NB: This letter is a reply to the article "A Crisis of Value", which appeared in Internationalist Perspective 51-52
Dear comrades in Berlin,
Here are my answers to the questions you raised. I put your questions in italic.
1) Where do you locate historically the transition to real subsumption? As is well known, Marx locates that shift already within the period of the manufacture when capital began to transform the labour process.
We do not see these phases as stable periods with a short turbulent transition between them. If the transformation of the labour process in the context of the manufacture announced already the transition to the specifically capitalist mode of production, the latter could only come into being when the machine organized the labour process. Technology at the center of the labor process, regulating it, quantifying it so that the law of value penetrates it deeply rather than dominating it ‘formally’, is the essence of real subsumption. The desire for ‘technological rent’, for the surplus profit resulting from selling a product above the value of the labor that went into it, drives this transformation which is itself a lever removing obstacles to the penetration of the law of value in other areas of the economy and of the rest of society which becomes absorbed by it. The (theoretical) endpoint of the transition to real subsumption would be the point at which all goods and services are produced in this way. But the contradiction of the value-form, unleashed by real subsumption, stands in the way of its completion. We realize that we take a more expansive view of real subsumption than Marx articulated yet we think it is implicit in his thought. For him, real subsumption meant a new mode of production, therefore we have to take the implications of this revolution beyond immediate production into account.
At what point did the real subsumption of labor become the prevalent mode of production? That differs from country to country of course but only by the end of the 19th century can we see, by the formation of prices on the world market, a global competition by machine-driven economies. That doesn’t mean that the transition to real subsumption had ended. The first assembly-line had yet to be assembled. We see “fordism’ as the next phase in this transition and ‘post-fordism’ as its actual, unfinished and unfinishable phase. But this first maturation of real subsumption already brought to the fore the contradictions of the value-form, creating a new paradigm for the accumulation process with increasingly disastrous implications for humankind. Which is why we think it lead to a new historical framework, both for value accumulation and for the working class’ position to it (see our position on ‘capitalism’s decadence’).
2) What do you mean by an ideal balance between productive and unproductive consumption?
An exchange of value between them so that the latter is equal to the part of the surplus product that is not needed for expanded reproduction. If it ‘s bigger, it mortgages the valorisation process, if it’s smaller, part of the surplus product cannot be realized. Its demand is thus not an autonomous factor that can compensate for the lack of demand for productive consumption. The point I’m making is that market forces tend towards this balance but that in this period, it is increasingly violated by the over-expansion of unproductive consumption, caused by the ever mounting ‘faux frais’ that the reproduction of capitalist society requires.
3) Concerning the inevitability of the TPRF, why can't the increase in living labour productively consumed to produce means of production offset the decrease in living labour productively consumed within department II? (A side issue concerning these two departments is why you think that dep. I has more potential for technological innovation than dep. II which doesn't seem to be immediately plausible).
I’m not sure why you write that this question concerns the inevitability of the TPRF. It seems to me that it’s more about the tendency of overaccumulation in Dep I. The point is not that it’s impossible that at a given moment the relative decrease in demand for consumer goods is compensated by a proportionate relative increase in demand for means of production, but there is, as far as I can see, no reason why this should always and automatically be the case. That quote of Marx, “constant capital is never produced fot its own sake but solely because more of it is needed in spheres of production whose products go into individual consumption” does not deny a growing internal trade within Dep I but reminds us that the production of value in Dep I too remains tied to use-value and that the use-value of a means of a machine remains tied to the use-value of what can be produced with it. That may be another machine which derives its use-value from what can be produced with it but at the end of the chain there must be a product that is useful for human consumption. The idea that demand for the use-values of means of production is disconnected from the demand for the use-values of means of consumption or automatically compensates for the decline of the latter, sins against the need to see the reproduction process, production and consumption, as a whole, bound in its expansion by their reciprocal demand for use-values as well as by their creation of surplus value.
The side issue that you bring up is interesting. It made me realize that it was indeed too broad to state that dep. I has inherently more potential for technological innovation than dep. II. Indeed, when we look at early industrialisation, the ‘high tech’- industries were mainly textiles. This first phase can be described as “machinal-industrial production of consumer goods with the aid of artisanally produced machines” (Cap1, chapter 13). This was demand-driven: in a context of formal subsumption of labor, with technology still in a minor role, the most expansive demand had to be means of subsistance of the expanding working class. Since there was more technological innovation in Dep II, productivity was higher than in Dep I, so that, through the tendential equalisation of the rate of profit, (see The Roots of Capitalist Crisis part 3 ) surplus value was constantly transferred from Dep I to Dep II. So the expansion of the latter occurred at the expense of the former and it was in Dep II that the first overproduction crises broke out. Later, the opposite happened as a result of the transition to real subsumption. The focus on technology as the primary means to obtain more surplus value made the organic composition of capital (occ) rise faster in Dep I than in Dep II (especially fixed capital. The occ of the production of circulating constant capital (raw materials) rose too but slower). The period of rapid technological innovation around the turn of the 19th and the 20th centuries which some call ‘the second industrial revolution’ impacted Dep I much more than Dep II (this is explained in some detail in: Ernest Mandel: Late Capitalism, chapter 6, even though his analysis of these data is different from ours). This pushed the occ and thus the productivity in Dep I higher than in Dep II, implying a transfer of surplus value from the latter to the former, resulting from the tendential equalization of the general rate of profit. The internal dynamic of capitalism now accelerated the accumulation of Dep I at the expense of Dep II and, given the further expansion of real subsumption and the drying up of other sources of surplus profit, this has continued to our days. (Even this clarification remains somewhat schematic. The role of the military sector (which is neither Dep I nor Dep II) in capitalist decadence has become so important that it itself has become a primary source of technological innovation, flowing from it to both departments).
So maybe it was a mistake to talk about ‘inherent potential’ for technological innovation when the limit of this potential is not so much inherent than in the value-form, in how the hunt for surplus value shapes the accumulation process. As I explained in my article, ‘moral depreciation’, which increases rapidly in periods of accelerated technological innovation such as today, hides the overaccumulation of Dep I.
I hope these reflections are helpful. Have a good discussion.
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