CLASS THREE: HOW CAPITALISM WORKS (Part Two)
1. WHAT IS THE ACCUMULATION OF CAPITAL?
The transformation of surplus value into new capital so as to increase the amount of capital in the hands of an individual or firm. Even if the rate of exploitation remains unchanged, the accumulation of capital enables the number of exploited workers employed by a particular individual or firm to be increased, so increasing the total surplus value obtained by the individual or firm concerned.
2. THE NEW MEANS OF PRODUCTION
OBTAINED AS A RESULT OF THE ACCUMULATION OF CAPITAL TEND TO BE MORE MECHANISED
THAN THE OLD.
WHAT ADVANTAGE DOES THIS GIVE
TO THE FIRM CONCERNED?
The increased productivity resulting
from the increased mechanisation reduces the cost of production of each
commodity, enabling the firm concerned (as long as it enjoys a technical
advantage over its rivals) to make an above-average rate of profit.
NOTE:
We call the ratio of constant capital (plant,
etc.) to variable capital (wages), the organic composition of capital.
Thus, the organic composition of capital tends constantly to increase.
3. WHAT IS CONCENTRATION OF CAPITAL?
The enlargement of individual
capitals into larger and larger units. The concentration of capital follows
from the process of accumulation
of capital. (Note by Alliance: Sometimes known under the term "Primitive
accumulation").
4. LEAVING ON ONE SIDE THE ACCUMULATION
AND MECHANISATION OF CAPITAL, HOW ELSE CAN A CAPITALIST FIRM INCREASE ITS
PROFITS?
Only by increasing the amount
of surplus value it obtains from each of its workers, for example:
The division of the value produced by the workers between the two classes -- the working class and the capitalist class. Leaving on one side the accumulation and mechanisation of capital, higher profits can be obtained only at the expense of the living and working conditions of the working class, while improved living and working conditions for workers can be obtained only at the expense of profit.
There is, therefore, a fundamental conflict of interest between the working class and the capitalist class. At times smouldering beneath the surface, at times bursting into the open flames of strike or lock-out, the class struggle is inherent in capitalist society. No repressive measures can do more than hold it down for a while. It will disappear only when capitalists and capitalism no longer exist.
6. WHAT IS THE BASIC CAUSE OF SLUMPS?
8. WHAT IS MONOPOLY?
A firm, or association of firms,
which possesses monopoly power, i.e., which controls so much of the output
of a commodity within a market that a competitive market can no longer
be said to exist.
9. WHAT ARE THE ADVANTAGES OF
MONOPOLY POWER TO THE CAPITALISTS POSSESSING IT?
A monopoly can price its commodities
higher than would be possible under conditions of competition, i.e., it
can sell its commodities above their value. It can assist this process
further by restricting output. Thus, a monopoly can make a higher rate
of profit than would be possible under conditions of competition.
10. A MONOPOLY MAY BE:
(i) A TRUST; (ii) A COMBINE,
OR (iii) A CARTEL.
WHAT ARE THE CHARACTERISTICS
OF EACH?
12. WHAT IS FINANCE CAPITAL?
As capitalism develops, concentration
and centralisation, of capital proceed in banking as in industry, and a
merging of bank and industrial capital takes place, so that a small group
of monopoly capitalists -- a financial oligarchy -- comes to control the
large banks and financial institutions as well as the large industrial
firms. This merged bank and industrial capital is called finance capital.
13. WE HAVE SEEN THAT THE CAPITALIST
CLASSES OF ALL COUNTRIES ARE FACED WITH A MARKET PROBLEM HOW DO THEY ENDEAVOR
TO SOLVE THIS PROBLEM?
'In theory' they could raise
the workers' wages to equal the value of the commodities they produce,
but since this would reduce their profits to nil, capitalists reject this
solution. Consequently, they endeavor to solve their perennial market problem
by exporting commodities. Since all the developed capitalist countries
have a market problem, each tends to direct its export drive primarily
towards less developed countries.
14. WHY DOES THE EXPORT OF COMMODITIES
TEND TO LEAD TO THE EXPORT OF CAPITAL AND TO COLONIALISM?
Because an underdeveloped country
is economically backwards, its population as a whole tends to be poor.
Furthermore, its economy tends to be autarkic
(that is, relatively self-contained). Consequently,
an underdeveloped country provides a poor market for the surplus commodities
from a developed capitalist country unless its economy is radically transformed.
This is
one reason why
capitalist firms in developed capitalist countries 'export
capital' to such underdeveloped countries,
i.e., invest it in the acquisition of large tracts of land for conversion
into plantations or mines.
These capitalist
firms flood the underdeveloped country with cheap manufactured goods which
ruin many of the native artisans (who still use handicraft methods which
cannot compete with machine production). And if they can control the administration
of the underdeveloped country -- a process known as colonialism
-- they can force a large part of the peasantry
from the land they traditionally held (for example, by imposing money taxes
which can be met only from wages).
These ruined artisans and landless peasants are compelled to seek employment
at starvation wages in foreign-owned plantations or mines producing cheap
raw materials
and food for the developed capitalist countries
(at a very high rate of profit for the firms involved). This provides a
second important
reason for the export of capital.
15. WHAT ARE SUPER-PROFITS?
Surplus value which a capitalist
class obtains by the exploitation of workers outside its own country, particularly
in underdeveloped colonial-type countries where the degree of civilisation
(and so the value and price of labour power) is lower than in the developed
capitalist country, so that the rate of
profit is
(often very considerably) higher.
16. WHAT IS A COLONY?
A colonial-type country which
is administered directly by a developed capitalist country, e.g., Gibraltar,
Northern Ireland.
17. WHAT IS A SEMI-COLONY?
A country which is nominally
independent but is in fact dominated by a foreign power (e.g., Saudi Arabia).
18. SOME PEOPLE CLAIM THAT THE
WORKING CLASS OF A DEVELOPED CAPITALIST COUNTRY AS A WHOLE SHARES IN THE
EXPLOITATION OF COLONIAL-TYPE COUNTRIES.
IS THIS TRUE?
No.
Super-profits from the exploitation of the working people of colonial-type
countries go to the capitalists of the developed capitalist countries concerned.
While a small portion of these super-profits may be used to bribe a stratum
of highly-paid workers (mainly the officials in the labour movement who
act as agents of capital) the workers as a whole receive only the value
of their labour power in wages and do not share in the super-profits.
Nevertheless,
the existence of the small stratum of workers bribed by imperialist super-profits
(the so-called 'labour aristocracy')
creates an objective split in the working class which complicates the development
of the socialist movement.
For the most
part, however, the fact that the standard
of living of
the British workers has risen over the past hundred years is
not because they receive in wages more
than the value of their labour-power, but because the
value
of their labour-power has increased.
A considerable
part of the super-profits from colonial-type countries has been used to
accumulate capital and mechanise production at home, so that productivity
has risen and with it the 'degree of civilisation'
which contributes to the determination of the value of labour power. In
other words, total production has risen very considerably over the last
century and the working class has been accorded a minor portion of this
in the form of increased real wages. However, the
share
of total production received in wages by the
working class has fallen, so that the exploitation
of the British working class has increased over this period.
19. THE ECONOMIC TRANSFORMATION
OF A COLONIAL-TYPE COUNTRY LIMITS IN TIME THE USEFULNESS OF THE COUNTRY
TO THE DEVELOPED CAPITALIST COUNTRY CONCERNED.
HOW DOES THIS COME ABOUT?
The capitalists of the dominating
country need a stratum of well-educated native people to serve them as
civil servants, office workers, etc., and these people become frustrated
by the fact that the higher positions are reserved for representatives
of the foreign dominating power.
Furthermore,
although the foreign capitalists try to limit capitalist development in
the colonial-type country, they need railways, harbours, etc. in order
to bring out raw materials and food from the country. This helps to bring
about the development of
a national capitalist class or national bourgeoisie
which, although frustrated in many ways by
the dominating foreign power (frustrations which assist in developing the
political consciousness of the national bourgeoisie), develops a degree
of native capitalist industry which competes with the export industries
of the developed capitalist country.
It also creates
an industrial
working class, small
in size but relatively concentrated; this naturally gives rise to a labour
movement, which begins to struggle for higher wages and better working
conditions.
In time,
all these factors lead to the rise of a national liberation movement, led
initially by the national bourgeoisie, the aim of which is to free the
colonial-type country from the domination and exploitation of the foreign
capitalists.
20. HOW DO THE CAPITALISTS OF THE DOMINATING FOREIGN POWER RESPOND TO THE RISE OF A NATIONAL LIBERATION MOVEMENT?
ii) Karl Marx: Various chapters
from part VIII of "Capital": including:
Chapter xxvi "The Secret of
primitive accumulation"; p.100-103; "Selected Works" Volume 2; Moscow;
1973; OR: http://www.marxists.org/archive/marx/works/1867-c1/ch26.htm
Chapter xxvii Expropriation of the land from the agricultural population; p.103-118; Selected Works Volume 2; Moscow; 1973; OR: http://www.marxists.org/archive/marx/works/1867-c1/ch27.htm
Chapter xxxii "Historical tendency of Capitalist accumulation"; p.142-146. "Selected Works"; Volume 2; Moscow; 1973; OR: http://www.marxists.org/archive/marx/works/1867-c1/ch32.htm
2) On the Labour Aristocracy:
i) Frederick Engels: "Trade
Unions-I"; "Marx & Engels, Articles on Britain"; Moscow 1971; In pp373-380;
OR: http://www.marxists.org/archive/marx/works/1881-ls/ls03.htm
ii) Frederick Engels: chapter entitled "labour Movement"; (p501-530) of the Working Class in England"; in "Collected Works"; Volume 4; Moscow 1975. or: http://www.marxists.org/archive/marx/works/1840/cond-wce/cwe10.htm
iii) Lenin Vladimir I: "What Is To Be Done?" section entitled :"Trade-Unionist Politics & Social-Democratic Politics" In Selected Works Volume 1; Moscow 1977; pp.132-165. NOTE: that the term "Social-Democratic" was used to mean Marxist, before Social-Democrats betrayed Marxism. OR AT: http://gate.cruzio.com/~marx2mao/Lenin/WD02i.html#WD3
3) On Colonialisation
i) Marx Karl: "The British Rule
in India"; p.166; This is not so far on the web, but "Marx & Engels,
Articles on Britain"; Moscow 1971; Progress Publishers; OR: IN Collected
Works"; Volume 12; Moscow 1979; p.125;
ii) Marx Karl: "The Future Results
of the British Rule in India"; p.197-203; In"Marx & Engels, Articles
on Britain"; Moscow 1971; or "Collected Works"; Volume 12; Moscow 1979;
217-223.
4) On Imperialism
Vladimir I Lenin: "Imperialism
The Highest Stage of Capitalism"; Selected Works; Volume 1; p.633-726;
Collected Works Volume 27; OR:
http://gate.cruzio.com/~marx2mao/Lenin/IMP16.html