Marx’s schema of expanded reproduction cannot explain the process of accumulation as it occurs in reality and imposes itself historically. Why is this? The reason lies in the very presuppositions of the schema itself. The schema sets out to present the process of accumulation under the assumption that capitalists and workers are the only representatives of social consumption. As has been shown, Marx quite consistently and consciously bases his analysis in all three volumes of Capital on the theoretical premise of the universal and exclusive dominance of the capitalist mode of production. Under these conditions, as in the schema, there are indeed no other social classes than capitalists and workers: as consumers, all “third parties” in capitalist society (public servants, the liberal professions, the clergy, etc.) are to be counted as belonging to these two classes, and preferentially to the capitalist class. This premise is a theoretical expedient—in reality there has never been a self-sufficient capitalist society with the exclusive dominance of capitalist production. This theoretical expedient is entirely admissible, however, where it does not alter the conditions of the problem itself, but rather enables them to be expounded in their pure form. A case in point is the analysis of the simple reproduction of the total social capital. Here, the problem itself is based on the following fiction: in a society with capitalist production (i.e. one based on the generation of surplus value), the entire surplus value is consumed by those who appropriate it, namely the capitalist class. The schema seeks to present the necessary configuration of social production and reproduction under such conditions. The way the problem is posed here presupposes that production knows no other consumers than capitalists and workers, and it thus corresponds fully to Marx’s presupposition of the universal and exclusive dominance of the capitalist mode of production. One fiction is the theoretical counterpart to the other. Equally admissible is the assumption of the absolute dominance of capitalism in the analysis of the accumulation of individual capitals as given in the first volume of Capital. The reproduction of the individual capital is the basic element of total social reproduction. Yet this is an element whose movement follows an independent course and is in contradiction with the movements of the other elements, such that the total movement of social capital is no mechanical aggregate of the individual movements of the capitals, but yields instead a peculiarly transposed result. Although the aggregate value of the individual capitals, as well as its respective components (constant capital, variable capital, and surplus value) corresponds exactly to the magnitude of the value of the total social capital, i.e. its two component parts and the total surplus value, the material presentation of this value-magnitude in the respective components of the total social product completely diverges from the way in which the value relations of the individual capitals are materially embodied. The relations of reproduction of individual capitals in their material form thus coincide neither with one another, nor with those of the total social capital.* Each individual capital undergoes its own circulation, and thus its own accumulation, completely on its own account, and—in the normal course of the circulation process—depends on other capitals only insofar as it must realize its product† and find available to it the necessary means of production for it to operate. As far as the individual capital is concerned, it is of no significance whether it is within the sphere of capitalist production that this realization occurs and these means of production are produced. On the other hand, however, the most favorable theoretical premise for the analysis of the accumulation of individual capitals is the assumption that capitalist production represents the only setting within which this process occurs—i.e. that it has attained universal and exclusive dominance.286
Now, however, the question arises whether the premises that apply to individual capitals should also be considered admissible in the case of the total social capital. As a matter of fact, Marx himself identifies the conditions for the accumulation of total social capital with those of the individual capitals, as he confirms explicitly in the following passage:‡
The problem has now to be formulated thus: assuming general accumulation, in other words, assuming that capital is accumulated to some extent in all trades—this is in fact a condition of capitalist production and is just as much the urge of the capitalist as a capitalist, as the urge of the hoarder is the piling up of money (it is also necessary if capitalist production is to go ahead)—what are the conditions of this general accumulation, what does it amount to?
Marx gives the following answer:
The conditions for the accumulation of capital are thus the very same as those for its original production or for reproduction in general. These conditions, however, were: that labor was bought with one part of the money, and with the other, commodities (raw materials, machinery, etc.) … The accumulation of new capital can therefore proceed only under the same conditions as the reproduction of already existing capital.287
In reality, the actual conditions for the accumulation of total social capital are completely different to those that govern the accumulation of individual capitals and simple reproduction. The problem hinges on the following question: how is social reproduction configured, given the condition that a growing portion of surplus value is not consumed by capitalists, but used for the expansion of production? The complete absorption of the total social product by the consumption of workers and capitalists, with the exception of the replacement of constant capital, is a priori excluded, and this circumstance is the most essential moment of the problem. By the same token, the realization of the total social product by the workers and capitalists themselves is also excluded. By themselves, they can only ever realize the variable capital, the part of constant capital that is used up and the part of surplus value that is consumed, thus merely satisfying the conditions for the renewal of production on the previous scale. By contrast, the part of surplus value that is to be capitalized cannot possibly be realized by the workers and capitalists themselves. The realization of surplus value for the purposes of accumulation is thus an impossible task in a society consisting only of workers and capitalists. Remarkably, all the theorists who studied the problem of accumulation, from Ricardo and Sismondi to Marx proceeded from this very premise that rendered the problem insoluble. The correct intuition that there is a necessity for “third parties”—i.e. for consumers apart from the immediate agents of capitalist production, the workers and capitalists—for the realization of surplus value, led to all kinds of stratagems: certain theorists appeal to “unproductive consumption,” as incarnated in the person of the feudal landowner (Malthus), in militarism (Vorontsov), or in the “liberal professions” and various other strata appended to the capitalist class (Struve); alternatively, external trade is adduced and accorded a prominent role as a safety valve, as was done by all the skeptics of accumulation from Sismondi to Danielson. In part, too, the impossibility of the task led some theorists, such as von Kirchmann and Rodbertus, to renounce accumulation altogether, and others, such as Sismondi and his Russian epigones, the “Populists,” to argue that it was at least necessary to curb accumulation as much as possible.
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*The preceding two sentences were left out of Schwarzschild’s translation of The Accumulation of Capital.
†Luxemburg presumably means, “realize the value of its product.”
‡This sentence was omitted in Schwarzschild’s translation of The Accumulation of Capital.
However, it was not until the deeper analysis and precise schematic exposition of the process of total social production by Marx—especially his brilliant exposition of the problem of simple reproduction—that the crux of the problem of accumulation and the stumbling block of the earlier attempts to find a solution was laid bare. Marx’s analysis of the accumulation of total social capital is broken off in its early stages, however, and is further impaired by the fact that it is carried out in the context of the polemic against Smith’s analysis, which hardly facilitates a clear formulation of the problem, as mentioned above; as such, it does not immediately offer a finished solution, and in fact it rather complicates the problem by presupposing the exclusive dominance of the capitalist mode of production. Yet Marx’s whole analysis of simple reproduction and his characterization of the capitalist process as a whole in all its internal contradictions, and of the way that these develop, implicitly contain a solution to the problem of accumulation that accords with the other elements of Marx’s theory and with the historical experience and daily practice of capitalism, and thus allow the deficiencies of the schema to be corrected. On closer inspection, the schema of expanded reproduction itself points beyond itself to relations lying beyond capitalist production and accumulation.
Until now, expanded reproduction has only been considered from one side, namely in terms of the question of how surplus value is realized. This is the difficulty with which skeptics have been exclusively concerned to this day. The realization of surplus value is indeed the vital question for capitalist accumulation. If the consumption fund of the capitalists is disregarded altogether in order to simplify the problem, then the realization of surplus value requires a circle of purchasers beyond capitalist society as its first condition. Purchasers are deliberately referred to here, rather than consumers, since the realization of surplus value says nothing a priori of the material form of surplus value. The decisive moment here is that surplus value can be realized neither by workers—nor capitalists, but by social strata or societies that do not engage in capitalist production. There are two conceivable cases here:
1) Capitalist production supplies means of consumption beyond its own requirements (i.e. beyond those of its workers and capitalists), and these are purchased by noncapitalist strata and countries. For example, the British cotton industry supplied cotton textiles to the peasantry and the petty-bourgeoisie in the towns of the European continent and further abroad, to the peasantry in India, America, Africa, etc., during the first two-thirds of the nineteenth century, and to an extent continues to do so to this day. Thus it was consumption by non-capitalist strata and countries that formed the basis of the enormous expansion of the cotton industry in the U.K.288 An extended machine industry was developed to supply this cotton industry with spindles and weaving looms, and in turn the metal and coal industries, etc., evolved in order to supply the former. As such, the products of Department II (means of consumption) were increasingly realized by extra-capitalist social strata, thus creating an increasing demand on its part for the intra-capitalist production of Department I (means of production), and thus enabling this department in turn to realize its surplus value and to accumulate at a faster pace.
2) Conversely, capitalist production supplies means of production beyond its own requirements and finds purchasers in noncapitalist countries. For example, in the first half of the nineteenth century, British industry supplied materials for the construction of railways in the American and Australian states. The construction of railways does not in itself necessarily imply the predominance of the capitalist mode of production in a country. In fact, the railways were themselves merely one of the first preconditions for the introduction of capitalist production in these cases. Alternatively, the German chemical industry supplies means of production, such as dyes, which find huge markets in noncapitalist producing countries in Asia, Africa, etc.289 Here it is Department I that realizes its product in extra-capitalist spheres. The resulting progressive expansion of Department I elicits a corresponding expansion of Department II, which supplies means of consumption for the expanding army of Department I.
Each of these two cases differs from the Marxian schema. In the first case, the product of Department II exceeds the requirements of both departments in terms of variable capital and the consumed part of surplus value; in the second case, the product of Department I exceeds the size of the constant capital of both departments, even when its growth for the purposes of the expansion of production is accounted for. In neither case does surplus value come into existence in a natural form that would facilitate and condition its capitalization. In reality, both of these typical cases intersect at every step, complement one another, and devolve into one another.
One point is unclear in all this. If, for instance, an excess of means of consumption, e.g. cotton fabrics, is sold in noncapitalist spheres, then it is clear that these cotton fabrics, as capitalist commodities, do not merely represent surplus value, but also constant and variable capital. It would appear to be completely arbitrary to assume that precisely these commodities that are sold outside the sphere of capitalist society represent nothing but surplus value. On the other hand, it transpires that, in this case, the other department (Department I) does not merely realize its surplus value, but can also accumulate without selling its product outside of the two departments of capitalist production. Both objections, however, are merely superficial, and can be dismissed by a proportional exposition of the value of the mass of products according to its respective components. Under capitalist production, it is not only the total social product, but also each individual commodity that contains surplus value. This fact does not prevent the total social product from being analyzed into three proportional parts corresponding in value terms to the aggregate constant capital used up, the aggregate variable capital, and the aggregate surplus value extracted in society, just as the individual capitalist accounts, against the successive sales of his particular mass of commodities, first for the replacement of the constant capital he has invested, then for that of the variable capital (or, more incorrectly, but in keeping with actual practice: he accounts first for the replacement of his fixed capital, and then for that of his circulating capital), in order to enter the net proceeds as his profit. In simple reproduction, the material form of the total social product also corresponds to the above value proportions: constant capital reappears in the form of means of production, variable capital in the form of means of subsistence for workers, and surplus value in the form of means of consumption for capitalists. Yet, as has been shown, simple reproduction in this categorial sense—i.e. where the entire surplus value is consumed by the capitalists—is a mere theoretical fiction. As far as expanded reproduction or accumulation is concerned, according to the Marxian schema there is a strict proportionality between the value-composition of the total social product and its material form: the portion of surplus value that is determined as being for capitalization comes into existence already in the ratio between material means of production and means of consumption that corresponds to the expansion of production on the given technical basis. However, as has been observed, this conception, which is predicated on the self-sufficiency and isolation of capitalist production, breaks down when it comes to the realization of surplus value. Yet if it is assumed that the surplus value is realized outside capitalist production, then this implies that its material form has nothing to do with the requirements of capitalist production itself. Its material form corresponds to the requirements of those noncapitalist spheres that help to realize it. Capitalist surplus value can thus come into existence in the form of means of consumption (e.g. as cotton fabrics) or in the form of means of production (e.g. construction materials for railways). This surplus value, which is realized in the form of the products of one department, thus also helps to realize the surplus value of the other department in the ensuing expansion of production; however, this circumstance in no way alters the fact that the total social surplus value has been realized in part directly, and in part indirectly, outside both departments. An analogy can be drawn here with the fact that the individual capitalist can realize his surplus value even if his entire commodity-product merely goes to replace the variable or the constant capital of another capitalist.
The realization of surplus value is not the only decisive moment of reproduction, however. Let it be assumed that Department I has realized its surplus value by external sales (i.e. outside both departments) and has been able to proceed with accumulation, and further that there are prospects of an expansion in these external markets. With these assumptions, however, only half of the conditions for accumulation are given: there’s many a slip ‘twixt the cup and the lip. For now the requirement that the corresponding material elements of the expansion of production be readily available imposes itself as the second precondition for accumulation. Where can these be obtained, given that the surplus product in the form of the products of Department I—i.e. means of production—has just been transformed into money by selling it to markets that are external to capitalist production? The very transaction that has enabled the realization of surplus value has simultaneously removed—through the other door, so to speak—the prerequisites for the transformation of this realized surplus value into the form of productive capital. It would appear, then, that the remedy is worse than the illness. The problem will now be examined more closely.
Here the constant capital of Department I as well as that of Department II is taken as if these together constituted the entire constant portion of capital in production. As has been observed, however, this is false. In order to simplify the problem, the fact that the constant capital that figures in departments I and II in the schema is only a portion of the total constant capital (i.e. that portion that circulates annually, is used up within the period of production, and is transferred to the product) has been disregarded. It would be completely absurd to assume, however, that capitalist production (or any other, for that matter) uses up its entire constant capital and reproduces it from scratch in each period of production. On the contrary, production as it is presented in the schema presupposes a large mass of means of production that is periodically replaced in its entirety through the annual renewal of the part used up—such is the implication of the schema. With the increasing productivity of labor and the expanding scale of production, this mass does not merely grow absolutely, but also relative to the portion that is consumed in production; this also means, however, that the potential efficiency of constant capital increases at the same time. Thus, in the first instance, the expansion of production implies the more efficient use of this portion of constant capital without any direct increase in its value.
In the extractive industries, mines, etc., the raw materials do not form part of the capital advanced. The object of labor is in this case not a product of previous labor, but something provided by nature free of charge, as in the case of metals, minerals, coal, stone, etc. Hence the constant capital consists almost exclusively of instruments of labor that can very easily absorb an increased quantity of labor (day and night shifts, for example). All other things being equal, the mass and value of the product will rise in direct proportion to the labor expended. As on the first day of production, the two original agencies working to form the product, man and nature, continue to cooperate, and now, as creators of the products, they are also creators of the material elements of capital. Thanks to the elasticity of labor-power, the domain of accumulation has extended without any prior increase in the size of the constant capital.
In agriculture, the amount of land under cultivation cannot be increased without laying out more seed and manure. But once this has been done, the purely mechanical ploughing of the soil itself produces a marvellous effect on the size of the product. A greater quantity of labor, performed by the same number of laborers as before, thus increases the fertility of the land without requiring any new contribution in the form of instruments of labor. It is once again the direct action of man on nature, which becomes an immediate source of greater accumulation, without the intervention of any new capital.
Finally, in industry proper, every additional expenditure of labor presupposes a corresponding additional expenditure of raw materials, but not necessarily of instruments of labor. And as extractive industry and agriculture supply manufacturing industry both with its own raw materials and with those for its instruments of labor, the additional product provided by extractive industry and agriculture without any additional advance of capital also redounds to the advantage of manufacturing industry.
We arrive, therefore, at this general result: by incorporating with itself the two primary creators of wealth, labor-power and land, capital acquires a power of expansion that permits it to augment the elements of its accumulation beyond the limits apparently fixed by its own magnitude, or by the value and the mass of the means of production that have already been produced, and in which it has its being.290
Moreover, there is no reason why all requisite means of production and consumption should only derive from capitalist production. Although Marx’s schema of accumulation is based on this very assumption, it corresponds neither to the daily practice and history of capital, nor to the specific character of this mode of production. A large part of the surplus value that was generated in the U.K. in the first half of the nineteenth century emerged from the production process in the form of cotton fabrics. Yet although the material elements of its capitalization—raw cotton from the slave states of the American Union, or cereals (means of subsistence for the British workers) from the fields of serfowning Russia—did, for their part, constitute a surplus product, this was by no means capitalist surplus value. The extent to which capitalist accumulation depends on these means of production deriving from noncapitalist production is demonstrated by the cotton crisis in the U.K. that was brought about by the suspension of the cultivation of the plantations during the American Civil War,* or the crisis in European linen weaving caused by the interruption of imports of flax from serf-owning Russia due to the Crimean War.† For the rest, it suffices to recall the role played by the imports of grain produced by peasants (i.e. noncapitalist production) in the nutrition of the mass of industrial workers in Europe (i.e. as an element of variable capital) in order to appreciate the extent to which the accumulation of capital, in terms of its material elements, is bound up with noncapitalist spheres.
Moreover, the character of capitalist production itself precludes any restriction to means of production generated by capitalist production. In the drive of individual capitals to increase their rate of profit, an essential means by which they do so is to strive for the cheapening of the elements of constant capital. On the other hand, the constant increase in the productivity of labor, which is the most important method for raising the rate of surplus value, implies the unconfined exploitation of all the resources, all the materials and conditions provided by nature and by the Earth, and it is thus bound up with these. In this respect, it is in keeping with the essence and mode of existence of capital that it will tolerate no restrictions. After several centuries of its development, the capitalist mode of production as such still constitutes only a fraction of total world production, and until now it has been centered primarily around the small continent of Europe (where there are still whole spheres of production that it has not come to dominate, such as peasant agriculture and independent handicrafts, and also whole geographical areas), large parts of North America, and individual pockets on the other continents. In general, the capitalist mode of production has hitherto been predominantly restricted to industry in the countries of the temperate zone, whereas it has made relatively slight progress in the East and South. Accordingly, if it had been exclusively dependent on the elements of production available within these narrow borders, then it would not have attained its current level, and indeed would not have been able to develop at all. In its forms and laws of motion, capitalist production reckons with the whole world as the treasury of productive forces, and has done so since its inception. In its drive to appropriate these productive forces for the purposes of exploitation, capital ransacks the whole planet, procuring means of production from every crevice of the Earth, snatching up or acquiring them from civilizations of all stages and all forms of society. Far from being already resolved by the material form of the surplus value generated by capitalist production, the question of the material elements of capital accumulation transforms itself into an entirely different one: for the productive employment of realized surplus value, it is necessary for capital to dispose ever more fully over the whole globe in order to have available to it a quantitatively and qualitatively unrestricted range of means of production.
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*During the U.S. Civil War of 1861–65, over 95 percent of U.S. cotton production could not be exported to Europe because of the Union blockade of Southern ports. This drove up the price of cotton dramatically. England responded by turning to India and Egypt as its main source of cotton; the production of the crop in India alone quickly shot up by 700 percent.
†Since the Crimean War pitted Russia against both the U.K. and France, its embargo on the export of flax to its adversaries—the raw material in much of linen production—caused a severe downturn in that industry.
One of the most indispensable preconditions of the process of accumulation, elastic and mercurial as this is, consists in unrestricted and instant access to new areas of raw materials in order to cope with all potential vicissitudes and interruptions in the supply of raw materials from the previous sources, as well as with any sudden expansion in social requirements. When the American Civil War interrupted imports of American cotton to the U.K., causing the infamous “cotton famine,” huge new cotton plantations sprang up as if by magic in Egypt within the briefest period of time. Here it was oriental despotism in combination with the ancient relation of bondage that had created a new sphere of activity on which European capital could draw. Only capital, with its technical means, can conjure up such amazing transformations in such a brief period of time. However, it is only on the precapitalist soil of more primitive social relations that it is able to develop such a power of command over the material and human forces of production that figure among these wonders. Another similar example is the enormous increase in the world use of rubber: in value terms, imports of natural rubber now amount to one billion marks annually. The economic basis for this production of raw materials is formed by the primitive systems of exploitation as practiced by European capital in the African colonies as well as in America, which consist in varying combinations of slavery and relations of bondage.291
It should be noted that the above assumption that the first or the second department realizes only its surplus product in noncapitalist spheres is merely to give the most favorable case for the interrogation of the Marxian schema—i.e. the one that shows the relations of reproduction in their pure form. In reality, there is no reason why it should not be assumed that a part of the constant and variable capital in the product of the respective departments is also realized outside of the capitalist sphere. Indeed, the expansion of production, as well as the replacement of the elements of production that have been used up in their material form could equally be undertaken using the products of noncapitalist spheres. What the above example was intended to show is the fact that, at the very least, the surplus value that is to be capitalized and the corresponding part of the capitalist mass of products cannot possibly be realized within the capitalist sphere, and must therefore at all costs find purchasers outside this sphere, in social strata and formations not engaged in capitalist production.
Thus there are two different transactions between each period of production, in which surplus value is produced, and the ensuing accumulation, in which it is capitalized: the transformation of surplus value into its pure value-form (realization), and the transformation of this pure value-form into the form of productive capital. Each of these transactions occurs between capitalist production and the surrounding noncapitalist world. Thus, from both standpoints (i.e. from that of the realization of surplus value and from that of the acquisition of the elements of constant capital), international trade is from the outset a historical condition for the existence of capitalism: in the given concrete relations, it is essentially an exchange between the capitalist and the noncapitalist forms of production.
Until now accumulation has been considered only from the standpoint of surplus value and constant capital. The third fundamental moment of accumulation is variable capital. Progressive accumulation is accompanied by an increasing variable capital. In the Marxian schema, this is manifested in the material form of a growing mass of means of subsistence for the workers. The actual variable capital does not consist of the means of subsistence of the workers, but living labor-power, for whose reproduction the means of subsistence are required. Thus one of the fundamental conditions for accumulation is a supply of living labor that matches its requirements, and that capital sets in motion. In part, the increase of this quantity is achieved through the lengthening of the working day and the intensification of labor, as far as conditions permit. However, in neither case does this increase in living labor manifest itself in a growth in variable capital, or if so, only to a slight extent (e.g. as payment for overtime). Moreover, both methods are confined within definite and rather narrow constraints that they cannot exceed, and that are given by resistances that are in part natural, and in part social. The progressive increase in variable capital that accompanies accumulation must therefore express itself in the employment of a growing workforce. Yet where does this additional workforce come from?
In his analysis of the accumulation of individual capitals, Marx answers this question as follows:
Now in order that these components may actually function as capital, the capitalist class requires additional labor. If the exploitation of the workers already employed does not increase, either extensively or intensively, additional labor-powers must be enlisted. The mechanism of capitalist production has already provided for this in advance, by reproducing the working class as a class dependent on wages, a class whose ordinary wages suffice, not only to maintain itself, but also to increase its numbers. All capital needs to do is to incorporate this additional labor-power, annually supplied by the working class in the shape of labor-powers of all ages, with the additional means of production comprised in the annual product, and the transformation of surplus value into capital has been accomplished.292
Here the increase in variable capital is simply reduced directly to the growth through natural propagation of the working class that is already under the command of capital. This also corresponds precisely to the schema of expanded reproduction, which, according to Marx’s assumptions, only recognizes two social classes—i.e. the capitalists and the workers—and a single and absolute mode of production—i.e. the capitalist one. Under these presuppositions, the natural propagation of the working class is the only source of the increase of the available labor-power under the command of capital. Yet this conception contradicts the laws of motion of accumulation. The natural propagation of the workers stands neither in a temporal, nor in a quantitative, relation to the requirements of the accumulating capital. In particular, such propagation is not able to keep pace with the suddenly expanding requirements of capital, as Marx himself brilliantly demonstrates. As the only basis of the movements of capital, the natural propagation of the working class would preclude the continuation of accumulation in its periodic oscillation between overexpansion and contraction, and in its sudden leaps in the extension of the productive sphere, thereby rendering accumulation itself impossible. The latter requires the same unrestricted freedom of movement in relation to the growth in variable capital as it does in relation to the elements of constant capital—i.e. it must be able to dispose over the supply of labor-power without restriction. According to Marx’s analysis, this requirement finds its precise expression in the formation of an “industrial reserve army of workers.” Marx’s schema of expanded reproduction does not in fact recognize such a reserve army, nor does it leave any room for one—i.e. the industrial reserve army cannot be formed through the natural propagation of the capitalist waged proletariat. It must be able to draw on other social reservoirs of labor-power not previously under the command of capital, which are added to the wage proletariat as required. It is only from noncapitalist strata and countries that capitalist production can continuously draw this additional labor-power. In his analysis of the industrial reserve army,293 Marx in fact only considers (a) the displacement of older workers by machinery, (b) an influx of rural workers into the towns as the consequence of the dominance of agriculture by capitalist production, (c) the workforce that has been discarded by industry and that has only irregular employment, and finally (d) the lowest sediment of the relative surplus population—pauperism. Each of these categories represents a different form of excretion from capitalist production and comprises wage proletarians who have in one form or another been used up and have become surplus to requirements. For Marx, the rural workers constantly migrating to the towns are wage proletarians who were previously under the command of agricultural capital and now simply come under the dominion of industrial capital. Here Marx is evidently drawing on the conditions in the U.K., which was at a high stage of capitalist development. In contrast, he does not deal in this connection with the question of the source of this urban and rural proletariat, nor does he consider what is, in the European context, the most important source of this stream of new proletarians: the constant proletarianization of the rural and urban middle strata, and the decline of the peasant economy and small-scale handicraft production. What Marx fails to take into account here, then, is precisely the constant transition of labor-power from noncapitalist relations to capitalist ones, as an excretion not from the capitalist mode of production, but from precapitalist ones as these undergo a progressive process of collapse and dissolution. It is not just the processes of the decomposition of the European peasant economy and handicraft production that are to be considered here, but also the dissolution of the most varied primitive forms of production and society in non-European countries.
Since capitalist production must have all territories and climes at its disposal in order for it to develop, it can no more be confined to the natural resources and productive forces of the temperate zone than it can make do with the labor-power of the white race alone. Capital needs other races to exploit territories where the white race is not capable of working, and in general it needs unrestricted disposal over all the labor-power in the world, in order to mobilize all of the Earth’s productive forces to the extent that this is possible within the constraints of surplus value production. However, in most cases, as capital encounters this labor-power, the latter is rigidly bound by outmoded, precapitalist relations of production, from which it must first be “set free,” in order to be enlisted in the active army of capital. The process of extricating labor-power from primitive social relations and absorbing it into the capitalist wage system is one of the indispensable historical foundations of capitalism. The British cotton industry, which was the first genuinely capitalist branch of production, would have been impossible not only without cotton from the southern states of the American Union, but also without the millions of Black Africans who were transported to America in order to provide labor-power for the plantations, and who subsequently joined the ranks of the capitalist class of wage laborers as free proletarians after the American Civil War.294 The importance of acquiring the requisite labor-power from noncapitalist societies becomes very palpable for capital in the form of the so-called labor problem in the colonies. In order to solve this problem, all possible methods of “soft power” are employed to detach the labor-power that is subordinated to other social authorities and conditions of production from these and to place it under the command of capital. These endeavors give rise in the colonial countries to the most peculiar hybrid forms of the modern wage system and primitive relations of domination.295 These latter give a palpable demonstration of the fact that capitalist production is not feasible without labor-power from other social formations.
Marx does in fact deal in great detail with the process of the appropriation of noncapitalist means of production as well as that of the transformation of the peasantry into a capitalist proletariat. The whole of Chapter 28 of the first volume of Capital is given over to an account of the emergence of the British proletariat, of the agricultural capitalist tenant farmer class and of industrial capital. The looting of the colonial countries by European capital plays a prominent role in Marx’s portrayal of the last of these processes. It should be noted, however, that all this is merely treated from the point of view of so-called “primitive accumulation.” In Marx’s account, the processes specified here merely illustrate the genesis of capital, the moment that it comes into the world—they constitute the birth pangs as the capitalist mode of production emerges from the womb of feudal society. As soon as Marx begins his theoretical analysis of the process of capital (of production as well as circulation), he constantly returns to his presupposition of the universal and exclusive dominance of capitalist production.
However, it is evident that, even in its full maturity, capitalism depends in all of its relations on the simultaneous existence of noncapitalist strata and societies. This relation of dependence is not exhausted by the bare question of the market for the “excess product,” as the problem was posed by Sismondi and the later critics and skeptics of capitalist accumulation. The accumulation process of capital is tied to noncapitalist forms of production in all of its value relations and material relations—i.e. with regard to constant capital, variable capital, and surplus value. These noncapitalist forms of production form the given historical setting for this process. The accumulation of capital cannot adequately be presented under the presupposition of the exclusive and absolute dominance of the capitalist mode of production—in fact it is inconceivable in every respect without the noncapitalist spheres that form its milieu. Sismondi and his followers did in fact reveal a correct instinct for the conditions of existence of accumulation even if they reduced its difficulties to that of the realization of surplus value alone. There is a crucial difference between the conditions that determine this latter process and those that govern the expansion of constant and variable capital in their material form: capital cannot do without the means of production and labor-power of the entire planet—it requires the natural resources and labor-power of all territories for its movement of accumulation to proceed unimpeded. Since these are in actual fact overwhelmingly bound by the precapitalist forms of production that constitute the historical milieu of capital accumulation, capital is characterized by a powerful drive to conquer these territories and societies. In itself, capitalist production would be just as well served by rubber plantations operating on capitalist lines, for example, as have already been established in India. However, the actual predominance of noncapitalist social relations in the countries of these branches of production spurs capital to strive to bring these countries and societies under its dominion; indeed, in so doing, the primitive relations facilitate such extraordinarily rapid and violent surges in accumulation as would be unthinkable under purely capitalist social relations.
The same cannot be said of the realization of surplus value. This is a priori bound up with noncapitalist producers and consumers. The existence of non-capitalist purchasers of surplus value is thus an immediate, vital condition for capital and its accumulation, and is as such the decisive factor in the problem of capital accumulation.
Be that as it may, the fact of the matter is that the accumulation of capital as a historical process, in all its relations, is contingent upon noncapitalist social strata and forms.
The solution of the problem that has been a bone of contention in economic theory for almost a century thus lies between the two extremes—i.e. between on the one side the petty-bourgeois skepticism of Sismondi, von Kirchmann, Vorontsov, and Danielson, who declared accumulation to be impossible, and on the other the crude optimism of Ricardo, Say, and Tugan-Baranovsky, for whom capitalism can fructify itself ad infinitum, hence the merely logical corollary that it is eternal. The solution as defined by Marx’s theory lies in the dialectical contradiction that the movement of capitalist accumulation requires an environment of noncapitalist social formations, that it is in a constant process of metabolism with the latter as it proceeds, and that it can only exist for as long as it finds itself within this milieu.
On this basis, the concepts of internal and external markets, which have played such a prominent role in the theoretical disputes around the problem of accumulation, can be revised. Internal and external markets certainly each play a great and fundamentally differentiated role in the course of capitalist development—not as concepts of political geography, however, but rather as ones of social economy. From the standpoint of capitalist production, the internal market is the capitalist market, this production is itself the purchaser of its own products and the supplier of its own elements of production. The external market, from the point of view of capital, is the noncapitalist social environment, which absorbs its products and supplies it with elements of production and labor-power. From this economic standpoint, Germany and the U.K. for the most part represent the internal, capitalist market for one another in terms of their reciprocal exchange of commodities, whereas the exchange between German industry and German peasants as both consumers and producers represents external market relations as far as German capital is concerned. As can be observed from the schema of reproduction, these are rigorous, precise concepts. In the internal capitalist trade, only certain components of the value of the total social product can be realized: the constant capital that has been used up, the variable capital and the part of surplus value that has been consumed; in contrast, the portion of surplus value that has been determined as being for capitalization must be realized “externally.” If the capitalization of surplus value is the actual purpose and driving motive of production on the one hand, then the renewal of constant and variable capital (along with the part of surplus value that is consumed) forms the broad basis and precondition for this capitalization on the other. Furthermore, as capitalism develops internationally, the capitalization of surplus value becomes ever more urgent and ever more precarious, the broad basis of constant and variable capital becomes ever more vast in absolute terms and in relation to surplus value. Hence the contradictory phenomenon that the old capitalist countries represent ever-greater markets for one another and become ever more indispensable for one another, even as they contend with each other ever more jealously as competitors vis-à-vis the noncapitalist countries.296 The conditions for the capitalization of surplus value are in ever greater contradiction with those for the renewal of the total social capital—a contradiction that, incidentally, is a mere reflection of the contradictory law of the falling rate of profit.