Matt.+401-423

We are now moving from production to circulation.

Capital maintains and increases its value in realization process. Yet Marx also says that the realization process also appears the same as its devaluation process, in two respects: first, by increasing the force of production and effectively decreasing the “relative, necessary labour time”; second, by being converted into a commodity, the process of exchange ay break down and the commodity will lose its original value (402).
 * Capital as unity and contradiction of production and realization process**

Devaluation serves as one moment of the realization process regardless, insofar as the moment it exits production and enters circulation, it becomes not-value. Its value can only be realized as “value by means of exchange” (403).

“The three processes of which capital forms the unity are external; they are separate in time and space […] Despite their inner unity, they exist independently alongside one another, each as the presupposition of the other” (403). What are the three processes? Production, circulation, realization?

Inside production process, capital appeared to have no bounds. Those that existed “are always posited within it as barriers to be forcibly overcome.” In circulation, however, “there are now barriers to it which lie outside it” (404).

1) The first barrier is the need for consumption. Given that capital has created new value in the production process, an equivalent needs to be found for it. “Thus, by emerging from the production process and re-entering circulation, capital (a) as production, appears to encounter a barrier in the available magnitude of consumption – of consumption capacity” (405).

2) The second barrier is that surplus value requires a surplus equivalent. Value thus “seems to encounter a barrier in the magnitude of available equivalents, primarily money, not as medium of circulation by as money” (405). Surely this is what credit seeks to resolve?

These two barriers or contradictions are clear. “How they are constantly suspended in the system of production resting on capital, but also constantly created again – and are suspended only by force (although this suspension appears up to a certain point merely as a quiet equilibration) – this is another question. The important thing at present is to take note of the existence of these contradictions” (406). Marx then goes on to distinguish these contradictions in simple circulation from those of complex circulation, but the argument is somewhat unclear (406-07).

“The main point here – where we are concerned with the eneral concept of capital – is that it is this unity of production and realization, not immediately but only as a process, which is linked to certain conditions, and, as it appeared, external conditions” (407).

Then shifts analysis to circulation, imperialism and accumulation of dispossession:

“The creation by capital of absolute surplus value – more objectified labour – is conditional upon an expansion, specifically a constant expansion, of the sphere of circulation. The surplus value created at one point requires the creation of surplus value at another point, for which it may be exchanged […] A precondition of production based on capital is therefore the production of a constantly widening sphere of circulation, whether the sphere itself is directly expanded or whether more points within it are created as points of production. While circulation appeared at first as a constant magnitude, it here appears as a moving magnitude, being expanded by production itself” (407).

“The tendency to create the world market is directly given in the concept of capital itself. Every limit appears as a barrier to be overcome” (408).

Relative surplus value is the production of surplus value based on the increase and development of productive forces, whereas absolute surplus value is the extra value gained beyond the socially necessary labour time?

Here, I will include a full extract:

Production of relative surplus value “**requires** the **production** of **new** **consumption**; **requires** that the **consuming** circle within circulation expands as did the productive circle previously. Firstly quantitative expansion of existing **consumption**; secondly: creation of **new** needs by propagating existing ones in a wide circle; //thirdly:// **production** of **//new//** needs and discovery and creation of **new** use values. In other words, so that the surplus labour gained does not remain a merely quantitative surplus, but rather constantly increases the circle of qualitative differences within labour (hence of surplus labour), makes it more diverse, more internally differentiated. For example, if, through a doubling of productive force, a capital of 50 can now do what a capital of 100 did before, so that a capital of 50 and the necessary labour corresponding to it become free, then, for the capital and labour which have been set free, a **new**, qualitatively different branch of **production** must be created, which satisfies and brings forth a **new** need. The value of the old industry is preserved by the creation of the fund for a **new** one in which the relation of capital and labour posits itself in a **//new//** form. Hence exploration of all of nature in order to discover **new**, useful qualities in things; universal exchange of the products of all alien climates and lands; **new** (artificial) preparation of natural objects, by which they are given **new** use values. [|*] The exploration of the earth in all directions, to discover **new** things of use as well as **new** useful qualities of the old; such as **new** qualities of them as raw materials etc.; the development, hence, of the natural sciences to their highest point; likewise the discovery, creation and satisfaction of **new** needs arising from society itself; the cultivation of all the qualities of the social human being, **production** of the same in a form as rich as possible in needs, because rich in qualities and relations -- **production** of this being as the most total and universal possible social product, for, in order to take gratification in a many-sided way, he must be capable of many pleasures [//genussfähig//], hence cultured to a high degree -- is likewise a condition of **production** founded on capital. This creation of **new** branches of **production**, i.e. of qualitatively **new** surplus time, is not merely the division of labour, but is rather the creation, separate from a given **production**, of labour with a **new** use value; the development of a constantly expanding and more comprehensive system of different kinds of labour, different kinds of **production**, to which a constantly expanding and constantly enriched system of needs corresponds.

"Thus, just as **production** founded on capital creates universal industriousness on one side -- i.e. surplus labour, value-creating labour -- so does it create on the other side a system of general exploitation of the natural and human qualities, a system of general utility, utilizing science itself just as much as all the physical and mental qualities, while there appears nothing //higher in itself,// nothing legitimate for itself, outside this circle of social **production** and exchange. Thus capital creates the bourgeois society, and the universal appropriation of nature as well as of the social bond itself by the members of society. Hence the great civilizing influence of capital; its **production** of a stage of society in comparison to which all earlier ones appear as mere //local developments// of humanity and as //nature-idolatry.// For the first time, nature becomes purely an object for humankind, purely a matter of utility; ceases to be recognized as a power for itself; and the theoretical discovery of its autonomous laws appears merely as a ruse so as to subjugate it under human needs, whether as an object of **consumption** or as a means of **production**. In accord with this tendency, capital drives beyond national barriers and prejudices as much as beyond nature worship, as well as all traditional, confined, complacent, encrusted satisfactions of present needs, and reproductions of old ways of life. It is destructive towards all of this, and constantly revolutionizes it, tearing down all the barriers which hem in the development of the forces of **production**, the expansion of needs, the all-sided development of **production**, and the exploitation and exchange of natural and mental forces.

"But from the fact that capital posits every such limit as a barrier and hence gets //ideally// beyond it, it does not by any means follow that it has //really// overcome it, and, since every such barrier contradicts its character, its **production** moves in contradictions which are constantly overcome but just as constantly posited. Furthermore. The universality towards which it irresistibly strives encounters barriers in its own nature, which will, at a certain stage of its development, allow it to be recognized as being itself the greatest barrier to this tendency, and hence will drive towards its own suspension” (408-10).

Then shifts to critique of Say’s Law:

“The attempts made from the orthodox economic standpoint to deny that there is general overproduction at any given moment are indeed childish” (411). Critique runs through page 412-13. “Free competition, as Mr Wakefiled correctly sniffs out in his commentary on Smith, has never yet been developed by the economists, no matter how much they prattle about it, and no matter how much it is the basis of the entirety of bourgeois production, production resting on capital” (413-14). **This is basically Polanyi in a nutshell**.

“So far in the realization process, we have only the indifference of the individual moments towards one another; that they determine each other internally and search for each other externally; but that they may or may not find each other, balance each other, correspond to each other. The inner necessity of moments which belong together, and their indifferent, independent existence towards one another, are already a foundation of contradictions” (415).

Jim mentions realization. There are various moments that are barriers that need to be overcome, and each of these moments are potential barriers to realization.

Things start to become rather unclear to me starting on p. 415. He lists four necessary limits to the nature of capital, and then suggests that these limits come up against other general tendencies of capital.

“Hence overproduction: i.e. the sudden recall of all these necessary moments of production founded on capital; hence general devaluation in consequence of forgetting them. Capital, at the same time, [is] thereby faced with the task of launching its attempt anew from a higher level of the development of productive forces, with each time greater collapse as capital. Clear, therefore, that the higher the development of capital, the more it appears as barrier to production –hence also consumption—besides the other contradictions which make it appear as burdensome barrier to production and intercourse” (416).

“The entire credit system, and the over-trading, over-speculation etc. connected with it, rests on the necessity of expanding and leaping over the barrier to circulation and the sphere of exchange. This appears ore colossally, classically, in the relations between peoples than in the relations between individuals. Thus e.g. the English forced to lend to foreign nations, in order to have them as customers” (416). We see this now with IMF restructuring programmes, etc.

Capital has a tendency to increase the industrial population as much as possible in order to furnish consumption of the commodities they produce (419-20).

On an individual basis, the capitalist wants all workers (except his/her own) to have a decent wage so as to be consumers (420). But the effect of this on the aggregate is to drive beyond proportion and eventual collapse. Argues that an imminent contradiction within capital is to furnish demand among workers, but at same time to “restrict the worker’s consumption to the amount necessary to reproduce his labour capacity” (422). This is a new barrier to the sphere of exchange.

The same contradiction emerges with productive force. “On the one hand, the necessary tendency of capital to reaise it to the utmost, in order to increase relative surplus time. On the other hand, thereby decreases necessary labour time, hence the worker’s exchange capacity” (422).


 * Audio and video sources discussed:**

“The Giant Pool of Life” – audio podcast on subprime crisis

“Memoria del Sachao” (spelling?) - About the Argentinian crisis