A People's Guide to Capitalism by Hadas Thier

Author:Hadas Thier
Language: eng
Format: epub
Publisher: Haymarket Books
Published: 2020-07-20T00:00:00+00:00

THE CONTRADICTIONS OF ACCUMULATION

First and foremost, we know that capital accumulation is driven not by needs but by profits—that is, not by the creation of use-values, but by the realization of exchange-value. It is not enough for capital to be employed in order to produce commodities (M-C), but those commodities must then be converted to profit (C-M’). As Marxist Duncan Foley put it: “The production and distribution of use-values is an incidental by-product of this pursuit of value.”31

Were it the case that the construction of housing was driven by people’s needs to have proper shelter, it wouldn’t be that difficult for society to determine how many houses are required, and then to employ the workers necessary to build them. But the homebuilding and real estate industries have no interest in building homes to shelter people who cannot pay for them. Marx explained:

It should never be forgotten that the production of this surplus value—and the transformation of a proportion of it back into capital, or accumulation, forms an integral part of surplus value—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.32

Rather than needs, investment in construction is driven by market prices and profits. And there is no guarantee that the houses built—no matter how desperately needed—will be profitably sold.

The creation of surplus value through the exploitation of labor, and the realization of surplus value in exchange are two different actions. Capitalism first separates the production of goods from their consumption through an intermediary stop of sale in exchange for money. These processes therefore occur at different times and places, and the time lag separating them is precisely what leaves open the potential for a breakdown in the conversion of the manufacture of goods to their realization in sales.

Second, because capitalists must continually expand production on pain of extinction, any limitations to expansion are seen simply as barriers to be overcome. This drive to produce, accumulate, and reinvest is done without system-wide planning, and with little regard to the limits of the market. Production and consumption are, in Marx’s words, “not only separate in time and space, they are also separate in theory.” As we’ll discuss below, the laws that govern each are distinct and often conflicting. Marx explained: “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… within a given framework of antagonistic conditions of distribution, which reduce the consumption of the vast majority of society to a minimum level.”33

In previous societies, supply and demand were more or less in proportion because supply was determined by demand. “It was demand that dominated supply, preceded it. Production followed close on the heels of consumption. [Now] large-scale industry, forced by the very instruments at its disposal to produce at an ever-increasing scale, can no longer wait for demand.

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