Marxism - primary contradiction of capitalism

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After writing a long post, i decided to keep only the summary : I understand that in the marxist framework a mode of production is constituted by :

  • the relations of production
  • the productive forces

And that the engine of the (r)evolution of the mode of production, and its development is the contradiction between the 2. At some point the relations of production are an obstacle to the development of the productive forces. So my questions are :

  • how is it exactly that private property of means of production (the relations of production) and a socialized production (the productive forces) through the development of capitalism and an increasingly large-scale industry, constitute a contradiction, and the main one, in capitalist mode of production ?
  • how does that contradiction manifests itself ? Through economic crises, i've also read "the destruction of productive forces during those crises", but how are economic crises manifestations of this contradiction ?
  • how, according to marxism, is this supposed to lead to a socialist mode of production ? Taking from Lenin and his book on imperialism, that contradiction is being "solved" by ever-increasing concentration of capital, leading to monopolies in different branches of production, and the merger of branches of production, for example financial capital, being the merger of bank capital and industrial capital. And one can see how one large monopolistic company in one branch can purchase or merge with another monopolistic company of another branch. How is socialism supposed to happen or being brought ?

Thank you

joseph M'Bimbi-Bene

Posted 2018-12-31T14:17:56.007

Reputation: 103

doesn't this create crisis because of the laws of capital and its exploitation of workers: the falling rate of profit etc. – None – 2018-12-31T20:07:35.380

I wanted you to have this review of Michael Harrington's book, "The Twilight of Capitalism" (1977). It was written at an odd time, and got lost in the "Reagan Revolution" which began in 1981. This is a review in the Hofstra Law Review. It is a good book because it was written at the end of a certain era, however, the paperback was made with poor glue and it may be difficult to find this book even in a good library. https://scholarlycommons.law.hofstra.edu/cgi/viewcontent.cgi?referer=https://www.google.com/&httpsredir=1&article=1189&context=hlr

– Gordon – 2019-01-01T03:54:46.913

Answers

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Private property rights is necessary in order to accumulate wealth and thereby concentrate capital. With increasing concentration of capital the workers becomes relatively poorer and according to some interpretations of marxism even absolutely poorer. This happens such an extent that labour cannot reproduce itself, when wages falls below what is necessary eat and drink enough to be able to go to work tomorrow. This reveal an internal inconsistency in the capitalist system because labour is necessary to uphold production in the first place, without labour capital is dead. According to one interpretation it leads to a socialist mode of production through revolution, where the impoverished develop class consciousness and unite to overthrow the system.

Jesper Hybel

Posted 2018-12-31T14:17:56.007

Reputation: 111

"Private property rights is necessary in order to accumulate wealth and thereby concentrate capital."

how so ? Some entity, like the state or any unit of production, collectively owned by workers, could also accumulate wealth. I've read that happened in some communes and/or brigades of production in China after the revolution

"With increasing concentration of capital the workers becomes relatively poorer and according to some interpretations of marxism even absolutely poorer."

Then again, how so ? The concentration of capital could imply an increase in so-called "variable capital"

– joseph M'Bimbi-Bene – 2019-01-01T13:22:05.297

"This happens such an extent that labour cannot reproduce itself, when wages falls below what is necessary eat and drink enough to be able to go to work tomorrow."

While i get that point, i question your premisses, or how you formulated them

– joseph M'Bimbi-Bene – 2019-01-01T13:24:55.337

"This reveal an internal inconsistency in the capitalist system because labour is necessary to uphold production in the first place, without labour capital is dead."

So i understand that you say the contradiction is that increase in accumulation for a private owner, separated from the workers, tends to drive wages down, to the point that productive forces (the workers) can no longer, or not sufficiently survive. that lack of reproduction of workers/productive forces hinders the development of productive forces (obviously) and as a result of capital itself.

– joseph M'Bimbi-Bene – 2019-01-01T13:30:29.527

Thx for the comments @joseph M'Bimbi-Bene the reason I choose to speak about "reproduction" is because it in my opinion something that distinguishes how Marx thought about labor as compared to Neoliberal Economics as is often taught at Universities many places today. "Hence, the price of labor is also equal to the cost of production of labor. But, the costs of production of labor consist of precisely the quantity of means of subsistence necessary to enable the worker to continue working" marx on labor to quote from Wiki.

– Jesper Hybel – 2019-01-01T13:34:21.040

but then, either in a context of monopoly or concurrency, facing a threat of revolution, the owners could increase wages, or modify the "composition of capital" with more variable capital.

I've heard a few times that's the point of modern social-democrat, with the sole purpose of increasing wages and adding some "social" features to the state. It is often said to be some "tactics" of the bourgeoisie (at least its left side) to prevent the people from rebelling and organizing themselves to make a revolution – joseph M'Bimbi-Bene – 2019-01-01T13:34:34.410

I think that commenting on real world examples opens another discussion, which includes whether Marx was right. I thought your question was about how to interpret Marx, not how world economics works and whether Marx was right. Perhaps I misunderstood you. – Jesper Hybel – 2019-01-01T13:37:51.180

"Some entity, like the state or any unit of production, collectively owned by workers, could also accumulate wealth." No not in theory, in theory it is exactly "collectively owned". Whether you buy that theory and believe it accurately represents the state of affairs in certain countries, self-proclaimed communist, is another story. – Jesper Hybel – 2019-01-01T13:40:36.720

No problem, in fact i think your answers were appropriate and maybe i was mixing the 2 questions : "how to interpret max ?" and "Was that true ?".

In my own questionning and enquiring of marxism, i try, as much as a regular guy can, to consider real world examples. That helps me consolidate my understanding of the works of marx and other marxists, and also i understand it as the whole point of Marxism : a collection of tools to make sense of the world in order to have the leverage to change it.

But I think my purpose might not have been clear from the beginning, even to myself – joseph M'Bimbi-Bene – 2019-01-01T13:43:14.567

Ok, I hold an education in economics so when I try to understand Marx I mostly look for points where he says something different than what I was being taught at University. So my answer might be biased in that way. No neoliberal economist would argue that wage represents "means of subsistence" at least not to my knowledge. – Jesper Hybel – 2019-01-01T13:45:44.780

Oh, and what is being told about labour and its cost in a classical economics course ? I am a computer programmer, so no background in economics. With a knack for testing, maybe that's while i am sweating the details out of anything i get my hands on. " No not in theory, in theory it is exactly "collectively owned" "

So in theory, if it is collectively owned, there is no accumulation, all the wealth and value that is generated is distributed to workers or used for investment, increase of means of production and public services.

i guess it supposes that the wealth is fully collectivzed – joseph M'Bimbi-Bene – 2019-01-01T13:53:02.383

Well assuming free markets the value of labour equals marginal productivity of labour. Firms maximize profit $\max_L pF(L) - wL$ where $F(L)=Y$ is units produced when using $L$ units of labour and sold at the price $p$ that firms cannot set due to perfect competition, so they take product price as given. In optimum first order condition holds so $ \frac{\partial F(L)}{\partial L} = \frac{w}{p}$ hence marginal productivity must eqaul wage divided by product unit price. – Jesper Hybel – 2019-01-01T13:57:46.463

"Collectively owned" - there can be accumulation but not concentration. Think about schools they are often state owned, if the state is doing good from an economic perspective it can invest it money in a good educational system to the benefit of everyone (I live in Denmark, Universities are free here, you litteraly pay 0). – Jesper Hybel – 2019-01-01T14:05:48.227

Sure one state can do better than another and accumulate more wealth and put it into educational system, but if everyone has equal right to go to school then this does no imply "concentration" of wealth. So the private property rights works as a means of wealth concentration, creating rich and poor. Classconflict is the result. – Jesper Hybel – 2019-01-01T14:05:53.203

I meant "neccessary" in the sense of being a means to and more emphasis on "concentration" than "accumulation". I was imprecise but was aiming to keep it short to set out what I think is the core "logic" in Marx. – Jesper Hybel – 2019-01-01T14:11:30.380

I am reading and crunching everything you said, with what i read, trying to reach a new level of understanding and have new questions.

Anyway i think i understand what you mean when you introduce a difference between accumulation and concentration. The first allows to "pay" for non-profit generating activities for examples, while i understand with the second you designate the fact of keeping the profit or surplus value and not spending it. Am i right ? – joseph M'Bimbi-Bene – 2019-01-01T22:03:14.353

Then i feel there is still a difference from my understanding of "concentration", from reading Lenin for example, where it seems to define the act going to ever-increasing scale of production while cleaning concurrence, the process of going from concurrence capitalism to monopolistic capitalism. At least what i understood.

Merging of producers in one branch of production and merging of branches.

I need to chew and digest all that. Anyway thank you your explanations made me see things clearer and gave me new and understandable material to consider – joseph M'Bimbi-Bene – 2019-01-01T22:06:48.910

By "accumulation" I mean we get more wealth per person. So yesterday we had 2 pieces of bread per person today we have 4 and lets say we are 5 persons. So we have become more productive and accumulated more material wealth. However by "concentration" I refer to the distribution of wealth across individuals. Ok, we have more bread yesterday each person had 2 pieces, today we have 4 persons with 2 pieces each and 1 with 12 pieces that still 4 pieces per person but the distribution is uneven there is concentration. – Jesper Hybel – 2019-01-01T22:08:55.983

How can that happen? Only by somehow sort of assigning pieces of bread to specific individuals. Hence bread is treated as belonging to someone. What is that a manifestation of? Private property. To say that someone has 12 pieces of bread is exactly to assign him or her ownership. If property were collective I could not say that, there would just be 20 pieces of bread and 5 people and 4 per person. – Jesper Hybel – 2019-01-01T22:13:01.580

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how is it exactly that private property of means of production (the relations of production) and a socialized production (the productive forces) through the development of capitalism and an increasingly large-scale industry, constitute a contradiction, and the main one, in capitalist mode of production ?

Well.

If the property of means of production is private, and production is essentially production of commodities, then production is led by competition. Competition forces each private producer of commodities to seek to offer their commodities at the lowest price. This in turn makes each producer of commodities seek to systematically increase surplus value, which, barred the primitive and inefficient method of reducing wages and extending labour hours, is only possible through increased productivity of labour, which is only possible through increasing the composition of capital - ie, by improving the means of production so that workers produce more per unit of time.

Problem is, value is a function of labour time. So while the individual producer, when succeeding to increase the productivity of his/her unit of production, makes superprofits as long as the competition remains at an archaic level of productivity, the effect of the increase of productivity, as it spreads among all the productive system (or as it leads the least productive producers into bankrupcy), is to lower the value of each commodity, as it embodies lesser and lesser amounts of human labour.

In philosophical terms, this means that there is a contradiction between value and wealth; while value is the form of most wealth in a capitalist society, its relation to its substance, wealth, is doublefold:

  1. Synchronically, value is proportional to wealth: two coats are the double wealth as one coat, and the value of two coats is the double of the value of one coat;
  2. Diachronically, value is proportional only to labour time; doubling the wealth by halving the labour time to produce it doesn't double the value. When you are able to produce two coats in the time you formerly produced only one, wealth is doubled, but value remains the same.

At some point in the development of such a system, increasing the productivity is no longer worth the pain: gains of productivity will no longer result in increased profits. If the proportion between dead labour and live labour in a low-tech environment is 1/1, then profits will expand quite nicely by turning that proportion to 2/1. But when the proportion is already 100/1, increases in it will have very little effect on profits; the system no longer rewards gains of productivity - and has therefore come to be "an obstacle to the development of the productive forces" as you put it.

how does that contradiction manifests itself ? Through economic crises, i've also read "the destruction of productive forces during those crises", but how are economic crises manifestations of this contradiction ?

Economic crises in capitalism are basically crises of overproduction. As each producer of commodities seeks to offer the lowest possible prices, and to sell the largest possible amount of individual commodities in order to compensate for lower prices, time comes when there are too many commodities in the market, and part of them becomes unsalable. Part of these commodities being productive forces themselves, if they are not sold and subsequently used, they are wasted, which is in itself a form of "destruction of productive forces".

Economic crises tend to unleash political crises, in which further destruction of productive forces may happen, in the form of wars, sabotage, etc.

how, according to marxism, is this supposed to lead to a socialist mode of production ? Taking from Lenin and his book on imperialism, that contradiction is being "solved" by ever-increasing concentration of capital, leading to monopolies in different branches of production, and the merger of branches of production, for example financial capital, being the merger of bank capital and industrial capital. And one can see how one large monopolistic company in one branch can purchase or merge with another monopolistic company of another branch. How is socialism supposed to happen or being brought ?

The short answer is it doesn't. Socialism is thought to be only possible via a political revolution, which is a deliberate action by human agents. What the development of the capitalist system provide are merely conditions for such a revolution, which may be summarised as,

  1. Suppression of scarcity: under previous modes of production, the amount of wealth generated by human labour was always unsufficient to provide a rich, meaningful life for all mankind if it was equitatively divided;
  2. Destruction of petty, "idylic" previous relations that tied human beings to their country, province, town or hamlet;
  3. Creation of the means for social control of production, via automation of decision making;
  4. Creation of a mass of individuals who are denied access to most of the wealth created, although being responsible for the creation of all value, which is thought to provide the "human agents" required for the deliberate action of revolution.

The crises of capitalism, on the other hand, provide the empirical evidence that the system is unable to work smoothly, and that the "fixes" it needs to reboot itself into a new cycle of prosperity are too costly in terms of human lives and suffering to be continuously tolerated for an indeterminate lapse of time; and also the political fractures that may make the deliberate action of revolution possible.

Luís Henrique

Posted 2018-12-31T14:17:56.007

Reputation: 1 311

1nice long and through answer, pretty satisfying after a first reading (contradiction between wealth and value, the lack of incentive for productivity growth after some point and overproduction).

Let me process it and connect the dots :) – joseph M'Bimbi-Bene – 2019-01-01T13:16:45.437

Thank you. If necessary, I can improve on the above answer. – Luís Henrique – 2019-01-01T17:03:17.770