Let us draw together the complex
threads of our analysis of “the natural rate of interest” and “relative
overpopulation”. It is not the ageing of the working population that is the
real cause of the falling “natural rate of interest” or “secular stagnation” –
as Lawrence Summers and Paul Krugman and many other bourgeois economists have
wrongly opined. (How untenable this thesis is can be desumed quite simply by
considering that the global labour force has doubled[!] in the last thirty
years.) Nor is it the “immiseration thesis” that Thomas Piketty has incorrectly
attributed to Karl Marx. Nor is it Piketty’s own thesis of “income inequality” –
a hackneyed Keynesian leftover relic at best [the allusion os to Keynes calling
gold “that barbarous relic”] -, none of these catch the true essence of the
problem of capitalist society. Here we will deal with the first leg of our
thesis: the second leg will come in our next post.
The maximization of profit on the part
of capital implies the relative suppression of wages or “necessary labour time”.
But then, the excess of production over what can be sold on the market for
surplus value to be “realized” – this excess means that the capitalist
bourgeoisie needs an “excess population” that can be “purchased” with the
excess production from the previous cycle of production. But this “excess
population” of workers needs to be paid – and so its “wages” correspond to an
absolute expansion in “socially necessary labour time”.
It is this contradictory tendency of
capitalism – on one hand, to create unemployment so as to suppress wages, and
on the other to expand the absolute size of the exploitable labour force -, it
is this contradictory tendency or dynamic that is leading us toward the
apocalypse – the destruction of the biosphere.
“Universally free competition” means
that the participants to a market are “freely” entitled to exchange their
possessions for whatever other possessions available from other participants.
The problem with this conception of competition is that on this basis, and on
the assumption of “universal freedom” excepting coercion, and the further
assumption of universal knowledge (or “common knowledge” in game theory), it is
absolutely impossible for a capitalist to make a “profit” from exchange – and
therefore there can be no “rate of interest”, natural or otherwise. The only
way in which a market participant can become a “capitalist”, and therefore make
a “profit” from exchange, is if he can “exchange” his possessions or goods for
the “labour” or living activity of other market participants. In that case, the
capitalist will be able to buy the living labour of workers and exchange it
with less of their product than the workers actually produce. The difference
between the value of the products produced by the workers and what the
capitalist pays to them in wages is called “profit”.
But the question now arises: what can
the capitalist do with this “profit”? He can sell the excess production: but
obviously there will be no new buyers because the only market participants who
can buy these excess goods are workers who are already so “poor” that the only
exchange good they can sell is their own living activity, their “labour”. What
this means, quite obviously, is that for the capitalist to be able to sell his “profit”, he must be able either
to expand the size of the market with new exchange values from belonging to
populations not yet within the capitalist market sphere, or else he has to use
it as a hypothecation, as a
“mortgage”, on any “future labour” that may be available on the market.
Marx rightly stresses the difference
between value and capital – because although all capital
is “exchange value”, in the sense that it is capable of being exchanged, not
all exchange values are capital: because capital, unlike other “exchange
values”, is “value” capable of “valourising” itself. Thus, as we are about to
see, capital is a historically specific form of exchange value: its peculiarity
is that for capital to exist it must be “exchanged” with a unique “good” – human
living labour – that is capable of “valourising” capital by expanding existing
production. In other words, the existence of capital implies not only the
existence of human living labour available “for exchange”, as if human living
activity were yet another “good” or “consumable output”, as if it were a mere
material “product”; but also, it implies
the constant expansion of the pool of available living labour!
Money, to the extent that it exists
already as capital, is therefore simply a policy [a legal claim] on future (new)
labour. Objectively it exists only as money. Surplus value, the added objectified
labour, in itself is money; but money now exists as capital, and as such it is
a policy on future labour. Here capital enters a relationship no longer with existing labour, but also with future labour. It also presents itself
no longer as consisting merely of its simple elements in the process of
production, but also as money; but no longer as money that is simply the
abstract form of social wealth, but again as a policy [as a claim] on the real possibility of general wealth – on the
labour-force, or better on the labour-force in
actu. In this form as a policy or claim on potential labour-force, its
material existence as money is irrelevant and may be substituted by any other
claim on the labour-force. Just as with public credit, each capitalist
possesses, in the value already appropriated [as product or objectified labour],
a claim on the future labour-force; by appropriating living labour in its
present form as objectified labour, the capitalist has already appropriated a
claim on future labour-power…. Here is already revealed the ability of capital
to exist as a social power separate from its objective material existence. Here
is already implicit the existence of capital
as credit. Its accumulation in the form of money therefore is not at all an
accumulation of the material conditions of labour [of the means of production],
but rather of the legal claim to living labour [on workers]. This means posing
future labour as wage labour, as use value for capital. For tĵhe new
[objectified] labour created [the product] there exists no equivalent [that is,
no existing exchange value]; its possibility [to be valourised] exists only in
a new labour force. (K. Marx, Grundrisse, 3.2.21)
The capitalist must expand the available pool
of living labour for capital, the labour force, to keep yielding profits and
therefore for capital to be valourised. In other words, the existence and
meaning of “interest” or “average profit” requires that the pool of living
labour available to capitalists must constantly expand! This is the clear link
between “the natural rate of interest” and “relative overpopulation”. Whenever
capital is unable to expand the reserve army of workers the natural rate of
interest or profit must decline. In other words, the rate of profit is
dependent on the existence of “relative overpopulation” because surplus value in
the form of objectified labour can be realized as profit only when exchanged
with money, and in the form of money or credit it can only be valourised if and
when it can be exchanged with fresh labour-power.