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From The Militant, Vol. X No. 37, 14 September 1946, p. 6.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
We have stated the general law of constant capital, and particularly the machine. Constant capital produces no new value. It is merely transformed by the hand of labor into something else, thus preserving its original value in labor’s creation of a greater one.
But when capitalism was young things seemed to be different. For the FIRST capitalist to get a particular machine coins money out of his advantage over his brother capitalists. His laborers can produce ten things where other laborers produce only one. As long as this rosy heaven remains for the first capitalist, the price of his product is still high.
When the other capitalists get the machine, the socially necessary amount of labor to make the product finally becomes only one-tenth of what it was. And the price drops way down.
This happened again and again in the palmy days of capitalism. As a result there were cheap goods for all. There was constantly better machinery, better ways of doing things.
The 19th century was an age of progress mainly because of the race for machinery. There was great encouragement of inventions, engineering colleges, scientific research, popular education, and finally a greater degree of PEACE in which to trade and grow rich.
Most thinkers of the 19th century saw these advances and thought such progress on a capitalist basis was going to go on and on without any interruption. They thought the golden age of man had at last arrived. But Karl Marx, the real genius of the time, peered into his sociological microscope and saw differently.
“As the use of machinery becomes more general in a particular industry, the social, value of the product sinks down to its individual value. And the law that surplus value does not arise from the labor power replaced by the machinery, but from the labor power actually employed in working with the machinery, asserts itself. Surplus value arises from the variable capital alone (money spent for labor power).
Machinery and other constant capital was heaped up more and more, until it was no longer possible to discard an old machine for a new one so easily as before. Machines were too big now, and too expensive. It was a losing proposition for the capitalist to be on the side of progress.
Moreover, the products of the machine were so cheapened by now that the machine couldn’t be paid for in a short time, but only over a long period, as it reproduced its value gradually in its products.
So the same capitalists who once had price-cutting “wars” to drive each other out of business, now began to band together in monopolies to keep prices up – suppress new machinery, bury new inventions.
But only the biggest banded together. They ran smaller capitalists out of business, and began to prevent new ones from starting up. But they solved their contradiction only to make it worse. Now they had super profits to re-invest. They expanded their production again (that is, they increased their constant capital). This led to ever fiercer struggles, and on a world scale.
They conducted a world war to expand into markets of the world they did not yet control. But in the very process they expanded their productive capacity again. This means they must search for still more markets than they have yet won.
Out of capitalist competition grew capitalist monopoly. And out of capitalist peace grew capitalist war.
(Next Week: The Struggle for Markets)
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Last updated: 19 June 2021