The Capitalist Class. By Karl Kautsky (continued)

Specially translated for the Socialist Party of Great Britain and approved by the Author.


Simultaneously with the development aforementioned, the total amount of capital which the capitalists invest in their various undertakings with the view to profit shows the tendency to growing more rapidly than does the exploitation of the workers and the amount of surplus-value produced by them.

We cannot enter here into the details of the reasons for the appearance of this phenomenon, as the comprehension of such supposes some wider knowledge of economics. An example will illustrate the above statement.

Let us take a case of most convincing character. Let us compare a hand-spinner of a hundred years ago, who, we will say, was exploited by a capitalist as a worker carrying on home industry, with a machine-spinner of to-day. How much capital there is necessary to make possible the work of the latter ; and how small comparatively the capital has been which the capitalist used for the purpose of spinning by hand. He paid the wages of the spinner and gave him the cotton or flax to spin. With regard to wages little has altered, but the machine-spinner to-day uses up perhaps a hundred times as much raw material as the hand-spinner; and what enormous buildings, motive power, spinning machinery, etc., are necessary to carry on spinning by machinery.

Yet another circumstance has to be considered : the capitalist of a hundred years ago, who employed the spinner, invested in his concern only the outlay for wages and raw material ; there was scarcely any standing capital—the spinning wheel was not to be reckoned. His capital was quickly turned over—say in three months—hence he only needed to invest and advance in his concern one quarter of the amount of capital he used in the whole year. To-day the amount of capital required for machinery and buildings of a spinning mill is enormous. Though the period of turnover of the amount of capital advanced for wages and raw material may be equal to that of a hundred years ago, the period of turnover of the other portion of the capital, which a hundred years ago scarcely existed, is a very long one.

A number of causes act in the opposite direction, as for instance, the credit system, but especially the fall in the value of products, which is a necessary consequence of the increase in the productivity of labour. But these causes are by no means able to entirely put an end to the development in question. This development proceeds in all branches of industry, in some more, in others less rapidly ; with the result that the amount of capital advanced every year and reckoned at so much per head of the industrial workers, grows rapidly.

Let us suppose that this amount of capital a hundred years ago was £5 and to-day has grown to £50 ; let us further suppose that the exploitation of the worker has increased in the proportion of five to one so that if the surplus-value which a hundred years ago he produced each year amounted to £2 10s., it would to-day, given an equal amount of wages for the year, be £12 10s. The amount of surplus-value has thus in this case, as absolute surplus-value, risen enormously ; but in proportion to the amount of capital which the capitalist invests each year, the surplus-value has fallen. A hundred years ago this proportion was 50 per cent., to-day it is only 25.

That is, of course, only an example, but the tendency explained thereby actually exists.

The total amount of surplus-value produced each year in a capitalist country is increasing continually and rapidly; but more rapidly still increases the total amount of capital invested by the capitalist class in the various capitalist undertakings over which the surplus-value is distributed. If one further bears in mind the fact, which we have already observed, that for the requirements of the State and for ground-rent an ever increasing amount comes out of the total of surplus-value produced each year, one will comprehend that the amount of surplus-value which each year, on the average, falls to a given sum of capital is ever on the decrease, although the exploitation of the worker is growing.

The profit—that is to say, that portion of surplus-value which is left to the capitalist owner of the concern—thus shows the tendency to fall in proportion to the total capital advanced by him ; or, expressed in another way, in the course of development in the capitalist mode of production as a rule, the profit falling to a given amount of capital decreases continually. A sign of this fall is the unceasing decline in the rate of interest.

While thus the exploitation of the worker has the tendency to rise, the rate of profit of the capitalist shows the tendency to fall. That is one of the most peculiar contradictions of the many with which capitalist production abounds.

From this fall in the rate of profit the conclusion has been drawn that capitalist exploitation would end by itself; that capital would finally yield so little profit that the capitalist, in a starving condition, would be seeking something to do. But such would only be the case if the rate of profit would continually fall and the total amount of capital remain the same. That is, however, by no means the fact. The total capital in the capitalist countries increases more rapidly than the rate of profit falls. The increase of capital is one of the presumed conditions of the fall in the rate of profit, and if the rate of interest falls from 5 to 4, or from 4 to 3 per cent., the income of the capitalist, whose capital has in the meantime increased from one million to two or more millions, is not reduced.

The fall in the rate of profit or interest does by no means signify a reduction in the income of the capitalist class, because the bulk of the surplus-value which they obtain increases continually ; this fall in profit reduces the incomes of those capitalists only who are not in a position to increase their capital accordingly. In the course of the economic development the limit is ever extended from which a certain amount of capital begins to suffice for the maintenance of its owner in accordance with his social position. It is an ever larger amount of income which becomes the minimum required to enable anyone, without working himself, to live upon the labour of others. What fifty years ago was still a big fortune, to-day has become relatively a mere trifle. The fall in profit and the rate of interest does not cause the extinction, but merely thte decrease in the numbers of the capitalist class. Every year small capitalists are squeezed out of their ranks and brought face to face with the same death struggle that handicraftsmen, petty dealers, and peasants have to pass through ; a death struggle of a briefer or longer duration, which, however, ends, either for them or for their children, in their merging into the proletariat. What they endeavour to do in order to escape their fate, mostly only hastens their ruin.

One wonders at the great number of stupid people who are induced by swindlers to entrust them with their money on the promise that they will receive a high rate of interest. As a rule these persons are not so stupid as they appear to be : the swindling undertaking is the straw to which they cling in their desire to obtain adequate incomes from their small means. It is not so much their greed as their fear of want that blinds them in that way.

[To be continued]

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