Capitalism as Relative Overpopulation

Let us look once more at that quote from Knut Wicksell’s Interest and Money because it displays vividly the utter incomprehension of the bourgeoisie and its acolytes of exactly what kind of monstrous social system they have erected – one that, as is clearly visible to all who dare look – is heading fast toward the precipice of catastrophe:

The two rates of interest [the natural and the monetary] still reach ultimate equality, but only after, and as a result of, a previous movement of prices. Prices constitute, so to speak, a spiral spring [136] which serves to transmit the power between the natural and the money rates of interest; but the spring must first be sufficiently stretched or compressed. In a pure cash economy, the spring is short and rigid; it becomes longer and more elastic in accordance with the stage of development of the system of credit and banking. (Interest and Money, pp.135-6)

Prices, then, are the monetary expression of an underlying substance of economic reality. Prices are like Platonic shadows, like Kantian phenomena, to which is opposed a physical reality that can be distorted when prices diverge from the “real” value of underlying “goods” – but a reality that will “ultimately” impose itself on these “mere phenomena” on these monetary “disturbances”. Here is once again the dichotomy between “appearance” and “reality” that Nietzsche so fiercely derided as symptomatic of the deleterious hypocrisy of Christian-bourgeois society.

For, if it is possible for money to distort prices from their “ultimate equality”, then it is blindingly obvious that there is no such “ultimate equality”, that indeed capitalism is a world of mere shadows in which prices – far from heading toward the ultimate equality of underlying use values – are the expression of social relations of production, of political relations between human beings. There is no “real economy”, therefore.

Neoclassical economics, with its “marginal utility” and “marginal efficiency of capital” (a notion absurdly entertained by Keynes of all people) and of “factors of production” – neoclassical economics is one giant metaphysical construction whose pernicious influence over socio-political analysis and social policy over the last one and a half century is slowly but surely leading capitalist society to self-destruction.

If there is one reality that is coming prepotently to the fore, it is this: the capitalist economy is based on the accumulation of social resources on the part of the bourgeoisie to enable it to expand its political control over a greater number of human beings to be used as labour power for the expanded production of those resources. Capitalism is entirely dependent therefore on the relative growth of overpopulation, that is, of an excess workforce able to depress the living standards and political emancipation of the existing labour force. On one hand, the bourgeoisie seeks to co-opt its labour force with higher real wages whilst on the other it must create the conditions necessary for the expansion of the potential labour force, the reserve army of the unemployed and underemployed, to ensure the political subservience of those already in employment. This is the essence of capitalism: relative overpopulation.

So why must this come to a brutal end, to a war of all against all? Because the bourgeoise on one side relies on the allegiance of workers in its metropole to exert its domination over the periphery. But at the same time, the bourgeoisie also needs the periphery to exert dictatorial powers over the greatest portion of the world’s population – precisely in order to ensure that the workforce in the metropole remains loyal. It is evident therefore that there is a devastating, explosive contradiction between “liberal democracy” in the relatively underpopulated “West”, and utter crushing dictatorship in the relatively overpopulated “emerging economies”. This contradiction that was always present but was either suppressed or distorted is now becoming so explosive that its blinding truth can no longer be hidden from view!

Overpopulation as the real essence of capitalism is bringing about the devastation of the planet. As Tom Friedman once far-sightedly put it, “The Earth cannot afford 8 billion Americans”! In other words, no matter what the apologists of this insane social system might say about “capitalism is dragging billions of people out of poverty”, the reality remains that the living standards of workers in the metropole are collapsing. And they have to collapse! Because the Western bourgeoisie can accumulate capital through the complicity of inhumane dictatorial regimes the world over. Far from the end of the Cold War, we have now entered the most lethal “Hot Peace” whereby vast populations languishing in the periphery (China, India, Africa, Middle East) seek to compete with Western labour forces. The quicker we understand this self-destructive dynamic of capitalism, the higher will be our already very slim chances of surviving the madness of capitalist social relations of production.