Class 10 Polish

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Class 10

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We've spent a large chunk of time,

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and Marx has spent many pages,

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reflecting on the nature of surplus-value

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and the two kinds of surplus-value:

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'absolute', which arises from extending the length of the working-day

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and 'relative', which arises out of
increases in productivity

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which are given

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either by organizational transformations in cooperation of division of labor, or by

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the hardware in the form of machinery and the factory system and the like.

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As is typical with Marx, when he does a grand bifurcation of this kind—

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from saying 'the surplus-value, you've got to look at the two forms'

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he then wants to put them back together again—

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because in the end there is only
one form of surplus-value.

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And so he

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is going to insist that you couldn't have 'absolute' unless there was a technical basis for it

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and an adequate organizational form for it.

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You couldn't have 'relative' unless there was 'absolute'.

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So, clearly,

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they are interdependent,

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and in a sense we have to consider them as unified in the creation of surplus-value.

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But he insists on keeping the distinction because

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this helps us understand something about capitalist strategies as they're

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searching for surplus-value. That is,
their strategy can emphasize

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the absolute or it can emphasize the relative.

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And, so, that in terms of strategic possibilities

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for the capitalist in search of surplus-value, we have to

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always bear in mind

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this 'dual' character
of the way in which surplus-value

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can be gained.

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As usual with Marx, he does a couple of things in this

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chapter which are sort of summary points. But actually, both of the summary points he

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produces in this chapter have been the center of a great deal of controversy,

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and, therefore, I think

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we should explain a little bit

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what those controversies are and how those controversies have arisen.

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To begin with, he has several times in proceeding chapters introduced

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the idea of the 'collective laborer',

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so that the extraction of surplus-value is no longer an individual thing that

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goes on between a particular individual laborer and the capitalist,

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but is now seen as part of a collective aspect.

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And the difficulty with this is it raises the question: Where does the collective laborer begin,

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where does the collective laborer end?

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There was a simple,

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version of that which would say that if you see a factory you would say

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'the collective labor is all of that that's inside of the factory', which would include

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the people making the stuff,
the people who are pushing

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the loads of cloth around or the people who are cleaning the floors, etc.

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So you could come up with a sense of saying

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'everybody who's employed in the factory is a collective laborer,

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some of those people in the factory would not be doing

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the actual work of production, they would be ancillary to it in some way or other'.

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But, you can see immediately, then,

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issues arise when you say things like, what do you do with sub-contractors? Or:

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The sub-contracting parts into the factory: are they parts of a collective laborer or are they not?

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What about sub-contractors to the sub-contractors?

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What do we do about the outsourcing of, say,

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mental aspects in design and engineering forms, and so on?

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So, actually, there's a lot of controversy over exactly

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what is meant by collective labor

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and how to configure

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the idea of collective labor. Because if you decide to say 'it's just inside

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the factory', then you get one definition. If you start to proliferate it,

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you can end up with almost everybody who's employed in a capitalist society, including

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people employed in banks, and all the rest of it.

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So, there's a lot of controversy over

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what he means by 'collective labor'. But,

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nevertheless, it doesn't invalidate his point,

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which, I think, is a very important one, which is that you can only go so far in examining

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this dynamic of extraction of surplus-value

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by using this figure of the individual laborer

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in a capacity to labor contracting

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their labor-power to the capitalist.

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You can only go so far with that. You now have to move

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to a somewhat different perspective. And as we'll see in subsequent chapters

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he's much more interested in moving from what you might call the 'micro' perspective

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of the individual laborer

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to the whole field class relations.

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And, as you make that move from the individual laborer to class relations

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you could argue that the notion of the 'collective laborer'

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is a way of accomplishing that part of that transition.

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The second thing he does is to say that

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the notion of the collective laborer broadens our idea of what we're talking about but,

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when we reflect back on what we've done, we also have to narrow it

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to the idea that "productive labor"

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is productive labor only insofar as it produces or contributes to the production of surplus-value.

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Now, this also has been the object
of very considerable discussion.

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In part, it's kind of an emotive thing, because nobody likes to be called 'unproductive'.

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So, if you say to somebody 'you are in the unproductive laborer camp',

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people get kind of irritated, and they
don't like that. So they say 'well, no!'

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Marx tries to modify that point by saying 'but actually, under capitalism,

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to be a productive laborer is a misfortune'.

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So, not to be a productive laborer is something you should be really looking for,

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i.e. not to produce surplus-value for the capitalist.

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I think his point is very valid, which is:

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the definition of 'productivity' under capitalism is the capacity to produce surplus-value.

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This is not a normative statement!

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It's not a normative statement in the sense that says that's true for all times

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and all modes of production. In fact,

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you could argue that a revolutionary movement would try to do away with that particular definition

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of 'productivity'.

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And what it would seek for is another definition of 'productivity';

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'social worth' or something of that kind.

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Marx is saying 'you take this wide possibility of productive labor,

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but what capitalism does is to narrow it down

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to the point where if you don't produce
surplus-value for the capitalist,

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you are deemed not to be productive.'

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So, it is something which is defined by capital.

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But then here, too, the question is:

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who contributes to the production of surplus-value?

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And this will take us back

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to some of the debates which were
very strong in the early 1970s

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between socialists-feminists and some Marxists, saying

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'actually, you have to see the domestic sphere

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as being productive in the sense that it actually

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reduces the cost of reproduction of labor-power,

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and by so doing

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actually allows a lower wage to be paid, and therefore, is productive

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within the whole system'. So, again, I want to signal to you,

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I'm not going to give you any answers to these debates, I want to signal to you both the concepts

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of the 'collective laborer'
and the 'productive laborer'

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are controversial historically, and
need a great deal of nuancing

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if you want to push the theory into

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practical realms of application.

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There is also one other point to be noticed here, and that is there is a

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connectivity between Marx's

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definition of 'collectivity' and the definition of 'productive labor'.

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In a sense you could argue that the definition of the 'collective laborer'

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— from the standpoint of a class definition —

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is going to be constituted by all of those people who contribute to

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— directly or indirectly —

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the production of surplus-value, which is going to be appropriated by the capitalist.

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So, you shouldn't necessarily see these two concepts as isolated from each other: they interact,

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intersect, with each other

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and create a way in which we
could start to think about

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the class relation which exists between capital and labor, in terms of what happens to

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the surplus-value at the class level.

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So, I see these two concepts as

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Marx trying to rather typically come out of this

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definition of absolute/relative surplus-value,

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and say there's obviously only one form of surplus-value with two strategies,

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but within that we also start to see these re-definitions occurring about what is

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'productive' and what is 'collective',

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and that acts as a stepping stone, in a typical fashion,

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from the figure of the individual laborer to the notion of

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of class relations, which is going to be picked up on later.

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Now, the next two chapters are slightly (…)

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which deal with the way in which that

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the price of labor and changes in magnitude in the price of labor get set,

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form a transition to the discussion of wages.

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So, in chapter 17, for example,
he wants to point out that

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the mix of ways by which capitalists
can procure surplus-value

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— from the relative standpoint – this mix of ways

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is rather interesting.

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And, of course, he slips through and you get the point when you read the heading:

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“The length of the working-day

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and the intensity of labour constant;
The productivity of labour variable.”

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Then we go on to “The length of the working-day and the productivity of labour constant;

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The intensity of labour variable”,

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“The productivity and intensity of labour constant; The length of the working-day variable”

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And, in the final section: "Simultaneous variations in the duration, productivity

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and intensity of labour." Now,

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all of this is

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in a sense a little bit self-evident –that he's got 3 variables, if you like- and they contribute to

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the production of surplus-value in different degrees.

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Again, these are different strategic devices
which the capitalists have.

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I think the point to notice here

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which is a point which we're going to emphasize, and I've already emphasized it to some degree,

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is that Marx rarely takes any issue of this kind as if somehow or other

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there's a fixed outcome.

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That, actually, there are different ways
that capitalists can move.

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And, one of the themes, I think, which some people find surprising about

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'Capital' is the degree to which Marx is emphasizing the flexibility of capital

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in relationship to the dynamics
of the situation they are in.

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And many of the 'external' views of Marx are 'he's a structuralist',

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'he's talking about fixed structures', 'everything's fixed'.

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Well, when you see what he's doing here, he's saying, 'okay, I can unpack

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these different strategic possibilities, but how they work together in a particular situation,

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I can't predict.

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And, typically, what happens if capitalists get blocked in one direction they go in the other:

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if they can't do it by intensity they do it by lengthening the working-day;

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if they can't do it by lengthening the working-day they do it by intensity.

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If they can't do it by either of those,
what do they do: raise productivity.

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So, they have flexible strategies.

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And, this emphasis upon the flexibility

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seems to me to be one of the elements
you could take from

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this chapter.

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Even though I think the way he sets it up with

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three variables…you hold these two constant…and this one…

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is fairly self-evident. But, the flexibility that's implied in this,

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in terms of the dynamics of capitalism is important. But then,

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the chapter after that he, I think,

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got nervous about the idea that people would forget exactly how you define 'surplus

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value', so he gives you a reprise of that.

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This goes on several times, by the way, in 'Capital', and

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I think that probably what was going on was he was getting very (…) This was

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in his view, the great innovation of capital.

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And for those of us who seeped it up over the years and even those people

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who have not even understood it directly,

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some of that seems 'ok, all right, well, we know that, we know what "surplus-value" is',

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and so there's no issue about this…

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But Marx, I think, felt he really had to keep on coming back to it

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order to make sure we really understood it.

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And it's still today the case that people don't always get to the end of 'Capital' with having

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understood it. So, sometimes it's
a good idea that he does

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this. And, it's a good idea for you, if you feel uncertain in any way,

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to read these passages very carefully where he does this, and say: Have I really

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got it? Do I really know what's going on here?

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For instance, in these sections there's great emphasis

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on the difference between what labor gets, as a commodity,

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and what labor produces, in the way of value.

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So it's the difference between what labor produces

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and what labor gets for selling its labor-power as a commodity. That is the key difference

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which is there that the capitalists have to concentrate upon all the time

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it terms of trying to gain their surplus-value.

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Now, the chapters on wages,
there were 3 chapters on wages…

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Again, I'm not going to deal with these
in any great detail.

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Earlier in the chapter on the buying
and selling of labor-power,

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we dealt with the concept of the value of labor-power.

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And, the value of labor-power is the value of

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the commodities which are needed to keep the laborer alive at a given standard of living,

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at a given place, at a given time.

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So, we know about the value.

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On the other hand, wages are a price phenomenon.

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As Marx says of 'price': 'price' is the money name of 'value'.

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But, we know that the money _name_ and the money _representation_ is not the same as _value_.

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There is, as Marx has said several times,

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a distinction to be made between… there is he says a quantitative divergence between

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money and value,

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there's a qualitative divergence
between price and value.

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So, that the quantitative and qualitative divergence — if you go back to the chapter on money —

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becomes an important issue. And, it applies as much

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to the value of labor-power when it's converted into a money name called 'wages'.

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So, Marx is interested in what happens
through that 'convergence'.

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And, what we see immediately,

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is that this transformation in the money name brings us back to

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part of the argument that he made in the
chapter on money,

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where he made this kind of comment, if you remember, that,

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the fact that there's a quantitative divergence between

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the money representation of value and value

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is an advantage to a system which is based on anarchic market forces.

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And, in particular,

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if you go back and look at that passage, and

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commentaries that I was making on that passage, what you'd find me saying was

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that what the price system allows is

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tremendous fluctuations in
demand and supply to go on.

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And prices go up and prices go down depending upon demand and supply conditions.

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Value, however, is closer to

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what Marx there called 'natural price', i.e. the equilibrium value when demand and supply

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are in equilibrium.

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So, what does he say in this chapter? This is a place where he gets most explicit about that.

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This is on page 677-78.

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Where he says this:

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"It is not labour which directly confronts the possessor of money on the commodity-market,

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but rather the worker.

0:18:42.950,0:18:46.030
What the worker is selling is his labour-power.

0:18:46.030,0:18:50.830
As soon as his labour actually begins, it has already ceased to belong to him; It can, therefore no

0:18:50.830,0:18:53.880
longer be sold by him."

0:18:53.880,0:18:56.929
A very important sentence here which
you should always remember:

0:18:56.929,0:18:59.180
“Labour is the substance

0:18:59.180,0:19:01.320
and the imminent measure of value,

0:19:01.320,0:19:05.270
but has no value itself.”

0:19:05.270,0:19:08.350
To say that it has value itself would be a tautology.

0:19:08.350,0:19:12.400
We'd be talking about the value of value.

0:19:12.400,0:19:16.520
He then goes on to say: “In the expression 'value of labour', the concept of value is not only

0:19:16.520,0:19:19.360
completely extinguished, but inverted;

0:19:19.360,0:19:21.570
so that it becomes its contrary.

0:19:21.570,0:19:24.490
It is an expression as imaginary as the value of the earth.

0:19:24.490,0:19:26.890
These imaginary expressions arise nevertheless,
0:19:26.890,0:19:31.280
from the relations of production themselves.”

0:19:31.280,0:19:32.890
The expression 'value of labor'

0:19:32.890,0:19:36.220
is, of course, an expression that comes from classical political economy, it's not Marx's.

0:19:36.220,0:19:39.299
So he's critiquing that.

0:19:39.299,0:19:44.070
He then goes on: "Classical political economy borrowed the category 'price of labour'

0:19:44.070,0:19:48.220
from everyday life without further criticism, and then simply asked the question:

0:19:48.220,0:19:52.170
how is this price determined?

0:19:52.170,0:19:57.360
It soon recognized that changes in the relation between demand and supply explained nothing,

0:19:57.360,0:20:01.580
with regard to the price of labour or any other commodity, except those changes themselves,

0:20:01.580,0:20:08.289
i.e. the oscillations of the market price above or below a certain mean.

0:20:08.289,0:20:11.220
If demand and supply balance,

0:20:11.220,0:20:17.010
the oscillation of prices ceases, all other circumstances remaining the same.

0:20:17.010,0:20:22.150
But then demand and supply also cease to explain anything.

0:20:22.150,0:20:26.370
The price of labour, at the moment when demand and supply are in equilibrium,

0:20:26.370,0:20:30.910
is its natural price, determined independently of the relation of demand and supply.”

0:20:30.910,0:20:35.560
i.e., the 'natural price' is going to be the price of those bundle of commodities

0:20:35.560,0:20:42.250
which the laborer needs to survive at a given standard of living at a given time.

0:20:42.250,0:20:45.880
So this explains to you why it is that Marx

0:20:45.880,0:20:52.670
does not believe that demand and supply is a crucial

0:20:52.670,0:20:56.540
explanation of anything other than
all of the oscillations

0:20:56.540,0:20:59.550
that go on in the market.

0:20:59.550,0:21:04.240
As demand and supply converge on an equilibrium, so you get a natural price

0:21:04.240,0:21:08.240
which is the price representation of value, and considered

0:21:08.240,0:21:12.020
in classical political economy and also in Marx' theory

0:21:12.020,0:21:20.540
as a reasonable representation of value in the monetary form.

0:21:21.500,0:21:23.919
So, he's going to critique some of these phrases

0:21:23.919,0:21:27.820
which you find in popular writing about the value of labor,

0:21:27.820,0:21:30.210
and so on,

0:21:30.210,0:21:37.210
and talk about some of the “inextricable confusions and contradictions”, as he puts it on p.679,

0:21:38.320,0:21:40.650
which confuse us at the same time

0:21:40.650,0:21:44.990
as they provide “a secure base of operations to the vulgar economists…”

0:21:44.990,0:21:50.650
with their interest the world of appearance.

0:21:50.650,0:21:55.060
What then follows is a summary

0:21:55.060,0:22:01.620
of some of the argument in 'Capital'.
Now, chapter 20 and 21,

0:22:01.620,0:22:05.440
really kind of say that once you get into

0:22:05.440,0:22:08.080
this price form,

0:22:08.080,0:22:11.470
again, go back to the chapter on money,

0:22:11.470,0:22:15.570
and you'll see Marx talking about the 'price form'

0:22:15.570,0:22:20.460
as not only the money name but, also,
being able to oscillate

0:22:20.460,0:22:23.929
and to diverge in all sorts of ways.

0:22:23.929,0:22:26.870
Which, of course, leads to the way in which prices

0:22:26.870,0:22:33.410
and price movements mask fundamental relations.

0:22:33.410,0:22:37.680
And, in exactly the same qualitatively, Marx says, as a soon as you can hang a price on anything,

0:22:37.680,0:22:43.660
you can do it on conscience, and honor, and all these other things which are not commodities.

0:22:43.660,0:22:47.670
So, you can actually partition labor up
in different ways, and say

0:22:47.670,0:22:51.370
'I'll pay you by the hour, I'll pay you by the minute, I'll pay you by the week, I'll pay you

0:22:51.370,0:22:53.700
by the month,

0:22:53.700,0:22:57.000
or, I'll pay you by the piece'.

0:22:57.000,0:23:01.590
So, capital, once it gets into the price domain, has all kinds of choices

0:23:01.590,0:23:06.610
to make those masks even more explicit.

0:23:06.610,0:23:11.570
So, you hide the extraction of surplus-value

0:23:11.570,0:23:14.830
behind all of these varied wages systems:

0:23:14.830,0:23:20.190
time wages, piece wages, … and Marx writes about the qualities of both.

0:23:20.190,0:23:23.929
And, again, I don't think there is anything particularly difficult about this, and

0:23:23.929,0:23:30.730
I suspect most of you are fairly familiar with these differences.

0:23:30.730,0:23:36.720
But, again, clearly, capital has a number of different strategies.

0:23:36.720,0:23:39.020
It's not only stuck with

0:23:39.020,0:23:43.750
exploiting the worker just like that. No, it has a system of time wages, different temporalities

0:23:43.750,0:23:51.350
involved. It has piece systems and hybrid forms, and all the rest of it.

0:23:51.350,0:23:52.500
So, again,

0:23:52.500,0:23:57.120
Marx is looking at the way the different strategies that capital has in terms of

0:23:57.120,0:24:01.480
determining what wages are about, and how wages are going to be allocated,

0:24:01.480,0:24:04.840
in order to mask…

0:24:04.840,0:24:09.140
in a sense, it's a deliberate fetishization

0:24:09.140,0:24:13.000
of the social relation between capital and labor through

0:24:13.000,0:24:17.360
both the setting up of the price system (which is a necessary fetishism)

0:24:17.360,0:24:22.640
and then even using the fetishistic constructions, like value of labor

0:24:22.640,0:24:25.140
and so on, to confuse you ideologically,

0:24:25.140,0:24:26.470
and, at the same time

0:24:26.470,0:24:29.289
using all of these mechanisms
in order to confuse you

0:24:29.289,0:24:33.990
even further. So, what Marx is doing here

0:24:33.990,0:24:36.380
is to take these issues

0:24:36.380,0:24:40.820
and lay them on the table so
that we see very clearly

0:24:40.820,0:24:45.510
what a capitalist mode of production is about.

0:24:45.510,0:24:52.510
In the final section — National Differences in Wages —

0:24:52.960,0:24:56.000
Marx is harking back to the argument he

0:24:56.000,0:25:02.150
utilized in Chapter 17 — where he talked about the different strategies

0:25:02.150,0:25:07.330
whereby you can produce surplus-value.

0:25:07.330,0:25:11.670
And, those different strategies have different impacts

0:25:11.670,0:25:16.980
upon those commodities which fix the value of labor-power.

0:25:16.980,0:25:19.500
And what, we have to acknowledge is

0:25:19.500,0:25:26.090
that those different strategies are likely to vary from one place to another:

0:25:26.090,0:25:32.090
that in France they may be different from the United States, which is different from Britain.

0:25:32.090,0:25:36.870
So, what Marx is here prepared to concede is that out of this,

0:25:36.870,0:25:39.220
what you would get

0:25:39.220,0:25:43.170
is, even in a situation where there's an equal standard of living

0:25:43.170,0:25:46.650
in terms of material goods between those different places,

0:25:46.650,0:25:51.350
you would get different values of labor-power because you'd have different

0:25:51.350,0:25:57.250
prices of those products which determine the value of labor-power.

0:25:57.250,0:25:58.790
In other words,

0:25:58.790,0:26:04.640
if I go into a high productivity strategy in order to gain surplus-value

0:26:04.640,0:26:07.700
in the production of shoes,

0:26:07.700,0:26:12.440
because that's the best way I can go in Britain, then

0:26:12.440,0:26:16.080
the value of shoes is going to drop. And, if the value of shoes is important in the value

0:26:16.080,0:26:18.930
of labor-power then the value of labor-power is going to drop

0:26:18.930,0:26:21.230
even though people have the same amount of shoes.

0:26:21.230,0:26:24.540
If you didn't do that, and you had,

0:26:24.540,0:26:28.450
say still an artisanal production of
shoes somewhere else,

0:26:28.450,0:26:31.720
they would be of much higher value, and therefore you'd have to pay

0:26:31.720,0:26:34.710
labor more, they'd have a much higher value. So Marx is really talking about

0:26:34.710,0:26:39.500
the way in which uneven geographical development can arise

0:26:39.500,0:26:40.830
out of

0:26:40.830,0:26:44.730
these different strategies which capitalist have in different situations in different places in

0:26:44.730,0:26:46.060
different times.

0:26:46.060,0:26:49.520
in his instance he's talking about the difference between nation states but you could also

0:26:49.520,0:26:52.290
find regional differences,

0:26:52.290,0:26:55.880
within say the United States or regional differences within France.

0:26:55.880,0:26:59.490
So these regional differences can start to become important. Again,

0:26:59.490,0:27:03.240
he doesn't talk about this at great length,

0:27:03.240,0:27:06.850
he indicates that it's an issue.

0:27:06.850,0:27:11.330
There is a moment there where he also suggests that these differentials in the value of

0:27:11.330,0:27:15.400
labor-power can in fact
lead to situations in which

0:27:15.400,0:27:21.590
values starts to be transferred from one particular political space to another.

0:27:21.590,0:27:24.380
That is, it's possible to get a hint here

0:27:24.380,0:27:28.850
of what is called 'unequal exchange',

0:27:28.850,0:27:33.280
and the unequal exchange between the nation states

0:27:33.280,0:27:36.590
can then start to set up ways of extracting

0:27:36.590,0:27:39.390
surplus-value through that unequal exchange,

0:27:39.390,0:27:42.390
but he doesn't elaborate upon it, he barely hints at it.

0:27:42.390,0:27:44.260
All he seems to want to do here

0:27:44.260,0:27:48.610
is to talk about the way in which
wage rate determination

0:27:48.610,0:27:52.950
in different spaces of the world economy are not only going to be confused

0:27:52.950,0:28:02.059
by the temporal and the piecework stuff, it's not only going to be confused by all of that,

0:28:02.059,0:28:06.070
it's also going to be confused geographically by

0:28:06.070,0:28:08.620
these differences which can arise.

0:28:08.620,0:28:14.860
Okay, let's go on then to look at the next section,

0:28:15.830,0:28:20.440
which is part seven.

0:28:20.440,0:28:22.600
Part seven,

0:28:22.600,0:28:25.110
just to set the stage,

0:28:25.110,0:28:32.110
is I think the culminating argument of
Volume One of Capital.

0:28:32.170,0:28:37.220
It's here where he starts to put all of
the bits and pieces together

0:28:37.220,0:28:45.550
and create an understanding of the dynamics of a capitalist mode of production.

0:28:45.550,0:28:52.550
So we're now going to talk about the capitalist mode of production as a whole.

0:28:53.140,0:28:56.250
In order to do that we have to move,

0:28:56.250,0:28:57.910
as I've already suggested,

0:28:57.910,0:29:04.910
to looking at class relations rather than individuals.

0:29:05.000,0:29:09.600
And this shift to understanding

0:29:09.600,0:29:16.600
the capitalistic mode of production as a totality is

0:29:18.070,0:29:20.330
I think…

0:29:20.330,0:29:28.130
you have to grasp what that shift is about.

0:29:28.130,0:29:32.150
And the first thing Marx does is, in this

0:29:32.150,0:29:36.900
two page prologue

0:29:36.900,0:29:44.710
he lays out what could best be described as some key assumptions

0:29:44.710,0:29:52.290
in terms of how he's gonna to unpack this capitalist mode of production.

0:29:52.290,0:29:57.780
He starts off by saying,
bottom of the first paragraph,

0:29:57.780,0:30:01.850
he's going to be talking now
about the circulation of capital

0:30:01.850,0:30:10.930
in general and it's accumulation.

0:30:10.930,0:30:15.480
but then he says: “The first condition of accumulation is that the capitalist must have

0:30:15.480,0:30:17.490
contrived to sell his commodities,

0:30:17.490,0:30:22.320
and to reconvert into capital the greater part of the money received from their sale.

0:30:22.320,0:30:25.230
In the following pages, we shall assume

0:30:25.230,0:30:30.750
that capital passes through its process of circulation
in the normal way. The detailed analysis

0:30:30.750,0:30:36.180
of the process will be found in Volume 2.”

0:30:36.180,0:30:40.100
Now, what does this mean?

0:30:40.100,0:30:43.280
Throughout Volume 1 of Capital so far we've been assuming that

0:30:43.280,0:30:47.930
all commodities are sold at their value

0:30:47.930,0:30:54.930
and he's going to assume that in the argument that follows.

0:30:55.080,0:30:57.190
What does that mean?

0:30:57.190,0:31:02.100
It means there's always somebody somewhere or other who wants the commodities

0:31:02.100,0:31:04.580
as use value,

0:31:04.580,0:31:11.990
and somebody somewhere who has the money to pay for it.

0:31:11.990,0:31:17.730
There is in effect no problem in the market,

0:31:17.730,0:31:21.550
the market is always in equilibrium,

0:31:21.550,0:31:26.670
there's never any overproduction or underproduction,

0:31:26.670,0:31:30.270
because everything is being sold at its value, not less than its value,

0:31:30.270,0:31:32.150
not more than its value, but at its value.

0:31:32.150,0:31:39.440
Therefore he's going to assume
a market equilibrium situation,

0:31:39.440,0:31:48.310
to put it in Keynesian terms: there is no problem of lack of effective demand.

0:31:48.310,0:31:52.310
Now, is that a reasonable assumption?

0:31:52.310,0:31:54.250
The answer is:

0:31:54.250,0:31:56.240
not at all.

0:31:56.240,0:31:59.110
There are a lot of problems in the market,

0:31:59.110,0:32:05.140
in fact a lot of crises arise out of lack of effective demand, as Keynes described etc.

0:32:05.140,0:32:10.490
And we will get into the forms of those crises when we start

0:32:10.490,0:32:12.790
to do Volume 2 of Capital,

0:32:12.790,0:32:15.120
but for purposes of Volume One

0:32:15.120,0:32:21.450
he assumes those problems do not exist.

0:32:21.450,0:32:27.000
This is a classic tactic of modeling anything, you assume something constant

0:32:27.000,0:32:30.140
so you could look at something that's variable,

0:32:30.140,0:32:32.950
and he is going to look at something that's varying,

0:32:32.950,0:32:39.300
and I think what he looks at is extremely interesting.

0:32:39.300,0:32:43.720
But that doesn't mean that what he's going to describe in the pages that follow

0:32:43.720,0:32:46.750
is a full model of

0:32:46.750,0:32:51.580
a fully operative capitalist mode of production.

0:32:51.580,0:32:53.310
It's a partial model,

0:32:53.310,0:32:58.360
and we're going to look at a capitalist mode of production
through a certain window

0:32:58.360,0:33:02.050
and we're going to describe what we see from that window.

0:33:02.050,0:33:05.840
And we're gonna see a lot of very interesting things but it's not the only window you can

0:33:05.840,0:33:08.600
use. In Volume 2 he uses

0:33:08.600,0:33:12.210
the consumption realization window

0:33:12.210,0:33:16.160
and we see another lot of things.

0:33:16.160,0:33:19.540
Volume 3 he tries to put those together and says these are in contradiction to each other

0:33:19.540,0:33:24.470
therefore, when you go to the third window, as it were in Volume 3, you see another

0:33:24.470,0:33:27.510
set of things, because you remember what you saw from

0:33:27.510,0:33:30.590
the Volume 1 perspective and what you saw from the Volume 2 perspective,

0:33:30.590,0:33:33.570
and you then start to get a better idea of

0:33:33.570,0:33:38.860
the foundational contradictions of
a capitalist mode of production.

0:33:38.860,0:33:44.150
But from this standpoint, he's going to assume this.

0:33:44.150,0:33:50.570
The second thing he assumes is in the next paragraph,

0:33:50.570,0:33:58.030
he says, well we know in practice “The capitalist who produces surplus-value…

0:33:58.030,0:34:01.450
is by no means its ultimate proprietor. He has to share it afterwards

0:34:01.450,0:34:04.800
with capitalists who fulfill other functions

0:34:04.800,0:34:09.690
in social production taken as a whole, with the owner of the land, and with yet other people.

0:34:09.690,0:34:14.279
Surplus- value is therefore split up into various parts.

0:34:14.279,0:34:15.629
Its fragments fall to various categories of person,

0:34:15.629,0:34:19.689
and take on various mutually independent forms, such as profit,

0:34:19.689,0:34:27.779
interest, gains made through trade, ground rent, etc.” You could include taxes in the “etc.”.

0:34:27.779,0:34:34.779
“We shall be able to deal with these modified forms of surplus-value only in Volume 3.”

0:34:39.279,0:34:42.159
There on the next page he explains why…

0:34:44.599,0:34:48.739
this (…) and the first assumption even further.

0:34:48.739,0:34:54.709
What this means is that he's going to look at the way the system works

0:34:54.709,0:35:02.430
without any consideration of the way
the surplus-value gets split up,

0:35:02.430,0:35:10.319
between financiers, merchant-capitalists, landlords, the state etc.

0:35:10.319,0:35:20.949
And he's going to assume that their activities really play no disturbing role

0:35:20.949,0:35:27.949
on the capitalism he's going to describe.

0:35:28.539,0:35:32.739
And again, by the time you get to the end of Volume 3

0:35:32.739,0:35:40.529
you realize that actually, particularly something like finance capital, money capital,

0:35:40.529,0:35:47.400
plays an incredibly important role in the dynamics of what capitalism is about.

0:35:47.400,0:35:52.160
If I tried to persuade you that actually Volume 1 is the only proper analysis in today's world,

0:35:52.160,0:35:57.349
when Citibank is going down the tube, Merrill Lynch is falling apart, the stock market is

0:35:57.349,0:36:00.779
crashing, you'd say this is an irrelevant analysis

0:36:00.779,0:36:08.380
here compared to what is actually
going on in capitalist society.

0:36:08.380,0:36:11.129
But Marx again wants

0:36:11.129,0:36:17.019
to get a very clear perspective on the dynamics of capitalism from

0:36:17.019,0:36:22.299
this one window, he's excluding these complications

0:36:22.299,0:36:24.479
from his story.

0:36:24.479,0:36:28.289
He's going to assume there's only one capitalist who extracts surplus-value

0:36:28.289,0:36:32.259
and he's going to look at the relationship between the working class and the capitalist class

0:36:32.259,0:36:37.259
as if the capitalist class is just a homogeneous entity,

0:36:37.259,0:36:41.650
which it's not. And we know it's not

0:36:41.650,0:36:45.339
and Marx knows it's not.

0:36:45.339,0:36:49.309
If you go read something like “The 18th Brumaire” you'll find all of these factions,

0:36:49.309,0:36:52.539
like industrial capital, the financiers,

0:36:52.539,0:36:59.539
often at loggerheads with each other, actually doing all kinds of different things.

0:37:00.079,0:37:02.629
Again,

0:37:02.629,0:37:04.929
these assumptions are important.

0:37:04.929,0:37:08.929
Now there's a third assumption which he doesn't introduce here,

0:37:08.929,0:37:14.209
but which he introduces on p. 727 in a footnote.

0:37:14.209,0:37:22.170
But I'm going to do introduce it here because this is also important,

0:37:22.170,0:37:28.089
Footnote 2 on page 727, he says this:

0:37:28.089,0:37:36.959
“Here we take no account of the export trade, by means of which a nation

0:37:36.959,0:37:40.929
can change articles of luxury either into means of production or means of subsistence,

0:37:40.929,0:37:42.219
and vice versa.

0:37:42.219,0:37:44.079
In order to examine

0:37:44.079,0:37:46.889
the object of our investigation in its integrity,

0:37:46.889,0:37:50.189
free from all disturbing subsidiary circumstances,

0:37:50.189,0:37:53.429
we must treat the whole world of trade as one nation,

0:37:53.429,0:37:56.460
and assume that capitalist production is established everywhere

0:37:56.460,0:38:02.650
and has taken possession of every branch of industry.”

0:38:02.650,0:38:04.409
What this in effect says,

0:38:04.409,0:38:09.109
what this assumption says is Marx is going to look at capitalism as if it is in a closed

0:38:09.109,0:38:13.049
system.

0:38:13.049,0:38:16.069
No colonies, no colonial trade,

0:38:16.069,0:38:22.539
no export markets. It's a closed system.

0:38:22.539,0:38:28.299
Now these three assumptions are very strong assumptions,

0:38:28.299,0:38:30.259
no problems in the market

0:38:30.259,0:38:33.910
no issues arise out of the way in which the surplus gets distributed and

0:38:33.910,0:38:40.910
we're looking at a closed system.
They're very strong assumptions.

0:38:42.079,0:38:46.359
What you then have to understand is that

0:38:46.359,0:38:51.289
most of the analysis that follows, not all but most of the analysis that follows,

0:38:51.289,0:38:58.289
is contingent upon those assumptions.

0:38:58.789,0:39:04.349
so if he says, well this and this and this will happen,

0:39:04.349,0:39:06.579
well he means this and this and this will happen

0:39:06.579,0:39:08.779
in a situation of this sort where there are no problems

0:39:08.779,0:39:11.029
in the market, where there's no

0:39:11.029,0:39:12.690
issues of foreign trade

0:39:12.690,0:39:14.630
and where the issues of

0:39:14.630,0:39:21.140
the distribution of the surplus are irrelevant.

0:39:21.140,0:39:22.329
Now the reason

0:39:22.329,0:39:27.349
I emphasize this is because

0:39:27.349,0:39:33.169
people who've criticized Marx, are very fond of
taking certain statements of his and

0:39:33.169,0:39:35.939
saying 'well this is not true,

0:39:35.939,0:39:38.079
so obviously the guy's an idiot,

0:39:38.079,0:39:40.390
not worth reading'

0:39:40.390,0:39:44.230
and some of their favorite passages that they do this with

0:39:44.230,0:39:46.219
are the passages which come

0:39:46.219,0:39:50.539
in the chapters that follow.

0:39:50.539,0:39:55.319
They take it that Marx is talking about capitalism,

0:39:55.319,0:39:58.899
he's not, he's talking about

0:39:58.899,0:40:04.269
capitalism seen from one perspective,

0:40:04.269,0:40:07.359
and when people say obviously he doesn't understand what capitalism is about

0:40:07.359,0:40:09.859
because what he said on page

0:40:09.859,0:40:14.799
766 is totally wrong, and they cite it and say 'see,

0:40:14.799,0:40:16.909
don't bother reading Marx,

0:40:16.909,0:40:19.179
because he's obviously wrong'. Well, the answer is

0:40:19.179,0:40:22.269
that he's not wrong,

0:40:22.269,0:40:27.739
it's just that he's making a set of statements which are contingent upon these assumptions,

0:40:27.739,0:40:29.759
and a full analysis of

0:40:29.759,0:40:32.079
what a capitalist society is going to look like

0:40:32.079,0:40:38.589
is going to have to wait till the end of Volume 3 or Volume 4 of Capital,

0:40:38.589,0:40:41.529
unfortunately he never got there.

0:40:41.529,0:40:42.870
But our task

0:40:42.870,0:40:46.979
is maybe to get there if we can

0:40:46.979,0:40:50.609
and at the same time recognize that

0:40:50.609,0:40:52.699
Volume One, which is something he did complete

0:40:52.699,0:40:54.749
for publication,

0:40:54.749,0:40:57.630
has this quality to it.

0:40:57.630,0:41:00.689
And not fall into the trap

0:41:00.689,0:41:05.109
and actually some pro-marxists do this,

0:41:05.109,0:41:08.569
to take some statement in here and turn it into a dogma,

0:41:08.569,0:41:14.839
Marx says …, yeah, I know he said that but that is a contingent statement,

0:41:14.839,0:41:20.849
it is not an absolute truth.

0:41:20.849,0:41:24.289
In reading this please remember

0:41:24.289,0:41:28.159
all the time that we're dealing with

0:41:28.159,0:41:30.359
contingent statements,

0:41:30.359,0:41:32.150
contingent on these assumptions,

0:41:32.150,0:41:34.199
and these

0:41:34.199,0:41:40.049
assumptions are clearly laid out.
I always find it odd

0:41:40.049,0:41:45.319
that in a lot of readings of Capital people don't pay any attention to these couple of pages.

0:41:45.319,0:41:51.919
But they're crucial for setting the stage for what is about to follow.

0:41:51.919,0:41:57.349
And what follows are three chapters.

0:41:57.349,0:42:03.239
The first of which is about simple reproduction,

0:42:03.239,0:42:07.160
and Marx immediately poses the question:

0:42:07.160,0:42:11.479
How does a society reproduce itself?

0:42:11.479,0:42:15.119
how does capitalism get reproduced?

0:42:15.119,0:42:21.619
and again we first look at this in simplified form,

0:42:21.619,0:42:24.150
by imagining that all of the surplus-value

0:42:24.150,0:42:26.859
which is produced

0:42:26.859,0:42:28.659
is consumed away.

0:42:28.659,0:42:31.099
so that all that happens is that

0:42:31.099,0:42:33.910
capitalism reproduces itself in a stationary state.

0:42:33.910,0:42:40.150
We know that's unlikely for all sorts of reasons and the next chapter we see why.

0:42:40.150,0:42:46.049
But again we can construct a model, as it were, of simple reproduction

0:42:46.049,0:42:49.609
and by simplifying the argument we can see

0:42:49.609,0:42:53.639
certain critical elements in how

0:42:53.639,0:42:58.209
a capitalist mode of production really works.

0:42:58.209,0:43:02.589
So his task here he says is to look at this system

0:43:02.589,0:43:09.749
“as a connected whole, and in the constant flux of its incessant renewal,

0:43:09.749,0:43:16.749
every social process of production is at the same time a process of reproduction.”

0:43:19.609,0:43:24.259
And so we are interested therefore in the capitalist system not only of production but of

0:43:24.259,0:43:31.259
reproduction.

0:43:33.479,0:43:34.949
When we start to look at it

0:43:34.949,0:43:41.609
here from the standpoint of a class perspective,

0:43:41.609,0:43:48.439
what simple reproduction suggests, as he says at the bottom of p.712,

0:43:48.439,0:43:53.509
is a certain positionality of the working-class, of the worker,

0:43:53.509,0:43:57.739
he says: “What flows back to the worker in the shape of wages is a portion of the product

0:43:57.739,0:44:02.189
he himself continuously reproduces.

0:44:02.189,0:44:06.099
The capitalist, it is true, pays him the value
of the commodity in money,

0:44:06.099,0:44:12.659
but this money is merely the transmuted form of the product of his labour.”

0:44:12.659,0:44:18.169
So having reproduced

0:44:18.169,0:44:24.029
labor-power, the worker receives money equivalent

0:44:24.029,0:44:29.509
of what the worker has actually already produced.

0:44:29.509,0:44:34.559
Top of p.713: There is an “illusion” which is “created by the money-form” but

0:44:34.559,0:44:39.409
this “vanishes immediately if, instead of taking a single capitalist and a single worker,

0:44:39.409,0:44:43.619
we take the whole capitalist class and the whole working class.”

0:44:43.619,0:44:46.299
Here comes I think the crucial passage:

0:44:46.299,0:44:52.029
“The capitalist class is constantly giving to the working class drafts, in the form of money,

0:44:52.029,0:44:57.069
on a portion of the product produced by the latter and appropriated by the former.

0:44:57.069,0:45:01.579
The workers give these drafts back just as constantly to the capitalists, and thereby

0:45:01.579,0:45:06.019
withdraw from the latter their allotted share of their own product.

0:45:06.019,0:45:08.619
The transaction is veiled by the commodity-form of the product

0:45:08.619,0:45:13.399
and the money-form of the commodity. ”

0:45:13.399,0:45:17.269
Now what does this describe?

0:45:17.269,0:45:19.420
This describes

0:45:19.420,0:45:26.209
really the working-class is in a kind of company store relation to capital,

0:45:26.209,0:45:31.339
I think that's the best image for it, right? That's where the worker is.

0:45:31.339,0:45:37.839
The worker makes the product, and then is given money to buy part of their own product back.

0:45:37.839,0:45:43.149
The result, says Marx, is that variable capital

0:45:43.149,0:45:46.079
“is therefore only a particular historical form of appearance

0:45:46.149,0:45:49.079
of the fund for providing the means of subsistence”.

0:45:49.079,0:45:50.900
Now, variable capital

0:45:50.900,0:45:57.900
is a form of circulation which goes through the body of the worker.

0:46:06.629,0:46:15.239
But then on p.714, Marx makes some interesting gestures, this is going to come up again:

0:46:15.239,0:46:19.429
“Variable capital, it is true, loses its character of a value advanced out of the capitalist's funds

0:46:19.429,0:46:26.489
only when we view the process of capitalist production in the flow of its constant renewal.”

0:46:26.489,0:46:29.939
When we thought of it individually, the capitalist had some money,

0:46:29.939,0:46:35.089
advanced it to buy the labour-power,

0:46:35.089,0:46:41.239
in order to do that the capitalist had to have an original concentration of money.

0:46:41.239,0:46:45.339
So Marx here introduces the idea of primitive accumulation,

0:46:45.339,0:46:48.029
that the capitalist must have gone out and found some way

0:46:48.029,0:46:54.019
to get the right amount of money to be able to do this.

0:46:54.019,0:46:59.359
So there must have been a beginning where the capitalist went out and

0:46:59.359,0:47:03.179
stole or robbed or did something
or other to get the money.

0:47:03.179,0:47:04.429
And that of course is going to be

0:47:04.429,0:47:07.929
the topic of part 8 of Capital.

0:47:07.929,0:47:14.719
Then Marx does a very interesting exercise:

0:47:14.719,0:47:21.269
“If a surplus-value of £200 is generated every year by the use of a capital of £1,000,

0:47:21.269,0:47:24.349
and if this surplus-value is consumed every year,

0:47:24.349,0:47:28.289
it is clear that when this process has been repeated for five years, the surplus-value consumed

0:47:28.289,0:47:36.580
will amount to 5 X £200, or the £1,000 originally advanced. ”

0:47:37.689,0:47:41.300
Then he goes on in this vane

0:47:41.300,0:47:46.679
to end up but at the bottom of p.715, long paragraph:

0:47:46.679,0:47:48.899
“When a person consumes the whole of his property,

0:47:48.899,0:47:51.009
by taking upon himself debts equal to the value of

0:47:51.009,0:47:55.460
that property, it is clear that his property represents nothing but the sum total of his debts.

0:47:55.460,0:48:00.749
And so it is with the capitalist; when he has consumed the equivalent of his original capital,

0:48:00.749,0:48:05.119
the value of his present capital represents nothing but the total amount of surplus-value

0:48:05.119,0:48:06.809
appropriated by him without payment.

0:48:06.809,0:48:12.759
Not a single atom of the value of
his old capital continues to exist.”

0:48:12.759,0:48:17.959
Marx is arguing here with John Locke,

0:48:17.959,0:48:20.389
because John Locke took the view that

0:48:20.389,0:48:25.310
private property arises out of the way in which

0:48:25.310,0:48:27.920
individuals mixed their labor with the land,

0:48:27.920,0:48:31.739
and to the degree that they mixed their labor with the land, they had a right

0:48:31.739,0:48:35.359
to appropriate that land.

0:48:35.359,0:48:43.689
But who is mixing their labor here with the land and the means of production? The laborer.

0:48:43.689,0:48:48.349
So what Marx is doing is saying:
If you take the Lockean theory seriously,

0:48:48.349,0:48:52.049
the capitalist who started out with £1,000 would lose £200 every year

0:48:52.049,0:48:55.009
because they'd consume it away.

0:48:55.009,0:48:57.039
If they consumed away the surplus

0:48:57.039,0:49:00.269
it would be like consuming away

0:49:00.269,0:49:04.169
£200 each year of the original £1,000. At the end of five years

0:49:04.169,0:49:06.299
they consumed away their original wealth,

0:49:06.299,0:49:12.729
they do not have the right to that wealth anymore.

0:49:12.729,0:49:16.459
Because they didn't mix their labor with the land or with the means of production,

0:49:16.459,0:49:18.459
the laborer did.

0:49:20.459,0:49:23.490
Now what happens then is that

0:49:23.490,0:49:27.529
surplus-value which is generated by the worker

0:49:27.529,0:49:33.849
becomes capitalized, Marx says on p.715.

0:49:33.849,0:49:36.479
What we're now beginning to see

0:49:36.479,0:49:40.219
is a process by which labor produces capital.

0:49:40.219,0:49:44.819
He started off with the argument, as if capital existed

0:49:44.819,0:49:48.949
and then employed the worker and took on the worker,

0:49:48.949,0:49:55.479
but we're now gonna look at the whole way in which the worker produces capital.

0:49:58.209,0:50:03.910
This Lockean argument that erupts on p.714-15 or anti-Lockean argument that erupts

0:50:03.910,0:50:05.009
there

0:50:05.009,0:50:12.039
is I think a very useful starting point to go into what follows.

0:50:12.039,0:50:26.699
Because it's the unpaid labour which is gonna form the capital down the down the line.

0:50:26.699,0:50:32.129
On p.716 at the bottom Marx says:

0:50:32.129,0:50:37.759
“Therefore the worker himself constantly produces objective wealth, in the form of capital,

0:50:37.759,0:50:42.410
an alien power that dominates and exploits him;

0:50:42.410,0:50:45.110
and the capitalist just as constantly produces labour-power,

0:50:45.110,0:50:47.559
in the form of a subjective source of wealth

0:50:47.559,0:50:50.970
which is abstract, exists merely in
the physical body of the worker,

0:50:50.970,0:50:55.269
and is separated from its own means of objectification and realization;

0:50:55.269,0:50:59.879
in short, the capitalist produces
the worker as a wage-labourer.”

0:50:59.879,0:51:03.179
So there's a mutual co-production going on here, where

0:51:03.179,0:51:06.369
the worker produces the capitalist

0:51:06.369,0:51:11.939
and the capitalist produces the worker.

0:51:11.939,0:51:16.449
On p.717 this leads to the formulation that says

0:51:16.449,0:51:20.739
actually the worker consumes in two ways:

0:51:20.739,0:51:22.980
there is productive consumption i.e.

0:51:22.980,0:51:28.019
the way the worker consumes
materials in the labor process

0:51:28.019,0:51:31.429
then there's the individual consumption which is the way in which

0:51:31.429,0:51:40.109
the labor consumes in order to reproduce his or her own life.

0:51:40.109,0:51:45.809
So when we start to look at that, again,

0:51:45.809,0:51:49.849
not in terms of individuals, but in terms of the capitalist class and working class,

0:51:49.849,0:51:54.379
as Marx proposed at the bottom of p.717,

0:51:54.379,0:51:58.499
we get this company store thing laid out,

0:51:58.499,0:52:02.339
he says: “By converting part of his capital into labour-power, the capitalist valorizes

0:52:02.339,0:52:09.159
the value of his entire capital.” So the worker not only produces

0:52:09.159,0:52:12.909
their own means of production, they also produce the capitalists'.

0:52:12.909,0:52:17.119
he says: The capitalist “kills two birds with one stone. He profits not only by what he receives

0:52:17.119,0:52:20.059
from the worker, but also by what he gives him.

0:52:20.059,0:52:24.190
The capital given in return for labour-power is converted into means of subsistence

0:52:24.190,0:52:27.209
which have to be consumed to reproduce the muscles, nerves,

0:52:27.209,0:52:33.579
bones and brains of existing workers, and to bring new workers into existence.

0:52:33.579,0:52:37.079
Within the limits of what is absolutely necessary, therefore, the individual

0:52:37.079,0:52:39.319
consumption of the working class

0:52:39.319,0:52:44.460
is the reconversion of the means of subsistence given by capital in return for labour-power

0:52:44.460,0:52:49.729
into fresh labour-power which capital is then again able to exploit.

0:52:49.729,0:52:52.749
It is the production and reproduction of the capitalist's most indispensable means of production:

0:52:52.749,0:52:55.749
the worker.

0:52:55.749,0:53:00.519
The individual consumption of the worker, whether it occurs inside or outside the workshop,

0:53:00.519,0:53:02.019
inside or outside the labour process,

0:53:02.019,0:53:06.809
remains an aspect of the production and reproduction of capital,

0:53:06.809,0:53:08.809
just as the cleaning of machinery does,

0:53:08.809,0:53:11.149
whether it is done during the labour process, or when intervals

0:53:11.149,0:53:15.399
in that process permit.”

0:53:15.399,0:53:17.109
And then Marx makes some comment about

0:53:17.109,0:53:19.109
“The maintenance and reproduction of the working class remains

0:53:19.109,0:53:21.009
a necessary condition…

0:53:21.009,0:53:24.009
But the capitalist may safely leave this to the worker's drives

0:53:24.009,0:53:30.249
for self-preservation and propagation.”

0:53:30.249,0:53:34.509
p.719 this leads to the idea:

0:53:34.509,0:53:38.139
“From the standpoint of society,

0:53:38.139,0:53:42.049
then, the working class, even when it stands outside the direct labour process,

0:53:42.049,0:53:47.279
is just as much an appendage of capital as the lifeless instruments of labour are.”

0:53:47.279,0:53:50.329
Now you come up on this idea of the

0:53:50.329,0:53:54.629
laborer as an appendage of capital inside the labor process,

0:53:54.629,0:53:57.460
within division of labor and also

0:53:57.460,0:54:00.619
even more spectacularly within machinery, but now

0:54:00.619,0:54:06.109
we're seeing that the laborer is actually an appendage of capital outside, in the marketplace,

0:54:06.109,0:54:10.609
in the reproduction process.

0:54:10.609,0:54:15.669
And Marx then goes to one of his favorite figures, Mr Potter,

0:54:15.669,0:54:19.349
not Harry but the other.

0:54:19.349,0:54:23.429
Whereby,

0:54:23.429,0:54:27.039
as he puts it on p.723:

0:54:27.039,0:54:31.589
“Capitalist production therefore reproduces in the course of its own process

0:54:31.589,0:54:37.920
the separation between labour-power and the conditions of labour.

0:54:37.920,0:54:43.559
It thereby reproduces and perpetuates the conditions under which the worker is exploited.

0:54:43.559,0:54:47.739
It incessantly forces him
to sell his labour-power in order to live,

0:54:47.739,0:54:54.509
and enables the capitalist to purchase labour-power in order that he may enrich himself.

0:54:54.509,0:54:58.369
It is no longer a mere accident that capitalist and worker confront each other in the market

0:54:58.369,0:55:00.669
as buyer and seller.

0:55:00.669,0:55:04.729
It is the alternating rhythm of the process itself which throws the worker back onto the market

0:55:04.729,0:55:08.569
again and again as a seller of his labour-power…

0:55:08.569,0:55:12.349
…In reality, the worker belongs to capital before he has sold himself to the capitalist.

0:55:12.349,0:55:14.299
His economic bondage is

0:55:14.299,0:55:15.899
at once mediated through, and concealed by,

0:55:15.899,0:55:21.549
the periodic renewal of the act by which he sells himself…”

0:55:21.549,0:55:24.049
So we come to the fundamental conclusion of this chapter:

0:55:24.049,0:55:26.049
“The capitalist process of production, therefore,

0:55:26.049,0:55:27.669
seen as a total,

0:55:27.669,0:55:31.189
connected process, i.e. a process of reproduction, produces

0:55:31.189,0:55:34.189
not only commodities, not only surplus-value,

0:55:34.189,0:55:38.029
but it also produces and reproduces the capital-relation itself;

0:55:38.029,0:55:44.589
on the one hand the capitalist, on the other the wage-labourer.”

0:55:44.589,0:55:48.299
It's interesting here: Marx does not look

0:55:48.299,0:55:51.569
on the reproduction of the capitalist order as

0:55:51.569,0:55:56.579
primarily a technical problem or
a quantitative flow problem,

0:55:56.579,0:56:00.669
but as a reproduction of the social relation problem,

0:56:00.669,0:56:04.329
it's a reproduction of the social relationship between capital and labor

0:56:04.329,0:56:08.900
which is at the heart of the issue.

0:56:08.900,0:56:13.999
Let's look at this diagrammatically for a minute and see what we get.

0:56:13.999,0:56:15.649
We have the capitalists

0:56:15.649,0:56:21.059
who begin with money,

0:56:21.059,0:56:22.880
they begin with money.

0:56:22.880,0:56:26.279
What do they do? they go into the market

0:56:26.279,0:56:35.569
and then they buy labour-power.

0:56:35.569,0:56:42.569
and they buy means of production.

0:56:47.399,0:56:57.039
And then bring these two things together in a labour process,

0:57:07.569,0:57:11.269
the act of production.

0:57:11.269,0:57:19.999
Out of this labor process there comes a commodity

0:57:19.999,0:57:36.189
which is then sold for money plus surplus-value (profit).

0:57:44.609,0:57:48.849
This money then goes back into production

0:57:48.849,0:57:53.400
and you just go on and on and on in perpetuity.

0:57:53.400,0:57:57.379
And what Marx is doing here it is to draw our attention

0:57:57.379,0:58:00.289
to this dynamic,

0:58:00.289,0:58:04.679
and then say 'look at what labor-power does',

0:58:04.679,0:58:06.939
labour-power goes into the labor process

0:58:10.869,0:58:24.299
and engages in productive consumption.

0:58:30.469,0:58:41.099
In return for that labour-power is given a certain amount of money

0:58:41.509,0:58:44.249
and that money then is used

0:58:44.249,0:58:54.599
to purchase means of subsistence.

0:58:59.049,0:59:03.289
So what you then see is that

0:59:03.289,0:59:07.079
the worker, and we've mentioned this before, is involved in

0:59:07.079,0:59:09.350
a C-M-C circulation process

0:59:09.350,0:59:15.349
commodity-money-commodity circulation process.

0:59:15.349,0:59:18.929
And the means of subsistence,

0:59:18.929,0:59:23.879
when they come back into…

0:59:23.879,0:59:30.879
allow the laborer to live,

0:59:34.539,0:59:38.449
which allows them to enter back into…

0:59:38.449,0:59:43.269
some of these commodities flow back.

0:59:43.269,0:59:48.279
So what Marx is saying is that actually variable capital, if we look at the circulation

0:59:48.279,0:59:52.739
process of labor-power

0:59:52.739,0:59:55.880
in relationship to this,

0:59:55.880,1:00:04.109
what we're actually seeing is
a circulation of variable capital.

1:00:04.109,1:00:09.069
It's a distinctive form of circulation and there's a very distinctive reason why Marx calls

1:00:09.069,1:00:10.969
it 'variable capital', because

1:00:10.969,1:00:16.029
it is an appendage of capital and a form of capital that circulates

1:00:16.029,1:00:20.140
through the body of the laborer.

1:00:20.140,1:00:25.069
And you could say that's a very inhumane way to look at, yes it is,

1:00:25.069,1:00:32.069
but that's how capital looks at it.

1:00:35.899,1:00:42.890
As Dickens once put it in one of his novels, it's interesting

1:00:42.890,1:00:46.559
what the industrialists do is they call their workers 'hands'

1:00:46.559,1:00:52.489
'cause they wish they didn't have brains and stomachs.

1:00:52.489,1:00:55.999
So this whole terminology…

1:00:55.999,1:01:00.809
and actually we have a contemporary terminology, for example,

1:01:00.809,1:01:05.099
firms will talk about 'human resources'

1:01:05.099,1:01:08.169
it's not about people, it's about 'human resources'

1:01:08.169,1:01:11.759
it's about 'labor supply', all those kind of things. In fact we have

1:01:11.759,1:01:15.289
a whole dehumanized

1:01:15.289,1:01:22.289
set of words in which we would describe this circulation process, 'labor inputs'

1:01:23.669,1:01:25.519
and all the rest of it.

1:01:25.519,1:01:28.739
So there is a circulation process here,

1:01:28.739,1:01:34.940
the circulation circuit of variable capital.

1:01:34.940,1:01:37.660
And Marx is here arguing, well

1:01:37.660,1:01:39.670
initially then

1:01:39.670,1:01:44.279
what we've got is a reproduction of the system because the money that flows in,

1:01:44.279,1:01:47.529
and this is where the john locke argument comes in, after a while

1:01:47.529,1:01:50.399
that money should no longer belong to the capitalist, it should be along to the worker

1:01:50.399,1:01:52.889
'cause they're the ones who

1:01:52.889,1:01:57.699
engage in all the productive consumption and also individual consumption

1:01:57.699,1:01:59.920
up here.

1:01:59.920,1:02:09.599
So the labourer is central to this whole process.

1:02:09.599,1:02:16.599
That leads him in chapter 24 to say, well what happens to the surplus-value?

1:02:16.949,1:02:24.919
if we assume that this goes on for another round of

1:02:24.919,1:02:29.119
buying labour-power and production etc.

1:02:29.119,1:02:37.049
a portion of this combines to come back in

1:02:37.049,1:02:44.049
and this time you want labour-power,

1:02:44.589,1:02:46.219
the original,

1:02:46.219,1:02:49.909
but you need more labor-power,

1:02:49.909,1:02:56.909
you need means of production,

1:02:58.449,1:03:04.499
but you need more means of production.

1:03:04.499,1:03:20.279
Part of this however is taken away as
revenue for capitalist consumption,

1:03:25.329,1:03:28.329
And the big issue we then have to look at

1:03:28.329,1:03:33.199
is what determines how much of the surplus

1:03:33.199,1:03:37.519
gets converted into fresh capital for expansion of the system

1:03:37.519,1:03:40.179
and how much of it gets converted

1:03:40.179,1:03:42.369
into revenue and gets

1:03:42.369,1:03:45.309
consumed away,

1:03:45.309,1:03:49.189
and what is the relationship between

1:03:49.189,1:03:53.039
reinvestment of part of the surplus,

1:03:53.039,1:03:59.209
-this part- is reinvestment,

1:03:59.209,1:04:04.579
and consumption of revenues.

1:04:04.579,1:04:08.890
Marx says: “The employment of surplus-value as capital,

1:04:08.890,1:04:12.869
or its reconversion into capital, is called accumulation of capital.”

1:04:12.869,1:04:19.869
So the accumulation of capital is this process with part of the surplus-value

1:04:20.069,1:04:26.439
reinvested as capital in the expansion of production.

1:04:26.439,1:04:31.249
Bottom of 726: “Accumulation requires the transformation

1:04:31.249,1:04:34.949
of a portion of the surplus product into capital.

1:04:34.949,1:04:39.149
But we cannot, except by a miracle, transform into capital anything but such articles as can

1:04:39.149,1:04:44.209
be employed in the labour process (i.e. means of production)…

1:04:44.209,1:04:47.559
…Consequently, a part of the annual surplus labour must have been applied to the production

1:04:47.559,1:04:51.410
of additional means of production and subsistence,
over and above the quantity

1:04:51.410,1:04:56.119
of these things required to replace the capital advanced.”

1:04:56.119,1:05:03.380
Where are your extra means of production going to come from?

1:05:03.380,1:05:06.650
Somebody must have produced them somewhere

1:05:06.650,1:05:11.599
last year, if they're going to be available to you this year.

1:05:11.599,1:05:15.089
That is one of the problems

1:05:15.089,1:05:21.049
and if you put into here the question that behind

1:05:21.049,1:05:26.029
all of these means of production at some point or other there lies a relation to nature, means

1:05:26.029,1:05:32.699
that you're gonna have to expand
natural resource extraction,

1:05:32.699,1:05:39.699
somewhere down the line you're going to have to do a lot of that.

1:05:42.629,1:05:49.049
Then comes, p.727, not only the question of where will be the means of production come from,

1:05:49.049,1:05:55.959
but where do the extra workers come from?

1:05:55.959,1:06:00.259
and Marx says “The mechanism of capitalist production has already provided for this in advance,

1:06:00.259,1:06:04.039
by reproducing the working class as a class

1:06:04.039,1:06:08.609
dependent on wages, a class whose ordinary wages suffice, not only to maintain itself,

1:06:08.609,1:06:13.439
but also to increase its numbers.”

1:06:13.439,1:06:17.829
So what he's looking at here is the idea that

1:06:17.829,1:06:22.449
population expansion is part and parcel

1:06:22.449,1:06:25.099
of answering that question as to where does

1:06:25.099,1:06:27.799
the extra labor come from.
But as we're going to see,

1:06:27.799,1:06:33.639
there are other ways in which that extra labor can be provided.

1:06:33.639,1:06:36.339
On p.728-29

1:06:36.339,1:06:39.910
he goes back over the John Lockean myth,

1:06:39.910,1:06:42.869
this time with a capital of ten thousand pounds,

1:06:42.869,1:06:49.119
and two thousand pounds that comes from the surplus.

1:06:49.119,1:06:54.069
And he says, well you know when we take that Lockean argument in this society,

1:06:54.069,1:06:57.929
he says on top of p.729:

1:06:57.929,1:07:03.129
“In every case, the working class creates by the surplus labour of one year the capital destined

1:07:03.129,1:07:05.989
to employ additional labour in the following year.

1:07:05.989,1:07:12.949
And this is what is called creating capital out of capital. ”

1:07:12.949,1:07:15.679
You call it creating capital out of capital when it's actually

1:07:15.679,1:07:19.679
the working class that produces it,

1:07:19.679,1:07:22.569
and he then cites Wakefield,

1:07:22.569,1:07:25.659
who's going to come up again

1:07:25.659,1:07:28.769
in our analysis much later, right at the bottom

1:07:28.769,1:07:30.839
footnote 5,

1:07:30.839,1:07:36.479
approving saying “'Labour creates capital before capital employs labour'”

1:07:36.479,1:07:43.479
Wakefield at least got it right.

1:07:45.689,1:07:49.869
But, bottom of p.729: “each individual transaction continues

1:07:49.869,1:07:54.869
to conform to the laws of commodity exchange, …”

1:07:54.869,1:07:57.209
-there's no cheating going on-

1:07:57.209,1:08:00.369
“with the capitalist always buying labour-power and the worker always selling it

1:08:00.369,1:08:03.369
at what we shall assume is its real value.”

1:08:03.369,1:08:05.880
i.e. the assumption that everything trades at its value.

1:08:05.880,1:08:10.479
“It is quite evident from this that the laws of appropriation or of private property,

1:08:10.479,1:08:14.829
laws based on the production and circulation of commodities, become changed into their direct

1:08:14.829,1:08:21.549
opposite through their own internal and inexorable dialectic.

1:08:21.549,1:08:28.109
The exchange of equivalents” becomes the non-equivalent of surplus-value.

1:08:28.109,1:08:31.479
“The relation of exchange between capitalist and worker becomes

1:08:31.479,1:08:35.179
a mere semblance belonging only to the process of circulation,

1:08:35.179,1:08:39.279
it becomes a mere form, which is alien to the content of the transaction itself,

1:08:39.279,1:08:43.699
and merely mystifies it.”

1:08:43.699,1:08:49.219
“The constant sale and purchase of labour-power is the form;”

1:08:49.219,1:08:50.609
-the market form-

1:08:50.609,1:08:54.650
“the content is the constant appropriation by the capitalist, without equivalent,

1:08:54.650,1:08:58.329
of a portion of the labour of others which has already been objectified,

1:08:58.329,1:09:05.949
and his repeated exchange of this labour for a greater quantity of the living labour of others. ”

1:09:05.949,1:09:09.649
Bottom of that paragraph: “property turns out to be the right,

1:09:09.649,1:09:15.099
on the part of the capitalist, to appropriate the unpaid labour of others or its product,

1:09:15.099,1:09:21.249
and the impossibility, on the part of the worker, of appropriating his own product.

1:09:21.249,1:09:25.299
The separation of property from labour thus becomes the necessary consequence of a law

1:09:25.299,1:09:32.299
that apparently originated in their identity.”

1:09:33.479,1:09:38.500
The law that originated in its identity is that of Locke,

1:09:38.500,1:09:45.689
but the perversion of that into this particular form of law is another matter.

1:09:45.689,1:09:51.789
There then follows a reprise of

1:09:51.789,1:09:54.639
the theory of surplus-value. If you want to read that

1:09:54.639,1:09:59.169
carefully on p.731-732, you should do so,

1:09:59.169,1:10:05.030
where you get the theory of surplus-value reiterated.

1:10:05.030,1:10:08.629
He then says, well we've been looking at the theory of surplus-value

1:10:08.629,1:10:11.300
from the standpoint of the individual worker

1:10:11.300,1:10:14.460
At the bottom of 733 he says: “To be sure, the matter looks quite different if we consider

1:10:14.460,1:10:19.060
capitalist production in the uninterrupted flow of its renewal,

1:10:19.060,1:10:21.159
and if, in place of the individual capitalist and the individual

1:10:21.159,1:10:25.070
worker, we view them in their totality, as the capitalist class

1:10:25.070,1:10:27.599
and the working class…

1:10:27.599,1:10:33.919
But in so doing we should be applying standards entirely foreign to commodity productions.”

1:10:33.919,1:10:35.920
In other words,

1:10:35.920,1:10:40.459
workers and capitalists do not approach each other in the marketplace

1:10:40.459,1:10:42.829
as classes,

1:10:42.829,1:10:46.769
they approach each other in the marketplace as individuals, individual capitalists and

1:10:46.769,1:10:49.010
individual workers,

1:10:49.010,1:10:54.009
so you're seeing this class system being perpetuated through

1:10:54.009,1:10:58.030
the individualism of this.

1:10:58.030,1:11:05.030
The result is the individual relations of that sort typically hide the class relations.

1:11:05.899,1:11:11.020
And the class relation depends entirely on this dialectical inversion

1:11:11.020,1:11:15.499
of the nature of private property rights,
from the Lockean view

1:11:15.499,1:11:21.989
to the capitalistic system.

1:11:21.989,1:11:24.299
And that has been accomplished,

1:11:24.299,1:11:25.839
remember,

1:11:25.839,1:11:27.940
through the way in which

1:11:27.940,1:11:32.210
circulation on the market and what goes on in the realm of production

1:11:32.210,1:11:35.539
are separate realms but integrated with each other,

1:11:35.539,1:11:40.780
so that you could produce surplus in production,

1:11:40.780,1:11:44.500
not in the market.

1:11:44.500,1:11:47.799
And it's that inversion, he says on p.733 at the bottom:

1:11:47.799,1:11:52.379
“This result (the inversion) becomes inevitable from the moment there is a free sale,

1:11:52.379,1:11:55.249
by the worker himself, of labour-power as a commodity.”

1:11:55.249,1:12:00.190
It is the commodity form of labor-power which is the issue.

1:12:00.190,1:12:03.830
“But it is also only from then onwards that commodity production is generalized

1:12:03.830,1:12:07.100
and becomes the typical form of production;”

1:12:07.100,1:12:09.860
In other words, here's another one of those passages where Marx is saying:

1:12:09.860,1:12:14.149
It's only when all of this becomes totally generalized,

1:12:14.149,1:12:21.159
that we're going to have the system operating
in its perfected way.

1:12:21.159,1:12:22.639
Then he goes on to say:

1:12:22.639,1:12:28.360
“it is also true that only there does it unfold all its hidden potentialities.

1:12:28.360,1:12:32.460
….To the extent that commodity production, in accordance with its own immanent laws,

1:12:32.460,1:12:35.270
undergoes a further development into capitalist production,

1:12:35.270,1:12:39.839
the property laws of commodity production must undergo a dialectical inversion

1:12:39.839,1:12:46.839
so that they become laws of capitalist appropriation.”

1:12:53.149,1:12:56.549
Section 2, “The Political Economists' Erroneous Conception

1:12:56.549,1:13:01.499
of Reproduction on an Increasing Scale”

1:13:01.499,1:13:05.649
There are many stories that are told about why the system expands.

1:13:05.649,1:13:06.409
One of them is:

1:13:06.409,1:13:09.609
the capitalists spend their revenue

1:13:09.609,1:13:13.109
on consumption, and they employ retainers and all that kind of thing,

1:13:13.109,1:13:14.869
and this is where the expansion coming from. Marx

1:13:14.869,1:13:17.869
will have none of that, it has nothing to do with

1:13:17.869,1:13:19.870
expansion of the system.

1:13:19.870,1:13:21.219
The second is

1:13:21.219,1:13:23.420
the idea that somehow or other

1:13:23.420,1:13:25.409
capitalists are going to save

1:13:25.409,1:13:28.500
and hoarding has something to do with it, they're gonna take

1:13:28.500,1:13:32.130
that surplus-value and save it and hoard it.

1:13:32.130,1:13:36.429
Again, Marx says that's a popular idea but it's nonsense,

1:13:36.429,1:13:44.739
and most political-economists recognized it as nonsense.

1:13:44.739,1:13:50.299
On p.736: “The classical economists are therefore quite right to maintain

1:13:50.299,1:13:54.369
that the consumption of the surplus product by productive, instead of unproductive,

1:13:54.369,1:13:57.770
workers is a characteristic feature of the process of accumulation.”

1:13:57.770,1:13:59.909
That is, you've gotta reinvest

1:13:59.909,1:14:05.300
in this labor process which is generating the surplus.

1:14:05.300,1:14:08.300
But you've not only gotta reinvest in that, and this is where he says

1:14:08.300,1:14:14.850
not only does this mean advancing more wages, more variable capital,

1:14:14.850,1:14:16.869
but you also want to have…

1:14:16.869,1:14:20.499
you're gonna have to buy more means of production.

1:14:20.499,1:14:25.239
so he says what this means is

1:14:25.239,1:14:29.790
you have to put more money in purchasing labour-power and more money

1:14:29.790,1:14:34.079
into purchasing extra means of production.

1:14:34.079,1:14:41.079
You put those two together and that is where accumulation comes from.

1:14:41.179,1:14:46.119
This imposes all kinds of complicated relations.

1:14:46.119,1:14:50.149
I've already suggested that one of the issues is

1:14:50.149,1:14:54.839
if for example I rely upon extra energy resources,

1:14:54.839,1:14:58.510
somebody somewhere must have already produced the extra energy resources in order for them

1:14:58.510,1:15:04.780
to be available in the market for me
to expand smoothly, freely.

1:15:04.780,1:15:07.079
Somebody must have produced
the extra machinery

1:15:07.079,1:15:09.170
or a new machinery, somebody must have…

1:15:09.170,1:15:14.670
This is a very complicated time problem here,

1:15:14.670,1:15:18.010
how does this dynamic actually work?

1:15:18.010,1:15:24.449
Well, says Marx, it's a complicated issue and I will look at that in Volume 2 which he does,

1:15:24.449,1:15:26.719
and you have to get used to the idea

1:15:26.719,1:15:32.190
that he's gonna look at it in Volume 2 and he's gonna have some a pretty good ideas about it.

1:15:34.530,1:15:36.830
He mentions here that one of those good ideas he has taken

1:15:36.830,1:15:40.880
from the fysiocrats: the Tableau économique.

1:15:40.880,1:15:47.290
In which they actually set up what we now would call something like an input-output system.

1:15:47.290,1:15:52.469
So that there was an equilibrium of flows
of people making means of production in relationship

1:15:52.469,1:15:54.620
to wage goods in relationship to…

1:15:54.620,1:16:02.340
Marx takes that over and develops these ideas at length in volume 2.

1:16:02.340,1:16:04.409
But he's going to push ahead and

1:16:04.409,1:16:06.889
ask the question:

1:16:06.889,1:16:09.019
Where does this

1:16:09.019,1:16:14.880
division of surplus-value into capital
and revenue come from?

1:16:14.880,1:16:17.489
He says on p.738

1:16:17.489,1:16:22.340
“One part of the surplus-value is consumed by the capitalist as revenue,”

1:16:22.340,1:16:23.689
-just consume it away-

1:16:23.689,1:16:30.209
“the other part is employed as capital,
i.e. it is accumulated.”

1:16:30.209,1:16:33.209
So why does this occur? “it is the owner of the surplus-value, the capitalist,

1:16:33.209,1:16:34.409
who makes this division.

1:16:34.409,1:16:41.309
It is an act of his will.”

1:16:41.309,1:16:46.209
The interesting question is why does a capitalist as an active agent

1:16:46.209,1:16:52.729
decide to do this? Why don't they just consume it all away and have a good time?

1:16:52.729,1:16:59.729
His answer comes on p.739, a very important passage: “Except as capital personified,

1:17:00.209,1:17:04.409
the capitalist has no historical value, and no right to that historical existence

1:17:04.409,1:17:08.569
which, to use Lichnowsky's amusing expression, 'ain't got no date'

1:17:08.569,1:17:12.869
It is only to this extent that the necessity of the capitalist's own transitory existence

1:17:12.869,1:17:17.389
is implied in the transitory necessity of the capitalist mode of production.

1:17:17.389,1:17:20.599
But, in so far as he is capital personified,

1:17:20.599,1:17:24.760
his motivating force is not the acquisition and enjoyment of use-values,

1:17:24.760,1:17:31.639
but the acquisition and augmentation of exchange- values.

1:17:31.639,1:17:36.599
He is fanatically intent on
the valorization of value;

1:17:36.599,1:17:41.260
consequently he ruthlessly forces the human race to produce for production's sake.

1:17:41.260,1:17:45.440
In this way he spurs on the development of society's productive forces,

1:17:45.440,1:17:50.360
and the creation of those material conditions of production which alone can form the real basis

1:17:50.360,1:17:52.570
of a higher form of society,

1:17:52.570,1:17:56.579
a society in which the full and free development of every individual forms the ruling principle.”

1:17:56.579,1:18:01.699
-again notice the positive potentiality in all of this-

1:18:01.699,1:18:05.350
“Only as a personification of capital is the capitalist respectable.

1:18:05.350,1:18:09.760
As such, he shares with the miser an absolute drive towards self-enrichment.”

1:18:09.760,1:18:14.380
-go back to the passage about what separates the miser from the capitalist-

1:18:14.380,1:18:18.219
“But what appears in the miser as the mania of an individual is in the capitalist the effect of

1:18:18.219,1:18:22.610
a social mechanism in which he is merely a cog.

1:18:22.610,1:18:26.219
Moreover, the development of capitalist production makes it necessary

1:18:26.219,1:18:30.989
constantly to increase the amount of capital laid out in a given industrial undertaking,

1:18:30.989,1:18:33.059
and competition

1:18:33.059,1:18:37.089
subordinates every individual capitalist to the immanent laws of capitalist production,

1:18:37.089,1:18:40.159
as external and coercive laws.

1:18:40.159,1:18:44.489
It compels him to keep extending his capital, so as to preserve it, and he can only extend it

1:18:44.489,1:18:49.550
by means of progressive accumulation.”

1:18:49.550,1:18:52.010
A number of issues here,

1:18:52.010,1:18:56.799
we've seen that money is a form of
social power which is appropriatable

1:18:56.799,1:19:01.760
by private persons.

1:19:01.760,1:19:03.340
So there's an incentive

1:19:03.340,1:19:08.650
for those in search of social power to expand this system and gain more and more of it,

1:19:08.650,1:19:13.329
as there is the incentive of the miser for self-enrichment.

1:19:13.329,1:19:15.969
There are lots of reasons why

1:19:15.969,1:19:19.269
people want to accumulate that social power,

1:19:19.269,1:19:22.389
but the point is that anybody who is a capitalist

1:19:22.389,1:19:26.739
is also impelled by the coercive laws of competition by other capitalists

1:19:26.739,1:19:27.739
to reinvest a part of their surplus

1:19:27.739,1:19:30.739
whether they like it or not.

1:19:30.739,1:19:32.719
They don't have a choice.

1:19:32.719,1:19:35.609
If I don't reinvest, you will,

1:19:35.609,1:19:38.550
and if you reinvest and I have not,

1:19:38.550,1:19:39.610
eventually

1:19:39.610,1:19:42.039
I’ll no longer be a capitalist,

1:19:42.039,1:19:45.360
you're gonna drive me out of business,
particularly if you reinvest

1:19:45.360,1:19:50.760
in new machinery, new activities.

1:19:50.760,1:19:54.869
So what Marx is saying here is that you have to see the capitalist as actually being

1:19:54.869,1:20:01.269
embedded within the social relations of a capitalist system and

1:20:01.269,1:20:05.560
no matter whether they're good people or bad people or greedy people

1:20:05.560,1:20:09.940
or nice people or power-hungry people

1:20:09.940,1:20:11.769
or decent people,

1:20:11.769,1:20:15.889
that all of them at some point or other are faced with this choice:

1:20:15.889,1:20:19.829
reinvest part of your surplus and stay in business

1:20:19.829,1:20:21.189
or consume it away

1:20:21.189,1:20:24.260
and cease to be a capitalist.

1:20:24.260,1:20:27.269
Simple as that.

1:20:27.269,1:20:32.110
So Marx is saying that this is the

1:20:32.110,1:20:37.280
centerpiece of what a capitalist system is about. But the capitalists

1:20:37.280,1:20:40.040
faced with that reality

1:20:40.040,1:20:45.539
try to make a virtue out of what is actually a social necessity.

1:20:45.539,1:20:49.619
So on p.740 we find him introducing

1:20:49.619,1:20:53.840
the capitalist argument about abstinence,

1:20:53.840,1:20:58.949
they're abstaining from consumption.

1:20:58.949,1:21:03.869
They're trying to do good for society by abstaining from consumption, they're refraining from

1:21:03.869,1:21:06.880
consumption. And 'oh what good people they are',

1:21:06.880,1:21:10.340
the fact that they have no choice
in the matter is hidden

1:21:10.340,1:21:13.819
behind the idea that they're
engaging in abstinence

1:21:13.819,1:21:18.810
in order to reinvest and to build

1:21:18.810,1:21:24.369
a different kind of society. Well Marx

1:21:24.369,1:21:30.139
mocks that process and treats it
as a Faustian dilemma,

1:21:30.139,1:21:32.479
as he puts it on p.741,

1:21:32.479,1:21:36.679
“'Two souls, alas, do dwell within his breast; The one is ever parting from the other.' ”

1:21:36.679,1:21:39.580
The one for enjoyment and the necessity of

1:21:39.580,1:21:43.210
reinvestment for accumulation.

1:21:43.210,1:21:48.409
And then he talks about Dr. Aikin

1:21:48.409,1:21:53.519
and his different stages, where he says in the initial stages

1:21:53.519,1:21:57.730
capitalists could not afford too much

1:21:57.730,1:22:00.510
consumption of revenue,

1:22:00.510,1:22:03.210
because the system was small, it was developing, all this kind of stuff

1:22:03.210,1:22:04.819
and then as time went on

1:22:04.819,1:22:07.819
they got more and more surplus, they could consume more and more of it,

1:22:07.819,1:22:09.469
then you get to the fourth stage

1:22:09.469,1:22:14.500
where they can start to be conspicuous consumers.

1:22:14.500,1:22:18.520
It would be very hard in today's world to argue that somehow or other the capitalists

1:22:18.520,1:22:22.090
are engaging in abstinence,

1:22:22.090,1:22:26.769
but back then it was the tendency to do this,
so the point that

1:22:26.769,1:22:31.440
Marx is making is: forget that abstinence argument, the only reason if you see something

1:22:31.440,1:22:33.470
like abstinence it's only because

1:22:33.470,1:22:41.769
capitalists don't have any option
except to do that.

1:22:41.769,1:22:46.549
Vulgar economics supported
this notion of abstinence.

1:22:46.549,1:22:52.150
So he goes on to sort of mock that, saying we can't really take this seriously

1:22:52.150,1:22:56.150
and ends this section on p.748 saying:

1:22:56.150,1:22:59.329
“Here, production and reproduction
on an increasing scale go on

1:22:59.329,1:23:03.449
their way without any intervention from that peculiar saint, that knight of

1:23:03.449,1:23:08.059
the woeful countenance, the 'abstaining' capitalist.”

1:23:08.059,1:23:09.669
So you don't need the figure of
the abstaining capitalist

1:23:09.669,1:23:18.749
to to look at this system.

1:23:18.789,1:23:22.559
What this implies is this:

1:23:22.559,1:23:26.860
back on p.742 he's laid out, I think,

1:23:26.860,1:23:33.780
an extremely important idea:

1:23:33.780,1:23:38.399
capital and capitalism by definition is about accumulation.

1:23:38.399,1:23:43.590
It cannot be about anything else.

1:23:43.590,1:23:47.809
As he says on the middle of 742: “Accumulate, accumulate!

1:23:47.809,1:23:52.070
That is Moses and the prophets! industry furnishes the material which saving accumulates.'

1:23:52.070,1:23:56.690
“Therefore save, save,
i.e. reconvert the greatest possible

1:23:56.690,1:24:00.219
portion of surplus-value or surplus product into capital!

1:24:00.219,1:24:02.480
Accumulation for the sake of accumulation,

1:24:02.480,1:24:03.780
production for the sake of production:

1:24:03.780,1:24:06.770
this was the formula in which classical economics expressed

1:24:06.770,1:24:11.769
the historical mission of the bourgeoisie in the period of its domination.

1:24:11.769,1:24:16.010
Not for one instant did it deceive itself over the nature of wealth's birth-pangs.

1:24:16.010,1:24:19.459
But what use is it to lament a historical necessity?

1:24:19.459,1:24:22.750
If, in the eyes of classical economics, the proletarian is merely a machine

1:24:22.750,1:24:24.350
for the production of surplus-value,

1:24:24.350,1:24:26.950
the capitalist too is merely a machine

1:24:26.950,1:24:31.350
for the transformation of this surplus-value into surplus capital.”

1:24:35.219,1:24:38.779
In other words,

1:24:38.779,1:24:43.519
the theory that Marx is working here,
I've argued that this book is very

1:24:43.519,1:24:47.770
much about what is socially necessary,

1:24:47.770,1:24:51.900
and what is socially necessary for the survival of capitalism is

1:24:51.900,1:24:55.889
accumulation for accumulation's sake,

1:24:55.889,1:24:58.209
production for production's sake.

1:24:58.209,1:25:03.419
and Marx says even the bourgeois economists understood that,

1:25:03.419,1:25:07.340
bourgeois political economy understood that,

1:25:07.340,1:25:14.340
which means of course the system has to grow.

1:25:15.409,1:25:22.030
So what do we do? we start to think that growth is good,

1:25:22.030,1:25:27.159
we start to say non-growth is a crisis.

1:25:27.159,1:25:32.049
You go to the newspapers, you go to financial press or anything like that,

1:25:32.049,1:25:34.579
'oh my god what was the growth rate last year?'

1:25:34.579,1:25:41.579
oh the growth rate is going down, we've to get it up again.

1:25:42.619,1:25:45.469
Buy why do we have to grow?

1:25:45.469,1:25:48.619
Marx is saying here it's a structural necessity,

1:25:48.619,1:25:55.109
within the nature of a capitalist economic system,

1:25:55.109,1:25:56.719
accumulation for accumulation's sake,

1:25:56.719,1:25:58.090
production for production's sake.

1:25:58.090,1:26:06.089
No matter what the social, political and ecological consequences might be.

1:26:06.089,1:26:08.800
We are locked in.

1:26:08.800,1:26:13.619
And in exactly the same way that capitalists back then

1:26:13.619,1:26:16.540
used the abstinence theory to try to

1:26:16.540,1:26:21.199
transformer a social necessity into a virtue,

1:26:21.199,1:26:28.070
we've done the same thing by simply thinking that growth is good,

1:26:28.070,1:26:33.169
lack of growth is a failure.

1:26:33.169,1:26:36.399
If you can't grow,

1:26:36.399,1:26:43.389
it's no good.

1:26:43.389,1:26:47.559
Now there's a little quirk in here which is kind of interesting

1:26:47.559,1:26:57.819
Because Marx mentioned on p.743
the ideas of Malthus.

1:26:57.819,1:27:00.400
You see, Malthus had a very peculiar

1:27:00.400,1:27:02.630
way of understanding the world

1:27:02.630,1:27:07.940
and this theory of population… he explained the poverty of the masses

1:27:07.940,1:27:12.000
as being due to the fact that they reproduced too fast in relationship to the availability

1:27:12.000,1:27:16.229
of natural resources, food supply in particular.

1:27:16.229,1:27:18.989
So therefore poverty,

1:27:18.989,1:27:23.439
starvation…all the rest of it…was inevitable.

1:27:23.439,1:27:26.449
But in his political economy

1:27:26.449,1:27:30.089
he was studying the question of

1:27:30.089,1:27:34.199
where does the effective demand come from?

1:27:34.199,1:27:38.130
When you sell this at the end of the day for more money

1:27:38.130,1:27:41.780
who's got more money in their pocket?

1:27:41.780,1:27:45.899
This is another issue.

1:27:45.899,1:27:48.499
Capitalists collectively start out with this amount of money

1:27:48.499,1:27:49.529
and end up with more of it at the

1:27:49.529,1:27:54.389
end of day which means somebody out there has to have more of it in order

1:27:54.389,1:27:57.149
to buy what the capitalist has produced.

1:27:57.149,1:28:01.389
This too is a real serious problem about the market.

1:28:01.389,1:28:04.429
Malthus's solution was:

1:28:04.429,1:28:06.359
the capitalists can't consume it,

1:28:06.359,1:28:11.919
can't provide the market because they're reinvesting and saving,

1:28:11.919,1:28:14.849
workers can't because…

1:28:14.849,1:28:18.209
Malthus didn't say they're being exploited but obviously

1:28:18.209,1:28:19.480
the wages can't do it.

1:28:19.480,1:28:23.639
So there has to be a third class.

1:28:23.639,1:28:25.799
And the third class

1:28:25.799,1:28:33.310
are a bunch of consumers
who do nothing except consume

1:28:33.310,1:28:42.279
and it was landlords, it was priests, it was a whole bunch of consumer classes

1:28:42.279,1:28:43.489
which were doing

1:28:43.489,1:28:49.199
a favour to capitalism by consuming as much as they possibly could,

1:28:49.199,1:28:53.309
and if they didn't consume as much as they possibly could then the whole system

1:28:53.309,1:28:55.079
would come crashing down.

1:28:55.079,1:28:58.849
So Malthus was saying that's stabilizing the system.

1:28:58.849,1:29:02.079
So on one end of the scale you have the poor who are dying like flies

1:29:02.079,1:29:05.569
because they're reproducing too much in relation to natural resources,

1:29:05.569,1:29:07.569
and the other end of the scale you have consuming

1:29:07.569,1:29:12.130
classes, whose sole job to keep capitalism going

1:29:12.130,1:29:17.509
is to consume to the hilt.

1:29:17.509,1:29:23.260
Now this is, as Marx mentions, this is a slightly paradoxical kind of situation

1:29:23.260,1:29:26.690
and as he says at the bottom of the page, well actually when

1:29:26.690,1:29:31.780
we have things like the July Revolution and
you have Robert Owen and the socialists

1:29:31.780,1:29:36.719
and Owenism and the Fourierists etc. and the socialists beginning

1:29:36.719,1:29:39.179
to get a hold of all of this,

1:29:39.179,1:29:43.679
people dropped the Malthus kind of argument,

1:29:43.679,1:29:46.760
but one of the ways in which they dropped Malthus' argument

1:29:46.760,1:29:50.559
was to do away with the whole effective demand problem, and as

1:29:50.559,1:29:53.510
I've mentioned when we were discussing Say's law,

1:29:53.510,1:29:58.309
remember the distinction between the general glut theorists,

1:29:58.309,1:30:02.759
people like Malthus who said there could be a crisis of

1:30:02.759,1:30:06.380
overproduction, general crisis of overproduction, and others

1:30:06.380,1:30:11.809
who held to Say's law, like Ricardo says there can be no such thing because

1:30:11.809,1:30:13.789
every purchase is a sale,

1:30:13.789,1:30:18.549
and therefore there's equilibrium
in the system always.

1:30:18.549,1:30:23.259
So they got away from the political consequences of Malthus’s very uncomfortable

1:30:23.259,1:30:25.289
argument,

1:30:25.289,1:30:29.139
by abandoning the question

1:30:29.139,1:30:32.460
'could there be a crisis in the system due to

1:30:32.460,1:30:35.209
lack of effective demand?'

1:30:35.209,1:30:40.639
Which of course is where
Keynes came in

1:30:40.639,1:30:44.289
and said 'yes you could' in the 1930s.

1:30:44.289,1:30:50.969
And we get a completely different set up.

1:30:50.969,1:30:52.699
Section four

1:30:52.699,1:30:59.429
starts p.747.

1:30:59.429,1:31:01.599
notice what Marx is doing here,

1:31:01.599,1:31:04.429
he suggested this isn't the only way
which you can

1:31:04.429,1:31:07.840
get surplus-value,

1:31:07.840,1:31:12.480
there's a whole bunch of different strategies the capitalists could use.

1:31:12.480,1:31:18.249
Notice the flexibility he's talking about.

1:31:18.249,1:31:23.059
First possibility for getting extra surplus-value:

1:31:23.059,1:31:27.099
reduce wages below value.

1:31:27.099,1:31:31.129
More surplus-value,

1:31:31.129,1:31:37.849
there is a however one problem with that if you take that to far as he says on p.748:

1:31:37.849,1:31:41.010
“ 'If labour could be had without purchase, wages might be dispensed with.'

1:31:41.010,1:31:47.189
But if the workers could live on air, it would not be possible to buy them at any price.

1:31:47.189,1:31:51.280
This zero cost of labour is therefore a limit in a mathematical sense, always beyond reach,

1:31:51.280,1:31:54.739
although we can always approximate more and more nearly to it.

1:31:54.739,1:32:01.179
The constant tendency of capital is to force the cost of labour back towards this absolute zero.”

1:32:01.179,1:32:05.369
Are there reasons why that -again remember the contingency argument here-

1:32:05.369,1:32:10.369
if you've got an effective demand problem it may not be wise to do that?

1:32:10.369,1:32:12.099
But if that's not a problem

1:32:12.099,1:32:16.070
then that's a direction you would move in.

1:32:16.070,1:32:23.070
The other way is that you would actually get the workers themselves to economize,

1:32:23.099,1:32:28.789
he talks about cookery books with recipes of all kind for

1:32:28.789,1:32:32.329
replacing expensive food with various surrogates.

1:32:32.329,1:32:36.150
This is no joke actually, this is what

1:32:36.150,1:32:41.820
Ford did when he set up 5 dollar – 8-hour day,

1:32:44.270,1:32:50.689
hired a bunch of social workers to go in and instruct the workers on exactly how to consume

1:32:50.689,1:32:54.150
and actually a lot of bourgeois philanthropy

1:32:54.150,1:32:59.509
back in the 19th century was precisely
about doing exactly this,

1:32:59.509,1:33:03.790
which is learning to

1:33:03.790,1:33:10.790
-and we still find it going on today- learn to do better with the money you've got.

1:33:12.519,1:33:14.499
There are other ways in which you can go about things

1:33:14.499,1:33:19.880
On p.751 he talks about saving on constant capital,

1:33:19.880,1:33:26.250
more efficient uses of constant capital or different forms of constant capital.

1:33:26.250,1:33:31.989
p.751 at the bottom, you can get something out of nature free of charge,

1:33:31.989,1:33:34.820
so if you can substitute something which is

1:33:34.820,1:33:41.190
natural and therefore not a commodity, you get something.

1:33:41.190,1:33:45.650
And he says on p.752: “It is once again the direct action of man on nature

1:33:45.650,1:33:48.000
which becomes an immediate source of greater accumulation,

1:33:48.000,1:33:54.709
without the intervention of any new capital.”

1:33:54.709,1:33:59.039
and he concludes this: “We arrive, therefore, at this general result:

1:33:59.039,1:34:04.050
by incorporating with itself the two primary creators of wealth, labour-power and land,

1:34:04.050,1:34:06.550
capital acquires a power of expansion

1:34:06.550,1:34:10.409
that permits it to augment the elements of its accumulation

1:34:10.409,1:34:12.219
beyond the limits apparently fixed by its own magnitude,

1:34:12.219,1:34:16.360
or by the value and the mass of the means of production which have already been produced,

1:34:16.360,1:34:19.699
and in which it has its being.”

1:34:19.699,1:34:24.889
Then he gets into transformations in
productivity, which are again

1:34:24.889,1:34:29.520
very important, scale and so on.

1:34:29.520,1:34:32.639
He also gets into the way in which

1:34:32.639,1:34:42.249
old machines which have amortized could be used in this process.

1:34:42.249,1:34:49.249
At p.754 he talks about science and technology and improved methods,

1:34:49.849,1:34:54.469
“Every time improved methods are introduced, therefore, this has an almost simultaneous

1:34:54.469,1:34:58.139
impact on the new capital and the capital already engaged in its function.

1:34:58.139,1:35:02.089
Every advance in chemistry not only multiplies the number of useful materials, and the useful

1:35:02.089,1:35:04.739
applications of those already known,

1:35:04.739,1:35:08.949
thus extending capital's sphere of investment along with its growth; it also teaches capital

1:35:08.949,1:35:10.639
how to throw back the waste…”

1:35:10.639,1:35:12.319
-this is recycling -

1:35:12.319,1:35:14.119
“…from the processes of production and consumption

1:35:14.119,1:35:16.300
into the cycle of the process of reproduction,

1:35:16.300,1:35:22.280
and thus, without any previous outlay of capital, it creates fresh materials for it. ”

1:35:22.280,1:35:26.199
“science and technology give capital a power of expansion which is independent

1:35:26.199,1:35:29.860
of the given magnitude of the capital actually functioning.”

1:35:29.860,1:35:32.270
Notice how those elements that we were talking about,

1:35:32.270,1:35:34.859
those moments were talking about,

1:35:34.859,1:35:39.409
in the chapter on machinery, when we were talking about technology and nature,

1:35:39.409,1:35:43.659
mental conceptions, social relations, all those things are actually being employed here.

1:35:45.380,1:35:49.610
By going around all those elements you can find ways in which you can improve on this,

1:35:49.610,1:35:51.829
improve on that, and actually get

1:35:51.829,1:35:58.239
extra surplus-value out of it.

1:35:58.239,1:35:59.210
And then

1:35:59.210,1:36:03.899
p.756 and 757 in particular,

1:36:03.899,1:36:14.769
he starts to talk about past labour which gets disguised as capital.

1:36:14.769,1:36:17.380
These elements he says are “partly consumed,

1:36:17.380,1:36:20.890
to that degree do they perform, as we saw earlier, the same free service

1:36:20.890,1:36:25.639
as the forces of nature, such as water, steam, air and electricity.”

1:36:25.639,1:36:30.150
There's often a problem of capitalist production,

1:36:30.150,1:36:35.390
of dual products, joint-products.

1:36:35.390,1:36:40.630
You have cattle, and therefore you have hides and you have meat

1:36:40.630,1:36:43.110
and you have milk.

1:36:43.110,1:36:45.860
Joint-products.

1:36:45.860,1:36:49.169
Maybe you're going after them because of their meat,

1:36:49.169,1:36:53.840
and you find that there are all these hides lying around, and they're essentially a free good.

1:36:53.840,1:36:56.809
Because you're really producing the cattle for the meat so the hides are there,

1:36:56.809,1:37:03.809
so the leather goods can take off with the hides, so again it's a free good.

1:37:04.449,1:37:09.580
So Marx is here talking about all the ways in which capitalists can utilize all of these

1:37:09.580,1:37:16.199
ways to augment the accumulation process.

1:37:16.199,1:37:20.899
And so in section five on p.758,

1:37:20.899,1:37:24.839
he comes to something which again I think you really do have to emphasize

1:37:24.839,1:37:27.389
in his treatment of capital

1:37:27.389,1:37:30.769
he says: “It has been shown in the course of this inquiry”

1:37:30.769,1:37:34.829
and I invite you to go back and think about where he has shown it-

1:37:34.829,1:37:38.760
“that capital is not a fixed magnitude,

1:37:38.760,1:37:42.269
but a part of social wealth which is elastic,

1:37:42.269,1:37:47.309
and constantly fluctuates with the division of surplus-value into revenue and additional capital.

1:37:47.309,1:37:50.780
It has been seen further that, even with a given magnitude of functioning capital,

1:37:50.780,1:37:53.429
the labour-power, science and land

1:37:53.429,1:37:56.029
(which means, economically speaking, all the objects of labour

1:37:56.029,1:37:58.829
furnished by nature without human intervention)

1:37:58.829,1:38:02.650
incorporated in it form elastic powers of capital,

1:38:02.650,1:38:08.579
allowing it, within certain limits, a field of action independent of its own magnitude.

1:38:08.579,1:38:13.460
In this inquiry we have ignored all relations arising from the process of circulation,”

1:38:13.460,1:38:16.189
-remember the assumption-

1:38:16.189,1:38:23.189
“…which may produce very different degrees of efficiency in the same mass of capital.”

1:38:24.259,1:38:28.059
Then he goes on to say: “Classical political economy has always liked to conceive

1:38:28.059,1:38:34.420
social capital as a fixed magnitude
of a fixed degree of efficiency.

1:38:34.420,1:38:37.210
But this prejudice was first established as a dogma by the arch-philistine,

1:38:37.210,1:38:39.010
Jeremy Bentham, that soberly pedantic and

1:38:39.010,1:38:43.210
heavy-footed oracle of the 'common sense' of the nineteenth-century bourgeoisie.”

1:38:43.210,1:38:46.479
well okay!

1:38:46.479,1:38:50.429
but I always find it so fascinating

1:38:50.429,1:38:55.189
the people who are around who conceived the world in a very fixed form

1:38:55.189,1:38:58.770
are often let off the hook and Marx has always been accused of fixing things,

1:38:58.770,1:39:02.239
when actually he's giving you one of the most fluid possible ways

1:39:02.239,1:39:05.510
of thinking about how this damn system works.

1:39:05.510,1:39:08.090
And you better watch out for how this works, if you wanna understand how it works

1:39:08.090,1:39:12.320
and you think 'well you could put the bung in here and stop it dead',

1:39:12.320,1:39:15.130
well, it'll go off over there!

1:39:15.130,1:39:19.960
Tremendous flexibility in the system and Marx is very concerned I think

1:39:19.960,1:39:26.579
to try to really both emphasize its fluidity and its flexibility

1:39:26.579,1:39:31.389
and to identify all of those forms of flexibility and so on. So that

1:39:31.389,1:39:34.529
we get a better understanding
of how this system works.

1:39:34.529,1:39:38.960
This system would have come to a stop years ago if it had been as so

1:39:38.960,1:39:44.570
fixed as many of the classical political economists supposed it to be.

1:39:44.570,1:39:53.500
And it is its very dynamism in all senses which becomes critical.

1:39:53.500,1:39:57.179
So he ends on that note, the accumulation of capital is

1:39:57.179,1:40:04.179
a highly flexible process,

1:40:04.880,1:40:07.070
but of course it's always still

1:40:07.070,1:40:12.029
got its possible blockages.

1:40:12.029,1:40:16.980
And interestingly, right at the end of this on p.761 he says:

1:40:16.980,1:40:20.849
“The greater part of the yearly accruing surplus product, which is embezzled from

1:40:20.849,1:40:23.499
the English workers without any equivalent being given in return,

1:40:23.499,1:40:27.989
is thus used as capital, not in England, but in foreign countries.

1:40:27.989,1:40:31.530
But with the additional capital thus exported, a part of the 'labour fund' invented by God

1:40:31.530,1:40:38.530
and Bentham naturally also flows out of the country.”

1:40:38.769,1:40:42.649
We have excluded by assumption

1:40:42.649,1:40:46.019
foreign trade, but it's interesting that he brings it back in here,

1:40:46.019,1:40:53.560
it's one of the other ways in which the system is able to adjust and be flexible.

1:40:53.560,1:40:56.269
He's not gonna deal with it very much here,

1:40:56.269,1:41:01.369
only later in the book will he come back to this.

1:41:01.369,1:41:06.789
but again those assumptions work.

1:41:06.789,1:41:09.649
So the accumulation of capital then

1:41:09.649,1:41:13.570
works in this way.

1:41:13.570,1:41:16.789
And when we start to look at it, we see a certain dynamism

1:41:16.789,1:41:22.690
and then we can see all kinds of contingent things around which allow this system,

1:41:22.690,1:41:24.949
new means of production,

1:41:24.949,1:41:30.010
maybe they're free goods from nature,
maybe they're

1:41:30.010,1:41:31.020
hides which are not being used

1:41:31.020,1:41:32.669
maybe they're

1:41:32.669,1:41:36.639
old machines that have been amortized and therefore are free goods,

1:41:36.639,1:41:40.749
maybe they're urban infrastructures that have been amortized and are free goods.

1:41:40.749,1:41:41.989
All those sorts of things.

1:41:41.989,1:41:44.929
Science and technology allows you to recycle.

1:41:44.929,1:41:48.879
So some of the waste that you get in production can go into being means of production

1:41:48.879,1:41:50.819
in the next cycle.

1:41:50.819,1:41:55.499
So you got all kinds of cycles which are possible here,

1:41:55.499,1:41:56.829
like i've been emphasizing

1:41:56.829,1:42:02.619
you have to see the flexibility and fluidity very much in the system.

1:42:02.619,1:42:05.060
We're out of time here.

1:42:05.060,1:42:06.100
Next week I wanna do

1:42:06.100,1:42:10.530
the general law of capitalist accumulation -

1:42:10.530,1:42:15.079
chapter twenty five,

1:42:15.079,1:42:22.539
and we're going to spend a lot of time on the first four sections,

1:42:22.539,1:42:26.039
section 5 is a very very long empirical thing like the working-day

1:42:26.039,1:42:29.859
and some of the stuff on the factory acts and machinery and so on.

1:42:29.859,1:42:31.250
Very rich and if you're interested

1:42:31.250,1:42:33.130
in how Marx is viewing the Irish and

1:42:33.130,1:42:38.900
their role in all of this, this is useful and important and you see how

1:42:38.900,1:42:41.689
the reserve army is created and so on.

1:42:41.689,1:42:43.760
But the heart of the argument

1:42:43.760,1:42:45.979
is in the first four sections,

1:42:45.979,1:42:50.919
which is a rather dense theoretical argument in which Marx brings together

1:42:50.919,1:42:54.710
many of the elements he's just put in place in these two chapters,

1:42:54.710,1:42:58.669
as well as many elements which were there earlier.

1:42:58.669,1:43:02.519
And you'll see him putting it together in a dynamic model

1:43:02.519,1:43:07.119
of the accumulation of capital, under the assumptions

1:43:07.119,1:43:11.940
which he's laid out in the beginning of this part 7.

1:43:11.940,1:43:14.590
Always remember that.

1:43:14.590,1:43:21.499
It's a very important thing that you
really grapple very hard with,

1:43:21.499,1:43:24.150
these first four sections of chapter 25.

1:43:24.150,1:43:26.309
And see if you can get them straight

1:43:26.309,1:43:30.760
on your own 'cause it's a very powerful and

1:43:30.760,1:43:32.289
important culmination to

1:43:32.289,1:43:35.629
the theoretical argument in Volume One of Capital.

1:43:35.629,1:43:37.580
Okay so we'll do that next time.

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