Valorisation - The Conflict Between Physical Output Growth and Valorization

The Conflict Between Physical Output Growth and Valorization

In Capital Vol. 3, chapter 15, section 2 (Penguin ed., p. 355f) Marx discusses how conflicts arise between expanding physical output and the valorization of capital. From the point of view of capital, increased productivity means both increase in the scale of production and a reduction of labour-costs as a fraction of the total capital invested. From the point of view of labour, increased productivity means both an increase in surplus labour and an increase in the amount of capital used per worker. Marx then explains that these four variables can come into conflict with each other, creating disturbances in the growth process of capital:

"Simultaneously with impulses towards a genuine increase in the working population, which stem from the increase in the portion of the total social product that functions as capital, we have those agencies that create a relative surplus population. Simultaneously with the fall in the profit rate, the mass of capital grows, and this is associated with a devaluation of the existing capital, which puts a stop to this fall and gives an accelerating impulse to the accumulation of capital value. Simultaneously with the development of productivity, the composition of capital becomes higher, there is a relative decline in the variable portion as against the constant. These various influences sometimes tend to exhibit themselves side by side, spatially ; at other times one after the other, temporally; and at certain points the conflict of contending agencies breaks through in crises. Crises are never more than momentary, violent solutions for the existing contradictions, violent eruptions that re-establish the disturbed balance for the time being. To express this contradiction in the most general terms, it consists in the fact that the capitalist mode of production tends towards an absolute development of the productive forces irrespective of value and the surplus value this contains, and even irrespective of the social relations within which capitalist produc­tion takes place; while on the other hand its purpose is to maintain the existing capital value and to valorize it to the utmost extent possible (i.e. an ever accelerated increase in this value). In its specific character it is directed towards using the existing capital value as a means for the greatest possible valorization of this value. The methods through which it attains this end involve a decline in the profit rate, the devaluation of the existing capital and the development of the productive forces of labour at the cost of the productive forces already produced." (p. 357-358)