And Furthermore...........

Furthermore, Marx's analysis, showing that the conditions that determine the tendency of rate of profit to decline are the conditions that accompany the increase in the mass of profits is developed on the basis of the consideration of the total social capital.

Marx is referring to the total social capital; he is analyzing the development of capital as a totality.

Therefore, furthermore,  the more capitalist production develops, the more capital accumulates, the more it reproduces itself, the more it engages wage labor, the greater the mass, and the lower the rate of profit. This is cold consolation, and no compensation for the capitalists, since the increment of the expansion of value– the rate of accumulation is the be all and end all of value production. As a consequence, the distribution of the mass becomes ever more critical– which is why Marx asserts that competition does not cause the rate of profit to decline; rather the decline in the rate of profit determines and intensifies competition.

As, furthermore Marx says in Vol 3 of Capital ["The Law Itself"] “Previous economists, not knowing how to explain the falling rate of profit, invoked the rising mass of profit, the growth in its absolute amount, whether for the individual capitalist or for the social capital as a whole, as a kind of consolation, but this was also based on mere commonplaces and imagined possibilities.”

How does Marx explain the increase mass of profits?– By a massive increase in capital deployed against, engaging, increased masses of wage-labor:

“When the percentage composition in the previous example was 60c + 40v, the surplus-value or profit on it was 40 and the rate of profit therefore 40 per cent. Let us assume that at this level of composition the total capital was 1 million. The total surplus-value and total profit would then amount to 400,000. If the composition were later to become 80c + 20v, the surplus- value or profit on each 100 would be 20 with the level of exploitation being the same. But the surplus-value or profit grows in its absolute mass, as we have shown, despite this decline in the rate of profit or the decline in the production of surplus-value by each capital of 100 and this growth might be from 400,000 to 440,000 say. This is possible only if the total capital that corresponds to this new composition has grown to 2,200,000.  The mass of the total capital set in motion has risen to 220 percent of its initial value, whereas the rate of profit has fallen by 50 percent. If the capital had simply doubled, then at the rate of profit of 20 percent it could only have produced the same amount of surplus value and profit as the old capital of 1,000,000 did at 40 percent. Had it grown by less than this it would have produced less surplus value or profit than the capital of 1,000,000 did previously, although at its earlier composition this would only have had to grow from 1,000,000 to 1,100, 000 in order for its surplus value to rise from 400,000 to 440,000.

“Here we can see asserting itself the law we developed earlier [ volume 1, chapter 25, 2] according to which the relative decline in the variable capital, and thus the development of the social productivity of labor, means that an ever greater amount of total capital is required in order to set the same quantity of labour-power in motion and to absorb the same amount of surplus labour…”

“A fall of 50 per cent in the rate of profit is a fall of a half. If the mass of profit is to remain the same therefore, the capital must double.” 

And, furthermore,  where does this massive increase in capital come from to generate the massive profits? Where can it come from? With the means of production organized as commodities, as values, it can only come from the expansion of value; it can only come from the expanded and/or intensified exploitation of labor-power.

Hence, furthermore,  at a certain point the accumulation of capital sooner or later reaches a point where it must attempt to drive the wage below the value of labor-power, below its costs of reproduction.

At its apotheosis, capital is nothing but primitive accumulation all over again.

Marx isn't kidding when he says of the law of the tendency of the rate of profit to fall that that tendency is the most important law of capitalist reproduction.   Furthermore.

April 26, 2014