Absolute overaccumulation with a growing population and changing technology (increases in the organic composition of cap

It would be wrong to conclude that absolute overaccumulation is only possible when population and technology are held constant. Using Bauer’s scheme I have shown that it can and must arise on the basis of the assumptions: a) of a progressively rising organic composition of capital and b) of annual increases in population. Under the conditions postulated by this model, absolute overaccumulation does not set in immediately but only after a certain interval. I showed (in Table 2.2, p. 75) that after year 21 the capitalists could have no interest in accumulating at the existing rate (10 per cent for constant capital, 5 per cent for variable) because a capital expanded at this rate would be too large to be valorised to the same degree.

The personal consumption of the capitalists would start declining. So instead of accumulating the surplus value (of year 20) — that is, incorporating it into the original capital — they will earmark it for capital export.

Since businessmen are not inclined to cut down their own consumption, there will be a shortage of the portion earmarked for accumulation. By year 36 there has to be a reserve army (of 11 509 workers) and simultaneously a superfluous capital (of 117 174). This is the situation that prevailed in Britain early in 1867 as reported in Reynolds’ Newspaper: ‘At this moment, while English workmen with their wives and children are dying of cold and hunger, there are millions of English gold — the produce of English labour — being invested in Russia, Spain, Italy and other foreign countries’ (Marx, 1954, p. 625).

From this moment on accumulation runs into difficulties. The profit earmarked for accumulation cannot be invested in expanding business in the industry in which it was made. This is because industry is saturated with capital. Marx says:

if this new accumulation meets with difficulties in its employment, through a lack of spheres of investment, ie, due to a surplus in the branches of production and an oversupply of loan capital, this plethora of loanable money capital merely shows the limitations of capitalist production ... an obstacle is indeed immanent in its laws of expansion, ie, in the limits in which capital can realise itself as capital. (1959, p. 507)

The limits to accumulation are specifically capitalist limits and not limits in general. Social needs remain massively unsatisfied. Yet from the standpoint of capital there is superfluous capital because it cannot be valorised.

It is absolutely false to argue, as Luxemburg does, that Marx’s reproduction scheme ‘contradicts the conception of the capitalist total process and its course as laid down by Marx in Capital Volume Three’ (1968, p. 343). The fundamental idea underlying Marx’s scheme is the immanent contradiction between the drive towards an unlimited expansion of theforces of production and the limited valorisation possibilities of overaccumulated capital. Precisely this is the necessary consequence of Marx’s schemes of reproduction and accumulation. Because Luxemburg transformed these limited valorisation possibilities into a limited capacity for consumption she could find no trace of that immanent contradiction in thescheme itself. Against this Marx shows that:

the self expansion of capital based on the contradictory nature of capitalist production permits an actual free development only up to a certain point, so that in fact it constitutes an immanent fetter and barrier to production, which are [sic] continually broken through by the credit system. (1959, p. 441)

The limit of overaccumulation is broken through by the credit system, that is, by export of capital and the additional surplus value obtained by means of it. It is in this specific sense that the late stage of accumulation is characterised by the export of capital.

How does Luxemburg reconcile the fact of capital exports with her theory of the non-realisability of surplus value under capitalism? She devotes a special chapter, ‘international loans’ (1968, Chapter 30) to this question. Over some 30 pages she tells us how the capitalist countries of Europe export capital to the non-capitalist countries, build factories there, create a capitalist system and draw them by stages into their own sphere of influence. But there is not a word about how the surplus value produced in the former is realised in the latter. Instead we are told how the masses of Egypt and elsewhere have to work for long hours at low wages, how they are drawn into the capitalist nexus. In short Luxemburg shows us not how the surplus value produced under capitalism is realised in the backward countries but how an additional surplus value is produced in these countries, by means of capital exports, and brought back to the countries of advanced capitalism. The existence of capital exports is not only irreconcilable with Luxemburg’s theory, it directly contradicts it. Capital exports bear no relation to the realisation of surplus value. They are related to the problem of production, of the production of additional surplus value abroad.