THE ANALYSIS OF ACCUMULATION

Like the contributors to the classical tradition before him, Marx held that accumulation arose from the income shares received by property owners. But his general view of the economic process yielded a different insight into the nature of this 'net' revenue.

The consequences of the creation of surplus value under capitalism were powerfully

influenced by the use of machinery. Machine techniques meant that the ranks of the eligible participants in the capitalist process were swollen. Positions in the labour force were now created, for example, for women and children (who could be employed more cheaply than men in a large number of newly-created repetitive tasks). At the same time, the advance of machine techniques augmented the leverage of capitalists by placing new instruments of control over the duration and intensity of labour input at their disposal. No longer could the productivity of the labour force be significantly influenced by the skills and initiative of workers themselves. Instead, the rhythm of the machine established the pace of work. However unhappy the consequence might be for the dignity of workers, these procedures nevertheless increased productivity enormously. It is interesting to note that in some modern discussions of the problems of underdeveloped countries, a similar argument is now invoked to support the introduction of highly capital-intensive techniques, despite the fact that a large potential labour force might be available at low wages.

The extended use of machinery had other significant effects. By virtue of the fact that higher techniques increased the productivity of labour - i.e. labour inputs per unit of output were reduced - the value of commodities was depressed. At the same time, Marx maintained that the rate of surplus value would tend to rise because the cheapening of commodities would shorten the number of working hours required to produce the means of subsistence. The latter effect, of course, was at odds with the outcome expected by writers in the mainstream of classicism. Most theorists in this tradition held that the 'progress of improvement' would tend to increase the quantity of labour input required to produce necessaries. This conclusion had been based on the special conditions governing the production of food. As they saw the problem, larger national food requirements would necessarily tend to shrink the capitalist's surplus by raising the cost of the main component of subsistence. Marx rejected this analysis, arguing that the dividing line between commercialized agriculture and industry was not as sharp as the classical tradition had supposed. Instead, he maintained that capitalist production, by its nature, spread its tentacles throughout the economic structure. The industrial segment of the economy might be the dynamic engine of change. But the mere growth of capitalism would tend to homogenize conditions of production throughout the economy. In fact, he insisted:

In the sphere of agriculture, modern industry has a more revolutionary effect than elsewhere, for this reason, that it annihilates the peasant, that bulwark of the old society, and replaces him by the wage labourer.

This view reflected Marx's rejection of classical definitions of profits and rents. From his perspective, what counted was ownership of the means of production: nothing of substance distinguished the capitalist from the landlord. Both were in a position to exploit

labour and to extract surplus value from it. Similarly, the physical constraints on the rapid expansion of agricultural output (to which writers of a classical persuasion had given so much attention) were de-emphasized. The application of new techniques to agricultural production promised to raise productivity sufficiently to satisfy the food requirements generated by industrial expansion. This did not mean that rents disappeared completely from the Marxian vocabulary. They remained, but were no longer unique to land. They might arise as the result of qualitative differentials in any of the productive agents. With this set of arguments Marx disposed of the other support to the Malthusian fear that population would tend to outstrip the availability of food.

The appropriation of surplus value by capitalists also permitted accumulation - indeed it was pre-requisite to accumulation on a substantial scale. It afforded the command over labour that Smith had written about; Marx merely added the qualification that it was 'essentially the command over unpaid labour'.17 Nor did he entertain any doubt that a significant share of the surplus value claimed by capitalists would be used for the purpose of extending their capitals and, most particularly, for the acquisition of machinery. Further, the application of higher technologies meant that the value of commodities - measured in labour inputs - would be reduced. Commodities were thus 'cheapened'. This process would snowball because capitalists would be obliged to join in the race of competitive cheapening of commodities.

Only as personified capital is the capitalist respectable. As such, he shares with the miser the passion for wealth as wealth. But that which in the miser is a mere idiosyncrasy is, in the capitalist, the effect of the social mechanism, of which he is but one of the wheels. Moreover, the development of capitalist production makes it constantly necessary to keep increasing the amount of capital laid out in a given industrial undertaking, and competition makes the immanent laws of capitalist production to be felt by each individual capitalist, as external coercive laws. It compels him to keep constantly extending his capital, in order to preserve it, but extend it he cannot except by means of progressive accumulation.18

And again:

Accumulate, accumulate! That is Moses and the prophets!... Therefore, save, save, i.e. reconvert the greatest possible portion of surplus-value, or surplus-product into capital! Accumulation for accumulation's sake, production for production's sake...19

This explanation of the incessant drive of capitalists had wide implications. Within Marx's system the capitalist was often described as a ruthless exploiter. Even so, Marx held it to be inappropriate to attach blame to the capitalist as a person, a point he made clear in the preface to the first edition of Capital:

I paint the capitalist and the landlord in no sense couleur de rose. But here individuals are dealt with only in so far as they are the personification of economic categories,

embodiments of particular class-relations and class interests. My standpoint, from which the evolution of the economic formation of society is viewed as a process of natural history, can less than any other make the individual responsible for relations whose creature he socially remains, however much he may subjectively raise himself above them.20

In short, energies devoted to condemning the behaviour of capitalists were misplaced. As Marx observed in another context: 'What avails lamentation in the face of historical necessity?'21

Clear limits, however, were attached to the amount of accumulation undertaken at any one time.

This line of argument, virtually by definition, made the substitution of machinery for labour a precondition for the acquisition of capital goods. This proposition was crucial to the embellishment of Marx's model. Ricardo had anticipated the conclusion in the chapter ‘On Machinery' in the third and final edition of his Principles. He then amended his earlier support for the position that the immediate competition between machinery and employment would be offset by releases of funds which could be used to engage more labour.23 The mainstream of classicism, it will be recalled, rested its case on the argument that this compensating effect would shortly neutralize - by swelling profits and thereby increasing the subsequent demand for labour - any short-term appearances of technological unemployment. This view, Marx insisted, was fallacious in that it presupposed that all of the ensuing gains to the capitalist would be 'destined to support labour'. Marx, on the contrary, maintained that the laws of motion of capitalism demanded that part of the expanded surplus be allocated to the acquisition of machinery. Moreover, when this occurred, the total demand for labour would necessarily diminish. Marx, of course, recognized that the introduction of higher techniques might be associated with reductions in costs and with growth in the volume of output.

But even this short-lived stimulus to the demand for labour might be swamped by forces moving in a counter direction. Among its other consequences, the increased use of machinery would have the effect of killing off the jobs of those who worked with older and inferior techniques. Handicraft workers would be among the first to feel the sting of the spread of industrialism; much of their labour time would become 'socially unnecessary'. Later, as the application of industrial techniques gained momentum, the weaker and smaller

capitalists would be destroyed. In this phase, the battle of competition, Marx maintained, 'always ends in the ruin of many small capitalists, whose capitals partly pass into the hand of their conquerors, partly vanish'.24 This combination of forces would produce a situation in which the total demand for labour would expand less rapidly than the numbers eligible for employment. In Marx's words:

Since the demand for labour is determined not by the amount of capital as a whole, but by its variable constituent alone, that demand falls progressively with the increase of the total capital, instead of... rising in proportion to it. It falls relatively to the magnitude of the total capital, and at an accelerated rate, as this magnitude increases. With the growth of the total capital, its variable constituent or the labour incorporated in it, also does increase, but in a constantly diminishing proportion.25

The problem to which Marx was here directing attention has by no means lost its pertinence in the modern world. It is still a widely held view that labour-saving technological improvements should be welcomed on the grounds, that, whatever their short-term effects on the labour market, their long-term effects must necessarily be favourable to the economy at large. In the history of Western industrial countries there is a substantial basis for this view. In a number of underdeveloped countries, however, it has become increasingly apparent that the adoption of modern techniques of manufacture may have unfortunate 'backwash' effects on established lines of employment. The consequences of this situation are especially serious in underdeveloped economies nowadays where, in most cases, the population of working age is growing at considerably faster rates than was the case in Western countries at comparable periods in their industrial emergence. Some governments - perhaps most notably the government of India - have attempted to minimize the risks of job displacements from the introduction of modern technologies by restricting their use to product lines which do not compete with established manufacturing enterprises.26 This approach to policy builds on an insight that was initially Marxian, though Marx himself would have rejected it. Within his perspective, policy measures designed to alter the course of history were inevitably fruitless and vain.27

As Marx saw it, the mechanism of accumulation under capitalism could be explained in the first instance by the creation of surplus value and by the pressures on the capitalists to re-invest a substantial part of that surplus. The significance of the process he was describing extended well beyond the domain of economic causes and effects as narrowly construed. By its very nature, capitalism was bound to produce an ever-widening cleavage within the social structure. Increasingly labourers would be debased in skill and reduced to the status of operatives performing routine and repetitive tasks. This debasement of skill, it may be noted in passing, had the analytical consequence of simplifying the measurement of output in labour units, for the dynamics of the capitalist system itself tended to standardize the labour force. Meanwhile, the displacement of labour by machines would increase the number of jobless and swell the ranks of the 'reserve army of unemployed'. The capitalist mode of production, Marx maintained, required this outcome both to maintain the power position of capitalists and to ensure that an abundant labour supply would be available at subsistence wages. Increasing misery among the proletariat was a necessary by-product of these

mechanisms. As Marx saw the outcome of this phase of capitalism: in proportion as the productiveness of labour increases, capital increases its supply of labour more quickly than its demand for labourers. The overwork of the employed part of the working class swells the ranks of the reserve, whilst conversely the greater pressure that the latter by its competition exerts on the former, forces these to submit to overwork and the subjugation under the dictates of capital.'28

Meanwhile, at the other end of the social spectrum, the situation of capitalists - or at least of those who retained a position as owners of the means of production - would be improved. They could now afford to indulge themselves in luxuries and economic inequalities would be widened. The number of successful capitalists, however, was likely to shrink. With the spread of machinery, only the strong could survive; the weak would be ground under. This proposition applied to capitalists fully as much as to the proletarian class. Caught up in the dynamics of the system, many of the smaller capitalists would find themselves pushed down the social scale to become, like the workers they had formerly employed, dependent on property owners for an opportunity to gain a livelihood. Concentration and centralization of the ownership of the means of production thus marched hand in hand with increasing misery and inequality.

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