I’ve been getting into reading the Grundrisse lately, and found the following passage from Martin Nicolaus’ foreword to be particularly useful in understanding immiseration, one of the most controversial and difficult to understand points in Marxist theory. Nicolaus writes:
[Ricardo’s] one-sided view is corrected in the Grundrisse with the overthrow of [his] theory of profit. The immediate inverse identity of profit and wages holds only in the short run, and only if the intensity of exploitation (for example speed of production) is held constant. Over the somewhat longer term, specifically during the upward phase of the economic cycle, however, both wages and profits may show an absolute increase at the same time; and during such periods the workers may either take the risk of accumulating a small fund of savings for the next crisis, or may broaden the sphere of his consumption to take a small part in ‘higher, even cultural satisfactions,…[for instance] agitation for his own interests, newspaper subscriptions, attending lectures, educating his children, developing his taste etc.,’ constituting the worker’s ‘only share of civilization which distinguishes him from the slave’ (p.287). During such periods of prosperity, the relation of capital and labour reveals a side which ‘is an essentially civilizing moment, and on which the historic justification, but also the contemporary power of capital rests’ (p.287). It is furthermore theoretically possible, quite apart from the question of the economic cycle, for one fraction of the working class (but not the whole) to receive, via the mechanisms of the distribution of profit among different capitalists, ‘an extremely small share of’ the surplus value produced by themselves in the form of ‘surplus wages’ (p. 438). This is one side of the matter. However, there is also at the same time the other side. Firstly, the course of capitalist development proceeds in cycles of ‘prosperity’ alternating with crises, during which latter there is ‘suspension of labour’ (unemployment), ‘degradation of the labourer’ and a most straitened exhaustion of his vital powers’ (p.750) (Marx’s English; that is, an absolute reduction in real wages combined with speed-up). Furthermore, quite apart from, but modulated by, crises, there is, with the advance of capitalist accumulation, also an increase in the percentage of the working class as a whole which exists as a surplus population, that is, surplus relative to the employment capital makes available. A portion of this surplus labour power is held to reserve for periods of capitalist accumulation; another portion is maintained out of state revenue as perpetual paupers; a fragment becomes lumpen (pp. 608-10). The whole of this surplus population – surplus relative to the needs of capitalist accumulation – grows larger as capital approaches its inherent limits and barriers (p. 608). Finally, the periodic crises of overproduction repeat themselves ‘on a higher scale’, with increasing severity (p.750). Thus, in sum, the long-run historic tendency towards relative impoverishment is accompanied by the long-run historic tendency towards absolute impoverishment of an increasing proportion of the working class; and the experience of the remainder of the working class as a whole is one of periods of absolute improvement accompanied by growing insecurity, and broken by increasingly sharp crises during which absolute impoverishment is the general fate.
Here we have a good summary of both the positive and negative sides of capitalist development. Marx’s observations regarding the growth of the “surplus” population (Castells calls them “disposable labour,” Robinson calls them “supernumeraries,” for Friedman they are those who are outside the “new middle”), the increasingly tenuous status of the working class even during economic upswings, and the intensification of crises of overproduction especially rings true. While Marx may have underestimated to some degree the capacity of unions to appropriate “surplus wages” for their members during particularly favourable circumstances, after 40 years of neoliberalism it is hard not to be convinced of the basic truth of his argument.