The accumulation of capital and the problem of population

Bauer argued that crises only stem from a temporary discrepancy between the scale of the productive apparatus and increases in population. The crisis automatically adjusts the scale of production to the size of population and is then overcome. Luxemburg produced a brilliant refutation of this harmonist theory (1972, pp. 107—39). She showed that in the decades prior to the War the tempo of accumulation was more rapid than the slow rate at which the population increased in various countries. Bauer’s observation that ‘under capitalism there is a tendency for the accumulation of capital to adjust to the growth of population’ (1913, p. 871) is thus incompatible with the facts. In the fifty years from 1870 to 1920, the US population increased by around 172 per cent, while the accumulation of capital in industry expanded by more than 2 600 per cent.

However Luxemburg’s critique, which is perfectly valid against Bauer, makes the basic mistake of seeing population only as a market for capitalist commodities: ‘It is obvious that the annual increase of ‘mankind’ is relevant for capitalism only to the extent that mankind consumes capitalist commodities’ (1972, p. 111). She sees in population a limit to the accumulation of capital in the sense that it cannot provide a sufficient market for those commodities.

My own view is diametrically opposed to both Bauer’s and Luxemburg’s. Against Bauer, and using his own reproduction scheme, I have shown that from a certain stage — despite increases in population — an overaccumulation of capital results from the very essence of capital accumulation. Accumulation proceeds, and must proceed, faster than population grows so that the valorisation base grows progressively smaller in relation to the rapidly accumulating capital and finally dries up. From this it follows that if capital succeeds in enlarging the valorisation base, or the number of workers employed, there will be a larger mass of obtainable surplus value — a factor which will weaken the breakdown tendency. Therefore there is a perfectly comprehensible tendency for capital to employ the maximum possible number of workers. This does not in the least contradict the other tendency of capital of ‘employing as little labour as possible in proportion to the invested capital’ (Marx, 1959, p. 232). This is because the mass of surplus value depends not merely on the number of labourers employed — at a given rate of surplus value — but on raising the rate of surplus value through increases in the amount of means of production relative to living labour applied in the production process.

From this it follows that with ‘a sufficient accumulation of capital, the production of surplus value is only limited by the labouring population if the rate of surplus value ... is given’ (Marx, 1959, p. 243). Therefore population does form a limit on accumulation, but not in the sense intended by Luxemburg. If population expands the interval prior to absolute overaccumulation is correspondingly longer. This is what Marx means when he writes:

If accumulation is to be a steady, continuous process, then this absolute growth in population - although it may be decreasing in relation to the capital employed — is a necessary condition. An increasing population appears to be the basis of accumulation as a continuous process (1969, p. 477).

The tendency to employ the largest possible number of productive workers is already contained in the very concept of capital as a production of surplus value and surplus labour.

Oppenheimer’s criticism, that Marx was forced to admit that despite the overall displacement of workers their total number grows, is really unfounded and meaningless. Capital accumulation is only possible if it succeeds in creating an expanded valorisation base for the growing capital. For example at the low degree of accumulation which survived in Germany up to the end of the 1880s the nascent large-scale industry failed to absorb the entire working population. Emigration became necessary to contain this situation. In the decade 1871—80 some 622 914 persons emigrated abroad from the country. In the following decade this number rose to 1 342 423. But with the rapid upsurge of industrialisation and the accelerated tempo of accumulation in the 1890s, emigration ceased and even gave way to immigration from Poland and Italy into the industrial areas of the West. The absorption of these additional labour powers provided the basis for producing the surplus value required for the valorisation of the expanded capital.

Natural increases in urban population and migration from the countryside were insufficient. This was the case despite continuous intensification of labour which meant that the mass of exploited labour was growing faster than the number of exploited workers. A shortage of labour power persisted despite the recruitment of new workers and the reabsorption of workers displaced by the increasing mechanisation of work processes and rising organic composition of capital. After the 1907 crisis capital was compelled to seek out an expanded valorisation base by intensifying the incorporation of women workers. This had the additional advantage of being cheaper. In a penetrating account of the German economy A Feiler tells us:

It became increasingly clear that the rapid expansion of female labour which had characterised the depression years of 1908 and 1909 was not some passing phenomenon that would vanish once the rate of employment restabilised. It survived the depression years into the boom. The number of women workers continued to rise. In the five years from 1905 to 1910... the number increased by 33 per cent. This trend intensified in the years that followed. The number of women employed in factories and offices increased much more rapidly than the number of men. This was a revolution pure and simple ... At the end of 1913 there were as many employed women in Germany as employed men. (1914, p. 86)

However, not much more can be drawn out of the disposable mass of labour power. Children and old people cannot be inducted into the production process. The reservoir of human labour is running dry. If there is a declining inflow of labour into production the source of additional surplus value is restricted. This means an intensified struggle on the world market in search of the sources of additional surplus value required for the valorisation of the expanded capital.

But even in countries where population is expanding the danger of overaccumulation is inherent. Given a rising organic composition of capital, every increase in the number of workers implies only a temporary weakening of the breakdown, not its final overcoming. Because constant capital expands much more rapidly than population it follows that after a more or less long period of accumulation a point must come at which the given population is not enough to valorise the swollen mass of capital. At this point capital begins to press against the extreme boundary of valorisation. Population begins to form the limit to the accumulation of capital not because the consumption base of capital is too narrow but because the valorisation base is insufficient. As a result of insufficient valorisation a reserve army is created and there is chronic unemployment. Yet this unemployment has nothing to do with the introduction of machinery: it flows from the accumulation of capital. A working population which is scarce generates a working population which is surplus.

It is not difficult to see why the question of population should have changed so rapidly since Malthus’ time. The slow tempo of accumulation characteristic of early capitalism generated a concern about overpopulation and its attendant misery. Today bourgeois writers in both France and Germany are concerned about whether the future accumulation of capital will find adequate reserves of labour power at its disposal. The modern bourgeois economist is characterised by his dread of underpopulation.

It might be argued that the threat is not too serious because there are still hundreds of millions of people in the enormous continents of Asia and Africa who could satisfy capital’s insatiable appetite for labour. But the point is not whether there are large masses of people in this or that part of the world, but whether they are available where capitalism needs them. If we look at the matter this way then colonial capitalism and imperialism are characterised by a shortage of labour power. It would be superfluous to go into all the evidence available from various parts of the world. I shall only take a few examples.

Australia is not important as a market for the advanced capitalist economies. Australia’s significance lies in its production. Next to Argentina, Australia is the world’s most important producer of wool. Broken Hill District alone supplies around 20 per cent of the world’s total production of zinc. The copper mines of Mount Morgan are among the world’s largest. The immigration of cheap labour power has therefore always played an important role in the various colonisation projects relating to Australia, starting with the famous system devised by Wakefield who established his own companies in Adelaide, South Australia (1836) and Wellington in New Zealand (1839) by importing impoverished immigrant workers whose fares were paid by him.

This drive for labour power has persisted. According to W Pember-Reeves Australia’s production could be increased significantly if coloured workers were allowed jobs on the sugar plantations of Queensland (1902, Chapter 4). However capital ran up against the opposition of white workers to the immigration of coloured workers. W Dressler tries to counter this fear of competition from immigrant labour by saying that in the long run the white workers would leave the unhealthy jobs to immigrant workers and would have to take on supervisory functions (1915, pp. 188—9). As recently as 1925 we hear that ‘in Australia there is an absolute shortage of labour power’ (F Hess, 1925, p. 138).

The picture is the same in all the colonial countries. It is true of the South African mines, the cocoa plantations of San Tome, the copper districts of Katanga, the cotton fields of French Cameroon and Equatorial Africa, the sugar plantations of the Dominican Republic and Guyana, the rubber plantations of Sumatra and Borneo. ‘In large parts of Africa’, according to a report in the Berliner Borsen Courier [Berlin Stock Exchange Courier], the black population ... is being pushed back into increasingly smaller reservations ... in Kenya around five million acres have been reserved for settlement by whites.’ In this way ‘increasingly greater masses of blacks are compelled to sell their labour power to European entrepreneurs at starvation wages’ (6 May 1928). In Sumatra and Borneo whatever little labour there is prefers to work on the rubber plantations of the native peasantry than on the large-scale plantations owned by the big European capitalists, who literally treat them like animals.

When Marx described the gruesome exploitation of the British working class in Capital bourgeois economists called it a ‘one-sided’ picture and tried their best to show that the conditions described were characteristic only of the early stages of industrial development, and were bound to be superseded by the gradual progress of social reforms. Yet Marx’s description of the conditions of the British working class of the early nineteenth century was an empirical illustration of tendencies which Marx had established through a theoretical analysis of the nature of capital.

Restrained in its wolf-like hunger for labour at home, West European capital celebrates even more unbridled orgies of exploitation in the territories recently opened up to capitalist production. The shameless character of capital’s exploitation of the labour of women and children is repeated here on an enormously magnified scale. And the immense squandering of human life that follows only intensifies the shortage of labour.