Overaccumulation and export of capital in Marx’s conception

Marx points to the consistency of Ricardo’s argument that if overproduction of commodities is impossible then there ‘cannot ... be accumulated in a country any amount of capital which cannot be employed productively’ (Ricardo, 1984, p. 193).

This proposition is founded on J B Say’s thesis that demand and supply are identical. It shows that ‘Ricardo is always consistent. For him, therefore, the statement that no overproduction (of commodities) is possible, is synonymous with the statement that no plethora or overabundance of capital is possible’ (pp. 496—7). Marx then refers to the ‘stupidity of his [Ricardo’s] successors’:

who deny overproduction in one form (as a general glut of commodities on the market) and who not only admit its existence in another form, as overproduction of capital, plethora of capital, overabundance of capital, but actually turn it into an essential point of their doctrine. (p. 497)

The epigones of Marx, for instance Varga, merely reverse this stupidity. They accept the overproduction of commodities and even ‘make this a fundamental part of their doctrine’, but deny the overproduction of capital.

For Marx there could be no fundamental distinction between the two phenomena. The question is: what is the relation between these two forms of overproduction, the form in which it is denied and the form in which it is asserted or accepted? ‘The question is, therefore, what is the overabundance of capital and how does it differ from overproduction?’ (p. 498).

Those economists who admit to the possibility of an overabundance of capital maintain that ‘capital is equivalent to money or commodities. So overproduction of capital is overproduction of money or of commodities. And yet the two phenomena are supposed to have nothing in common with each other’ (p. 498). Against this ‘thoughtlessness, which admits the existence and necessity of a particular phenomenon when it is called A and denies it when it is called B’ (p. 499) Marx emphasises that when we are dealing with overproduction we are not dealing merely with an overproduction of commodities as commodities. We are dealing with ‘the fact that commodities are here no longer considered in their simple form, but in their designation as capital’ (p. 498). The commodity ‘becomes something more than, and also different from, a commodity’ (p. 499).

In a situation of overproduction the producers confront one another not as pure commodity owners but as capitalists. This means that in every crisis the valorisation function of capital is disrupted. A capital that fails to valorise itself is superfluous, overproduced capital. In this sense overproduction of commodities and overproduction of capital are the same thing. ‘Overproduction of capital, not of the individual commodities — although overproduction of capital always includes overproduction of commodities — is thus simply overaccumulation of capital’ (Marx, 1959, p. 251).

The heart of the problem of capital exports lies in showing why it is necessary and under what conditions it comes about. Marx’s achievement was that he did precisely this.

Marx showed the circumstances which determine a tendential fall in the rate of profit in the course of accumulation. The question arises — how far can this fall go? Can the rate of profit fall to zero? Many writers believe that only in such a case can we speak of an absolute overaccumulation of capital. As long as capital yields a profit, however small, we cannot speak of overaccumulation in an absolute sense because the capitalist would rather be content with a small profit than have no profit at all.

I shall show that this idea is completely false, that there is a limit to the accumulation of capital and this limit comes into force much earlier than a zero rate of profit. There can be absolute overaccumulation even when capital yields a high interest. The crux of the matter is not the absolute level of this interest, but the ratio of the mass of surplus value to the mass of accumulated capital.

In identifying the conditions on which this limit depends mere empiricism is quite useless. For instance in the utilisation of fuel the experience of almost 100 years has shown that it was always possible to obtain a greater quantity of heat from a given quantity of coal. Thus experience, based on several decades’ practice, might easily suggest that there is no limit to the quantity of heat obtainable through such increases. Only theory can answer the question whether this is really true, or whether there is not a maximum limit here beyond which any further increases are precluded. This answer is possible because theory can calculate the absolute quantity of energy in a unit of coal. Increases in the rate of utilisation cannot exceed 100 per cent of the available quantity of energy. Whether this maximum point is reached in practice is of no concern to theory.

Starting from considerations of this sort Marx asks, what is overaccumulation of capital? He answers the question thus: ‘To appreciate what this overaccumulation is ... one need only assume it to be absolute. When would overproduction of capital be absolute?’ (1959, p. 251) According to Marx absolute overproduction would start when an expanded capital could yield no more surplus value than it did as a smaller capital:

As soon as capital would, therefore, have grown in such a ratio to the labouring population that neither the absolute working time supplied by this population, nor the relative surplus working time, could be expanded any further (this last would not be feasible at any rate in the case where the demand for labour were so strong that there were a tendency for wages to rise); at a point, therefore when the increased capital produced just as much, or even less, surplus value than it did before its increase, there would be absolute overproduction of capital. (p. 251)

According to Marx’s definition of absolute overaccumulation it is not necessary for profit on the total capital to disappear completely. It disappears only for the additional capital which is accumulated. In practice the additional capital will displace a portion of the existing capital so that for the total capital a lower rate of profit results. However whereas a falling rate of profit is generally bound up with a growing mass of profit, absolute overaccumulation is characterised by the fact that here the mass of profit of the expanded total capital remains the same.

To understand the conditions under which this occurs I shall first analyse the simplest case where population and the productivity of labour are constant.