Forwarded from Anthony (falling rate of profit)

Mon Dec 31 02:06:24 MST 2001

Dialectic of Organic Composition of Capital at this stage of development.
"The Tendency towards a falling rate of profit." Part 1

Actually this article is written backwards in an attempt to clarify "The
Tendency towards a falling rate of profit."

Under conditions of the computerization and digitalization of the production
process, the Marxist conception of the organic composition of capital
acquires profound meaning. Being able to reproduce human activity in the
production process, in the absence of the worker, is a qualitatively
different juncture in social production and consequently human history.

Technology inherently increases the productivity of labor. Technology
operates on a continuum - has a trajectory that expresses progressive
movement from one point to another. The invention of the first simple plow
laid the basis for the social revolution in agriculture by increasing the
productivity of labor. The most advanced form of plowing today can be done by
aircraft using laser beams (particle technology) to "plow fields."

The early computers increased the productivity of labor and rendered the
slide rule and mechanical adding machine obsolete as the fundamental tools in
accounting. An enormous amount of human labor was rendered superfluous in
every accounting department in every major business on earth.  Intel's early
computer chip - what the heck was it, the 4004, 4 bits (?), is clunky
compared to the 32 bits - modern personal computers, but represented a
qualitative leap over the slide rule. The slide rule went the way of the
spinning wheels and the horse and buggy.

    The juncture identified as expressing a qualitative development in social
production is the transition from electromechanical production to
electro-digital production. The last stage of electromechanical production
has distinct features generalized as electricity added to mechanical
production. Certain characteristics are identified as electromechanical
machine processes; man plus machinery plus electricity in the production
process. Electromechanical means that petroleum by products is consumed in
the production process in the form of say, oil - lubricants to break the
friction between interlocking moving parts. Electromechanical processes are
incapable of reproducing the dexterity of human activity on a scale, which
becomes a self-repeating process in the absence of the worker. Thus, the
worker becomes an absolute appendage to the machine during the last phases of
industrial production, whereas he was the master of the machine during the
period of manufacturer.

Under digital capitalism the workers is neither master nor slave to the
machine, he is removed from the production process on the basis of machine
technology. That is to say his relationship in production develops and
crossing a juncture (leap) where he is now external to the process that
birthed him. This is the absolute domination of dead labor over living labor.

In as much as commodities exchange for the socially necessary labor that goes
into their production, including the commodity labor power, a further
reduction in the standard of living of the working class must take place with
intense polarization between wealth and poverty. The "tendency" is toward
zero living labor in the production process and in this sense the collapse of
capitalism is historically inevitable.

    This is not to say that society will eliminate all living labor in social
production. The fact of the matter is that the organic composition of capital
- the relationship between dead and living labor in production, is changing
with living labor occupying an ever-decreasing role in the production of
commodities. Dead labor increasingly dominates living labor and determines
standard of living based on the amount of living labor (value) in the
production process.

    Capital personified is the possessing class - possessing ownership of the
means of production, who like the mythical King of folk lore, claims the
right of the first night over the Kingdoms brides, when it places claim over
dead labor and the productive forces. According to Marx dead labor is
incapable of producing value, thus our King claim is also for the first right
of living labor, the surplus labor, surplus product and surplus value. Once
again Marx is consulted.

"The identity of surplus-value and surplus labor imposes a qualitative limit
upon the accumulation of capital. This consists of the total working day, and
the prevailing development of the productive forces and of the population,
which limits the number of simultaneously exploitable working days. But if
one conceives of surplus value in the meaningless form of interest, the limit
is merely quantitative and defies all fantasy.

"Now, the concept of capital as a fetish reaches its height in interest
bearing capital, being a conception which attributes to the accumulated
product of labor, and at that in the fixed form of money, the inherent secret
power, as an automation, of creating surplus value in geometrical
progression, so that the accumulated product of labor, as the Economist
thinks, has long discounted all the wealth of the world for all time as
belonging to it and rightfully coming to it. The product of past labor, the
past labor itself, is here pregnant in itself with a portion of present or
future living surplus labor. We know, however, that in reality the
preservation, and to that extent also the reproduction of the value of
products of the past labor is only the result of their contact with living
labor; and secondly, that the domination of the products of past labor over
living surplus labor lasts only as long as the relations of capital, which
rest on those particular social relations in which past labor independently
and overwhelmingly dominates over living labor." (Capital Volume 3
Externalization of Relations of Capital Chapter XXIV)

   Capital is not a thing, income nor simply idleness on the part of the
possessing class. Capital is a historically evolved social power that
subordinate living labor to dead labor and each qualitative development in
technological increases this subordination because the ratio between dead and
living labor (organic composition) changes in the production process. Social
revolution is called forth to overthrow a specific relations of production -
not "the government" or various forms of authority, because society is
furthered impoverished and the social means of production become enslaved to
the pursuit for maximum profits.

Although it is a profound moral question, which harkens back to the biblical
"first question" - 'Am I my brothers keeper,' capitals legal right to dead
labor as accumulated productive forces, means nothing without its domination
of living labor to engage the productive process. What is called into
question is the legal right for existence of the dominating class as capital,
not simply guardianship.

    According to Marx, the system process of capital contains laws that make
its revolutionary collapse - overturning or overthrow, and transformation
inevitable, just as the feudal system process gave way to capitalist
production relations. Dialectics in the hands of Marx is like the guitar in
the hands of Santana or George Benson, depending on "your thing" - or J.
Hendrick, or Eddie Van Halen. (OK I still do "1984" and "Jump")

    The serf did not overthrow the feudal system of landed property -
estates. That is, the social power of the estates and the legal systems
designed to stabilize these relations of production was overthrown by the
development of a social forces external to the "master" and serf, the rising
capitalist class and working class. A group of people emerged within the womb
of feudal social relations of production, which constituted an external agent
- existing as a part of but outside of feudal social production, and these
people were a rising proletariat and capitalist class.

    This same dialectical approach has meaning for today. The employed sector
of the working class cannot break its connection with its counterpart in the
form of capital. That is to say, it cannot step outside the relationship of
its employment without becoming subject to the impact of "another" process
development. The increase in the domination of dead labor over living labor
further polarizes society into "haves and have-nots." Within the polarity of
"haves" there is a process (dialectic) of division. A sector of capital
emerges opposed to itself by way of its existence being increasing divorced
from the very production process creating capital. Capital as money rises and
repudiates its connection with production and condemns its mother. Capitalist
increasingly divorced from social production is an absurdity and extreme
intensification of the social contradiction.

    Within the polarity of "have-nots" there is a process (dialectic) of
division. A sector of the proletariat emerges opposed to itself by way of its
existence as a class divorced from the production process creating the unity
called capital and labor. The growth of that sector of the working class,
unemployed and outside the logic of capital in motion, yet a product of
capital's historic motion, represents the emergence of the external agent
that signals the ripening of the end of the epoch of the bourgeoisie.

This thesis (development by way of a leap in which internal opposites emerge
as relatively independent opposites (poles), external to each other) means
the growth of a proletariat unable to sell its labor power; the historical
formation and consolidation of a proletariat external to active engagement of
the productive forces; ripening of the world forces of social revolution and
clarifies the doctrine of the class struggle as it is being played out on a
world scale, in front of our eyes. The growth of the domination of dead labor
over living labor (the doctrine or thesis called the organic composition of
capital) creates a class of the living dead in the formation of a societal
grouping that begins its development outside the unity of capital and labor
in the production process. Although at its initial stages of development,
this social force outside the unity of capital and labor in the production
process must manifest a series of features that establish new laws of social

    Marx and Engels defined the working class, or modern proletariat as that
portion of society that has no means of subsistence other than the sell of
their labor power; including the unemployed - then called the industrial
reserve army, who could not find a purchaser of labor power except during
"boom times." At what point does capital create another crisis of
overproduction from which partial recoveries in no way improve the
circumstances of this "external formation" (external or outside engagement of
the productive forces) within the proletariat? And cheapen the price of
active labor, which appears as polarization between wealth and poverty and
rendering more people superfluous to the production process. This point in
time now exists for billions of people on earth.

     Herein resides the current significance of the organic composition of
capital. Qualitative changes in social production, the results of the
implementation of technology, is expressed within the proletariat as a leap
in its development, wherein a sector emerges as a relatively independent
pole, compelled to establish its domination over the previously existing
dominate pole, which is the power of capital. Stated another way, the moment
the employed sector of the proletariat breaks its connection with capital as
engagement in the productive process, it becomes part of a qualitatively new
segment of unemployed proletarians who are no longer a reserve army of labor,
but a permanent body of "outcasts" created by capital.

   Marx wrote a comprehensive view of the power of capital - its law of
value, in the three volumes called Capital: A Critical Analysis of Capitalist
Production. Further writings are contained in the three-volume set, under the
title Theories of Surplus Value. The following - rather lengthy quotation,
can serve as a guide for anyone interested in studying capital.

   In Capital Marx begins from the simplest, basic relations of
merchant-capitalist society - the exchange of commodities. He at once shows
the ambiguity, the contradictory characteristic of a "commodity," an article
made simply for sale, as a unity of price and value, discloses its internal
contradictions, the ambiguous character of the labor that creates the
article, the concrete labor on the one hand and one the other the abstract
labor that creates the value.

   Marx further shows that the internal contradiction concealed in the
commodity finds the forms of its movement in the external contradiction,
which emerges as the relation of the relative and the equivalent forms of
value, which are polar opposites, indissolubly connected with each other. The
further development of this relationship, which reflects the development of
the commodity, goes through three stages of a simple, a developed and finally
a universal form of value. In the last of these three stages, the article
takes on the double form of the commodity itself and its monetary equivalent.

   The development of money, in its different functions, being the result of
the extension and complication of commodity relations and at the same time
the condition of the development of these relations, is the further form of
development of these relations, is the further form of development of its
initial contradictions.

   Marx shows further the process of the development of money into capital,
the internal contradiction of the general form of movement of capital and the
continual resolution of this contradiction in the buying and selling of labor
power. The appearance of the latter denotes the higher development of the
initial contradiction, the development of the law of value on a very
universal scale. At this point development takes place more quickly and with
more intensity than formerly, because the separation of the means of
production from the producer (and the stage of development of commodity
relations that we are discussing inevitably leads to such a separation) the
basic productive power - labor power, is turned into a commodity. Production
of commodities for sale becomes capitalist. Thus we arrive at the basic means
of production of a new social structure. The conversion of money into capital
denotes the development of the law of value into a new qualitatively unique
law-system - into the law of Surplus Value, which is the "source of the
self-movement" of capitalism.

   Marx shows that the capitalist organization of production "demotes the
concentration in great workshops of the up-until-now disconnected means of
production and their conversion by this means from the productive forces of
separate persons into social productive forces" but under conditions of
individual appropriation. He further shows how the pursuit after a continuous
increase in the rate of surplus value, which depends on the physiological
limitations of the working day and the resistance of the working class, leads
to the growth and intensification of the contradictions between the social
character of production and individual appropriation - that basic
contradiction of capitalism, leads to the growing of simple capitalist
co-operation into manufacture, and thence into production by machinery. Marx
showed that the increase of the rate of exploitation requires an
uninterrupted expansion of production - that reproduction leads to the
concentration and centralization of capital and consequently to the ruin of
small scale capitalist. From another point of view, the same process of
capitalist reproduction creates an industrial reserve army, and ever more and
more intensifies class contradictions. Marx discloses in all its terrible
nakedness the general law of capitalist accumulation, with the absolute
impoverishment of the working class as its obverse side, thus showing the
inevitability of the collapse of capitalism.

   In disclosing the essence of capitalism and its deep, ever changing
contradictions, Marx shows the emergence on their basis, of contradictory
phenomena. To this are devoted the second and third volumes of Capital, where
Marx shows the process of the circulation of capital and its reproduction,
and the division of surplus value into the forms of profit of enterprise,
interest, profits of commerce and ground rent. Marx shows here how the law of
value is developed in its external forms, growing into a law of costs of
production. He shows how production is expanded, how the organic composition
of capital grows and how, under the influence of this, the rate of profit
falls although the hope of its rise is the very thing, which drives
capitalism to develop the forces of production. He further shows how
capitalist contradictions ever more and more intensify, finding their
temporary solution in certain characteristic phenomena - crisis, depression,
recovery, boom, the trade cycle, which appears as the forces of production
emerge in ever more irreconcilable conflict with the social law of their
development. The social structure of capitalism hampers the development of
productive forces. The bourgeoisie becomes unable to control production. The
movements of capitalist contradictions gives rise to the necessity and also
to all the conditions and possibilities of the collapse of capitalism.

   This is the picture unfolded by Marx in Capital . . .

(Textbook of Marxist Philosophy, prepared by the Leningrad Institute of
Philosophy under the direction of M. Shirokov, 1937 Chapter IV pages 178, 179

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