RE: Re: Interesting exchange on overproduction (from psn-l)

["David McDonald" <dbmcdonald@xxxxxxxxxxx>]

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[mailto:owner-marxism@xxxxxxxxxxxxxxx]On Behalf Of Mike Friedman
Sent: Thursday, October 23, 2003 7:54 AM
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Subject: Fwd: Re: Interesting exchange on overproduction (from psn-l)


>From: "dmschanoes" <dmschanoes@xxxxxxxxxxxxx>
>To: "Mike Friedman" <mikedf@xxxxxxxx>
>Subject: Re: Interesting exchange on overproduction (from psn-l)
>Date: Thu, 23 Oct 2003 07:45:23 -0500
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>----- Original Message -----
>From: "Mike Friedman" <mikedf@xxxxxxxx>
>
>  David, Can you clarify this passage a bit?


I think your analysis here is very clear and a big improvement over the
prior post, which I also had trouble following gramatically.

It may be easier to see what overproduction is about if one focuses on
Marx's idea that capital is self-expanding value. The main idea is that
capital in each of its circuits must grow larger or die. The reason that
capital is not continuously in crisis due to the fact that the workers at
best are able to buy back only a portion of what they produce is that the
workers are not the only class that consumes use-values in the form of
commodities. Capitalists also consume commodities in two ways, first as
items of luxury (to get that out of the way) and secondly and more
importantly as means of production that become a part of the material basis
of production for the following circuit.

This is what DMS is talking about as presenting a barrier to the realization
of surplus value, i.e. turning surplus value into profit. Now, the
additional means of production that are produced in one circuit of capital
and must be consumed as use-values (set in motion as capital to put
labor-power into motion) in the next circuit represent an expansion both
intensively and extensively.

Extensive expansion occurs e.g. when yet another Walmart appears down the
road. It is not different from other Walmarts, and it absorbs capital and
employs capital in all its forms. None of this changes the technical basis
for the overall relationship of constant to variable capital, i.e. of dead
labor to living labor, and thus the amount of living labor that can be put
into motion and thereby exploited by the dead labor is in, roughly, the same
proportion as in the previous circuit of capital.

Intensive expansion, as DMS notes, is quite different. It is based on
relative surplus value production. In relative surplus value production
(RSVP for short) the proportions between constant and variable capital
change. MORE constant capital (dead, congealed labor) is set in motion
relative to variable capital (labor power) than in the prior circuit of
capital. This solves the pesky problem of what to do with all that capital
in the form of money that is sitting around waiting for its next chance to
expand, which it can only do by putting labor power into motion.

Now as we know no capitalist bothers to do what is good for the system as a
whole unless it helps him personally. RSVP is a lure to individual
capitalists because it is the means by which they are able to achieve a
greater than average level of profit for the commodities they produce, a
superprofit. This happens when a capitalist intuits, discovers, buys, etc.,
a method to change the physical act of commodity production in such a way as
to reduce the amount of labor involved in producing a commodity.
Historically, this occurs by increasing the mass of constant capital and
thereby displacing some living labor from the labor process itself, thus
allowing for cheaper unit production of the commodity. But the market as a
whole creates prices based on AVERAGE costs of production, so the
capitalist's produced-by-a-new-method widget that costs him only 80% of what
it costs the other capitalists to produce, can be sold at 90% of the average
price and both yield the crafty capitalist a superprofit AND drive
competitors out of the market.

But, Marx's analysis asserts, no surplus value comes from the mass of newly
deployed constant capital. It's value is merely recovered over time as the
capital is used up slowly in the production process. All surplus value and
profit (if the surplus value is realized, if the commodity in which it is
contained is sold) issues from the living labor contained in the commodity.
But the capitalist has just reduced the relative weight of living labor in
the produced commodity. Hence the overarching problem and contradiction of
capital: in order to increase profit, it must drive out of the process of
production the basis for creating the profit in the first place. Further, as
the system grows historically, the relative proportion of constant capital
becomes overwhelmingly gigantic and the proportion of living labor ever and
ever smaller. This is the point that Melvin P. has returned to again and
again on this list when he says that value, the basis of all commodity
production, is being historically destroyed and that this is a good time to
be a communist.

David McDonald




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