There has been a great deal of talk recently in the news media about Marx and his ideas, so I thought I would bring up one of his most famous statements from Capital Volume I, Chapter 25, which is effectively the conclusion of the book, where the monstrous character of capitalism is finally revealed:
We can now understand the foolishness of the economic wisdom which preaches to the workers that they should adapt their numbers to the valorization requirements of capital. The mechanism of capitalist production and accumulation itself constantly effects this adjustment. The first word of this adaptation is the creation of a relative surplus population, or industrial reserve army. Its last word is the misery of constantly expanding strata of the active army of labour, and the dead weight of pauperism.
On the basis of capitalism, a system in which the worker does not employ the means of production, but the means of production employ the worker, the law by which a constantly increasing quantity of the means of production may be set in motion by a progressively diminishing expenditure of human power, thanks to the advance in the productivity of social labour, undergoes a complete inversion, and is expressed thus: the higher the productivity of labour, the greater is the pressure of the workers on the means of employment, the more precarious therefore becomes the conditions of their existence, namely the sale of their own labour-power for the increase of alien wealth, or in other words the self-valorization of capital. The fact that the means of production and the productivity of labour increase more rapidly than the productive population expresses itself, therefore, under capitalism, in the inverse form that the working population always increases more rapidly than the valorization requirements of capital.
We saw in Part IV, when analysing the production of relative surplus-value, that within the capitalist system all methods for raising the social productivity of labour are put into effect at the cost of the individual worker; that all means for the development of production undergo a dialectical inversion so that they become means of domination and exploitation of the producers; they distort the worker into a fragment of a man, they degrade him to the level of an appendage of a machine, they destroy the actual content of his labour by turning it into a torment; they alienate from him the intellectual potentialities of the labour process in the same proportion as science is incorporated in it as an independent power; they deform the conditions under which he works, subject him during the labour process to a despotism the more hateful for its meanness; they transform his life-time into working time, and drag his wife and child beneath the wheels of the juggernaut of capital. But all methods for the production of surplus-value are at the same time methods of accumulation, and every extension of accumulation becomes, conversely, a means for the development of those methods. It follows therefore that in proportion as capital accumulates, the situation of the worker, be his payment high or low, must grow worse. Finally, the law which always holds the relative surplus population or industrial reserve army in equilibrium with the extent and energy of accumulation rivets the worker to capital more firmly than the wedges of Hephaestus held Prometheus to the rock. It makes an accumulation of misery a necessary condition, corresponding to the accumulation of wealth. Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, the torment of labour, slavery, ignorance, brutalization and moral degradation at the opposite pole, i.e. on the side of the class that produces its own product as capital.
The most simple response to this fiery passage is to argue that workers have iPhones these days, something 19th century workers could only dream of, and so Marx was quite simply a dunderhead. This is a very myopic response, but it is the one most mainstream critics level at Marx. Another response is to think about the wealth of workers in relation to that of capitalists, rather than in absolute terms. If we consider the proportion of wealth held by the global capitalist class relative to that held by the global working class (Global wealth inequality is not the best measure of this, but it’s the one I could find) Marx’s conclusions do not seem so far fetched.
The typical counterargument to this claim is that development of capitalist production around the world will eventually narrow wealth inequality to insignificant levels. Two problems with the development argument are 1) That it ignores how capitalism actually expands on the basis of absorbing the wealth of non-capitalist societies in a process Marx called primitive accumulation and 2) That it assumes that capitalism produces equality, which is simply untrue. Capitalism produces inequality, which may be compensated for to a certain (but always limited) extent by the state through the redistribution of surplus-value from capitalists to workers (either directly or through the provision of services).
This brings us to the third response to Marx’s argument, which is that it is the conclusion of Capital Volume I, not of Marx’s entire body of thought. Volume I of Capital is concerned with describing the process of production, and it therefore offers what we might call a “pure” model of capitalist accumulation that reveals the essence of the relationship between labour and capital. Volume I does not concern itself with the problem of the realization of capital (i.e. bringing goods to market and selling them so that cash can be obtained which can be reinvested). Most importantly, Capital Volume I does not concern itself with the problem of effective demand (Unlike Capital Volume II, which does). The realization problem and effective demand are of course the bread and butter of Keynesian theory, which is the only form of capitalist thought that attempts to address the inequality produced by capitalism. Keynesianism argues for the redistribution of surplus value in order to ensure the smooth(er) expansion of capitalism. The reason why this is necessary is really quite simple. If workers are sufficiently impoverished by the dynamics Marx describes above, then they will not have enough money to buy back their own products from the capitalists (which they must do as they do not own the means of production), and so capitalists cannot get the cash they need to reinvest, which leads to crisis. One way in which Keynesians managed to kick-start a sputtering capitalism during the New Deal era was to encourage (safe non-radical) unionism that would bargain for higher wages for its members. This put more money in workers’ pockets and helped to ensure capital could be realized. Unfortunately this same dynamic later lead to a profit squeeze, as I discussed here.
The response was the neoliberal counter-revolution, which imposed a kind of back-to-basics capitalist fundamentalism (something I will describe in more detail in the final section of my review of Stayin’ Alive). To the extent that neoliberalism brought us back to a “free market” capitalism, it has expressed exactly the same “purely” capitalist tendencies the Marx describes above. The end of collective bargaining, the expansion of the reserve army of the unemployed, widespread automation at the expense of the working class, and growing pauperism have all been the hallmarks of neoliberalism. It is important however to note that it would be totally erroneous to consider Keynesians (Yes, even the eminently likable Paul Krugman) the friends of the working class. Having learned from the 1970s profit squeeze, the “neo-Keynesians” understand quite well that there are times when working class power stands in the way of capitalist expansion, and so a portion of the working class must be thrown under the bus in the interests of “progress.” This is not done out of any particular malice, but if you assume (As Keynesians do) that capitalism is the natural form of human social relations, then there are times when “the needs of the many outweigh the needs of the few” (Conveniently the Keynesians tend to be among the many and not the few) and it shall forever be thus.
So what can we take away from all this? First, that Marx was in fact not a dunderhead and that there is some truth to the passage quoted above – the truth of neoliberalism. Second, that unions offer an important bulwark against the inequality producing tendencies of capitalism but that they are ultimately dependent on a certain degree of support from the (pro-capitalist) state. And third, that alliances with Keynesians make a lot of sense at times such as this when neoliberalism remains dominant, but that they will ultimately stand with capital over labour because they are not socialists.
So on this Labour Day take a moment to think about the workers on the picket line and how they’re our best line of defense against the terrifying scenario Marx described. If they don’t get our support the state won’t hesitate to crush them, and by extension crush us.
NOTE: For a more in-depth explanation of Chapter 25 of Capital see David Harvey’s lecture:
For some further substantiation of the immiseration thesis see the opinion of Madison Avenue here:
And of Citigroup here: