Marx’s Response to Dr PriceIf

Marx’s Response to Dr PriceIf capitalists seek compound interest, why doesn’t Dr Price’s formula totally overwhelm us all?Marx responds¹  “The process of accumulation of capital may be conceived [if you really want to conceive it this way] as an accumulation of compound interest [only] in the sense that—the portion of profit (surplus-value) which is reconverted into capital, i.e. which serves to absorb more surplus-labour, may be called interest.  But …” [Marx reveals the processes that limit the accumulation of capital.  As a scientist, he must draw upon his underlying theory, as developed in Capital Volume 1.  There he explains interest as one of several forms of surplus-value.  Consequently, the special form interest must also, like general surplus-value itself, ultimately depend upon the division of the social working day into necessary and surplus labour times.  This is Marx’s crucial theoretical insight.  The following explanation is therefore a crucial test of Marx’s theory.²]“Aside from all incidental interference, a large part of available capital is constantly more or less depreciated in the course of the reproduction process, because the value of commodities is not determined by the labour-time originally expended in their production, but by the labour-time expended in their reproduction, and this decreases continually owing to the development of the social productivity of labour.”“On a higher level of social productivity, for this reason, all available capital appears to be the result of a relatively short period of reproduction, instead of [the result of] a long process of accumulation of capital.”“As demonstrated in Part III of this book³, the rate of profit decreases in proportion to the mounting accumulation of capital and the correspondingly increasing productivity of social labour, which is expressed precisely in the relative and progressive decrease of the variable as compared to the constant portion of capital.”“To produce the same rate of profit after the constant capital set in motion by one labourer increases ten-fold, the surplus labour-time would have to increase ten-fold, and soon the total labour-time, and finally the entire 24 hours of a day, would not suffice, even if wholly appropriated by capital.” [Here, by the way, Marx is calling on external determinisms — that of the astronomically-limited working day and that of the biologically-limited working day that intrude crucially upon the capitalist mode of production — in addition to the determinisms inherent in the capitalist mode of production itself.]⁴“The idea that the rate of profit does not shrink is, however, the basis of Price’s progression and in general the basis of ‘all-engrossing capital with compound interest’.”“The identity of surplus-value and surplus-labour imposes a qualitative limit upon the accumulation of capital.  This [qualitative limit upon accumulation of capital] consists of the total working-day, and the prevailing development of the productive forces and of the population, which limits the number of simultaneously exploitable working-days.”“But, if one conceives of surplus-value in the meaningless form of interest, the limit is merely quantitative and defies all fantasy.”Notes¹ Capital, Volume 3 Chapter 24 is stunning.  It begins “The relations of capital assume … their most fetish-like form in interest-bearing capital.  We have here M — M′, money creating more money, self-expanding value, without the process that effectuates these two extremes.” ↩ [Back]² The exponential growth of profit creates an insuperable problem for the Sraffians, whose 1960s conception of Marx demolished Marx in the 1970s, and held sway to the end of the 20th century, until the TSSI school restored Marx’s original conception of his work.  The Sraffian school, following Ricardo, are “physicalists” in the sense of equating profit with physical goods.  On their conception, if profit grows exponentially then physical goods must also grow exponentially, and our Universe must fill up exponentially with Sraffian products, bulkier than Dr Price’s shillings.  [None of this is intended to denigrate the fine scholar Piero Sraffa himself, who remains the skilled editor of the collected works of David Ricardo.] ↩ [Back]³ Capital, Vol. 3, Part III.  The Law of the Tendency of the Rate of Profit to Fall. ↩ [Back]⁴ Autonomous robots, that in imagination work continuously for free — and so escape astronomical and biological determinisms — create a terminal problem for capitalism.  They render surplus labour-time meaningless; they thereby annihilate profit.  The fact that they produce goods of zero value, and so of zero price, is merely incidental to the terminal crisis they pose, if we ever get that far, for the capitalist mode of production. ↩ [Back]