Capital is dynamic. “Money never sleeps”. For capital to act as capital, it must continuously be in motion – continually seeking to create value from value. It is this overall dynamic of capital towards which Marx now turns his attention.

The capitalist system is built upon the basis of private ownership and production for profit. In the preceding chapters, Marx outlines the source of profit within the capitalist system: the unpaid labour of the working class.  It is not enough, however, for the capitalists simply to produce profit; they must at the same reproduce the conditions that give rise to this profit.

“Whatever the social form of the production process, it has to be continuous; it must periodically repeat the same phases. A society can no more cease to produce than it can cease to consume. When viewed, therefore, as a connected whole, and in the constant flux of its incessant renewal, every social process of production is at the same time a process of reproduction.” (Karl Marx, Capital, Volume One, Penguin Classics edition, p711)

Wage labour and capital

What, though, are the conditions that lead to profit that must be maintained? At root, as Marx notes, it is capital itself that must be maintained – that is, the capital-labour relation itself:

“The capitalist process of production, therefore, seen as a total connected process, i.e. a process of reproduction, produces not only commodities, not only surplus-value, but it also produces and reproduces the capital-relation itself; on the one hand the capitalist, on the other the wage-labourer.” (p724)

Capitalism, then, must maintain the capitalist as a capitalist and the worker as a worker. In a dialectical manner, once started, the capital-labour relation develops a logic of its own. What starts off as a mere historical accident becomes a self-reinforcing tendency. By alienating the worker from the product of his/her labour, the capital-labour relation at the same time creates and strengthens the dominance of the capitalist over the worker. The wealth that the worker produces, but which is appropriated as capital by the capitalist, becomes the instrument of the worker’s own oppression. The moment at which the worker begins to sell his/her labour-power to the capitalist is, at the same time, the moment when the worker begins to become ever more dependent on the capitalist.

“…what at first was merely a starting-point becomes, by means of nothing but the continuity of the process, by simple reproduction, the characteristic result of capitalist production, a result which is constantly renewed and perpetuated. On the one hand, the production process incessantly converts material wealth into capital, into the capitalist’s means of enjoyment and his means of valorisation. On the other hand, the worker always leaves the process in the same state as he entered it – a personal source of wealth, but deprived of any means of making that wealth a reality for himself.

“…Therefore the worker himself constantly produces objective wealth, in the form of capital, an alien power that dominates and exploits him; and the capitalist just as constantly produces labour-power…in short, the capitalist produces the workers as a wage-labourer. This incessant reproduction, this perpetuation of the worker, is the absolutely necessary condition for capitalist production.” (p716)

“That process, however, takes good care to prevent the workers, those instruments of production who are possess of consciousness, from running away, by constantly removing their product from one pole to the other, to the opposite pole of capital…The Roman slave was held by chains; the wage-labourer is bound to his owner by invisible threads.” (p719)

We see, therefore, that all the talk by the liberal apologists of capitalism about the “freedom of the individual” is a mere illusion. For all the “choice” and “liberty” that capitalism supposedly offers, in the final analysis a worker must sell their labour-power to the capitalist and work for a wage. Meanwhile, any democratic credentials that capitalism lays claim to are cast aside at the entrance to the workplace, inside which the boss’ word is final. Any veneer of freedom, as Marx notes, “is maintained by a constant change in the person of the individual employer, and by the legal fiction of a contract.” (p719)

“Capitalist production therefore reproduces in the course of its own process the separation between the labour-power and the conditions of labour. It thereby reproduces and perpetuates the conditions under which the worker is exploited. It incessantly forces him to sell his labour-power in order to live, and enables the capitalist to purchase labour-power in order that he may enrich himself. It is no longer a mere accident that capitalist and worker confront each other in the market as buyer and seller. It is the alternating rhythm of the process itself which throws the worker back onto the market again and again as a seller of his labour-power and continually transforms his own product into a means by which another man can purchase him.” (p723)

Reproduction and accumulation

Capital is “self-valorising value”. But for capital to continue to generate new value and create surplus-value, this surplus-value must itself by reinvested back into production – that is, surplus-value must be reconverted into capital. In other words, the capitalist must reinvest the profits of production back into new means of production. As Marx explains, this “employment of surplus-value as capital, or its reconversion into capital, is called accumulation of capital.” (p725)

It is only in this way that new values can be generated. As explained previously, and as re-emphasised by Marx here, through the act of exchange alone, no new value be created. Exchange does not create value, but merely realises it. “All the transactions in the market can accomplish is the interchange of the individual components of this annual product, their transfer from one hand to another. They cannot increase the total annual production, nor can they alter the nature of the objects produced.” (p726)

By converting surplus-value into new capital – that is, by reinvesting profits into new means of production – capitalism moves from a case of merely reproducing itself, to expanding and growing. Investment for the sake of profit, then, is the motor force behind growth under capitalism.

Such a fact is often glossed over by the reformist bourgeois politicians who talk about “growth” as though it were a tap that could be turned on-and-off at will. In reality, growth within the confines of private ownership will always be limited by the needs of capital: to make and realise a profit. Where profits cannot be made, investment will stop; and when investment stops, growth ceases. At such points, the driving force of profit turns into its opposite and becomes an enormous barrier to development; the economy, and society with it, is plunged into crisis, and millions suddenly find themselves surplus to the requirements of capital, thrown onto the scrapheap of unemployment.

As long as investment continues and the precariously balanced spinning plates of capitalism continue to revolve, however, a virtuous circle develops, with capital begetting yet more capital and accumulation paving the way to further accumulation. All that is required is the “original sin” of primitive accumulation – that is, the initial accidental differences that give some an economic advantage over others.

“The ownership of past unpaid labour is thenceforth the sole condition for the appropriation of living unpaid labour on a constantly increasing scale. The more the capitalist has accumulated, the more is he able to accumulate.” (p729)

The accumulation of wealth by the capitalists, therefore, is not the result of cheating, corruption, or force, but arises precisely due to the dynamics, laws, and logic of capitalism itself. As Marx comments, “the laws of appropriation or of private property…become changed into their direct opposite through their own internal and inexorable dialectic.” (p729) What begins as a fair exchange between the capitalist and the worker, “the exchange of equivalents” in which the capitalist buys the labour-power of the worker in return for a wage, now turns into a means by which the capitalist clearly appropriates a surplus – that is, obtains more than he/she has paid for.

“…property turns out to be the right, on the part of the capitalist, to appropriate the unpaid labour of others or its product, and the impossibility, on the part of the worker, of appropriating his own product. The separation of property from labour thus becomes the necessary consequence of a law that apparently originated in their identity.

“Therefore, however much the capitalist mode of appropriation may seem to fly in the face of the original laws of commodity production, it nevertheless arises, not from a violation of these laws, but, on the contrary, from their application.” (p730)

The capital-labour relation, then, is not in contradiction to the laws of property, but arises out of them – that is, from the laws of commodity production and exchange. But these same laws of production and exchange, as Marx explains, are themselves the result of the capital-labour relation, for these laws are only generalised at the point when commodity production and exchange is universal, which means that workers themselves must sell a commodity: their labour-power.

“As long as the laws of exchange are observed in every single act of exchange – taken in isolation – the mode of appropriation can be completely revolutionised without in any way affecting the property rights which correspond to commodity production…

“This result becomes inevitable from the moment there is a free sale, by the worker himself, or labour-power as a commodity. But it is also only from then onwards that commodity production is generalised and becomes the typical form of production; it is only from then onwards that every product is produced for sale from the outset and all wealth produced goes through the sphere of circulation. Only where wage-labour is its basis does commodity production impose itself upon society as a whole; but it is also true that only there does it unfold all its hidden potentialities…To the extent that commodity production, in accordance with its own immanent laws, undergoes a further development into capitalist production, the property laws of commodity production must undergo a dialectical inversion so that they become laws of capitalist appropriation.” (p733-734)

The question of accumulation under capitalism, therefore, is inextricably linked to the question of private ownership and commodity production. The concentration of wealth in the hands of a few is not a cancerous growth on the side of capitalism that can be painlessly cut away, as is suggested by the reformists, but is an organic part of the capitalist system itself. Inequality is merely the symptom; capitalism the real disease.

Productive and unproductive consumption

In addition to what Marx comments above, one might add that this process of production and reproduction is, at the same time, a process of consumption; for to maintain the system of profit, capitalism must, vitally, be able to maintain the working class itself, the goose that lays the golden egg. Such maintenance requires, in turn, the working class to consume.

Marx notes that the worker consumes in two senses:

“While producing he consumes the means of production with his labour, and converts them into products with a higher value than that of the capital advanced…On the other hand, the worker uses the money paid to him for his labour-power to buy the means of subsistence; this is his individual consumption.” (p717)

For the capitalist, this latter consumption – the individual consumption of the worker – appears as a necessary expenditure in the process of production, “just as coal and water are supplied to the steam-engine, and oil to the wheel.” On the one hand, therefore, the capitalist tries to reduce the outlay of this expenditure, in the same way as he/she would try to increase the efficiency of any machine by reducing the energy required for its running. On the other hand, this consumption is vital and cannot be avoided. “His means of consumption are then merely the means of consumption of a means of production; his individual consumption is directly productive consumption.” (p717)

In contrast to this productive consumption, both of the means of production and in terms of individual consumption of the workers, there is also unproductive consumption – the consumption of commodities that does not feed back into the productive process; the consumption of use-values that does not act to generate further value.

Within this category of “unproductive consumption” lies the consumption of “luxury goods” – the unnecessary and wasteful expenditure by the capitalist class in maintaining their own extravagant lifestyles. For capitalism as a whole, such luxuries are a drain on the system, diverting away wealth that could – and should – be used to generate further wealth.

“The commodities the capitalist buys with a part of the surplus-value for his own consumption do not serve as means of production or means of valorisation…Instead of transforming surplus-value into capital, he rather consumes or expends it as revenue when he purchases those commodities…” (p735)

The role of the capitalist, in this respect, is merely to act as “capital personified” – “his motivating force is not the acquisition and enjoyment of use-values, but the acquisition and augmentation of exchange-values…Only as a personification of capital is the capitalist respectable.” (p739)

“Accumulate, accumulate! That is Moses and the prophets!...Therefore save, save, i.e. reconvert the greatest possible portion of surplus-value or surplus product into capital! Accumulation for the sake of accumulation, production for the sake of production: this was the historical mission of the bourgeoisie in the period of its domination…If, in the eyes of classical economics, the proletarian is merely a machine for the production of surplus-value, the capitalist too is merely a machine for the transformation of this surplus-value into surplus capital.” (p742)

The capitalist, then, in order to play any progressive role, must “promulgate the doctrine that the accumulation of capital is the first duty of every citizen…to preach unceasingly that accumulation is impossible if a man eats up all his revenue, instead of spending a good part of it on the acquisition of additional productive workers, who bring in more than they cost.” (p735)

Abstinence rather than extravagance, then, is the name of the game for the individual capitalist, who is forced by the invisible hand of competition to constantly reinvest and accumulate rather than frivolously consume and waste.

“…competition subordinates every individual capitalist to the immanent laws of capitalist production, as external and coercive laws. It compels him to keep extending his capital, so as to preserve it, and he can only extend it by means of progressive accumulation.” (p739)

Those who do not invest and reinvest in order to keep up with the latest technologies and techniques, therefore, will be left in the dust. It is precisely this, the reinvestment and development of the means of production as a result of competition, that give capitalism – and the capitalist as “capital personified” – any right to exist.

“He is fanatically intent on the valorisation of value; consequently he ruthlessly forces the human race to product for production’s sake. In this way he spurs on the development of society’s productive forces, and the creation of those material conditions of production which alone can form the real basis of a higher form of society, a society in which the full and free development of every individual forms the ruling principle.” (p739)

Today, however, investment everywhere has dried up, with the capitalists instead hoarding cash as a result of the enormous excess capacity that exists on a world scale – a reflection of the contradiction of overproduction. Hoarding, as Marx comments, is not the aim of the capitalists, but precisely an indication that their system has ground to a halt.

“The exclusion of money from circulation would constitute precisely the opposite of its valorisation as capital, and the accumulation of commodities in the sense of hoarding them would be sheer foolishness. In fact the accumulation of commodities in great masses is the result either of a bottleneck in circulation or of overproduction.” (p735)

Despite a whole host of new technologies that have the potential to transform society, as the Economist notes in a recent special report (4th October 2014), “the digital revolution has yet to fulfil its promise of higher productivity and better jobs…the digital economy, far from pushing up wages across the board in response to higher productivity, is keeping them flat for the mass of workers while extravagantly rewarding the most talented ones.”

Capitalism, then, has ceased long ago to play any progressive role and has outlived its historical task – to develop the forces of production and take society forward. In short, the capitalist system no longer has any justification or excuse for its own existence and should be swept aside to where it belongs: the dustbin of history.

Investment, productivity, and wages

Whilst the capitalist, by force of competition, is driven to forgo extravagance in favour of reinvestment, nevertheless, the desire for personal enrichment remains. As Marx notes, “there develops in the breast of the capitalist a Faustian conflict between the passion for accumulation and the desire for enjoyment.” (p741) Indeed, the vulgar economists frequently confuse the situation by claiming that profits are merely the “reward” for the abstinence of the capitalists – recompense to the capitalists for not consuming the wealth for themselves.

This same reinvestment, however, with money ploughed back into new technologies and techniques, is at the same time the key to resolving this conflict within the heart of the capitalist. The role of such investment is to develop science; to refine the machinery and methods employed in industry; ultimately to increase the productivity of labour, such that “the value and mass of the means of production set in motion by a given quantity of labour increase…” (p754).

In this way, the stock of capital grows and accumulation increases, “accompanied by a higher rate of surplus-value, even when real wages are rising” (p753). In other words, with investment and increasing productivity, the size of the economic pie grows, and with it, the mass of profits increases also. As a result, the capitalist can continue to make their lifestyle ever more luxurious, whilst consuming only a small overall proportion of the wealth generated.

“That the more that capital increases by means of successive accumulations, the more does the sum of value increase that is divided into a fund for consumption and a fund for accumulation. The capitalist can therefore live a more pleasant life, and at the same time ‘renounce’ more.” (p757)

The same logic – of a growing pie meaning there is more to share for everyone – is frequently cited by the capitalists as the way to increase real wages. If productivity is increasing and the economy is growing, the argument of the apologists of capitalism goes, then wages can be increased without it “affecting investment” – i.e. threatening their profits.

But such an argument is flawed in two respects, both proven by the economic facts that the bourgeois mouthpieces themselves acknowledge. On the one hand, whilst real wages may increase in an absolute sense as a result of a general increase in the stock of society’s wealth, relative wages – that is, the share of the total wealth in society going to labour – nevertheless decrease. Such a tendency is being observed today where – due to globalisation and the intensification of world competition between workers, the role of automation and labour-saving machinery, and the political onslaught against workers’ organisations and trade union rights – the dominance of capital over labour has increased across the board. As the Economist comments in their recent special report (4th October 2014):

“Over the past 30 years or so…the share of income going to labour has fallen steadily the world over.

“Recent work…puts the global decline in labour’s share since the early 1980s at roughly five percentage points, to just over half of national income. This seems to hold good within sectors and across many countries, including fast-growing developing countries like China…”

On the other hand, the fact is that real wages have seen little rise, despite economic growth and productivity increases, and in many countries haven’t even increased at all, as the Economist explains:

“Between 1991 and 2012 the average annual increase in real wages in Britain was 1.5% and in America 1%...That was less than the rate of economic growth over the period and far less than earlier decades. Other countries fared even worse. Real wage growth in Germany from 1992 to 2012 was just 0.6%; Italy and Japan saw hardly any increase at all. And, critically, those averages conceal plenty of variation. Real pay for most workers remained flat or even fell, whereas for the highest earners it soared.”

“…despite a slowdown in productivity growth, pay has lagged badly behind productivity growth. From 2000 to 2011, according to America’s Bureau of Labour Statistics, real output per person rose by nearly 2.5% a year, whereas real pay increased by less than 1% per year.”

Despite the best arguments and claims of the bourgeois commentators and defenders of capitalism, therefore, their system is failing to deliver for the vast majority even on their own terms. Of course, at the same time, profits have never been higher; the dominance of capital over labour continues.

Inequality and accumulation

The very dynamic and motion of capital, therefore, is one of growth and expansion.

“As simple re-production constantly reproduces the capital-relation itself, i.e. the presence of capitalists on the one side, and wage-labourers on the other side, so reproduction on an expanded scale, i.e. accumulation, reproduces the capital-relation on an expanded scale, with more capitalists, or bigger capitalists, at one pole, and more wage-labourers at the other pole.” (p763)

If this motion of capital stops, the spinning plates crash and the situation goes into reverse, throwing society backwards with it. At the other end of the scale though, there are situations where capital runs ahead of itself – where the expansion of the productive forces and the growing demand for labour outstrip the available supply. At such times, market forces step in and act to push wages up.

“…under conditions especially liable to stimulate the drive for self-enrichment, such as the opening of new markets, or of new spheres for the outlay of capital resulting from newly developed social requirements, the scale of accumulation may suddenly be extended…for all these reasons the requirements of accumulating capital may exceed the growth in labour-power or in the number of workers; the demand for workers may outstrip the supply, and thus wages may rise.” (p763)

This dynamic, however, contains a countervailing tendency – a self-correcting feedback within itself. In the case that wages might rise as a result of a rapid expansion of capital, the effect will be a decline in the rate of profit; and with profits declining, the motivation behind the capitalist’s investments will be deflated also, leading to a slowdown in the pace of accumulation. In the words of Marx, “accumulation slackens…because the stimulus of gain is blunted”. (p770)

In the final analysis, as Marx emphasises, the wealth generated in society must go either to Labour or to Capital – to wages or to profits. Any increase in the share going to Labour means a decrease in the share going to Capital; hence why the capitalists are willing to endure strikes in order to resist wages increases.

The capitalist system, therefore, does not – and will not – simply self-destruct. Wages can only rise so far – and no further – simply through the power of market forces. Any rise in wages due to the supply of labour and capital’s demand for it will never be so extreme as to eliminate profits altogether:

“A rise in the price of labour, as a consequence of the accumulation of capital, only means in fact that the length and weight of the golden chain the wage-labourer has already forged for himself allow it to be loosened somewhat…

“…The production of surplus-value, or the making of profits, is the absolute law of this mode of production. Labour-power can be sold only to the extent that it preserves and maintains the means of production as capital, reproduces its own value as capital, and provides a source of additional capital in the shape of unpaid labour…

“…it is clear that at the best of times an increase in wages means only a quantitative reduction in the amount of unpaid labour the worker has to supply.” (p769)

Thus, today, we see the limitations of those who seek to improve living standards by calling for government to increase the minimum wage or introduce a mandatory living wage. Such calls, needless to say, are resisted tooth-and-nail by the capitalists, who correctly point out that rising wages will dent investment – i.e. their profits. Inequality, therefore, is inherent within capitalism. Reform of the wages system can only go so far; ultimately it must be abolished.

“The law of capitalist production which really lies at the basis of the supposed ‘natural law of population’ can be reduced simply to this: the relation between capital, accumulation and the rate of wages is nothing other than the relation between the unpaid labour which has been transformed into capital and the additional paid labour necessary to set in motion this additional capital…it is rather, at bottom, only the relation between the unpaid and the paid labour of the same working population…

“…The rise of wages is therefore confined within limits that not only leave intact the foundations of the capitalist system, but also secure its reproduction on an increasing scale…It cannot be otherwise in a mode of production in which the worker exists to satisfy the need of the existing values for valorisation, as opposed to the inverse situation, in which objective wealth is there to satisfy the worker’s own need for development. Just as man is governed, in religion, by the products of his own brain, so, in capitalist production, he is governed by the products of his own hand.” (p772)

Concentration, centralisation, and competition

Once begun, the process of accumulation is self-reinforcing. “Every accumulation becomes the means of new accumulation.” (p776)

“With accumulation of capital…the specifically capitalist mode of production develops, and, with the capitalist mode of production, the accumulation of capital.” (776)

Within this process of accumulation, however, there are also the dual dynamics of concentration, on the one hand, and competition on the other; concentration of wealth in the hands of Capital rather than Labour, and at the same time competition between different capitalists.

 “Accumulation…presents itself on the one hand as increasing concentration of the means of production, and of the command over labour; and on the other hand as repulsion of many individual capitals from one another.” (p777)

The historic role of capitalism lay in its ability to centralise the means of production into the hands of a few; to abolish the old feudal ways of scattered, petty production and create large-scale industries – economies of scale in which efficiency and productivity increases as a result of bringing different elements of production under a common direction.

“It is concentration of capitals already formed, destruction of their individual independence, expropriation of capitalist by capitalist, transformation of many small into few large capitals.” (p777)

This centralisation of the means of production, however, is at the same time the necessary result of competition. Competition forces the capitalists to achieve economies of scale, in order to increase productivity, drive down costs and provide a competitive strength. This includes mergers and acquisitions, through which big businesses subsume their competitors in a given industry, expand into a new sector, or takeover their suppliers below and distributors above in the chain of production; such processes are known respectively as horizontal and vertical integration in the language of bourgeois economics. Such centralisation, in turn, creates “new and powerful levers of social accumulation.” (p780)

“Capital grows to a huge mass in a single hand in one place, because it has been lost by many in another place. This is centralisation proper, as distinct from accumulation and concentration…

“…The battle of competition is fought by the cheapening of commodities. The cheapness of commodities depends, all other circumstances remaining the same, on the productivity of labour, and this depends in turn on the scale of production. Therefore the larger capitals beat the smaller.” (p777)

The free market of competition, by its very nature, therefore, turns into its opposite – that is, into the dominance of monopolies in every sector and across sectors. The antagonism between centralisation and competition, however, remains at the heart of the capitalism system, reflected in the contradiction between the immense levels of organisation and planning within a given business, and the irrational anarchy between different businesses, which produce without any co-ordination or general plan.

The task of socialist revolution is to resolve this contradiction: not by turning back the wheel of history and trying to artificially create smaller businesses and corporations – as is suggested, for example, by those politicians who advocate breaking up the banks; but by taking these major monopolies that capitalism has created, placing them under public ownership and workers’ control, and integrating them into a general, rational, socialist plan of production.

The reserve army of labour

Whilst there may be exceptional periods, as discussed above, when rapid growth allows for the needs of capital to exceed the available supply of labour, it is unemployment that is the real normality in capitalist society.

As accumulation increases, there is a tendency for the “organic composition” of capital to grow, as the accumulated labour of the past – crystallised in constant capital – increases in relative importance to the living labour of today. In other words, as production develops and profits are ploughed back as investment, we see an ever increasing amount of machinery and raw materials in comparison to the workers needed. Although the overall population – and thus the total number of workers – increases with the growth of production, the dominance of machines over man increases also.

The result, Marx notes, is that society consistently finds itself in a position where there are men and women who are surplus to the needs of capital – a surplus population:

“…it is capitalist accumulation itself that constantly produces, and produces indeed in direct relation with its own energy and extent, a relatively redundant working population, i.e. a population which is superfluous to capital’s average requirements for its own valorisation, and is therefore a surplus population.” (p782)

This surplus population of the unemployed, Marx comments, acts as an “industrial reserve army”, expanding and contracting with the ever-changing pace and rhythm of capitalist production itself, reducing in periods of boom and a growing in times of slump. Capitalism knows of no dynamic other than that of chaotic motion: of booms and slumps; “expansion by fits and starts of the scale of production”, followed by “its equally sudden contraction” (p785).

In this way, the reserve army of labour becomes a “condition for the existence of the capitalist mode of production” (p784), acting like a dampener for the capitalist system, absorbing the sudden shocks and spurts of growth in production, and removing any barrier to this development.

Conditions have changed somewhat, however, since Marx wrote Capital. In discussing the industrial reserve army, Marx was describing a human reservoir of labour, the level of which would rise and fall with the boom-slump cycle of capitalism. But, as with the Great Depression of the 1930s, during today’s even greater crisis we see a different phenomenon: no longer that of a reserve army of labour, but a permanent scar of mass unemployment due to an organic crisis of capitalism; the rhythm of capitalism has lost any of its cyclical character, and instead we see only “secular stagnation”.

The enforced idleness on the part of this “surplus population”, however, exists in a dialectical unity with its opposite: the over-work on the part of those remaining in employment. Millions cannot find employment, and yet others have to work in multiple jobs just to get by. The two condition each other: the reserve army of labour is used to create competition between workers and put a downward pressure on the wages of those in work; meanwhile, the harder the capitalist can make his/her workers labour, the fewer workers the capitalist must employ. “Work for less or I will get someone else to do your job and you will not work at all!” – this is the chorus of the bosses, with their industrial reserve army behind them.

“The over-work of the employed part of the working class swells the ranks of its reserve, while, conversely the greater pressure that the reserve by its competition exerts on the employed workers forces them to submit to over-work and subjects them to the dictates of capital. The condemnation of one part of the working class to enforced idleness by the over-work of the other part, and vice versa, becomes a means of enriching the individual capitalists, and accelerates at the same time the production of the industrial reserve army on a scale corresponding with the progress of social accumulation.” (p789-790)

Whilst the capitalists are free to determine the demand for labour, however, with all the decisions relating to the level of employment in society left in their dictatorial hands, workers are clearly not given the same freedom to restrict the supply of labour. Hence the capitalist apologists raise a hue-and-cry about any regulations imposed by trade unions, and the whole might of the bourgeois state is used to eliminate any barrier to the supply of labour.

“…as soon as, by setting up trade unions, etc., they try to organise planned co-operation between the employed and the unemployed in order to obviate or to weaken the ruinous effects of this natural law of capitalist production on their class, so soon does capital and its sycophant, political economy, cry out at the infringement of the ‘eternal’ and so to speak ‘sacred’ law of supply and demand.” (p793)

Alongside the general rise and fall of wages due to the expansion and contraction of production, meanwhile, and its corresponding rise and fall in the demand for labour relative to the surplus population available,  there is also, Marx describes, “the local oscillations of the labour-market in a particular sphere of production” – that is, a rise and fall for the wages available in particular industries, “which accompany the distribution of the working population into the different spheres of outlay of capital, according to its varying needs” (p792).

Just as the oscillations in the price of a commodity indicate the relative supply and demand of different commodities and provide an indication to the capitalist of where investments should be channelled, the relative change in wages in different industries act, under capitalism, therefore, to direct labour into different sectors.

Today, as in the time of Marx, we have the contradiction of mass unemployment alongside an abundance of needs in society that are not fulfilled. Clearly there is work that needs to be done; simultaneously, there are people looking for work – and yet this work remains undone and those looking for work remain unemployed. The problem, the capitalists tell us, is not the lack of people looking for work, but the lack of people with the right skills for the work that is available. The solution, therefore, is education, as the recent Economist report asserts:

“The best hope for reducing the glut of less-skilled labour is to transform some of it into the more-skilled sort through higher spending on education. In the 19th and 20th centuries it took significant public investment to ensure that newly industrialised economies had a supply of labour with the right qualifications. Something similar is needed today.”

But, as Marx notes, it is capitalism that creates this very conundrum, on the one hand by automating industry and creating this “glut of less-skilled labour”; and, on the other hand, by cutting away at the very funding for education that is needed to help workers learn new skills and transition away from the old industries and into the new.

“That the natural increase of the number of workers does not satisfy the requirements of the accumulation of capital, and yet, at the same time, exceeds those requirements, is a contradiction inherent in capital’s very movement. Capital demands more youthful workers, fewer adults. This contradiction is no more glaring than the other contradiction, namely that a shortage of ‘hands’ is complained of, while, at the same time, many thousands are out of work, because the division of labour chains them to a particular branch of industry.” (p794-795)

Whilst the accumulation and growth of capital may increase the demand for labour, therefore, at the same time workers in old industries are thrown onto the scrapheap due to the development of new technologies and processes that make their skills redundant and obsolete.

“Capital acts on both sides at once. If its accumulation on the one hand increases the demand for labour, it increases on the other the supply of workers by ‘setting them free’, while at the same time the pressure of the unemployed compels those who are employed to furnish more labour, and therefore makes the supply of labour to a certain extent independent of the supply of workers.” (p793)

Advances in production and technology, therefore, do not liberate us, but are used under capitalism to enslave us. Man is in a race against the machine. We do not control production; production controls us.

“On the basis of capitalism, a system in which the workers does not employ the means of production, but the means of production employ the worker, the law by which a constantly increasing quantity of means of production may be set in motion by a progressively diminishing expenditure of human power, thanks to the advance in the productivity of social labour, undergoes a complete inversion, and is expressed thus: the higher the productivity of labour, the greater is the pressure of the workers on the means of employment, the more precarious therefore becomes the condition for their existence, namely the sale of their own labour-power for the increase of alien wealth, or in other words the self-valorisation of capital. The fact that the means of production and the productivity of labour increase more rapidly than the productive population expresses itself, therefore, under capitalism, in the inverse form that the working population always increases more rapidly than the valorisation requirements of capital.” (p798)

All the increases in wealth and productivity do not translate into an equivalent increase in living standards and leisure time. As explained above, in recent times, not only is the share of wealth in society going to labour decreasing, but real wages have declined also. Meanwhile, we work harder than ever as a society. Development of the productive forces has not meant development of society and humanity, but instead only the enrichment of the few at the expense of the many.

“Within the capitalist system all methods for raising the social productivity of labour are put into effect at the cost of the individual worker; all means for the development of production undergo a dialectical inversion so that they become means of domination and exploitation of the producers; they distort the worker into a fragment of a man; they degrade him to the level of an appendage of a machine, they destroy the actual contact of his labour by turning it into a torment; they alienate from him the intellectual potentialities of the labour process in the same proportion as science is incorporated in it as an independent power; they deform the conditions under which he works, subject him during the labour process to a despotism the more hateful for its meanness; they transform his life-time into working-time, and drag his wife and child beneath the wheels of the juggernaut of capital. But all methods for the production of surplus-value are at the same time methods of accumulation, and every extension of accumulation becomes, conversely, a means for the development of those methods. It follows therefore that in proportion as capital accumulates, the situation of the worker, be his payment high or low, must grow worse. Finally, the law which always holds the relative surplus population or industrial reserve army in equilibrium with the extent and energy of accumulation rivets the worker to capital more firmly than the wedges of Hephaestus held Prometheus to the rock. It makes an accumulation of misery a necessary condition, corresponding to the accumulation of wealth. Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, the torment of labour, slavery, ignorance, brutalisation and moral degradation at the opposite pole, i.e. on the side of the class that produces its own product as capital.” (ibid, p799)

The Economist sums up the situation today in their recent report, describing a world where growing inequality in society and an ever-widening chasm between the rich and the rest are seen as a result of automation and technological innovation, echoing the words of Marx’s Capital:

“Technology has created a growing reservoir of less-skilled labour while simultaneously expanding the range of tasks that can be automated. Most workers are therefore being forced into competition between each other and against machines. No wonder their share of the economic pie has got smaller, in developing economies as well as in the rich world.”

What a nonsensical and contradictory world we live in under capitalism, where mass unemployment and underemployment exists alongside overwork; where living standards fall whilst technology advances; where leisure time is reduced despite an abundance of automation and time-saving devices.

All of these contradictions merely express the contradiction between, on the one hand, the enormous planning of production that exists inside the individual workplace or industry and, on the other hand, the anarchy of competition between different corporations and businesses; a contradiction between a productive process that is completely interconnected and social in its scope, but in which the means of production are privately owned and the wealth generated is privately appropriated.

With the socialist transformation of society, such contradictions would disappear, and workers would no longer be faced in competition with each other, nor with the machines that society has created. Rather than the means of production dominating over us, we will be masters of our own destiny, and the technologies we invent will be used to free us from the chains of work and the shackles of scarcity, providing the material basis for a new stage in the development of humanity. In the words of Frederick Engels, it will mark “the ascent of man from the kingdom of necessity to the kingdom of freedom.”

Part nine -->>

Marx Capital in a Day

Marx Capital in a Day

Educate Yourself

  • Educate Yourself
  • The Fundamentals of Marxism
  • Dialectical Materialism and Science
  • Historical Materialism
  • Marxist Economics
  • The State
  • Russia, Lenin, Trotsky and Stalinism
  • Anarchism
  • Feminism
  • Fascism
  • The National Question
  • Imperialism and War
  • Revolutionary Strategy
  • Revolutionary History

Socialist Appeal are proud to publish this basic guide to help focus your studies of Marxist theory and practice. Visit the various tabs to find links to introductory articles, classic texts, and audio talks for different topics. We also invite our readers to become acquainted with the more basic ideas of Marxism by starting with the recommended short reading list, going through the FAQ section, reading this article that combats the myths about Marxism, and listening to the following audios:

Why Marx Was Right - Alan Woods

What is Marxism? - Alan Woods

What Will Socialism Look Like? - Fred Weston

What is Capitalism? What is Socialism? - Fred Weston

We will be expanding and developing this section over time. Please contact us if you have any questions, or if you'd like any suggestions on what to read next.

Reading the classics of Marxism is the best way to understand these ideas. At first it may seem difficult, but every worker and young person knows that things worth having are worth working hard for!  Patient and persistent study, discussion, and ultimately, the day to day application of these ideas over a lifetime are the key.

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Marxist theory is the basis upon which our analysis, perspectives, program, and participation in the movement are based. It is our "guide to action." This why Socialist Appeal and IMT place so much emphasis on political education. To this end, we have created an extensive Education Plan to assist comrades in their political development. This is an important resource.

However, it's length and scope may seem daunting to new comrades. With this in mind, Socialist Appeal has compiled a shorter list of classic works and other important writings we think will serve to lay a strong foundation in the ideas and methods of Marxism. We would like to encourage all our supporters and those interested in learning more about Marxism to read (or re-read!) through the works on this list.

This selection of writings is an excellent introduction to many of the fundamentals of Marxist theory. There are many other writings that could be added, but this selection provides a strong basis for those wishing to equip themselves with the necessary ideas for the daily work of fighting for socialism.

Many of these are smaller books or pamphlets; some are more lengthy books; and others are just short articles. This list should therefore be more digestible than the full Education Plan, particularly those with busy work or school schedules. All of them are available to

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Dialectical Materialism is the philosophy or methodology of Marxism. Every political movement, party, or even statement of any kind bases itself, consciously or unconsciously, on some sort of philosophy or world outlook. Marxism is concerned with effecting a radical change in society, and therefore requires an exceptionally clear, thoroughgoing, and systemic set of philosophical principles.

The ideas of Dialectical Materialism, based on the best traditions of philosophical thought, are not a fixed dogma but a system of tools and general principles for analysing the world materialistically and scientifically.

If we are to understand society in order to change it, this cannot be done arbitrarily, since the human will is not master of nature; rather, our ideas and thoughts are reflections of necessary material laws. Instead, we must seek to understand the laws of how human society changes. By following our education plan for Dialectical Materialism, the reader will familiarise themselves with this way of looking at the world so that they too can begin to apply Marxist ideas.

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Historical Materialism is the result of Dialectical Materialism applied to human society and history. It encompasses the general theory of how and why society develops in the way it does. A deeper, more concrete understanding of these principles in combination with a study of real, living history of class struggles enables us to come to a general understanding of where capitalist society is headed and what political strategy is required to successfully influence the course of events.

The basic principles of Historical Materialism are that human society has inherent laws guiding it - its developments are by no means arbitrary or accidental, nor the mere subject of the will of great men and ideas. Human individuals can and do influence society according to their ideas, but only ever within definite material constraints and conditions. Above all, the law determining historical development is that of the development of the means of production - meaning economically productive technology, science, technique etc. The extent of the development of the productive forces determines the social relations of production - i.e. the structure of society, class relations etc. Each social system has its inherent laws of motion. If we want to overthrow capitalist society, we must understand how capitalism works.

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Marxist economics is the study of the laws of motion of capitalist society. Why does capitalism perpetually go into crisis? Why does mass unemployment exist? Are commodity production, the domination of the market, and rich and poor natural, immutable states of being for humanity? Or are they merely the products of this specific mode of production - capitalism? If so, is there any way capitalism can exist without these problems, or by minimising them?

Marxist economics is a “holistic” way of analysing capitalist economy. It starts out by placing it in its real historical context (rather than dreaming up abstract idealisations of capitalism to justify it, as bourgeois economics does), studying all its interconnections and contradictions, rather than artificially isolating one aspect of it. In doing so, Marxist economics lays bare the functioning of capitalism; the exploitation and injustice inherent within it. Those who want to get to the essence of why, in the 21st Century, despite having a more advanced understanding of the world than ever before, humanity seems plunged into perpetual crisis it cannot get to grips with, should look no further than Marxist economics, beginning with the writings of Marx himself.

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Like money, the state is something we are all very familiar with and take for granted, but its real essence tends to elude us. The ideologists of capitalism have tried, in various ways, to justify the capitalist state as supremely rational; a neutral arbiter for society, and the embodiment of justice. For Marxists, the state is not at all neutral, nor just. It is certainly anything but rational. We must strip the vale of mysticism away and reveal the state’s real basis. To do that, we have to treat the state historically - taking in its origins, rise, and eventual fall.

The state has not always existed. It is inseparable from class society. Ultimately, it is the instrument for the ruling class to oppress and hold down the masses, guaranteeing the status quo and the sanctity of property. Although the modern state performs many other functions, these are secondary to its real basis - the protection of a set of property relations. To do this, it needs “armed bodies of men” and a monopoly on the use of violence. To establish socialism, it will not be possible for the working class to use the state as it currently exists - that is, with the same network of judges, heads of police and army etc. All the key texts explaining how exactly we relate to the state, and the

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The Russian Revolution is the greatest event in world history for Marxists. For the first time, the working class successfully took and held power. The slaves fought back and won. For these reasons, the name of Lenin and Trotsky, and the entire 1917 episode, has been deliberately dragged through the mud by the bourgeoisie ever since.

Naturally they are aided in this task by the degeneration of the revolution and by the existence of Stalin’s monstrous dictatorship. However, Stalinism represents the opposite of Bolshevism’s real traditions, which readers can read about in this section, as well as the Marxist explanation for why Stalinism took place and what this means for our movement.

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Radicalised youth, seeking to understand how to change modern society, naturally tend to look to both Marxism and Anarchism in equal measure. The question as to which philosophy, or which combination of the two, has the best answers, has long been at the forefront of the minds of revolutionaries.

Anarchism is naturally attractive to all those correctly alienated by bureaucracy in the revolutionary movement. Anarchists are certainly correct to reject Stalinism and careerism. However, it is not sufficient simply to reject these phenomena. We need to understand why bureaucracy and oppression exist and what role they play, in order to understand how to avoid them. We believe that, for all its opposition, Anarchism has little to say about the alternative to bureaucracy. Instead, it is Marxism’s historical materialist method that allows us to understand these problems. In this section the reader will find a series of articles dealing with anarchism and the issues that anarchism raises.

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The discrimination and oppression of women is integral to class society, such that Engels even referred to it as the “first class oppression”. Along with the class system itself, the oppression of women often takes on the appearance of being natural, immutable and eternal, since it has been with us for so long.

But Marxism is a historical science, concerned with understanding the fundamental changes that society goes through. It cannot be satisfied with comfortable prejudices. A study of the origins of human society, as Engels famously conducted in his book The Origins of the Family, Private Property and the State, reveals that the oppression of women is by no means natural and was not even known for much of our history. As Engels explains, the oppression of women arose with the emergence of class society and private property; it will fall with it.

Marxists are fully in solidarity with feminists: we are irreconcilably opposed to the oppression of women and fully support the struggle for their emancipation. We believe this will be achieved through the class struggle, since that is the basic locomotive of history in a class society such as ours. However, Marxism represents a distinct set of ideas from feminism, which is a more eclectic and varied set of ideas. We believe that in this section, readers will find the tools Marxism

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Fascism is something of a bogeyman in modern British society, and has an almost mythical character in bourgeois public opinion. But despite constant talk of it, very little is said about why it happened and how it may or may not happen again.

Fascism is really the death agony of capitalism and the “distilled essence of imperialism”. The fascists in Germany, Italy, Spain and other countries were only able to come to power on the back of defeats of the working class. Ultimately, the madness of fascism expresses the historic crisis and dead-end of capitalism that had arrived by the early 20th Century, alongside the inability of the working class to take power and replace capitalism with a workers’ state, due to the corruption of their leadership, in the form of both reformism and Stalinism. Fascism could and should have easily been avoided had the working class possessed a militant and united leadership prepared to take power.

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The question of nationalities - that is, the oppression of nations and national minorities, which has characterised capitalism from its birth till the present time - has always occupied a central position in Marxist theory. Once again, the historical materialist approach of Marxism dissolves the apparent “natural” role of the nation as a necessary expression of human society. Nations have by no means always existed, nor will they always exist in the future.

The nation as we know it today is a product of the development of capitalism and its need to unify peoples into units of a certain size (depending on the level of the system’s development – e.g. more recently formed nations tend to be much bigger) to consolidate the market. The contradictions and tensions between nations are a result of capitalism’s “combined and uneven” development. The contradictions of the capitalist mode of production itself force each ruling class to expand outwards, developing a global market and imperialism in the process.

The violent tensions that this process breeds in turn give rise to nationalism, racism and wars. There is no way a successful world revolution, abolishing the global capitalist system, can take place without a careful and nuanced understanding of the national question, with all the sensitivities and complexity it brings. Therefore this section is of the utmost importance for revolutionaries.

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War is a constant feature of life under capitalism, especially in the epoch of imperialism. There has not been a single day of peace since the end of WWII, despite the appearance of WWII (and all previous wars) of being the “war to end all wars”. Capitalism is inherently unstable, competitive and violent. Moreover, there can be no final peace between the classes, since this system is based on the exploitation of the working class by the rich. 

However, there are wars of different kinds under capitalism. The question of war is the hardest equation of all to judge, so careful study is essential so that revolutionaries are not blown off course by the complexities involved. For example, some “socialists” called for support for the war in Iraq, as it had the appearance of establishing “democracy” over dictatorship. Equally, the failure to understand the true meaning of WWI and its implications was the direct cause of the death of the Second International.

Wars, like revolutions, represent the sharp extreme of capitalism’s crisis. Under capitalism, there will be many wars in the future. The more revolutionaries study and understand capitalism’s previous wars, the better equipped we will be to fight against future wars and the capitalist system itself.

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Socialist Appeal is the British section of the International Marxist Tendency, which is active in around 40 countries. Our aim is to spread the ideas of Marxism, in an organised fashion, in the labour and youth movement. Only the British working class has the ability to change British society, because of the central role they play in production and their shared interest in establishing socialism.

However, we must carefully study the history and traditions of the British working class in order for Marxist ideas to connect with them. There are all too many groups who simply declare themselves the vanguard of the British working class, and have a dismissive attitude to the class’ real traditions.

In this section readers will find a series of articles explaining our position on the class struggle in Britain, the key points in the history of the British working class and the lessons to be learnt from them, and the strategy of the Marxists in relation to the movements of the masses.

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The ideas of Marxism and the need for a revolutionary party are not the result simply of a single individual, but arise from the study of history - the history of class struggle. In this respect, the revolutionary party is often referred to as being the memory of the working class, and our task is to learn the lessons from history in order to prepare for the revolutionary events taking place today and in the future.

In this section we present a series of articles and audios covering the key revolutionary struggles in history - from the early class struggles in Rome to the tremendous movements of the working class in the 20th Century. By reading and listening to these, our readers should gain a good overview of the history of the revolutionary movement and the main lessons to be learnt from these.

For analysis of 21st Century revolutionary movements, check out the News and Analysis sections of the website!

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Marxist theory

Hitler and the Rise of Fascism in Germany Hitler and the Rise of Fascism in Germany
Duration: 00:51:40
Date: 9 Mar 2017
Workers’ control, democracy, and power Workers' control, democracy, and power
Duration: 00:57:00
Date: 2 Mar 2017
In Defence of the Russian Revolution - part two In Defence of the Russian Revolution - part two
Duration: 00:21:16
Date: 17 Feb 2017
In Defence of the Russian Revolution -  part one In Defence of the Russian Revolution - part one
Duration: 00:22:04
Date: 1 Feb 2017
Materialism and Dialectics in Ancient Greece Materialism and Dialectics in Ancient Greece
Duration: 00:48:58
Date: 27 Jan 2017
Imperialism in the 21st century Imperialism in the 21st century
Duration: 00:57:35
Date: 13 Dec 2016
Fascism: What it is and how to fight it Fascism: What it is and how to fight it
Duration: 00:36:44
Date: 12 Dec 2016
Dialectics, science, and nature Dialectics, science, and nature
Duration: 00:48:55
Date: 9 Dec 2016
Fidel Castro and the Cuban Revolution Fidel Castro and the Cuban Revolution
Duration: 00:42:54
Date: 30 Nov 2016
Marxism, Imperialism, and War Marxism, Imperialism, and War
Duration: 00:50:16
Date: 25 Nov 2016
The Hungarian Revolution: 60 years on The Hungarian Revolution: 60 years on
Duration: 00:47:10
Date: 1 Nov 2016