Reducing the costs of variable capital through increases in productivity

a) Starting from a dynamic equilibrium the previous analysis assumed a constant rate of surplus value of 100 per cent throughout the course of accumulation. This conflicts with reality and has a purely fictitious, tentative character. It has to be modified. Rising productivity cheapens commodities; in so far as this includes commodities that go into workers’ consumption, the elements of variable capital are thereby cheapened, the value of labour power therefore declines and surplus value and the rate of surplus value increase. Marx says:

hand in hand with the increasing productivity of labour, goes ... the cheapening of the labourer, therefore a higher rate of surplus value, even when the real wages are rising. The latter never rise proportionally to the productive power of labour. (1954, p. 566)

A further factor in enhancing the rate of surplus value is the rising intensity of labour that goes together with general increases in productivity. The increasing degree of exploitation of labour that flows from the general course of capitalist production constitutes a factor that weakens the breakdown tendency.

b) The ‘depression of wages below the value of labour power’ (Marx, 1959, p. 235) works in the same direction. Obviously, since the efficiency of work is going to fall, this can only be a temporary step.

Throughout the analysis we have assumed, in keeping with the hypothetical state of equilibrium, that the commodity labour power is fully employed — that there is no reserve army to begin with and consequently, like all other commodities, labour power is sold at its value. However I have shown that even on this assumption, a reserve army of labour necessarily forms at a certain level of capital accumulation due to insufficient valorisation. Beyond this point the mass of the unemployed exert a downward pressure on the level of wages so that wages fall below the value of labour power and the rate of surplus value rises. This forms a further source of increases in valorisation, and so another means of surmounting the breakdown tendency. The depression of wages below the value of labour power creates new sources of accumulation: ‘It ... transforms, within certain limits, the labourer’s necessary consumption fund into a fund for the accumulation of capital’ (Marx, 1954, p. 562).

Once this connection is clear, we have a means of gauging the complete superficiality of those theoreticians in the trade unions who argue for wage increases as a means of surmounting the crisis by expanding the internal market. As if the capitalist class is mainly interested in selling its commodities rather than the valorisation of its capital. The same holds for F Sternberg. He cites the low wages prevalent in England in the early nineteenth century as one reason ‘why the crises of this period caused far deeper convulsions in English capitalism than those of the late nineteenth century’ (1926, p. 407). Low wages, and therefore a high rate of surplus value, form one of the circumstances that mitigate crises.