people can never consume
more than the average quantity of necessaries, that their consumption therefore
does not grow correspondingly with the productivity of labour." MECW Vol.
32, pp. 101-2)
Marx explained that the profit of the capitalist (today one could say company)
stems from the workers' demand (the demand based on the money (wage) the worker
earns from selling labor power to the capitalist) being less than the value of
the products the workers create. As this demand (i.e. wage) becomes smaller
relatively, profits grow correspondingly larger. For the capitalist the workers'
demand is certainly considered important, but to expand this demand would
require paying more and more to the workers thereby reducing profits. However,
for capital the reduction of profit has an absolute limit, namely the collapse
of capital itself. Capital only produces to obtain the maximum profit possible,
not with consumption as the goal of production. If profits cease then capital
ceases production irregardless of consumption. No matter how much demand there
is for a given product (i.e. in this sense, consumption), or how much a product
meets the needs of the people, if the product c!
!
annot be sold at a profit there is no demand as far as capital is concerned. On
the one hand, for capital the exploitation of the workers means the reduction of
demand and capital needs to increase this demand. On the other hand, however,
capital cannot expand the workers' demand and "sufficiently" secure
this demand. If this were done, profits would decrease and this would be fatal
to capital. On the one hand, demand must be increased, but on the other hand,
this is not possible. Here the limits and contradictions of capital are clearly
revealed.
For capital, increasing profits is the source of prosperity and the cardinal
presupposition. The expansion of profit is the same thing as capitalistic
prosperity, and all other conditions being the same, the increase in profits is
only possible through strengthening the exploitation of the workers, that is by
decreasing the wage which is the basis of the worker's consumption. The
prosperity of capital only becomes a more certain and secure thing through
limiting the consumption of the workers within all possible limits, that is,
only through the "insufficient consumption" of the workers. Certainly
the overproduction of the market-i.e. the "insufficient consumption",
especially the workers' "insufficient consumption"-is synonymous with
high profits. However, just like Robert Owen and Sismondi, the Communist Party
is completely unable to understand this.
3. Workers Under Other Capital
(workers as the sellers and purchasers of commodities)
One reason that the theory of underconsumption can appear to be correct is that for capital (a given capitalist or company), the expansion of the consumption of those workers under other capital is a preferable situation since it expands the market. The spread of the Communist Party's silly fantasy is based on this hypothesis.
For capital, the worker as a seller of a commodity and as a purchaser of a commodity are two completely different phenomenon. The worker as a seller of a commodity receives money (wage) with which to buy commodities. This sort of worker is important to capital as the seller of commodities since it means demand. On the other hand, in the case of the worker as the seller of labor power, the capitalist wants to control and restrict the price of the commodity (the wage) as much as possible because lower wages mean higher profits, and higher wages mean lower profits. The Communist Party is completely unable to understand this contradiction, or the confrontational nature of the wage system.
Marx wrote that the capitalist (especially those producing consumption goods) sees the workers under other capitalists as purchasers or consumers of his own products, and thus as being outside the capital/wage labor relation. The expansion of consumption (i.e. increased wages) appears to be beneficial. However, essentially this is a fantasy and the capitalist becomes aware of this during a crisis. The Communist Party's idea that a crisis can be overcome through increased consumption (increasing the workers' wages) is based on an absolute fantasy. Increasing wages would certainly directly increase demand for the consumption goods capitalist. However, for the individual capitalists or capital in general, increasing wages would lower the rate of exploitation and profits, and since this would in fact intensify the crisis, this is a cure (solution) that would kill the patient.
Capitalists take seriously and make a fuss over the consumption of millions of workers because they see an enormous demand. Capitalists who produce consumption goods are directly, and capitalists who produce production goods indirectly, interested in the expansion of this demand since they see this as an expansion of the market for their own products (in a sense they are correct). Ultimately, however, it is a fantasy to think that the expansion of workers' consumption (increased wages) is in the interest of capital. This is because at his own point of production the capitalist is engaged in a directly confrontational relation with the worker. In this relation (i.e. capital/wage relation), the capitalist cannot casually think that since higher wages which increase consumption is in his interest. The reality of capitalist society directly appears here in the opposition between capital and wage labor. This confrontational relationship penetrates each self. The essence of capitalist society is the opposition between capital and wage labor, not their common interest. Clearly the capitalist's hope for workers consumption is nothing but a temporary illusion, and he will soon wake up, and indeed must wake up, from this sweet daydream. Only foolish reformists, liberals, syndicalists and the JCP pick up the fantasy of the capitalists and
(mis)use it for their opportunism and class collaboration.
Certainly in capitalist society the working class is an enormous power and a consumer class. Unlike slaves, the workers are formally (legally) an "economic" class (i.e. exchangers) equal to the bourgeoisie. Once outside of the employee relationship, the workers appear as the "citizen" independent of the capitalist class, or as the purchaser of capital's commodities (capital's beloved customer). Moreover, in capitalists society the working class as consumers are flattered with all sorts of words, and flooded with advertisements to tempt them to increase their consumption. It is plain to see that workers who appear on the market with money earned from the sale of their labor power form a massive demand, and that this consumption has important meaning for capitalistic prosperity. The weakening of working class consumption is considered one of the decisive causes of capitalistic depression. However, this is simply incorrect.
This is merely a concept that comes from a capitalist looking at the relationship between another capitalist and his workers. If seen from the real oppositional class relation between capitalists and workers this is nothing but a utopian concept or a fantasy. Marx discussed how this fantasy did not grasp the essential or internal relationship between capital and labor in the following way:
"Actually, the relation of one capitalist to the workers of another capitalist is none of our concern here. It only shows every capitalist's illusion, but alters nothing in the relation of capital in general to
labour. Every capitalist knows this about his worker, that he does not relate to him as producer to consumer, and [he therefore] wishes to restrict his consumption, i.e. his ability to exchange, his wage, as much as possible. Of course he would like the workers of other capitalists to be the greatest consumers possible of his own commodity. But this is just how the illusion arises-true for the individual capitalist as distinct from all the others-that apart from his workers the whole remaining working class confronts him as consumer and participant in exchange, as money-spender, and not as worker."
(Grundrisse, Penguin Classics p.420)
Marx next discusses the relation between the limits of consumption and crisis:
"It is forgotten, that, as Malthus says, 'the very existence of a profit upon any commodity pre-supposes a demand exterior to that of the labourer who has produced it', and hence the demand of the labourer himself can never be an adequate demand. Since one production sets the other into motion and hence creates consumers for itself is an 'adequate demand'. On one side, this demand which production itself posits drives it forward, and must drive it forward beyond the proportion in which it would have to produce with regard to the workers; on the other side, if the demand exterior to the demand of the labourer himself disappears or shrinks up, then the collapse occurs. Capital itself then regards demand by the
worker-i.e. the payment of the wages on which this demand rests-not as a gain but as a loss. I.e. the immanent relation between capital and labour asserts itself. Here again it is the competition among capitals, their indifference to and independence of one another, which brings it about that the individual capital relates to the workers of the entire remaining capital not as to workers: hence is driven beyond the right proportion. What precisely distinguishes capital from the master-servant relation is that the worker confronts him as consumer and possessor of exchange values, and that in the form of the possessor of money, in the form of money he becomes a simple centre of circulation-one of its infinitely many
centres, in which his specificity as worker is extinguished." (Ibid pp. 420-1)
Outside of production relations, in the sphere of circulation and the market, the relationship between the capitalist and the worker appears as a relation of mutually equal "citizens" with independent rights, and a mutual relation between a seller of a commodity and a purchaser. The essential 'internal' relation between capitalist and workers (master-servant relation) is thus abstracted and forgotten. The worker as "one centre of circulation' also has an important "social role"-the JCP has actually earnestly used such an expression-to play in this society of capital. I.e. through increased consumption the worker can make an important contribution towards overcoming the difficulties of a crisis. For the individual capitalist, other capitalist's workers are not workers but merely possessors of money, purchasers, or "citizens" who represent demand. Moreover, since every bourgeois regards the worker not as a worker whose consumption is narrowly limited by class relations, but merely as a possessor of money and consumer, and under this presupposition because production is strengthened, production easily exceeds demand and must do so. If the bourgeoisie were able to evaluate the worker "rationally" or from the total social relations, they would not view the worker simply as a consumer, and they would know that within confrontational class relations their consumption is necessarily limited. However, this rational understanding is impossible for them because they are limited by their narrow-minded class-based perspective.
If a crisis arrives, however, the brutal reality of class society immediately shakes the bourgeoisie free from all fantasies. They come to think of ideas such as the decisive importance for profits of raising workers wages or the expansion of consumption through higher wages, as optimistic foolishness or complete drivel. In other words, Marx's so-called 'immanent relations' penetrate them.
The individual bourgeois sees the workers of other capitalists as simply purchasers or customers for his own commodities. Therefore, he reasons that a raise in their income would mean increased demand for his commodities, and so he hopes for an increase in their wages and thinks that this will increase consumption and demand. However, once a depression worsens, and begins to have a direct effect on this capitalist, his fantasy that an increase in wages will expand demand is blown to shreds. Furthermore, in place of this fantasy the immanent truth of capitalism, its essential relations, are deeply felt, i.e. the truth of the opposition between the interests of capital and labor, how a rise in wages means a decrease in profit, how if this rise progresses without limit it would mean the collapse and end of capitalism. The view that a rise in wages means an expansion of consumption and demand provides no comfort because if there is no profit, it becomes impossible for capital to exist as capital. The essence of capital is production for profit, definitely not production which aims for the consumption of the mass of workers and producers. In other words, capitalism is capitalism, not socialism.
Marx's view is important since this fantasy is not only common within the bourgeoisie, but has in fact been widely circulated not only within the leftwing parties, but also within the leadership of the labor unions. They insist that the increased consumption of the workers would expand the market and is thus one important-if not the only-means of overcoming a crisis. By emphasizing the expansion of consumption would also benefit capital through the expansion of the market, they pursue collaboration with capital and speak for the common interests of capital and the workers. While berating the bourgeoisie for not being wise enough pursue a policy of common interest between all people (classes), they completely ignore the confrontational class relationship between the bourgeoisie and the working class. In fact, there is nothing more convenient for collaborationists than the fantasy that crisis can be overcome through increased consumption. This is the idea that the only thing obstructing this fabulous "win-win" policy for everyone which would overcome the crisis for the bourgeoisie and ensure wage increases for the workers, is the foolishness and stupidity of the bourgeoisie.
The SP, JCP and labor unionists should seriously ponder why the bourgeoisie wouldn't happily carry out this sort of policy if it is indeed in their own interests. In fact, the reason is not the stupidity of the bourgeoisie or their superficial understanding. The nonsensical argument advanced that chance, misunderstanding or stupidity would prevent a policy that would be rooted in the interests of all classes and control their fate is a far cry from scientific thinking (even though the expression "scientific" socialism is often uttered by the Communist Party).
The Communist Party fails to understand the essential point that the "system of consumption" has an immanent necessity for capitalism, and this cannot be removed through reforms. The attempts to change this are complete nonsense and bring about no results (in the case of the attempt to overcome a recession this effort produces the "opposite result"). The expansion of consumption of the masses is thus a dilemma for capital. Even though this is intended to overcome the recession (through the expansion of the market for capital), this is a policy which would deepen and expand the recession (because the expansion of consumption through a wage increase would decrease profits for capitalists). Marx clearly recognized that limited consumption itself (i.e. the greatest possible limitation of consumption; that is, the greatest possible exploitation of the workers) is the basis of and starting point for large profits and thus capitalist prosperity.
An increase in workers consumption means a decrease in profit. Therefore, the dilemma is that an expansion of the workers' consumption would mean a loss of the (most important) basis of capital's prosperity, and the conditions for the development of a crisis would become greater. The Communist Party has been completely unable to "solve" this practical contradiction thus far, and will be unable to do so in the future.
The Communist Party has been unable to understand that the idea that a rise in wages could expand the market and play a role in "reviving the economy" is nothing but a simple fantasy, a mistaken one-sided view within the bourgeoisie. If a crisis deepens the bourgeoisie will immediately listen to "reason" and drop this fantasy under the pressure of reality, but the foolish petty bourgeoisie (i.e.
JCP) scramble to pick up this discarded illusion.
The idea that the market can be expanded through increased wages and thus a crisis-the concentrated expression of the contradictions of capitalistic production-can be combated is a bourgeois viewpoint, and moreover a temporary and superficial viewpoint.
If it were in fact possible under capitalism for the people's consumption to be enlarged to the point where profits were zero, then certainly all "insufficient consumption" could be eliminated and all crisis and depression would be finished. However, this in fact cannot and will not occur. The basis of the Communist Party's politics is the incredibly sweet fantasy (suitable for the petty bourgeoisie) regarding the capitalist mode of production which lacks an awareness that the "system of consumption" which signifies the exploitation of workers is necessary for capitalism and that essentially this base of capital cannot be alleviated.
Certainly if it were possible to expand the workers' consumption with no regard for profit, then it could be said that "insufficient consumption" in every sense could be eliminated, and capitalist recession could be solved. In that case the sublation of profit would mean that capitalism had ceased to be capitalism. However, before this stage could be reached, capital surely would have begun to counterattack. It is certainly impossible for wages to be raised to the point where the consumption limits of the workers were decisively eliminated. For this to happen the rule of capital would have to be abolished. Workers should never forget for a moment the essential limits of capital, i.e. capitalism is production for profit, not for the consumption.
The fantasy of the JCP in the end revolves around the idea that capitalism is not capitalism, and production is not for profit, but directly for consumption. As a result of this fantasy, they replace the class struggles of the workers with collaboration with the bourgeoisie and the attempt to convince the bourgeoisie to eliminate the contradictions of capitalism and to work together to obtain capitalist prosperity. In other words, raising the wages of the workers would be in the interest not only of the workers but also the bourgeoisie because the increased consumption would expand the market and thus be the path towards eliminating overproduction and overcoming the economic recession; as a result this would be a policy that would be good for all of the people. The reason why the bourgeoisie would not be aware of such a terrific position can only be explained by saying that they are dim-witted. They believe that this dogma is the truth, and that society can be saved by convincing the bourgeoisie of this. In fact, however, they don't understand the reality of capitalism and have lost all class-based perspective, and only spend their time babbling away inside their fantasy world. Their policy would never succeed because it lacks (or has "overcome") the awareness of the truth of class division and class struggle in capitalist society. Consequently, the "practice" of the JCP which is isolated from reality will inevitably collapse.
4. The Contradiction Between Production and
Consumption Under Capitalism
(but not as the underconsumption theorists understand it)
Just because the surplus value produced by the worker is realized doesn't mean
that production and consumption, or purchases and sales, are directly the same
thing without any contradictions. As Marx emphasized, under capitalism
production and consumption, purchases and sales, and supply and demand, while
being internally united, are externally independent moments with their own
movement, and herein lies the possibility for crisis to occur and develop.
Already under simple commodity production and circulation the possibility of
crisis developed, but under capitalistic production this develops further with
the greatest opportunity being in the relation between capital and labor.
The fools in the JCP say that "limited consumption" exists under
capitalistic production. Of course! The question, however, is not whether it
exists or not, but rather what is its character and significance. The balance
between production and consumption, supply and demand, and sales and purchases
is obvious in the case of the exchange of products, and in the case of simple
commodity production this also seems a fair proposition at a glance. This is
because the person who receives money for selling a commodity is also a person
who purchases a commodity. Under these conditions, any "limited
consumption" would be illogical. If one only abstracts from this simple
relationship, one could insist in the manner of Mill, Say or Ricardo, that sales
and purchases, and purchases and sales are in agreement and that production and
consumption are essentially identical, and hence general overproduction and
crisis could be refuted. However, under capitalistic production, this simple
argument is already completely meaningless. Say's theory of equilibrium, by
dissolving commodity exchange into the exchange of products, ignores the
historical limitations of commodity production, and thereby the possibility of
crisis can be denied.)
If we look at crisis in a purely formal manner, supply and demand are split and
in disagreement. Commodities are supplied (produced) which exceed that demand
able to purchase them. Here Say's simple theory of "harmony" and
"market theory", which states that since production is consumption and
purchases are sales, there is agreement between supply and demand, breaks down
from the start.
Marx argues that the possibility of crisis-for the moment only a possibility-is
given along with simple commodity production and develops further under capital.
"Nothing could be more foolish than the dogma that because every sale is a
purchase, and every purchase a sale, the circulation of commodities necessarily
implies an equilibrium between sales and purchases…But no one directly needs
to purchase because he has just sold. Circulation bursts through all the
temporal, spatial and personal barriers imposed by the direct exchange of
products, and it does this by splitting up the direct identity present in this
case between the exchange of one's own product and the acquisition of someone
else's into the two antithetical segments of sale and purchase. To say that
these mutually independent and antithetical processes form an internal unity is
to say also that their internal unity moves forward through external antitheses.
These two processes lack internal independence because they complement each
other. Hence, if the assertion of their external independence [aausserliche
Verselbstandigung] proceeds to a certain critical point, their unity violently
makes itself felt by producing-a crisis. There is an antithesis, immanent in the
commodity, between use-vale and value, between private labour which must
simultaneously manifest itself as directly social labour, and a particular, and
a particular concrete kind of labour which simultaneously counts as merely
abstract universal labour, between the conversion of things into persons and the
conversion of persons into things [personification of things and reification of
persons-footnote in Penguin edition]; the antithetical phases of the
metamorphosis of the commodity are the developed forms of motion of this
immanent contradiction. These forms therefore imply the possibility of crisis,
though no more than the possibility. For the development of this possibility
into a reality a whole series of conditions is required, which do not even exist
from the standpoint of the simple circulation of commodities."
("Capital" Volume. I, pp. 208-9; Penguin Classics)
However, this disagreement between supply and demand is simply a possibility,
and in normal conditions of capitalist production it does not occur. Of course,
there is some possibility for this to occur partially (i.e. in the case of
individual commodities or a certain sector of industry), but this does not occur
in general. While it might not be possible to sell a given product, but in fact
(usually) they can be sold. In general it does a disequilibrium between supply
and demand does not occur wherein too many commodities are supplied and
(produced)-or too little demand (purchases) which amounts to the same thing. A
perpetual crisis cannot occur in capitalism. Commodities are swallowed up by the
market and are able to be sold smoothly. It is an abnormal or particular case
that they are not sold.
However, in simple circulation it occurs in some cases that the agreement
between supply and demand and purchases and sales is lost. For example, a person
who sells a commodity hoards the money from this sale instead of purchasing a
commodity. This person puts a commodity into circulation, but that is all. He
does not pull a corresponding commodity out of circulation. That is, instead of
using the money earned from the sale of his commodity to pull a commodity out of
circulation, he elects to save this money. Since we have to admit that this is
not merely a random occurrence, but a necessity that can generally occur, it
appears that even in the case of simple commodity circulation, supply and demand
and sales and purchases are not always in balance. This is a formal possibility
but definitely not an arbitrary one. Rather, it is a possibility that is
inseparably and internally linked to commodity production. Under capitalistic
production this takes on an even greater scale, and appears in this production
as an inevitable thing. Since the goal of the capitalist is normally
accumulation and accumulation is achieved through the transformation of surplus
value for capital, it is an everyday occurrence that a purchase doesn't follow a
sale. Of course the actions of individual capitalists are offset. When one
capitalist sells but doesn't buy, another capitalist buys but doesn't sell.
Therefore, if the capitalist class is taken as a whole it could be said that
supply and demand and purchases and sales are roughly in agreement. However,
even with capitalists taken as a whole, can it really be said that there is a
moment or time where there are only purchases and no sales, or only sales and no
purchases? This occurs in the case of the individual capitalist, but even when
the capitalists are taken as a whole, can the possibility be denied that this
will not be offset? Considering the capitalist class en masse, can one declare
that the situation would not arise in which there were only purchases and no
sales, or an avalanche in the opposite direction? Formally the possibility of
this occurring could not be denied (and if this occurs it would signify a
crisis). This thus signifies the possibility of crisis and its development. At
any rate, it can and does occur that sales and purchases can appear as the
independent moments of supply and demand, as unrelated moments.
We also know, of course, that under the system of capitalist production not only
are there cases where there are only sales and no purchases, but also cases with
only purchases and no sales. For instance, in the case of large scale industries
which require a long period of time to be established, a number of years are
dedicated solely to the purchase of the means of production (machinery, factory
facilities, etc.) In this case, no commodities are thrown into circulation for
the simple reason that production has not yet commenced. It is worthless to
insist that with the commencement of production the case will be reversed and
sales would be greater than purchases and thus it could be said that in the end
it is offset and purchases are sales and sales are purchases. Although this is
probably true in the long term, if we take a given moment, a decisive gap and
huge difference between supply and demand, and purchases and sales.
"If we were to consider a communist society in place of a capitalist one,
then money capital would immediately be done away with, and so too the disguises
that transactions acquire through it. The matter would be reduced to the fact
that the society must reckon in advance how much labour, means of production and
mass of subsistence it can spend, without dislocation, on branches of industry
which, like the building of railways, for instance, supply neither means of
production nor means of subsistence, nor any kind of useful effect, for a long
period, a year or more, though they certainly do withdraw labour, means of
production and means of subsistence from the total annual product. In capitalist
society, on the other hand, where any kind of social rationality asserts itself
only post festum (after the feast: too late to have any effect), major
disturbances can and must occur constantly. On the one hand there is pressure on
the money market, while conversely the absence of this pressure itself calls
into being a mass of such undertakings, and therefore the precise circumstances
that later provoke a pressure on the money market. The money market is under
pressure because large-scale advances of money capital for long periods of time
are always needed here. This is quite apart from the fact that industrialists
and merchants throw the money capital they need for the carrying on of their
businesses into railway speculations, etc., and replace it with loans from the
money market. The other side of the coin is pressure on the society's available
productive capital. Since elements of productive capital are constantly being
withdrawn from the market and all that is put into the market is an equivalent
in money, the effective demand rises, without this in itself providing any
element of supply" (Capital Vol. 2. ch. 16)
In capitalist production the stage of simple commodity production has be
superseded, and thus the possibility of crisis is magnified. For example, let's
consider the relationship between capitalists and workers. Here the purchase and
sale directly appear as two different things.
First let's look at the capitalist. He must "sell at a higher price than he
purchased". This can be said because he sells commodities which includes
more value than the ones he purchased. The commodities he purchases and takes
out of circulation take the form of means of production and labour power
(commodities as constant capital and variable capital), but the commodities he
sells and puts into circulation are commodities in which the value of the means
of production and labour power have been added, and which include the surplus
value exploited from the workers in the process of production (commodities as
the body of value in which surplus value has been added to the variable and
constant capital). Of course, this has nothing to do with the arbitrary decision
of the capitalist to sell the commodity at a higher price which is merely a
necessary action for as long as a capitalist remains a capitalist, and a normal
occurrence in a capitalist society. The motive and goal of the capitalist's
productive and economic activity is the acquisition of this surplus-that is, to
"buy cheap and sell dearly" gives rise to a gap between sales and
purchases. For this reason, for the individual capitalist "supply" and
"demand" do not, and cannot, directly be in agreement.
In the case of the workers it is the same. If the capitalist doesn't buy or
doesn't sell, the worker sells more and consumes less, i.e. "under"
consumes. What the worker is paid (wages, i.e. constant capital) and what he
hands over to the capitalist in exchange (value) include the surplus value part
in addition to the constant capital part. However, what the worker is paid is
purely the constant capital part. For instance, even though the workers produces
value for the capitalist of 1,000,000 Yen, they are merely paid half that
amount, 500,000 Yen, in wages for the price of their labour power commodity. The
capitalist receives 500,000 Yen as profit. In other words, the workers are
exploited. Although this part was produced by the workers, it is not realized
for them. Even though the workers (through the mediation of the capitalist) put
commodities with a value of 1,000,000 Yen into circulation, they only withdraw
half of that in paid compensation with commodities From the workers' viewpoint
the commodities with a value of 500,000 Yen are a surplus. The workers
"under-consumption" appears as an unmistakable reality. Since this
phenomenon is simply accepted, the mistaken theory of under-consumption was
born, this is the basis for the fact that this theory spread so easily.
Thus, under relations of capitalist production and class relations, the
proposition that at a glance production and consumption are in agreement appears
as something irrational because the working class cannot "purchase",
and as a result "consume", everything that they themselves have
produced. The workers only produce as long as they produce surplus value, i.e.
as long as they produce something above their production for themselves. In
other words, production and consumption only take place as long as things are
produced in addition to production for their own consumption, that is,
production of surplus value for the capitalist. If the worker only produces for
his own consumption, that is if no unpaid labor for the capitalist is carried
out, no surplus value will be produced and the worker will certainly cease to
work. If the worker doesn't produce surplus value for the capitalist, he also
will not (cannot) produce for his own consumption. So as long as the workers
produce, they must produce surplus value for the capitalist, i.e. labor
performed in excess of that done for their own consumption, in this way they are
wage workers. In this sense, the workers always produces "too much",
and produces in excess of consumption. Say's simple proposition that production
and consumption, and supply and demand are in agreement, appears at a glance to
be mistaken in the case of the workers, i.e. in the case of the relation between
capital and waged labor. In the case of commodities consumed individually in
which one's labor is objectified as value, not to mention those commodities
industrially consumed, the workers are certainly unable to purchase all of them.
Production and consumption each appear as separate, independent and mutually
unconcerned moments. Here the "internal unity" between the two appears
meaningless at a glance.
Of course, this is a consequence of capitalistic production but this does not
directly mean that this is "impossible" or "unrealizable" in
capitalism (Rosa Luxemburg and Narodnik theorists often understood it in this
way). Marx emphasized in the following passage that even if the limits of
workers consumption give birth to partial overproduction in the production
sector of consumption goods which leads to overproduction in related production
sectors, this in itself still does not signify general overproduction:
"This argument, however, cuts two ways. If it is easily understood how
overproduction of some leading articles of consumption must bring in its wake
the phenomenon of a more or less general overproduction, it is by no means clear
how overproduction of these articles can arise. For the phenomenon of general
production is derived from the interdependence not only of the workers directly
employed in these industries, but of all branches of industries which produce
the elements of their products, the various stages of their constant capital. In
the latter branches of industry, overproduction is an effect. But whence does it
come in the former? For the latter continue to produce so long as the former go
on producing, and along with this continued production, a general growth in
revenue, and therefore in their own consumption seems assured." (MECW Vol.
32, p. 153)
This passage shows the errors of the JCP's simplistic "theory of
underconsumption" (the theory which explains crisis as a result of
underconsumption, particularly the underconsumption of the workers). In other
words, Marx says that the limited consumption of the workers can be understood
to lead to overproduction in certain production sectors of consumption goods,
but this is all; it cannot explain general overproduction. Marx's view creates
serious havoc for the vulgar view of the JCP. Overproduction in general must be
explained from a different moment.
Believers in the JCP's theory of underconsumption are completely unable to
understand that in order for workers to continue their own production, and hence
their consumption, it is necessary for them to produce in excess (extension of
labor time) of the production needed for their own consumption (labor time),
i.e. they must produce surplus value for the capitalist. Moreover, if this does
not occur, even the production for themselves will not be carried out, and thus
their own "consumption" will become impossible.
Following their pathetic wisdom they reach the conclusion that if the workers
would only produce for their own consumption, overproduction would definitely
not occur since the workers would only be producing for themselves and nothing
would be superfluous (the JCP only vaguely say that the consumption of the
workers would be increased, but they don't say that this increase would make
surplus value impossible). However, this is only correct if workers are
understood as small producers, not exploited by capital, whose consumption is
based on the sale of what they have produced themselves. (However this can only
be said in the abstract theoretical meaning.)
Incidentally, the JCP claims that crisis can be evaded through the expansion of
workers consumption, but do they mean to say that consumption can be expanded to
any extent, and that if consumption is expanded to any extent a crisis can be
avoided? If the workers were to consume all they had produced, this would be the
negation of capitalist production which aims for the production of surplus
value, and would thus signify socialism. However, they usually posit their
demands "within the framework of capitalism", and hence their demand
for increased consumption not only does not contradict the production of surplus
value, but exists comfortably within this framework. In other words, they pursue
the absolutely contradictory, and utopian demand of eliminating the workers'
limited consumption without eliminating the very basis of their limited
consumption.
Under capitalistic production relations, production, and hence consumption, can
only occur as long as surplus value is produced for capital. Herein, the
"system of consumption" is included as an essential moment, and these
relations can only be sublated by overcoming capitalistic production. On the one
hand, the JCP appear to be opposed to the "limited consumption" of the
workers, but in the next breath they say that they don't deny the base of this
"limited consumption" , i.e. capitalistic production, and hence they
approve of the continuation of the workers' "limited consumption".
Since they declare that as long as the worker's consumption is limited
recessions will continue and worsen, it could be said that they are promising
the eternal existence and continuation of recession, and are defending the basis
of this society.
Marx certainly emphasized that consumption is "limited" under
capitalism, not in the simplistic manner of the underconsumption theorists (the
impossibility of realizing surplus value), but always as the opposition under
capitalism between the productive power and the anarchical development of
production. Under capitalism, production and consumption (market) are separate
things, mutually isolated and independent, and governed by distinct laws of
motion. Therefore, even though originally they are internally united, they
become decisively remote from each other. Furthermore, Marx discussed each of
the laws that govern production and consumption (market). Under capitalistic
production relations, production is expanded through anarchical, and accelerated
development. On the other hand, consumption, or in capitalistic terms the
market, cannot expand in proportion to productive power and production, but is
limited under capitalistic production relations, i.e. relations underpinned by
the exploitation of labor. Let's now look more closely at this phenomenon.
5. "The Cause of Crisis"-"Limited
Consumption" and the Development of Unrestricted Productive Power
Marx also emphasized that "limited consumption" has important meaning
for crisis. However, the question is what meaning, and in what sense does it
hold important meaning. It is completely meaningless to explain crisis as merely
"insufficient consumption" and thus propose solving crisis simply
through an expansion of consumption, i.e. a wage increase and an alternation in
distribution.
Marx repeatedly said that the true cause of crisis is not limited consumption,
but capital itself, the limits of capital. The cause and basis of crisis is
precisely the limits of capital; crisis is not the result of insufficient
consumption. Likewise, the basis of overproduction is not insufficient
production, but the "limits" of capital. The problem is capital
itself.
What does Marx mean, exactly, by the expression "the limits of
capital" or "capital itself"?
The most characteristic phenomenon of crisis is overproduction. In other words,
a situation in which commodities are produced which do not find a demand and
unsold commodities pile up (in some cases they are burned and in others thrown
into the ocean). The superficial view when faced with this phenomenon (currently
represented by the JCP and trade unionists, as well as Keynesianism)-says that
since consumption is insufficient there must be overproduction, i.e. production
that exceeds consumption. Since capitalistic production always keeps the workers
wages at the minimum level needed for its existence this view seems to be
entirely justified. These are the actual conditions for the prevalence of the
theory of underconsumption.
Marx was in fact opposed to this common view and consistently denounced the
theory of underconsumption and emphasized that the problem was not simply one of
underconsumption, but the original "limits" existing in capital
itself, the essential limits within the capitalistic means of production.
According to Marx, the expression "overproduction" conveys a mistaken
understanding because it gives the illusory impression that society's most
essential needs are satisfied. However, as any worker knows, despite even the
most urgent needs of the workers being limited, the occurrence of crisis, i.e.
overproduction, is not at all rare, but in fact common. In this sense, it is
definitely not a question of the demand or the "absolute" needs of
society. For Marx the question is "the capitalists' profit", not the
needs of society i.e. the producers. On this same point Marx criticized Ricardo
who, following Say, offered the concept that demand is supply and supply is
demand (or production is consumption and consumption is production). For Marx
this view completely ignored the particularity of capitalistic production. Marx
wrote:
"But the whole process of accumulation in the first place resolves itself
into surplus production, which on the one hand corresponds to the natural growth
of the population, and on the other hand, forms an inherent basis for the
phenomenon which appear during crises. The criterion of this surplus production
is capital itself, the scale on which the conditions of production are available
and the unlimited desire of the capitalists to enrich themselves and to enlarge
their capital, but by no means consumption, which from the outset is inhibited,
since the majority of the population, the working people, can only expand their
consumption within very narrow limits, whereas the demand for labour, although
it grows absolutely, decreases relatively, to the same extent as capitalism
develops. Moreover, all equalisations are accidental and although the proportion
of capital employed in individual spheres is equalised by a continuous process,
the continuity of this process itself equally presupposes the constant
disproportion which it has continuously, often violently, to even out." (MECW
Volume 32 pp. 123-4)
Many things are discussed in this passage. The first point emphasized is that
the "limit" of capitalistic production, that is, production with the
aim of surplus value, is not limited production, but "capital itself".
Marx positions "the scale on which the conditions of production are
available" on one hand, and "the unlimited desire of the capitalists
to enrich themselves and to enlarge their capital" on the other, and
emphasizes the contradiction and struggle between them. This is at the
foundation of the explanation of crisis. The repeated use of this concept in the
same expressions shows us that this is fundamental to Marx's thought. Expressed
in slightly different and more general terms, this is the contradiction between
the capitalistic relations of production and the rapid, anarchical development
and expansion of the productive forces within them.
In this passage Marx also insists that the limits to the production of surplus
value are not consumption limited from the outset, which should make it even
more clear that the JCP's theory of underconsumption has nothing to do with
Marxism. In the case of consumption, under capitalistic production consumption
is limited "from the outset"-the exploitation of the working masses by
capital is the condition which precedes their labor and existence. Removing this
condition leads to a circular argument which amounts to the same thing as
proving the "impossibility of capitalistic production".
The impulse to gain wealth and the impulse of capitalization are definitely not
the same thing. The impulse to save is not particular to the capitalist, but can
be seen in ruling classes preceding the capitalists. The essential
characteristic of capitalists is not only their impulse for surplus value, but
the impulse for capitalization, i.e. to accumulate capital and expand
reproduction. This objective is not merely to expand consumption or accumulate
wealth, but to reinvest capital, exploit labor on a greater scale, and obtain
ever larger profits. Moreover, this inevitably includes, or is internally
connected to, a lowering in the value of commodities through general competition
and the increase in productive power, the ruin of many capitalists and the
concentration of capital, an increase in the organic composition of capital, and
a trend towards decreased profit ratios.
Let's look at a few representative passages:
"Assuming the necessary means of production, i.e. a sufficient accumulation
of capital, the creation of surplus-value faces no other barrier than the
working population, if the rate of surplus-value, i.e. the level of exploitation
of labour, is given; and no other barrier than this level of exploitation, if
the working population is given. And the capitalist production process
essentially consists of this production of surplus-value, represented in the
surplus product or the aliquot portion of commodities produced in which unpaid
labour is objectified. It should never be forgotten that the production of this
surplus-value-and the transformation of a portion of it back into capital, or
accumulation, forms an integral part of surplus-value production-is the
immediate purpose and the determining motive of capitalist production.
Capitalist production, therefore, should never be depicted as something that it
is not, i.e. as production whose immediate purpose is consumption, or the !
!
production of the means of enjoyment for the capitalist. This would be to ignore
completely its specific character, as this is expressed in its basic inner
pattern.
It is the extraction of this surplus-value that forms the immediate process of
production, and this faces no other barriers than those just mentioned. As soon
as the amount of surplus labour it has proved possible to extort has been
objectified in commodities, the surplus-value has been produced. But this
production of surplus-value is only the first act in the capitalist production
process, and its completion only brings to an end the immediate production
process itself. Capital has absorbed a given amount of unpaid labour. With the
development of this process as expressed in the fall in the profit rate, the
mass of surplus-value thus produced swells to monstrous proportions. Now comes
the second act in the process. The total mass of commodities, the total product,
must be sold, both that portion which replaces constant and variable capital and
that which represents surplus value. If this does not happen, or happens only
partly, or only at prices that are less than the price of production, then
although the worker is certainly exploited, his exploitation is not realized as
such for the capitalist and may even not involve any realization of the
surplus-value extracted, or only a partial realization; indeed, it may even mean
a partial or complete loss of his capital. The conditions for immediate
exploitation and for the realization of that exploitation are not identical. Not
only are they separate in time and space, they are also separate in theory. The
former is restricted only by the society's productive forces, the latter by the
proportionality between the different branches of production and by the
society's power of consumption. And this is determined neither by the absolute
power of production nor by the absolute power of consumption but rather by the
power of consumption within a given framework of antagonistic conditions of
distribution, which reduce the consumption of the vast majority of society to a
minimum level, only capable of varying within more or less narrow limits. It is
further restricted by the drive for accumulation, the drive to expand capital
and produce surplus-value on a larger scale. This is the law governing
capitalist production, arising from the constant revolutions in methods of
production themselves, from the devaluation of the existing capital which is
always associated with this, and from the general competitive struggle and the
need to improve production and extend its scale, merely as a means of
self-preservation, and on pain of going under. The market, therefore, must be
continually extended, so that its relationships and the conditions governing
them assume ever more the form of a natural law independent of the producers and
becomes ever more uncontrollable. The internal contradiction seeks resolution by
extending the external field of production. But the more productivity develops,
the more it comes into conflict with the narrow basis on which the relations of
consumption rest. It is in no way a contraction, on this contradictory basis,
that excess capital coexists with a growing surplus value; for although the mass
of surplus-value produced would rise if these were brought together, yet this
would equally heighten the contradiction between the conditions in which this
surplus-value was produced and the conditions in which it was realized."
(Capital Vol. 3 pp. 352-3)
"In short, all the objections raised against the obvious phenomena of
overproduction (phenomena that remain quite impervious to these objections)
amount to saying that the barriers to capitalist production are not barriers to
production in general and are therefore also not barriers to this specific,
capitalist mode of production. But 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.
It is not that too many means of subsistence are produced in relation to the
existing population. On the contrary. Too little is produced to satisfy the mass
of the population in an adequate and humane way.
Nor are too many means of production produced to employ the potential working
population. On the contrary. What is produced is firstly too great a section of
the population which is in fact incapable of work, which owing to its situation
is dependent on the exploitation of the labour of others or on kinds of work
that can only count as such within a miserable mode of production. Secondly, not
enough means of production are produced to allow the whole potential population
to work under the most productive conditions, so that their absolute labour-time
is curtailed by the mass and effectiveness of the constant capital applied
during this labour time.
Periodically, however, too much is produced in the way of means of labour and
means of subsistence, too much to function as means for exploiting the workers
at a given rate of profit. Too many commodities are produced for the value
contained in them, and the surplus-value included in this value, to be realized
under the conditions of distribution given by capitalist production, and to be
transformed back into new capital, i.e. it is impossible to accomplish this
process without ever-recurrent explosions. It is not that too much wealth is
produced. But from time to time, too much wealth is produced in its capitalist,
antagonistic forms." (Ibid pp. 366-7)
"Overproduction 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; and this is carried out through
continuous expansion of reproduction and accumulation, and therefore constant
reconversion of revenue into capital, while on the other hand, the mass of the
producers remain tied to the average level of needs, and must remain tied to it
according to the nature of capitalist production." (V. 32 pp. 163-4)
"The ultimate reason for all real crises always remains the poverty and
restricted consumption of the masses, in the face of the drive of capitalist
production to develop the productive forces as if only the absolute consumption
capacity of society set limit to them." (Capital III chapter 30)
As is clear from the last citation, for Marx the cause of crisis was not purely
limited consumption, the limited consumption of the masses becomes a problem
because society's "absolute consumption capacity" is limited and this
checks the impulse to develop the productive power. The consumption of the
people is limited by the capitalistic mode of production, and thus also its mode
of distribution. In capitalistic development, this consumption ultimately is
restricted and explodes as crisis.
"To express this contraction in the most general terms, it consists in the
fact that the capitalist mode of production tends towards an absolute
development of the productive forces irrespective of value and the surplus-value
it contains, and even irrespective of the social relations within which the
capitalist production takes place; while on the other hand its purpose is to
maintain the existing capital value and to valorize it to the utmost extent
possible (i.e. an ever accelerated increase in this value). In its specific
character it is directed towards using the existing capital as a means for the
greatest possible valorization of this value. The methods through which it
attains this end involve a decline in the profit rate, the devaluation of the
existing capital and the development of the productive forces of labour at the
cost of the productive forces already produced.
The true barrier to capitalist production is capital itself. It is that capital
and its self-valorization appear as the starting and finishing point, as the
motive and purpose of production; production is production only for capital, and
not the reverse, i.e. the means of production are not simply means for a
steadily expanding pattern of life for the society of the producers. The
barriers within which the maintenance and valorization of the capital-value has
necessarily to move-and this in turn depends on the dispossession and
impoverishment of the great mass of the producers-therefore come constantly into
contradiction with the methods of production that capital must apply to its
purpose and which set its course towards an unlimited expansion of production,
to production as an end in itself, to an unrestricted development of the social
productive powers of labour. The means-the unrestricted development of the
forces of social production-comes into persistent conflict with the restricted
end, the valorization of the existing capital. If the capitalist mode of
production is therefore a historical means for the developing the material
powers of production and for creating a corresponding world market, it is at the
same time the constant contradiction between this historical task and the social
relations of production corresponding to it." (Capital III pp. 358-9)
In capitalist society, the market does not create production, production creates
the market-no matter how illogical this appears, it is nonetheless profoundly
true for capitalistic production. In other words, production and the market are
definitely not in agreement, and usually production exceeds the market. The
market does not expand in proportion to production, or does not develop or
expand as rapidly as production. This is a contradiction, but an inescapable
contradiction under capitalism. Under capitalism production exceeding
consumption and the market and supply exceeding demand appears as one inevitable
law.
According to Marx, production usually expands rapidly. This is because, first of
all, the capital invested in production always increases (capital accumulation
and the transformation of capital into surplus value is the nature of capital);
and secondly, through capital becoming increasingly productive. Hence,
production increases rapidly, but the market does not, and cannot, expand to
meet this. This does not mean that surplus value, i.e. the value exploited from
the workers, is not realized (or "consumed"), but the failure of the
expansion of consumption to keep pace with the expansion of production is one
contradiction which at a certain stage necessitates a forced readjustment. If a
certain stage of disequilibrium is reached, a violent retraction must occur.
It is absurd to ask the question why this takes a violent form under
capitalistic production, and whether this is indeed necessary. In a society in
which there is anarchy in production and the various internally united moments,
such as value and use value, production and consumption (market), supply and
demand, value and its realization, or productive capital and money capital,
etc., are externally independent, and move and develop according to their own
particular laws; that is, in a society penetrated by this sort of disequilibrium,
a general crisis is the only means to readjust, and achieve equilibrium.
Hasn't the bourgeoisie always stressed that things can be safely left to the
movement of the "market economy" and advocated its (anarchistic
movement) usefulness? In that case, isn't crisis also one of the
"automatic" harmonizing effects of the market economy? If they are
going to praise the splendid movement of the market, they would also have to
accept crisis to be consistent. It is self-contradictory to praise the
harmonization and adjustment function of the market, but to be frightened by
crisis which is the most sharp and decisive manifestation of this function. If
one accepts the market, one must also accept crisis; if one applauds the market,
one must also applaud crisis-because they are both fundamentally the same, and
are both the essence of the same capitalistic mode of production. Apart from
crisis, there is no other way that equilibrium can be reached in such a thorough
form for the sake of capital and its continuation, those who can't understand
this reveal their ignorance. One cannot only credit the market economy for
fortunate circumstances without recognizing crisis as a characteristic
manifestation of this market economy.
"The market expands more slowly than production; or in the cycle through
which capital passes during its reproduction-a cycle in which it is not simply
reproduced but reproduced on an extended scale, in which it describes not a
circle but a spiral-there comes a moment at which the market manifests itself as
too narrow for production. This occurs at the end of the cycle. But it merely
means: the market is glutted. Overproduction is manifest. If the expansion of
the market had kept pace with the expansion of production there would be no glut
in the market, no overproduction. However, the mere admission that the market
must expand with production, is, on the other hand, again an admission of the
possibility of overproduction, for the market is limited externally in the
geographical sense, the internal market is limited as compared with a market
that is both internal and external, the latter in turn is limited as compared
with the world market, which however is, in turn, limited at each moment of
time, [though] in itself capable of expansion. The admission that the market
must expand if there is to be no overproduction, is therefore also an admission
that there can be overproduction. For it is then possible-since market and
production are two independent factors-that the expansion of one does not
correspond with the expansion of the other; that the limits of the market are
not extended rapidly enough for production, or that new markets-new extensions
of the market-may be rapidly outpaced by production, so that the expanded market
becomes just as much a barrier as the narrower market was formerly." (MECW
Volume 32 pp. 153-4)
According to Marx's view, production and consumption (market) are distinct
things, and under capitalism develop and move in mutually independence and
autonomy. Certainly both are united and internally connected, but one character
of capitalism is that because they are also inescapably mutually independent and
in opposition, at a certain stage this contradiction must explode as a crisis.
Say, Mill and Ricardo said that production and consumption are simply identical;
that production is consumption, and consumption is production (or sales are
purchases, and supply is demand). However, the underconsumption theorists also
simply contrapose production and consumption in the same manner as the
equilibrium theorists. By basing their theory on an incorrect understanding
(surplus value could not be realized, etc.) to offer a simplistic account of
disequilibrium between production and consumption (market), and thus failing to
understand the real contradiction in capitalistic production, they are more or
less the same as the equilibrium theorists. They understand the contradictions
of capitalism in an extremely narrow way.
6. Crisis and the Fate of the Capitalist Mode of
Production
Crisis is the essence of capitalism, and thus its evaluation is at the same time
a judgement on capitalism. It is nonsense to say that capitalism is good, and
only crisis is bad (e.g. capitalism would be an ideal society if crisis were
eliminated). Crisis is the concentrated expression of the contradictions of
capitalism which explode in a visible form.
Marx emphasized that crisis revealed the inevitable limits of capitalism and the
inevitable limits of this mode of production which must be transformed into
socialism. This conception is precisely the same as the materialist conception
of history. For Marx, the recognition of the essential content and limitations
of capitalism in itself elucidates the nature of crisis. In this sense, the
viewpoint that "there is no systematic theory of crisis within
Marxism", or that "Marx was unwilling to construct a theory of
crisis" is mistaken.
"Beyond a certain point, the development of the productive forces becomes a
barrier to capital, and consequently the relation of capital becomes a barrier
to the development of the productive forces of labour. Once this point has been
reached, capital, i.e. wage labour, enters into the same relation to the
development of social wealth and the productive forces as the guild system,
serfdom and slavery did, and is, as a fetter, necessarily cast off. The last
form of servility assumed by human activity, that of wage labour on the one hand
and of capital on the other, is thereby shed, and this shedding is itself the
result of the mode of production corresponding to capital. It is precisely the
production process of capital that gives rise to the material and spiritual
conditions for the negation of wage labour and capital, which are themselves the
negation of earlier forms of unfree social production." (Grundrisse, MECW
Volume 29 pp. 133-4)
Marx said that each of the essential sides of capitalism were represented in the
theories and thought of Ricardo and Sismondi. If Ricardo represents the
"positive" side of capitalism by disregarding the limits of demand,
consumption and the market and how these limits impact on the development of the
productive forces, and how this trend itself prepares the material conditions
for socialism; Sismondi theoretically represents the "negative" side
of capitalism and its limits such as the explosions of crisis. According to
Marx, in the opposition between these two representative theories, the essence
of capitalism, and hence the essence of crisis, was revealed.
"The universality towards which it (capital) irresistibly strives
encounters barriers in its own nature, which will, at a certain stage of its
development, allow it to be recognized as being itself the greatest barrier to
this tendency, and hence will drive towards its own suspension.
Those economists who, like Ricardo, conceived production as directly identical
with the self-realization of capital-and hence were heedless of the barriers to
consumption or of the existing barriers of circulation itself, to the extent
that it must represent counter-values at all points, having in view only the
development of the forces of production and the growth of the industrial
population-supply without regard to demand-have therefore grasped the positive
essence of capital more correctly and more deeply that those who, like Sismondi,
emphasized the barriers of consumption and of the available circle of
counter-values, although the latter has better grasped the limited nature of
production based on capital, its negative one-sidedness…Sismondi, by contrast,
emphasizes not only the encounter with the barriers, but their creation by
capital itself, and has a vague intuition that they must lead to its breakdown.
He therefore wants to put up barriers to production, from the outside, through
custom, law, etc., which of course, as merely external and artificial barriers,
would necessarily be demolished by capital. On the other side, Ricardo and his
entire school never understood the really modern crises, in which this
contradiction of capital discharges itself in great thunderstorms which
increasingly threaten it as the foundation of society and of production
itself." (Grundrisse pp. 410-1)
"Sismondi is profoundly conscious of the contradictions in capitalist
production; he is aware that, on the one hand, its forms-its production
relations-stimulate unrestrained development of the productive power and of
wealth; and that, on the other hand, these relations are conditional, that their
contradictions of use value and exchange value, commodity and money, purchase
and sale, production and consumption, capital and wage labour, etc., assume ever
greater dimensions as productive power develops. He is particularly aware of the
fundamental contradiction: on the one hand, unrestricted development of the
productive power and increase of wealth which, at the same time, consists of
commodities and must be turned into cash; on the other hand, the system is based
on the fact that the mass of producers is restricted to the necessaries. Hence,
according to Sismondi, crises are not accidental, as Ricardo maintains, but
essential outbreaks-occuring on a large scale and at definite periods-of the
immanent contradictions. He wavers constantly: should the State curb the
productive forces to make them adequate to the production relations, or should
the productive relations be made adequate to the productive forces? He often
retreats into the past, becomes a laudator temporis acti (eulogiser of the
past), or he seeks to exorcise the contradictions by a different adjustment of
revenue in relation to capital, or of distribution in relation to production,
not realising that the relations of distribution are only the relations of
production seen sub alia specie (from a different aspect). He forcefully
criticises the contradictions of bourgeois production but does not understand
them, and consequently does not understand the process whereby they can be
resolved. However, at the bottom of his argument is indeed the inkling that new
forms of the appropriation of wealth must correspond to productive forces and
the material and social conditions for the production of wealth which have
developed within captialist society; that the bourgeois forms are only
transitory and contradictory forms, in which wealth attains only an antithetical
existence and apears everywhere simultaneously as its opposite. It is wealth
which always has poverty as its prerequisite and only develops by developing
poverty as well." (V. 32 pp. 247-8)
The significance of these representative passages should be clear. Here it is
revealed that the fundamental contradiction of the capitalistic mode of
production is the contradiction between productive power and the relations of
production, and that crisis is also determined by this.
Finally we need to consider the practical meaning of the theories which explain
crisis from under-consumption. However, the answer can already be found in the
history of capitalism where several varieties of under-consumption theories have
appeared which have been met with unsparing criticism from the camp of
revolutionary Marxists.
Marx criticized the petty bourgeois theorists who hope for "harmony"
between production and consumption through the agreement of "demand and
supply" in the following way:
"Fuit Troja (Troy is no more). This correct proportion between supply and
demand, which is beginning once more to be the object of so many wishes, ceased
long ago to exist. It has passed into the stage of senility. It was possible
only at a time when the means of production were limited, when the movement of
exchange took place within very restricted bounds. With the birth of large-scale
industry this correct proportion had come to an end, and production inevitably
compelled to pass in continuous such cession through vicissitudes of prosperity,
depression, crisis, stagnation, renewed prosperity, and so on.
Those who, like Sismondi, wish to return to the correct proportion of
production, while preserving the present basis of society, are reactionary,
since, to be consistent, they must also wish to bring back all the other
conditions of industry of former times. What kept production in correct, or more
or less correct, proportions? It was demand that dominated supply, that preceded
it. Production followed close on the heels of consumption. Large-scale industry,
forced by the very instruments at its disposal to produce on an ever-increasing
scale, can no longer wait for demand. Production precedes consumption, supply
compels demand.
In existing society, in industry based on individual exchange, anarchy of
production, which is the source of so much misery, is at the same time the
source of all progress.
Thus, one or the other:
Either you want the true proportions of past centuries with present-day means of
production, in which case you are both reactionary and utopian.
Or you want progress without anarchy: in which case in order to preserve the
productive forces, you must abandon individual exchange." (The Poverty of
Philosophy pp. 61-2)
There is nothing add to this passage, because on a daily basis we can confirm
that the JCP, have become defenders of the "old" petty bourgeois
relations on the one hand, and have prostituted themselves as bourgeois clerks
seeking to reform, not revolutionize, the capitalist relations of production on
the other hand. Instead of choosing Marx's proposal of "one or the
other", for the time being they jumble the two together. Of course their
progress (degeneration) into the bourgeois-like liberalism of petty bourgeois
"citizen activists" (jiminshugisha) is inevitable, and this shameless
progress continues right in front of our eyes.
Lenin exposed the practical meaning of the Narodnik (today's JCP) theory in the
following way:
"Indeed, if we explain crises by the impossibility of realising products,
by the contradiction between production and consumption, we are thereby led to
deny reality, the soundness of the path along which capitalism is proceeding; we
proclaim this path to be a "false one," and go out in quest of
"different paths." In deducing crises from this contradiction we are
bound to think that the further it develops the more difficult will be the way
out of the contradiction…On the other hand, if we explain crises by the
contradiction between the social character of production and the individual
character of appropriation, we thereby recognise that the capitalist road is
real and progressive and reject the search for "different paths" as
nonsensical romanticism. We thereby recognise that the further this
contradiction develops the easier will be the way out of it, and that it is the
development of this system which provides the way out." (A Characterization
of Economic Romanticis!
!
m p. 173)
At the time of Lenin's criticism capitalism was beginning to develop in Russia.
This was thus a period wherein the problem was not one of overcoming the
capitalistic mode of production, but what path should be pursued to break free
of the feudalistic relations. Consequently, Lenin position was that the
progressive meaning of the capitalistic development had to be recognized.
Nonetheless, Lenin correctly described the essential nature of crisis and the
meaning it held within capitalistic production, and resolutely counter-attacked
petty bourgeois views.
Finally, let's examine the relation between crisis and the fate of the workers.
One conspicuous phenomenon which crisis exposes is the surplus in labor power.
Companies suddenly notice that they possess too much labor power for them to be
able to increase profits. As a result, they begin severe restructuring and focus
their attention on firing workers. They are never short of excuses, because if
the "excess" labor power is not reduced capital cannot continue to
exist. As long as capital survives, "morality" can never exist in this
society. Capital doesn't care if workers become homeless or don't have enough to
eat. To protect itself, capital will permit anything whether it be firing
workers or indirectly killing them For capital anything that is useful is
"good" and ethical.
Crisis is the violent re-unification and re-adjustment of various independent
moments under capital. For this reason, crisis stems from the nature of capital,
and is a chance for capital to sweep away the surplus population it is burdened
and get rid of the "excess" labor power in terms of production for
profit, and achieve equilibrium. It is natural that labor power is subordinate
with production for profit, and in this topsy-turvy society anything else is
unthinkable.
Crisis and its accompanying high unemployment means that labor power has also
become "surplus", and this is an essential side of overproduction and
excess capital. But what is excess labor power? An absolute surplus of labor
power is unthinkable, and the concept itself is self-contradictory. Under
capitalism, like consumption, this is only a surplus for capital. Labor power
becomes a surplus for capital when it is not possible to obtain surplus value
through employing it. The rapid development of the productive power of labor has
led to a contraction in labor time. For capital, however, this only appears as
the contradiction of surplus labor power and the inability of obtaining surplus
value through the employment of workers. It is clear that if labor time were
reduced rapidly, there would be no problem of a surplus of labor time for
production. Under socialistic production the problem would appear in such a
simple form, but capitalist society is different. Under capitalism, for example,
the reduction in labor time through the development of productive power appears
as mass unemployment which prepares the resistance of the workers. Under
socialism, the total labor of all the people could be reduced on a large
scale-for the individual people this would appear as the rapid reduction in
labor time, but in capitalist society the development of productive power leads
to the abolishment of a large number of workers' jobs, i.e. the loss of the
means of living, and if this progresses to an extreme it prepares a revolution.
Outside of a revolution, the possibility of a large reduction in labor time of
capital is turned into mass unemployment. In other words, a process which should
increase the welfare of the workers, becomes a source of their misery because
this upside-down system continues to exist.
7. The Stalinists' Concept of Crisis-Mendelison's
"Theory and History of Crisis"
If we look back at the history of the theoretical debates, Engels' expression of
the contradiction between "the social character of production and the
private character of appropriation" has frequently been cited to explain
crisis (especially among Stalinists). The convincing argument has been spread
that crisis should not be explained solely through a theory of
"under-consumption" or "disequilibrium", but rather must be
defined through an explanation of the fundamental contradictions of the
capitalistic mode of production. It is not a question, then, of denying the
theory of under-consumption or disequilibrium, but of correctly positing it
within an overall theory of crisis. According to this logic, if this is not
done, a correct understanding of crisis cannot be reached. Now is the time to
completely break with this vulgar theory. As a result of the spread of this
"Stalinist" dogma the "Marxist" theory of crisis has grown
stale and become a boring and obscure heap of redundancy. Today there is nothing
as dried up and unappealing as the "Marxist" theory of crisis, and it
is no exaggeration to say that the responsibility for this lies with the
Stalinists (Communist Party) and their dogma.
Of course, it is absolutely correct to say that a theory of under-consumption or
disequilibrium by itself is mistaken since it superficially explains the
contradictions of the capitalistic mode of production, and is thus misused by
reformists and revisionists to serve their own opportunism. Moreover, it is a
correct formulation of the problem to say that crisis must also be explained
from the fundamental contradictions in the capitalistic mode of production (as
Marx said, crisis is the "concentrated expression of the contradictions of
capitalism"). Nevertheless, we certainly cannot say that the Stalinists'
conception is justified. Conversely, this theory became a source of confusion.
A criticism of Stalin has already been carried out, but there has yet to be a
complete discussion of works that were written under the influence of Stalinism
such as Mendelison's representative crisis theory in his "The Theory and
History of Crisis". In this work, "modeled after" Engels and
Lenin, the "fundamental cause" of crisis is found in the contradiction
between "the social nature of production and the private (capitalistic)
form of acquisition". But this Stalinist concept has as many twists and
turns and it is not easy to find the way out.
"The total sphere of the relations which condition the inevitability of
crisis develop together with the capitalistic mode of production. Further, they
stem from the fundamental contradiction of capitalism, i.e. the contradiction
between the social character of production and the private, capitalistic form of
appropriation. The social nature of production appears in the fact that any
product of labor is created through the collected efforts of many people, and
satisfies some social need." ("The Theory and History of
Crisis"-translated from Japanese)
This is the king of cliches that forms the basis of the Stalinist theory of
crisis and governs everything else. This cliche leads to another and another.
Is this concept just a different way of expressing the contradiction between the
relations of production and the productive power? If this is so, this conception
could understand the basis of crisis. If, however, this is something different
than the concept of the contradiction between the relations of production and
productive power it would a "Stalinistic" dogma which cannot
fundamentally explain crisis clearly or correctly. In this conception, the
"private, capitalistic form of appropriation" corresponds to the
relations of production, and the "social character of production"
corresponds to the productive power. However, it cannot be said that this
correspondence is justifiable. For example, "the social character of
production" and productive power are different things. Even though both of
them have a close relationship, this does not mean that the two are equivalent
concepts. The same thing can be said of the concept of the "private,
capitalistic form of appropriation" and the capitalistic production
relations. It is clear that the two concepts are not immediately the same thing.
The latter concept forms the basis of the relationship between capital and wage
labor, while this is not directly true in the case of the former. Of course, in
a sense the former could be said to be the same since it is inseparable from the
concept of capital and wage labor.
Moreover, the relations of production exist prior to the relations of
"appropriation" which is subordinate to them. The relations of
"appropriation" do not precede the relations of capitalistic
production as a "condition". Could it be said then that the
"relations of appropriation" is just another way of expressing the
relations of private property? If this is the case, we would have to question
the necessity or importance of introducing the term "appropriation"
instead of "private property". Furthermore, the laws of private
property are not directly the relation between capital and wage labor. Certainly
private property fundamentally determines these class relations, but there are
several "mediating factors" that are necessary-in reality, and thus in
theory-between private property and the class relation between capital and wage
labor.
"The socialization of labor is inseparably linked to the increase in labor
productivity, and the introduction of improved methods and means of production,
transportation, and communication." (Ibid)
Of course, this proposition is unquestionable. However, this statement if not
simply repetitive, is nothing but an hollow truth.
The Stalinists say that this "socialization of labor" is not unrelated
to the development of productive power, but "connected" to it.
However, we should not be fooled by the vague expression "connected"
because this is related to the decisively important question of the basis of
capitalist contradictions. Of course, to say that it "is connected"
could be saying anything. Certainly the "socialization of labor" is in
fact inseparable from, and "connected" to the development of
productive power. As the socialization of labor develops the productive power of
labor also reaches a higher level. We recognize that the two progress in
parallel. Nevertheless, they are two separate things; the concept of the
"socialization of labor" cannot be equated with productive power.
Of course, the Stalinists don't declare that these two things are the same, they
merely say that they are "connected". However, using this expression,
they create the impression that the socialization of labor and productive power
are the same concept. This vague concept is hence perfectly appropriate for the
Stalinists who can use this truthful sounding expression to conceal the reality
of capitalism.
Moreover, this "fundamental contradiction" is also not unrelated to
class struggle.
"The fundamental contradiction in capitalism is the contradiction between
the social character of production and the private form of acquisition. This is
because this contradiction expresses the fundamental characteristics of the
capitalistic mode of production, and the split of bourgeois society into
confrontational classes, i.e. the split between the bourgeoisie who monopolize
the social means of production, and the proletariat who are exploited by the
bourgeoisie and only possess their own labor power.
The contradiction between the social character of production and the private
form of appropriation is expressed in the collision between the character of
large-scale capitalistic production relations and the capitalistic property form
including all the other production relations (?-Hayashi ). At times, bourgeois
economists recognize this or that contradiction in the capitalist economy, but
they always deny or conceal the contradiction between the social character of
production and private appropriation. If they were to admit this contradiction,
it would mean recognizing that the capitalistic property form of the means of
production no longer corresponds to, collides more and more profoundly and
violently with, the character of the productive power, and for this reason
historically its fate is sealed, and will be replaced by the socialistic form of
property.
Since the contradiction between the social character of production and the
private, capitalistic appropriation is the fundamental contradiction within the
capitalistic system of production, and expresses the fundamental characteristics
of this system, all of the contradictions of bourgeois society are encompassed
within this contradiction. In other words, the contradiction between the social
character of production and capitalistic appropriation is revealed and expressed
in each of the other contradictions of capitalism. The reciprocal, dialectical
relation between the fundamental contradiction of capitalism and the other
various contradictions is extremely important. Starting from this reciprocal
relation, the fundamental problems of the theory of crisis could be correctly
solved for the first time." (Ibid)
What Engels, when characterizing capitalistic production, referred to as the
private form of acquisition, was the fact that even though the capitalistic
commodity becomes a thoroughly social product in the sense that it is already
the product of the workers collaborative labor, the capitalist appears as an
individual property owner and as such brings the product to market and sells it.
In other words, the relations of private property. Engels emphasized that in
capitalism the relations of small commodity production had already been
superceded, and that individual production had ended, but even though production
was carried out socially, possession, as before, is still private and
individualistic-it was here that Engels saw a contradiction. Of course this is
clearly a contradiction, but it cannot be simply (or directly) said that this is
"the fundamental contradiction of capitalism" and that crisis can be
explained from this contradiction. We can't understand why one would deny!
!
the simple but fundamental and comprehensive concept of the contradiction
between the capitalistic relations of production and productive power. What is
gained by taking this or that word of Engels-and only the words-and turning them
into a dogma? Only the Stalinists stand to gain from such a practice. The
Japanese Communist Party and others employ such means, and do nothing but
scatter around their dogma. It should be clear to anyone who has read even a
little Marx, that when he explained crisis he emphasized the contradiction and
conflict between the limits of capitalistic production (the limits of
"capital itself"), and the expanding productive power which crashes
into these limits.
As petty bourgeois private property is transformed into capitalistic private
property (capitalistic property relations), the class conflict between the
bourgeoisie and proletariat develops. This is unquestionable proposition.
However, to call this "the contradiction between the social character of
production and capitalistic appropriation" and to say that "within
this contradiction" the capitalistic class relations "are
revealed" (!?) only serves to render vague the essential relations of
capitalistic production, and cause confusion among the workers by drawing them
into a chaotic storm of meaningless jargon. This is one of the
"systematic" ideologies of the Stalinists which was born out of the
system of state capitalist society (the systems, mistakenly called socialist, of
the USSR and China), in other words, a reactionary "doctrine".
What the bourgeoisie refuses to "accept" is not the dogma of the
"the contradictions between the social character of production and
capitalistic appropriation", but rather the contradiction and conflict
between capitalistic production relations and productive power, which is a truly
revolutionary theory. Of course, under capitalism "contradictions between
the social character of production and capitalistic appropriation" do
exist, but there is no reason to call this the "fundamental
contradiction". Moreover, if one says that this is a "fundamental
contradiction" in a sense, but only a different, not necessarily superior,
way of expressing the contradiction and conflict between the relations of
production and productive power, then all of the reasons that the Stalinists use
appear as nonsensical repetition which mean nothing more than a difference of
expression. In other words, "the contradictions between the social
character of production and capitalistic appropriation" manifest the
contradiction between the relations of production and the productive power, and
has the same meaning, etc. However, even though this is too simplistic, the
Stalinists say that the former includes or expresses the later, and dress up
their arguments in convincing garb which only serves to reinforce the confused
and ambiguous nature of their theory.
"The contradiction between production and consumption and between the
potential of production and the low consumption ability of the masses, is an
expression of the contradiction between the social character of production and
capitalistic appropriation". (Ibid-translated from Japanese)
"The contradiction between the social character of production and
capitalistic appropriation" is also an expression of the anarchy of the
capitalist economy" (Ibid)
"Even societies of simple commodity production were characterized by a
'lack of planning' , but under conditions of capitalism, based on the
contradiction between the social character of production and the capitalistic
form of appropriation, the anarchy of production begins to take a destructive
form in the entire course of reproduction." (Ibid)
Furthermore, this is "conditioned by a series of factors", but these
"conditions" are first of all, "the enormous socialization of
labor"; secondly, "constant imbalance"; thirdly, "the
conflict between classes and the contradiction between production and
consumption which is one of its manifestations"; and finally, increasingly
severe, and destructive "competition".
It is extremely difficult to understand clearly what the author is trying to say
here, but it is immediately clear to us that this is nothing but a bunch of
jargon. He continues in the following way:
"The contradictions between the social character of production and
capitalistic appropriation appears clearly in the "antagonism between the
organization of production in the individual workshop and the anarchy of
production in society in general.'"
"The contradictions between the social character of production and
capitalistic appropriation is also revealed in the form of the contradiction
between the conditions for the production of surplus value and the conditions of
its realization."
"Among the many forms in which the contradiction between the social
character of production and capitalistic appropriation is revealed, we have only
discussed those which are particularly essential for explaining the
inevitability of crisis. Of these, the most important are the confrontation
between the proletariat and the bourgoeisie and the anarchy in production."
"The contradiction between the social character of production and
capitalistic appropriation is the basis, and inescapable cause of crisis. This
is because this contradiction is the synthesis of all the contradictions of
bourgeois society, and manifests itself in each particular contradiction. Each
contradiction (i.e. the anarchy of production, the contradiction between
production and consumption, the contradiction between the conditions for the
production of surplus value and the conditions for realizing this surplus value,
etc.) as the manifestation of this fundamental contradiction of capitalism can
become the cause of crisis."
This view seems to be saying that the contradiction between the social character
of production and capitalistic appropriation is the basis of crisis, but on the
other hand, when it appears as the contradiction between production and
consumption it becomes the cause of crisis. However, this is simply the
repetition of the same thing, and is like saying nothing. This is the argument
that the fundamental contradiction is the cause of crisis, but is only the cause
of crisis when it appears as the contradiction between production and
consumption, and would not be the cause if it didn't appear as such. They say
that the fundamental contradiction between production and consumption is not
inevitable, but rather that sometimes it manifests itself and sometimes it does
not. In place of the contradictions of capitalistic production they substitute
some arbitrary or random relations. This line of reason is nothing more than
sophistry and nonsense.
Enough is enough! We can already confirm that Stalinism has done nothing but
bring confusion and chaos to the workers through its flood of confusing
expressions and the trickery of its theory. The theory of the Stalinists is
generally dogma and the distortion and revision of Marxism, and their theory of
crisis is certainly no exception. Since the theory of crisis deals with the most
fundamental contradictions of capitalism, it is probably inevitable that the
Stalinist's theory of crisis is total nonsense and has degenerated to become
thoroughly reactionary dead phrases. Based on this theory of capitalism and
crisis it is impossible to organize the rebellion of the working class against
capitalism. It was certainly not accidental that the Stalinists sat idly by and
let the best moment for world revolution slip away during the Second World
War-as well as the best opportunity for revolution in Japan. They were lacking
the theory of rebellion and insurrection against capitalism.
The expression "the contradiction between the social character of
production and the private character of appropriation" which was used by
Engels and then Lenin as a concept to fundamentally explain crisis has assumed a
life of its own-as an expression only-in the Stalinist movement.
In an essay criticizing the Narodnik economists, Lenin exposed Sismondi's theory
of crisis in the following way:
"Sismondi says: crises are possible, because the manufacturer does not know
the demand; they are inevitable, because under capitalist production there can
be no balance between production and consumption (i.e., the product cannot be
realised). Engels says: crises are possible, because the manufacturer does not
know the demand; they are inevitable, but certainly not because the product
cannot be realised at all. For it is not true: the product can be realised.
Crises are inevitable because the collective character of production comes into
conflict with the individual character of appropriation." (A
Characterization of Economic Romanticism, p. 171)
In this way the Stalinists use the concept of the "the contradiction
between the social (collective) character of production and the private
(individual) character of appropriation" to explain crisis and gloatingly
"apply" this everywhere to "crush" their rivals. It is as if
this were a magical charm which only required the Stalinists to declare:
"all enemies be gone!".
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