Literature Study GuidesCapital Das KapitalVol 1 Part 7 Chapters 23 25 Summary

Capital (Das Kapital) | Study Guide

Karl Marx

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Capital (Das Kapital) | Vol. 1, Part 7, Chapters 23–25 : The Process of Accumulation of Capital | Summary

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Summary

Chapter 23: Simple Reproduction

Marx begins Chapter 23 with the concept that "every social process of production is at the same time a process of reproduction." Essentially Marx is arguing that the process of production, because it is part of the cyclical process of production and consumption, is also a process of reproduction. Capitalism as well must be part of the continuous cycle, wherein the capitalist makes capital continuously and not just on a one-time basis. In the capitalist system, while the capitalist increases wealth through the cycle of production-consumption-reproduction, the worker actually walks away depleted. In this way workers' labor becomes alienated from the workers and "appropriated by the capitalist." In order for the system to continue, the worker/working class relationship must also be continually reproduced. This process leads to a larger cycle of social relationships than those within a factory.

Chapter 24: The Transformation of Surplus-Value into Capital

Chapter 24 consists of five sections. Its first section focuses on the process of accumulation of capital. Marx defines the accumulation of capital as "the employment of surplus-value as capital, or its reconversion into capital." For surplus-value to become capital, it must be reinvested in additional workers and increased production. The second section deals with economic theories of German philosopher Georg Wilhelm Friedrich Hegel (1770–1831) and Scottish social philosopher and economist Adam Smith (1723–90), which Marx believes are erroneous. He says that they make a correct distinction between hoarding money and reinvesting it as capital. However, these theories are wrong to suppose that accumulation is "nothing more than the consumption of the surplus product by productive workers." Basically, Marx disagrees with Smith's argument that the surplus-value is simply transformed directly into labor-power.

In the third section Marx points out that he has examined surplus-value as something the capitalist consumes and also as accumulated capital. Here, he brings both concepts together and proposes that surplus-value is both things: "One part of the surplus-value is consumed by the capitalist as revenue," he argues, while "the other part is employed as capital, i.e. it is accumulated." A large part of the rest of the section is spent poking fun at Nassau W. Senior's theory of abstinence. In this theory Nassau attempts to glorify capitalism by replacing the word "capital" with the term "abstinence." Marx insists that this achieves nothing more than replacing "an economic category with a sycophantic phrase." Section 4 provides a more detailed examination into the exploitation of the worker, or the push and pull between the capitalist and the worker in the form of wages. Marx explains that "the constant tendency of capital is to force the cost of labor back towards this absolute zero."

In the final section of this chapter Marx begins by reinforcing one of his foundational arguments: that capital is not actually "a fixed magnitude, but ... is elastic" in that it "constantly fluctuates with the division of surplus-value into revenue and additional capital." Contrary to this, the classical political economists viewed capital as "a fixed magnitude." Marx makes a point to tear down the arguments of these classical political economists to strengthen the foundation for his theory of the exploited worker.

Chapter 25: The General Law of Capitalist Accumulation

In the first section of Chapter 25 Marx proposes to examine the "influence of the growth of capital on the fate of the working class." In order to do this it is necessary to have a better understanding of the composition of capital, as well as the "changes [capital] undergoes in the course of the process of accumulation." Capital comprises "value," which is the proportion of constant to variable capital, and "material," or the ratio of means of production and labor-power. Assuming that this composition remains a constant, then the need for more labor and the fund for the workers' wages must "increase in the same proportion as the capital." As capital grows and is constantly reinvested, there comes a point where growth outstrips available labor, and this causes a rise in wages.

Section 2 moves past the example situation of capital growing while its composition stays constant. Marx investigates how changes in the technical composition of capital are bound to occur. As capital grows, there are also changes in the technical composition of capital: the "mass of the means of production" grows, while the labor-power doesn't. This creates a corresponding change in proportions of value-composition, as the constant capital grows "at the expense of its variable constituent." Marx also introduces the concept of "primitive accumulation" in this section, which he states is the basis for modern capitalism. He investigates some further aspects of accumulation, noting that it increases "concentration of the means of production, and of the command over labor" while at the same time it works "as repulsion of many individual capitals from one another."

Accumulation of capital is not only quantitative but is also equally qualitative, because its constant component changes "at the expense of its variable component." The capitalist mode of production increases at a faster rate than accumulation of capital occurs. This happens for two reasons:

  1. because accumulation of capital experiences a "centralization of its individual elements" and
  2. because the technical composition portion of the additional capital corresponds to changes in the "technical composition of the original capital."

Social capital is constantly growing and changing both externally and internally. It can grow for a while technically and attract "additional labor-power in proportion to its increase," but "at other times it undergoes organic change and reduces its variable component." The increase of labor-power creates what Marx calls a "disposable industrial reserve army."

Marx identifies three types of surplus population: "the floating, the latent, and the stagnant." The floating form encompasses the technical demand for labor and its constant shifting. The latent surplus population is the workers who begin in agriculture and move from the countryside to urban centers as capitalism takes over the agricultural industry. The stagnant type is the poorest type of laborer, who has irregular work for the lowest wages. In the final section of this chapter Marx examines different contexts for capitalist accumulation, primarily in 19th-century England.

Analysis

In the beginning of Part 7 Marx introduces the concept of "reproduction" and reframes his early discussion about "production" in the context of "reproduction," since it is part of a cyclical process. In Chapter 23 he illustrates how the worker in a capitalist system is caught up in this cycle, explaining that the worker receives "in the shape of wages ... a portion of the product he himself continuously reproduces." However, it's important to note that Marx sees the worker's part in this cycle as one of disadvantage. He argues that "the worker always leaves the process in the same state as he entered it," but his continuation of that statement actually shows that the worker is in fact leaving the system worse off than when they entered it. Marx states that the worker leaves as "a personal source of wealth, but deprived of any means of making that wealth a reality for himself." The main idea of this chapter is pretty well summed up in the final paragraph, which states that the overall process of capitalism "produces and reproduces the capital-relation itself," which has two primary parts: "on the one hand the capitalist, on the other the wage-laborer."

Chapter 24 primarily deals with an in-depth examination of capital and its relation to surplus-value. Surplus-value is initially embodied in the form of money, and it becomes capital when it is reinvested in labor and production. Marx points out the irony in the fact that "additional workers are employed by means of the unpaid labor of the previously employed workers." The main point of this section is that in order for surplus-value to become capital, it must be invested as opposed to consumed. This system is made possible by the exploitation of workers. Marx makes a point to explain that though he disagrees with many of the major arguments of traditional political economists, he does agree with the traditional distinctions between unproductive workers, which are workers who create no new profit (such as a housemaid), and productive workers, who create products that make a profit.

In Section 4 of this chapter Marx digs into the issue of the wage struggle between capitalists and workers. He tries to drive home the fact that capitalists are always attempting to push the wage closer and closer to zero, while workers are pushing back for compensation that is fair and livable. In other words Marx illustrates here the fact of the exploitation of the worker. The final section of the chapter picks apart the arguments of political economists who over-simplify capital into something that is fixed and does not fluctuate. Marx understands that capital is more nuanced and elastic in nature. However, it was to the benefit of pro-capitalism economists to argue that it is a fixed thing, and therefore the struggle for higher wages is pointless because the "labor fund" is a fixed amount.

In the final chapter of Part 7 Marx looks at the trends of capitalism toward continual expansion. If the capitalist continues to make capital and reinvest it, making more capital off the original capital, this process of reproduction and accumulation are endless. And if capitalism keeps growing, this creates an ever-increasing need for workers. Marx indicates that this process also causes the price of labor and thus the wage to increase. It's important to note, however, that Marx still sees this type of wage increase as a pittance and not something that justifies the way workers are exploited. He argues that these wage increases still assume that "the worker will always provide a certain quantity of unpaid labor." The process of capitalist expansion that creates more jobs and raises wages in small increments is still a form of enslavement and extortion of the working class, in Marx's theory.

The "industrial reserve army" mentioned in the title of the third section of Chapter 25 is in fact the workers in the capitalist system. Marx argues that the workers actually create "the accumulation of capital and the means by which it is itself made relatively superfluous." What Marx calls a "surplus population of workers," which results from the ever-increasing capitalist mode of accumulation, is also responsible in Marx's opinion for the continuation of the capitalist system. The system would fall apart if it didn't have a surplus pool of workers to constantly draw on as accumulation increases and increasing labor-power is required. The worker in this situation is "disposable," as they can be replaced by any number of similarly abled workers. Marx creates three categories for these workers, all of whom exist in some degree of low-paid, relatively unstable condition of labor. He also describes the population that falls even "lower" than this stratum of workers, who are classified as various types of paupers. These paupers are often the raw material for becoming part of the "industrial reserve army."

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