Deville - The People's Marx (1893)

Chapter XXIV: Transformation of Surplus-Value into Capital

I. Reproduction on an increasing scale. —The more the capitalist has accumulated, the more he can accumulate. —Capitalist appropriation is only the application of the laws of the production of commodities.
II. False ideas concerning accumulation.
III. Division of surplus-value into capital and revenue. —The abstinence theory.
IV. Circumstances which affect the extent of accumulation. —Degree of exploitation of labor-power. —Productivity of labor. —Growing difference between capital employed and capital consumed. —Magnitude of capital advanced.
V. The labor-fund.

I.—Reproduction on an Increasing Scale.

In the previous chapters we have seen how surplus- value springs out of capital; we are now going to see bow capital issues from surplus-value.

If, instead of being spent, the surplus-value is advanced and employed as capital, a new capital is formed and joined to the former capital. To use surplus-value as capital then is to accumulate capital. Let us first consider this operation from the point of view of the individual capitalist.

A master-spinner, for example, has advanced a capital of $50,000.00, of which $40,000.00 or four-fifths are laid out in cotton, machinery, etc, and the remaining fifth in wages. With this, he produces annually 150,000 pounds of yarn, worth 40 cents a pound, or a total value of $60,000.00. The surplus-value, which is therefore $10,000.00, exists in the net product of 25,000 pounds (which is one-sixth of the gross product), since their sale at 40 cents a pound brings in an equivalent amount. Ten thousand dollars are always ten thousand dollars. The fact that they are surplus-value tells us how they came into the hands of the capitalist, but it makes no change in their nature as value or money. To capitalize this new sum of $10,000.00 then,—all other circumstances remaining the same—the master-spinner will simply have to advance four-fifths of it in the purchase of cotton, etc., and one-fifth in the purchase of additional spinners. Then the new capital of $10,000.00 will function in the spinning-process and yield in its turn a surplus-value of $2,000.00.

The capital-value was originally advanced under the form of money. The surplus-value, on the contrary, exists at first as the value of a certain quantity of the gross product. If the sale of the latter, its exchange for money, gives the capital-value back its original money form, it metamorphoses the original form of surplus- value, the commodity form. But after the sale of the gross product, the capital-value and the surplus-value, are, both of them, sums of money, and their transformation into capital, which takes place afterward, is accomplished in the same way in both cases. The master-spinner lays out each of them in the same way in the purchase of commodities that place him in a position to begin anew, and this time on a larger scale, the fabrication of his product.

But, in order to be able to buy the constituent elements of this process, he must find them on the market.

The annual production must, therefore, furnish not only all those articles naturally fitted to replace the material components of capital used up during the year, but it must furnish a greater quantity of these articles than the quantity consumed, and also an additional supply of labor-power, in order that the new and enlarged capital value may be able to function.

The mechanism of capitalist production provides this additional supply of labor-power, by reproducing the working-class as a wage-paid class—a class whose ordinary wages ensure not only its continued existence but also its continued growth. A part of the annual surplus-labor must be employed in producing means of production and subsistence in excess of the amount needed to replace the capital advanced. It is then only necessary for capital to incorporate the additional labor-power, annually supplied by the working-class, in the shape of laborers of all ages, with the surplus means of production included in the annual produce.

Accumulation results, therefore, from the reproduction of capital on an increasing scale.

The More the Capitalist has Accumulated, the More he can Accumulate.

The original capital was formed, in our example, by the advance of $50,000.00. How did the plutocrat get possession of that wealth? "By his own labor or that of his ancestors," answer in chorus the spokesmen of political economy, and their supposition seems, indeed, the only one in conformity with the laws of the production of commodities.

It is quite otherwise in regard to the new capital of $10,000.00. Its origin we know all about. It is capitalized surplus-value. From the start, it does not contain a single atom of value that is not drawn from the unpaid labor of others. The means of production with which the additional labor-power is incorporated, as well as the means of subsistence that sustain the additional laborers, are nothing but parts of the net product—of the tribute annually wrested from the working-class by the capitalist class. Though the latter, with a portion of this tribute, buys from the working-class additional labor- power, even at its just price, this is no more than is done by every military conqueror, who graciously pays for the goods of the conquered with the money he has robbed them of. By its surplus-labor of this year, the working- class creates new capital, which will make possible the employment of additional labor next year. This is what is called: the creation of capital by capital.

The accumulation of the first new capital of $10,000.00 presupposes that the sum of $50,000.00, advanced as the original capital, comes out of the pocket of the capitalist where it was put by his "primitive labor." But the accumulation of the second additional capital of $2,000.00 presupposes only the previous accumulation of the $10,000.00 capital—the capitalized surplus-value of the original capital. It follows that the more the capitalist has accumulated, the greater is his power of further accumulation. In other words, the more he has appropriated in the past of the unpaid labor of others, the greater is his present power of appropriating living unpaid labor.

Capitalist Appropriation is Only the Application of the Laws of the Production of Commodities.

It is very important to understand that this mode of enrichment is the result, not of the violation, but, on the contrary, of the application of the laws of commodity production. To convince oneself of this, it suffices to observe the successive operations that result in accumulation.

We saw that the original transformation of a certain value into capital took place conformably to the laws of exchange. One of the parties sold his labor-power and the other bought it. The first receives the value of his commodity, the use of which —labor—accordingly becomes the property of the second. The latter then transforms the means of production which he owns, by means of the labor which is his by right of purchase, into a new product, which also is indisputably his private property.

The value of this product contains first, the value of the means of production consumed; but labor could not advantageously consume these means of production with- out transferring their value to the product. It contains, in addition, a value equal to the value of the labor-power and a surplus-value. This result is due to the fact that the labor-power sold for a fixed time—as a day, or a week, etc.—possesses less value than its use produces in the same time. But in obtaining the exchange-value of his labor-power, the laborer has parted with the use-value, as is the case in every purchase and sale of commodities.

That this particular article, labor-power, in its use or consumption furnishes labor, and therefore produces value, does not alter at all the general law of the production of commodities. If then the amount of value advanced in wages reappears in the product with a surplus, this does not spring from a wrong done to the vendor, for he received the equivalent of his commodity, but from the consumption of this commodity by the purchaser. The only equality of the articles exchanged required by the law of exchange is equality in exchange- value, and this very law assumes a difference between their use-values, and it has nothing to do with their consumption, which does not begin till after the consummation of the bargain made on the market.

The original transformation of money into capital takes place then in conformity with the economic laws of commodity production and with the rights of property which are a consequence of those laws. How can this fact be modified because, afterward, it is surplus-value that the capitalist transforms into capital? This surplus-value is his property, as we have just seen; and the additional laborers whom, by functioning in its turn as capital, it serves to hire, have nothing to do with the fact that it was produced beforehand by laborers. All that these additional laborers can demand is that the capitalist shall pay them also the value of their labor-power.

Things would no longer appear in the same light if we were to examine the relations of the capitalist and the laborers, no longer separately, but as a connected concatenation, if we were to consider the capitalist class and the working-class. But as commodity production only confronts sellers and buyers independent the one of the other, in order to judge of this production by its own laws, we must take each transaction separately and not in its connection either with that which precedes it, or with that which follows it. Moreover, as sales and purchases are always transactions between individuals, we must not here examine into the relations between classes.

And so, every time that it enters upon its functions, capital recovers its virginity. It is in accordance with the laws of commodity production that under the capitalist regime wealth can be constantly more and more monopolized by means of the continuous appropriation of the unpaid labor of others. How great the illusion then of certain Socialist schools who imagine they can abolish the regime of capital by applying to it the laws of commodity production!

II.—False Ideas Concerning Accumulation.

The commodities that the capitalist buys as means of enjoyment evidently do not serve him as means of production and value expansion; neither is the labor that he buys for the same purpose productive labor. In this way he squanders the surplus-value as revenue, instead of making it breed as capital.

Therefore bourgeois political economy has preached, as the first of civic duties, accumulation—i.e., the duty of employing a large share of one's revenue in hiring productive laborers, who bring in more than they are paid.

It had to combat the popular prejudice that confounds capitalist accumulation with the amassing of hoards, as though putting money under lock and key was not the surest method to prevent its capitalization. It is also important not to confound capitalist accumulation, which is a productive process, with the augmentation of wealth which goes to form the consumption fund of the rich and which is gradually used up, nor with the formation of reserve stocks, which is a feature common to all modes of production.

Classical political economy is perfectly right in maintaining that the trait most characteristic of accumulation is that the people supported by the net product must be productive and not unproductive laborers. But the place where it errs is when it draws from this the conclusion that the part of the net product which is transformed into capital is consumed by the working- class.

According to this way of thinking, all the surplus- value transformed into capital would be laid out in wages. On the contrary, it splits up, like the capital-value from which it sprung, into the purchase price of the means of production and the purchase price of labor-power. If it is to be converted into additional labor-power, the net product must contain a surplus quantity of articles of subsistence of primary necessity; but if this additional labor-power is to be exploited, the net product must also contain new means of production which do not enter into the personal consumption of the laborers, any more than they do into that of the capitalists.

III.—Division of Surplus-Value into Capital and Revenue.

One portion of the surplus-value is spent by the capitalist as revenue, and the other portion accumulated as capital. All other circumstances remaining the same, the proportion by which this division is made will determine the magnitude of accumulation. It is the owner of the surplus-value, the capitalist, who divides it. This ratio then depends upon his will. The part of the tribute extorted by him, that he accumulates, he is said to "save," because he does not eat it—i.e. because he fulfils his function as a capitalist, which is to enrich himself.

The capitalist has no historical value, no historical right to life, no social raison d'Ítre, save in his function as personified capital. It is only in this capacity that the necessity for his own ephemeral existence is a consequence of the transitory necessity for the capitalist mode of production. The inciting motive of his activity is then neither use-value nor enjoyment, but rather exchange-value and its constant augmentation. The fanatical agent of the process of accumulation, he incessantly forces men to produce for production's sake, and thus unconsciously drives them to develop those productive powers and material conditions which alone can form the basis of a new and higher society.

The development of capitalist production demands the continuous enlargement of the capital invested in an enterprise, and competition compels every individual capitalist, whether he will or no, to conduct his business in harmony with the laws of capitalist production. It makes it impossible for him to preserve his capital without expanding it, and he cannot go on expanding it except by means of progressive accumulation. His will and his conscience express only the requirements of the capital he represents, and he looks upon his personal consumption as a sort of theft—at the least, a loan—from accumulation.

But, as the capitalist mode of production develops, and with it accumulation and wealth develop, the capitalist ceases to be a mere personification of capital. While the capitalist of the old stamp condemns every individual expenditure which is not indispensable, seeing in it only an encroachment upon accumulation, the modernized capitalist is capable of seeing in the capitalization of surplus-value an obstacle to the gratification of his insatiable thirst for pleasure.

At the beginning of capitalist production—and this fact is repeated in the individual life of every industrial upstart—avarice and desire to get rich are the ruling passions. But the progress of production not only creates an entire new world of pleasures; it opens with speculation and credit a thousand sources of sudden enrichment. At a certain stage of development, it even imposes upon the unhappy capitalist a wholly conventional prodigality, which is at once a display of wealth and a means of obtaining credit. Luxury becomes a business necessity, and thus one of the expenses necessarily incident to the possession of capital.

This is not all. The capitalist does not grow rich, like the independent peasant and artisan, in proportion to his Individual labor and personal frugality, but in proportion to the unpaid labor of others that he absorbs, and to the abstinence from all the joys of life that he inflicts upon his laborers. As his accumulations increase his prodigality grows, while his accumulation is not necessarily restricted by his growing expenditure. But there rages within him a struggle between the desire for accumulation and the desire for enjoyment.

The Abstinence Theory.

Save, constantly save! i.e., incessantly reconvert the largest possible portion of the surplus-value or net product into capital! Accumulate for accumulation's sake! Produce for production's sake! Such is the shiboleth, the exhortation of political economy proclaiming the historical mission of the bourgeois period. If the proletarian is only a machine for producing surplus-value, the capitalist is only a machine for capitalizing that surplus-value.

But it was after 1830, at a time when Socialist doctrines were spreading—Fourierism and St. Simonism in France and Owenism in England—, when the town proletariat at Lyons sounded the tocsin of revolution, when in England the rural proletariat were using the incendiary torch, that political economy revealed to the world a marvellous doctrine for the salvation of society.

It transformed at a stroke the conditions of the labor-process into so many acts of "abstinence" on the part of the capitalist—on the natural assumption that the laborer does not abstain from working for him. The capitalist "imposes upon himself," wrote G. de Molinari, a "privation by lending his instruments of production to the laborer"; he imposes upon himself a privation, in other words, when he makes his means of production a source of value as capital by incorporating labor-power with them, instead of eating them up just as they are— manures, draft-horses, cotton, steam-engines, etc.

In short, the world still lives by grace alone of the ascetic self-sacrifice of the capitalist. Not only accumulation, but "the simple conservation of a capital requires a constant effort to resist the temptation to consume it." (Courcelle-Seneuil.) One would have to be devoid of all humane feelings not to attempt to release the capitalist from his temptations and his martyrdom by releasing him from his capital.

IV.—Circumstances which Affect the Extent of Accumulation.

If the proportion according to which the surplus-value is split into capital and revenue is given, the magnitude of the capital accumulated evidently depends on the magnitude of the surplus-value. Suppose, for instance, that 80 per cent, of the surplus-value is capitalized and 20 per cent, consumed, then the capital accumulated will amount to $480.00 or to $240.00, according as the surplus-value was $600.00 or $300.00. And so, all the circumstances which determine the magnitude of the surplus-value are factors in determining the extent of accumulation. Let us recapitulate them, but solely from this last point of view.

Degree of Exploitation of Labor-Power.

It is known that the rate of surplus-value depends, in the first place, on the degree of exploitation of labor- power. In discussing the production of surplus-value, we always assumed that the laborer received the just value of his labor-power. Reductions below this value, nevertheless, play in practice a very important role. And this transforms, to a certain extent, the consumption fund required for the support of the laborer into an accumulation fund for the capitalist. Therefore the tendency of capital is to reduce wages as far as possible and to eliminate from the consumption of the working-class everything that it considers superfluous. Capital has been aided in this purpose by the cosmopolitan competition, to which the development of capitalist production has given birth, between all the laborers on the face of the globe. And it is to-day a question of nothing less than of lowering, in a future more or less close at hand, the European level of wages to the Chinese level.

Moreover, a higher degree of exploitation of labor-power makes it possible to increase the quantity of labor without increasing the equipment of instruments of labor, machinery, apparatus, tools, buildings, shops, etc. Let an establishment employ, for example, 100 men working 8 hours a day, and they will furnish daily 800 hours of labor. If, in order to raise this amount of labor by one-half, the capitalist were to hire 50 additional laborers, he would not only have to increase his outlay in wages, but also in equipment. While, by making his hundred laborers work twelve hours a day instead of eight, he would get the same result, and the former equipment would still be sufficient. This equipment, being used more, would wear out more quickly, and would have to be more frequently renewed, and that is all. In this way, additional labor, obtained by requiring from labor-power a more prolonged effort, increases the surplus-value or the net product—the substance of accumulation—without necessitating a previous and proportional increase of the part of capital laid out in equipment.

A simple increase of labor, drawn from the same number of laborers, suffices in the extractive industries, such as mining, etc., to increase the value and mass of the product—the free gift of Nature—and, therefore, to swell the fund destined for accumulation. In agriculture, where the mechanical action of labor on the soil, of itself, marvellously increases the fertility, a like increase of the amount of labor adds to this effect; as in the extractive industries, it is the direct action of man on Nature which promotes accumulation. Moreover, since the extractive industries and agriculture furnish materials to manufacturing industry, the excess of products which an augmentation of labor, without additional outlay, procures in the former, benefits the latter. Capital then may owe an increase in its elements of accumulation solely to those two basic sources of wealth—labor-power and land.

Productivity of Labor.

Another important factor in accumulation is the degree of productivity of social labor.

If the surplus-value is given, the mass of the net product—the incarnation of the surplus-value—corresponds to the productivity of the labor functioning. In proportion then as labor develops its productive powers, increasing the efficiency and abundance of the means of production and lowering their prices and the prices of the means of subsistence, and of the raw materials and auxiliary substances, the net product includes a larger and larger mass of means of enjoyment and accumulation. The part of the surplus-value which is capitalized may then even increase relatively to the other part which forms the revenue, without diminishing the actual consumption of the capitalist, for with the increase in productivity a smaller value is realized in a larger quantity of useful objects.

Growing Difference Between Capital Employed and Capital Consumed.

It is a natural property of labor, while creating new values, to preserve values already in existence. Labor transfers to the product the value of the means of production consumed. Hence, as its means of production increase in efficiency, mass and value—i.e., as it becomes more productive and more promotive of accumulation, capital preserves and perpetuates a constantly increasing capital-value.

The part of capital which is advanced in the form of mechanical equipment always functions in the productive process as a whole, while, as it is worn out only little by little, it transfers its value only by bits to the commodities which it successively aids in making. Its increase results in a greater and greater difference in magnitude between the total capital employed and the part of it which is consumed in each separate operation. Compare, for instance, the value of the European railways, with the quantity of value that they lose by wear and tear in one day. Now, in so far as they contribute to produce useful effects without increasing the expenses of production, these instruments created by man render free services—free as the services of natural forces—steam, water, air, etc. These gratuitous services of past labor energized by living labor, multiply with the development of the productive powers and the accumulation of capital which accompanies that development.

The more and more potent assistance which, under the form of mechanical equipment, past labor renders to living labor, is attributed by the economists, not to the laborer who did the work, but to the capitalist who appropriated the product. From their point of view, the instrument of labor and its character as capital, which it owes to the transitory social environment, can not be separated, any more than the mind of a Georgia planter could distinguish between the laborer himself and his character as a slave.

Magnitude of Capital Advanced.

If the degree of the exploitation of labor-power is given, the magnitude of the surplus-value is determined by the number of laborers simultaneously exploited, and this number corresponds, though in varying proportions, with the magnitude of the capital advanced. Hence, the more capital increases by means of successive accumulations, the more also does the value increase that is to be divided into consumption-fund and accumulation-fund.

V.—The Labor-Fund.

The capitalists, their creatures and their governments squander every year a goodly portion of the net annual product. Besides this, they store up in their consumption-fund for gradual use a mass of objects that might otherwise be reproductively employed, and they render sterile, by attaching it to their personal service, a great mass of labor-power. The quantity of wealth which is capitalized, is then never as large as it might be. The ratio between its magnitude and the total magnitude of the social wealth varies with every change in the division of the surplus-value into personal revenue and new capital. And so, instead of being a predetermined and fixed portion of the wealth of society, the social capital is merely a variable fraction of it.

Nevertheless certain economists are disposed to see in the social capital only a predetermined portion of the social wealth, and they apply this theory to what they call the "wage-fund" or "labor-fund." According to them this is a particular portion of the social wealth, the value of a definite quantity of the means of subsistence. The limits of this quantity, though they vary from time to time, at any given moment are positively fixed by Nature, and it is in vain that the working-class struggles against these fatal barriers. To believe them, the sum to be distributed among the wage-workers being thus given, it follows that if the share received by each of the recipients is too small, this is because there are too many of them, and, in the last analysis, their misery is a result, not of the social order, but of the natural order.

In the first place, the limits which the capitalist system imposes upon the consumption of the producer are "natural" only in the capitalist environment, just as the lash functions as the "natural" stimulus to labor only in the environment of slavery. It is, indeed, characteristic of the nature of capitalist production to limit the share of the producer to what is necessary for the maintenance of his labor-power, and to assign the balance of his product to the capitalist. To make good their case, the economists ought, first of all, to have proved that, in spite of its quite recent origin, the capitalist mode of social production is nevertheless the unalterable and "natural" mode.

But, even under the special form of the capitalist system, it is not true that the "wage-fund" is predetermined by the magnitude of the social wealth or of the social capital. Since the social capital is merely a variable portion of the social wealth, the wage-fund, which is only one part of this capital, can not be a predetermined and fixed portion of the social wealth.