Accumulation causing increased demand for labor-power with the organic composition of capital staying the same
[When wages rise due to accumulation of capital in an increasing scale, and therefore an increase for demand for labor-power] A larger part of their own surplus-product, always increasing and continually transformed into additional capital, comes back to them in the shape of means of payment, so that they can extend the circle of their enjoyments; can make some additions to their consumption-fund of clothes, furniture, etc., and can lay by small reserve funds of money. But just as little as better clothing, food, and treatment, and a larger peculium, do away with the exploitation of the slave, so little do they set aside that of the wage worker. A rise in the price of labour, as a consequence of accumulation of capital, only means, in fact, that the length and weight of the golden chain the wage worker has already forged for himself, allow of a relaxation of the tension of it. Marx, Capital, Volume 1 (Progress Publishers, 1887), p.436
[…] accumulation slackens in consequence of the rise in the price of labour, because the stimulus of gain is blunted. The rate of accumulation lessens; but with its lessening, the primary cause of that lessening vanishes, i.e., the disproportion between capital and exploitable labour power. The mechanism of the process of capitalist production removes the very obstacles that it temporarily creates. The price of labour falls again to a level corresponding with the needs of the self-expansion of capital, whether the level be below, the same as, or above the one which was normal before the rise of wages took place. […] The correlation between accumulation of capital and rate of wages is nothing else than the correlation between the unpaid labour transformed into capital, and the additional paid labour necessary for the setting in motion of this additional capital. It is therefore in no way a relation between two magnitudes, independent one of the other: on the one hand, the magnitude of the capital; on the other, the number of the labouring population; it is rather, at bottom, only the relation between the unpaid and the paid labour of the same labouring population. If the quantity of unpaid labour supplied by the working class, and accumulated by the capitalist class, increases so rapidly that its conversion into capital requires an extraordinary addition of paid labour, then wages rise, and, all other circumstances remaining equal, the unpaid labour diminishes in proportion. But as soon as this diminution touches the point at which the surplus labour that nourishes capital is no longer supplied in normal quantity, a reaction sets in: a smaller part of revenue is capitalised, accumulation lags, and the movement of rise in wages receives a check. The rise of wages therefore is confined within limits that not only leave intact the foundations of the capitalistic system, but also secure its reproduction on a progressive scale. Marx, Capital, Volume 1 (Progress Publishers, 1887), p.437-438
The composition of capital is to be understood in a two-fold sense. On the side of value, it is determined by the proportion in which it is divided into constant capital or value of the means of production, and variable capital or value of labour power, the sum total of wages. On the side of material, as it functions in the process of production, all capital is divided into means of production and living labour power. This latter composition is determined by the relation between the mass of the means of production employed, on the one hand, and the mass of labour necessary for their employment on the other. I call the former the value-composition, the latter the technical composition of capital. Between the two there is a strict correlation. To express this, I call the value composition of capital, in so far as it is determined by its technical composition and mirrors the changes of the latter, the organic composition of capital. Wherever I refer to the composition of capital, without further qualification, its organic composition is always understood. Marx, Capital, Volume 1 (Progress Publishers, 1887), p.434
Relative Diminution of the Variable Part of Capital with Accumulation
Apart from natural conditions, such as fertility of the soil, etc., and from the skill of independent and isolated producers (shown rather qualitatively in the goodness than quantitatively in the mass of their products), the degree of productivity of labour, in a given society, is expressed in the relative extent of the means of production that one labourer, during a given time, with the same tension of labour power, turns into products. The mass of the means of production which he thus transforms, increases with the productiveness of his labour. Marx, Capital, Volume 1 (Progress Publishers, 1887), p.438
Once given the general basis of the capitalistic system, then, in the course of accumulation, a point is reached at which the development of the productivity of social labour becomes the most powerful lever of accumulation. Marx, Capital, Volume 1 (Progress Publishers, 1887), p.438
But whether condition or consequence, the growing extent of the means of production, as compared with the labour power incorporated with them, is an expression of the growing productiveness of labour. The increase of the latter appears, therefore, in the diminution of the mass of labour in proportion to the mass of means of production moved by it, or in the diminution of the subjective factor of the labour process as compared with the objective factor. This change in the technical composition of capital, this growth in the mass of means of production, as compared with the mass of the labour power that vivifies them, is reflected again in its value composition, by the increase of the constant constituent of capital at the expense of its variable constituent. This law of the progressive increase in constant capital, in proportion to the variable, is confirmed at every step (as already shown) by the comparative analysis of the prices of commodities, whether we compare different economic epochs or different nations in the same epoch. The relative magnitude of the element of price, which represents the value of the means of production only, or the constant part of capital consumed, is in direct, the relative magnitude of the other element of price that pays labour (the variable part of capital) is in inverse proportion to the advance of accumulation. Marx, Capital, Volume 1 (Progress Publishers, 1887), p.438-439
The laws of this centralisation of capitals, or of the attraction of capital by capital, cannot be developed here. A brief hint at a few facts must suffice. The battle of competition is fought by cheapening of commodities. The cheapness of commodities demands, caeteris paribus, on the productiveness of labour, and this again on the scale of production. Therefore, the larger capitals beat the smaller. It will further be remembered that, with the development of the capitalist mode of production, there is an increase in the minimum amount of individual capital necessary to carry on a business under its normal conditions. The smaller capitals, therefore, crowd into spheres of production which Modern Industry has only sporadically or incompletely got hold of. Here competition rages in direct proportion to the number, and in inverse proportion to the magnitudes, of the antagonistic capitals. It always ends in the ruin of many small capitalists, whose capitals partly pass into the hands of their conquerors, partly vanish. Apart from this, with capitalist production an altogether new force comes into play – the credit system, which in its first stages furtively creeps in as the humble assistant of accumulation, drawing into the hands of individual or associated capitalists, by invisible threads, the money resources which lie scattered, over the surface of society, in larger or smaller amounts; but it soon becomes a new and terrible weapon in the battle of competition and is finally transformed into an enormous social mechanism for the centralisation of capitals. Commensurately with the development of capitalist production and accumulation there develop the two most powerful levers of centralisation – competition and credit. […] Whether this latter result is the consequence of accumulation or centralisation, whether centralisation is accomplished by the violent method of annexation – when certain capitals become such preponderant centres of attraction for others that they shatter the individual cohesion of the latter and then draw the separate fragments to themselves – or whether the fusion of a number of capitals already formed or in process of formation takes place by the smoother process of organising joint-stock companies – the economic effect remains the same. Everywhere the increased scale of industrial establishments is the starting point for a more comprehensive organisation of the collective work of many, for a wider development of their material motive forces – in other words, for the progressive transformation of isolated processes of production, carried on by customary methods, into processes of production socially combined and scientifically arranged. Marx, Capital, Volume 1 (Progress Publishers, 1887), p.441
Aris Goudouras
We can see in this excerpt that Marx doesn’t consider centralization a negative characteristic, as it allows for increased sophistication and cooperative scale in production. My sense is that theorists like Bookchin would be critical of that, since they’d advocate for an ecological society that is not so industrialized. Same with contemporary degrowth theorists.
Production of Surplus Population or Industrial Reserve Army & The General Law of Capitalist Accumulation
Considering the social capital in its totality, the movement of its accumulation now causes periodical changes, affecting it more or less as a whole, now distributes its various phases simultaneously over the different spheres of production. In some spheres a change in the composition of capital occurs without increase of its absolute magnitude, as a consequence of simple centralisation; in others the absolute growth of capital is connected with absolute diminution of its variable constituent, or of the labour power absorbed by it; in others again, capital continues growing for a time on its given technical basis, and attracts additional labour power in proportion to its increase, while at other times it undergoes organic change, and lessens its variable constituent; in all spheres, the increase of the variable part of capital, and therefore of the number of labourers employed by it, is always connected with violent fluctuations and transitory production of surplus population, whether this takes the more striking form of the repulsion of labourers already employed, or the less evident but not less real form of the more difficult absorption of the additional labouring population through the usual channels. […] The labouring population therefore produces, along with the accumulation of capital produced by it, the means by which it itself is made relatively superfluous, is turned into a relative surplus population; and it does this to an always increasing extent. Marx, Capital, Volume 1 (Progress Publishers, 1887), p.443
With the advance of accumulation, therefore, the proportion of constant to variable capital changes. If it was originally say 1:1, it now becomes successively 2:1, 3:1, 4:1, 5:1, 7:1, &c., so that, as the capital increases, instead of ½ of its total value, only 1/3, 1/4, 1/5, 1/6, 1/8, &c., is transformed into labour-power, and, on the other hand, 2/3, 3/4, 4/5, 5/6, 7/8 into means of production. Since the demand for labour is determined not by the amount of capital as a whole, but by its variable constituent alone, that demand falls progressively with the increase of the total capital, instead of, as previously assumed, rising in proportion to it. Marx, Capital, Volume 1 (Progress Publishers, 1887), p.443
It [the surplus population] forms a disposable industrial reserve army, that belongs to capital quite as absolutely as if the latter had bred it at its own cost. Independently of the limits of the actual increase of population, it creates, for the changing needs of the self-expansion of capital, a mass of human material always ready for exploitation. […] there must be the possibility of throwing great masses of men suddenly on the decisive points without injury to the scale of production in other spheres. Overpopulation supplies these masses. The course characteristic of modern industry, viz., a decennial cycle (interrupted by smaller oscillations), of periods of average activity, production at high pressure, crisis and stagnation, depends on the constant formation, the greater or less absorption, and the re-formation of the industrial reserve army or surplus population. In their turn, the varying phases of the industrial cycle recruit the surplus population, and become one of the most energetic agents of its reproduction. This peculiar course of modern industry, which occurs in no earlier period of human history, was also impossible in the childhood of capitalist production. The composition of capital changed but very slowly. With its accumulation, therefore, there kept pace, on the whole, a corresponding growth in the demand for labour. Slow as was the advance of accumulation compared with that of more modern times, it found a check in the natural limits of the exploitable labouring population, limits which could only be got rid of by forcible means to be mentioned later. The expansion by fits and starts of the scale of production is the preliminary to its equally sudden contraction; the latter again evokes the former, but the former is impossible without disposable human material, without an increase, in the number of labourers independently of the absolute growth of the population. This increase is effected by the simple process that constantly “sets free” a part of the labourers; by methods which lessen the number of labourers employed in proportion to the increased production. The whole form of the movement of modern industry depends, therefore, upon the constant transformation of a part of the labouring population into unemployed or half-employed hands. Marx, Capital, Volume 1 (Progress Publishers, 1887), p.444
If its accumulation, on the one hand, increases the demand for labour, it increases on the other the supply of labourers by the “setting free” of them, whilst at the same time the pressure of the unemployed compels those that are employed to furnish more labour, and therefore makes the supply of labour, to a certain extent, independent of the supply of labourers. The action of the law of supply and demand of labour on this basis completes the despotism of capital. As soon, therefore, as the labourers learn the secret, how it comes to pass that in the same measure as they work more, as they produce more wealth for others, and as the productive power of their labour increases, so in the same measure even their function as a means of the self-expansion of capital becomes more and more precarious for them; as soon as they discover that the degree of intensity of the competition among themselves depends wholly on the pressure of the relative surplus population; as soon as, by Trades’ Unions, etc., they try to organise a regular co-operation between employed and unemployed in order to destroy or to weaken the ruinous effects of this natural law of capitalistic production on their class, so soon capital and its sycophant, Political Economy, cry out at the infringement of the “eternal” and so to say “sacred” law of supply and demand. Every combination of employed and unemployed disturbs the “harmonious” action of this law. Marx, Capital, Volume 1 (Progress Publishers, 1887), p.448
The third category of the relative surplus population, the stagnant, forms a part of the active labour army, but with extremely irregular employment. Hence it furnishes to capital an inexhaustible reservoir of disposable labour power. Its conditions of life sink below the average normal level of the working class; this makes it at once the broad basis of special branches of capitalist exploitation. It is characterised by maximum of working-time, and minimum of wages. We have learnt to know its chief form under the rubric of “domestic industry.” It recruits itself constantly from the supernumerary forces of modern industry and agriculture, and specially from those decaying branches of industry where handicraft is yielding to manufacture, manufacture to machinery. Marx, Capital, Volume 1 (Progress Publishers, 1887), p.450
The lowest sediment of the relative surplus population finally dwells in the sphere of pauperism. Exclusive of vagabonds, criminals, prostitutes, in a word, the “dangerous” classes, this layer of society consists of three categories. First, those able to work. One need only glance superficially at the statistics of English pauperism to find that the quantity of paupers increases with every crisis, and diminishes with every revival of trade. Second, orphans and pauper children. These are candidates for the industrial reserve army, and are, in times of great prosperity, as 1860, e.g., speedily and in large numbers enrolled in the active army of labourers. Third, the demoralised and ragged, and those unable to work, chiefly people who succumb to their incapacity for adaptation, due to the division of labour; people who have passed the normal age of the labourer; the victims of industry, whose number increases with the increase of dangerous machinery, of mines, chemical works, etc., the mutilated, the sickly, the widows, etc. Pauperism is the hospital of the active labour-army and the dead weight of the industrial reserve army. Its production is included in that of the relative surplus population, its necessity in theirs; along with the surplus population, pauperism forms a condition of capitalist production, and of the capitalist development of wealth. It enters into the faux frais of capitalist production; but capital knows how to throw these, for the most part, from its own shoulders on to those of the working class and the lower middle class. Marx, Capital, Volume 1 (Progress Publishers, 1887), p.450
The greater the social wealth, the functioning capital, the extent and energy of its growth, and, therefore, also the absolute mass of the proletariat and the productiveness of its labour, the greater is the industrial reserve army. The same causes which develop the expansive power of capital, develop also the labour power at its disposal. The relative mass of the industrial reserve army increases therefore with the potential energy of wealth. But the greater this reserve army in proportion to the active labour army, the greater is the mass of a consolidated surplus population, whose misery is in inverse ratio to its torment of labour. The more extensive, finally, the lazarus layers of the working class, and the industrial reserve army, the greater is official pauperism. This is the absolute general law of capitalist accumulation. Marx, Capital, Volume 1 (Progress Publishers, 1887), p.450-451
The folly is now patent of the economic wisdom that preaches to the labourers the accommodation of their number to the requirements of capital. The mechanism of capitalist production and accumulation constantly effects this adjustment. The first word of this adaptation is the creation of a relative surplus population, or industrial reserve army. Its last word is the misery of constantly extending strata of the active army of labour, and the dead weight of pauperism. The law by which a constantly increasing quantity of means of production, thanks to the advance in the productiveness of social labour, may be set in movement by a progressively diminishing expenditure of human power, this law, in a capitalist society – where the labourer does not employ the means of production, but the means of production employ the labourer – undergoes a complete inversion and is expressed thus: the higher the productiveness of labour, the greater is the pressure of the labourers on the means of employment, the more precarious, therefore, becomes their condition of existence, viz., the sale of their own labour power for the increasing of another’s wealth, or for the self-expansion of capital. The fact that the means of production, and the productiveness of labour, increase more rapidly than the productive population, expresses itself, therefore, capitalistically in the inverse form that the labouring population always increases more rapidly than the conditions under which capital can employ this increase for its own self-expansion. We saw in Part IV., when analysing the production of relative surplus-value: within the capitalist system all methods for raising the social productiveness of labour are brought about at the cost of the individual labourer; all means for the development of production transform themselves into means of domination over, and exploitation of, the producers; they mutilate the labourer into a fragment of a man, degrade him to the level of an appendage of a machine, destroy every remnant of charm in his work and turn it into a hated toil; they estrange from him the intellectual potentialities of the labour process in the same proportion as science is incorporated in it as an independent power; they distort the conditions under which he works, subject him during the labour process to a despotism the more hateful for its meanness; they transform his life-time into working-time, and drag his wife and child beneath the wheels of the Juggernaut of capital. But all methods for the production of surplus-value are at the same time methods of accumulation; and every extension of accumulation becomes again a means for the development of those methods. It follows therefore that in proportion as capital accumulates, the lot of the labourer, be his payment high or low, must grow worse. The law, finally, that always equilibrates the relative surplus population, or industrial reserve army, to the extent and energy of accumulation, this law rivets the labourer to capital more firmly than the wedges of Vulcan did Prometheus to the rock. It establishes an accumulation of misery, corresponding with accumulation of capital. Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil slavery, ignorance, brutality, mental degradation, at the opposite pole, i.e., on the side of the class that produces its own product in the form of capital. Marx, Capital, Volume 1 (Progress Publishers, 1887), p.451
In the centres of modern industry – factories, manufactures, ironworks, mines, etc. – the labourers are sometimes repelled, sometimes attracted again in greater masses, the number of those employed increasing on the whole, although in a constantly decreasing proportion to the scale of production. Here the surplus population exists in the floating form. Marx, Capital, Volume 1 (Progress Publishers, 1887), p.449
As soon as capitalist production takes possession of agriculture, and in proportion to the extent to which it does so, the demand for an agricultural labouring population falls absolutely, while the accumulation of the capital employed in agriculture advances, without this repulsion being, as in non-agricultural industries, compensated by a greater attraction. Part of the agricultural population is therefore constantly on the point of passing over into an urban or manufacturing proletariat, and on the look-out for circumstances favourable to this transformation. (Manufacture is used here in the sense of all non-agricultural industries.) This source of relative surplus population is thus constantly flowing. But the constant flow towards the towns pre-supposes, in the country itself, a constant latent surplus population, the extent of which becomes evident only when its channels of outlet open to exceptional width. The agricultural labourer is therefore reduced to the minimum of wages, and always stands with one foot already in the swamp of pauperism. Marx, Capital, Volume 1 (Progress Publishers, 1887), p.449-450
Marx thought that the problem of the surplus population — ultimately a problem of the growing oversupply of, and under-demand for, labour — would intensify over time and, as a result, people would increasingly find themselves disconnected from labour markets, and hence from regular access to the wage. Indeed, Marx describes this as the “absolute general law of capitalist accumulation”. What happens is that capital’s ongoing accumulation process leads to rising labour productivity, which in turn expands the “industrial reserve army”, causing the “consolidated surplus population” — “whose misery is in inverse ratio to the amount of torture it has to undergo in the form of labour” — to grow, and increasing “official pauperism”; that is, those who cannot make enough in wages to survive, and so must beg for their bread.5 The overall result is that the accumulation of wealth occurs alongside an accumulation of poverty. In Marx’s account, the main reason capitalist development leads to the growth of the surplus population has to do with what we have called “technological ratcheting”.6 In essence, Marx argues that the demand for labour in each industry eventually falls as labour productivity rises. New industries do come on line, at a faster or slower pace, increasing the demand for labour. However, these new industries never start out from zero: they do not need to reinvent e.g. steam power, the assembly line, the electric motor. Instead, new lines absorb technological innovations that preceded them. As a result, the emergence of new industries is less and less effective in increasing the demand for labour. Hence capital has what Marx terms a “rising organic composition”. Marx argues that it is the older lines, which have not yet been technically renewed, which tend to absorb the most labour. Endnotes, An Identical Abject-Subject?, Endnotes #4 (2015), https://endnotes.org.uk/articles/an-identical-abject-subject
Marx defines the surplus population as workers without regular access to work: a worker “belongs to” the surplus population “when he is only partially employed or wholly unemployed”. [Marx, Capital, vol. 1 (MECW 35) pp. 634-635.] Marx refers to this surplus population as a “relative surplus population”, because these workers are not absolutely surplus, as in a Malthusian account (which is to say, it is not a matter of there not being enough food, water, shelter, etc). Instead, these workers are surplus relative to the needs of capital — that is, relative to capital’s demand for labour. In the history of capitalist societies, large masses of people have been absorbed into the labour market and have come to depend entirely upon earning wages in order to survive. They cannot leave the labour market unless they can get other workers to support them. In other words, workers have to work regardless of what sort and how much work is available. They are at the mercy of capital’s demand for labour. When that demand falls and there isn’t enough work to go around, workers do not stop working altogether — unless they really have no options, in which case they become paupers. Instead, they enter one or another branch of an extensive and variegated surplus population. Endnotes, An Identical Abject-Subject?, Endnotes #4 (2015), https://endnotes.org.uk/articles/an-identical-abject-subject
[…] the tendency towards increasing superfluity is not a tendency towards a literal extrusion of a part of the working class from the economy. Surplus workers still need to buy at least some of what they need to survive, and therefore they must earn or acquire money in order to live. Those who are produced as surplus to the needs of capital may still receive wages in super-exploited sectors, or they may be informally self-employed and thus self-exploiting (since they lack access to capital). […] It would thus be a mistake to identify surplus populations with “the unemployed”. This category is, to some extent, an artifact of 20th century high-income countries’ provision of unemployment insurance. In the 19th century, as in most low-income countries today, “being unemployed” in this sense was simply not an option. Unemployment insurance did not exist — and today covers few workers in low-income countries — so workers could not afford to be without work for long: they needed to find employment as soon as possible, regardless of the degree to which their labour was demanded by capital. If there was no demand, they needed to set up shop for themselves, without any employer — by picking through rags, for example. Endnotes, An Identical Abject-Subject?, Endnotes #4 (2015), https://endnotes.org.uk/articles/an-identical-abject-subject
On the one hand, this relatively simple theory of the tendential production of surplus population can help greatly in explaining various key aspects of the present global situation. It gives us a basis for explaining deindustrialisation, the relative growth of services, the spread of forms of insecure and flexible labour, and the numerous abuses for which this opens the way. In turn, these tendencies intensify and exacerbate the difficulty of unifying the working class under the hegemony of the industrial worker, in the way traditional Marxism anticipated; it thus gives us a basis for explaining the crisis of the left and present strategic predicaments. It also seems to offer an explanation for declining growth rates over recent decades, as relative surplus value-producing labour has become a diminishing share of global labour. […] On the other hand […] What seems to be a standard misinterpretation or over-extension of the theory of surplus population is characterised by a hypostatisation of “the surplus population” as a singular social subject, with the apparent implication that this may be viewed as the new revolutionary agent, or at least that it is the agent behind various forms of contemporary struggle. This involves a conceptual slippage between general tendency and particular sociological or empirical cases. While it would of course ultimately be false to separate the two, it is also important not to identify them too immediately or simplistically. Thus, the theory of surplus population does not involve some kind of neo-Bakuninite romanticisation of a surplus subject “more radical” or “more dangerous” than the organised working class; nor does it involve a reading of present struggles as those of some “surplus” subject. Endnotes, An Identical Abject-Subject?, Endnotes #4 (2015), https://endnotes.org.uk/articles/an-identical-abject-subject