The Accumulation of Capital

by Rosa Luxemburg

‘The poverty of the working classes precludes their income from giving scope to increasing production. The additional amount of products from the entrepreneurs’ point of view lowers the value of the aggregate product so far as to bar production on the former scale, leaving the workers at best to their accustomed straits, though, if it could be made available to the workers, it would not only improve their lot but would further act as a counterweight by increasing the value of what is retained by the capitalists (and so enable the latter to keep their enterprises at the same level).’[257]

The ‘counterweight’ which in the hand of the workers increases the ‘value’ of ‘what is retained’ by the entrepreneurs, can in this context only be the demand. Once again, we have landed happily at the familiar Ort of v. Kirchmann’s where workers and capitalists exchange their incomes for the surplus product, and where the crises arise because variable capital is small and the surplus value large. This peculiar notion has already been dealt with above. There are other occasions, however, when Rodbertus advances a somewhat different conception. The interpretation of his theory in the fourth Letter on Social Problems is that the continual shifts in the relations of demand, evident in the share of the working class and caused by the share of the capitalist class, must result in a chronic disproportion between production and consumption.

‘What if the entrepreneurs endeavour to keep always within the limits of those shares, yet the shares themselves are all the time on the decline for the great majority of the society, the workers, decreasing gradually, unnoticeably, but with relentless force?—What if the share of these classes is continually decreasing to the same extent as their productivity is increasing?’—‘Is it not really the fact that the capitalists of necessity organise production in accordance with the present volume of shares in order to make wealth universal, and that yet they always produce over and above this volume (of previous shares), thereby perpetuating dissatisfaction which culminates in this stagnation of trade?’[258]

On this showing, the explanation of crises should be as follows: the national product consists of a number of ‘common goods’, as v. Kirchmann puts it, for the workers, and of superior goods for the capitalists. The wages represent the quantity of the former, and aggregate surplus value that of the latter. If the capitalists organise their production on this footing, and if at the same time there is progressive productivity, a lack of proportion will immediately ensue. For the share of the workers to-day is no longer that of yesterday, but less. If the demand for ‘common goods’ had involved, say, six-sevenths of the national product yesterday, then to-day it involves only five-sevenths, and the entrepreneurs, having provided for six-sevenths of ‘common goods’, will find to their painful surprise that they over-produced by one-seventh. Now, wiser by this experience, they try to organise to-morrow’s output of ‘common goods’ to a mere five-sevenths of the total value of the national product, but they have a new disappointment coming to them, since the share of the national product falling to wages to-morrow is bound to be only four-sevenths, and so on.

In this ingenious theory there are quite a few points to make us wonder. If our commercial crises are entirely due to the fact that the workers’ ‘wage rate’, the variable capital, represents a constantly diminishing portion of the total value of the national product, then this unfortunate law brings with it the cure for the evil it has caused, since it must be an ever smaller part of the aggregate product for which there is over-production. Although Rodbertus delights in such terms as ‘an overwhelming majority’, ‘the large popular masses’ of consumers, it is not the number of heads that make up the demand, but the value they represent which is relevant. This value, if Rodbertus is to be believed, forms a more and more trifling part of the aggregate product. Crises are thus made to rest on an ever narrowing economic basis, and all that remains to discover is how in spite of it all it can still happen that the crises are universal and increasingly severe besides, as Rodbertus is fully aware. The purchasing power lost by the working classes should be gained by the capitalist class; if v decreases, s must grow larger to make up for it. On this crude scheme, the purchasing power of society as a whole cannot change, as Rodbertus says in so many words: ‘I know very well that what is taken from the workers’ share goes ultimately to swell that of the “rentiers” (rent and surplus value are used as synonyms, R.L.), and that purchasing power remains constant on the whole and in the long run. But as far as the product on the market is concerned, the crisis always sets in before this increase can make itself felt.’[259]

In short, the most it can amount to is that there is ‘too much’ of ‘common goods’ and ‘too little’ of superior goods for the capitalists. Quite unawares, and by devious ways, Rodbertus here falls in with the Say-Ricardian theory he so ardently contested, the theory that over-production on one side always corresponds to under-production on the other. Seeing that the ratio of the two shares is persistently shifting to the advantage of the capitalists, our commercial crises might be expected on the whole to take on increasingly the character of periodical under- instead of over-production! Enough of this exercise in logic. The upshot of it all is that Rodbertus conceives the national product in respect of its value as made up of two parts only, of s and v, thus wholly subscribing to the views and traditions of the classical school he is fighting tooth and nail, and even adding his own flourish that the capitalists consume the entire surplus value. That is why he repeatedly says without mincing his words, as in the fourth Letter on Social Problems:

‘Accordingly, we must abstract from the reasons which cause the division of rent in general into rent proper and capital rent, to find the basic principle underlying the division of rent (surplus value) in general, the principle underlying the division of the labour product into wage and rent.’[260] And, in the third Letter: ‘Ground rent, capital profit and the wage of labour are, let me repeat, revenue. By this means landlords, capitalists and workers must live, must satisfy, that is to say, their immediate human necessities. They must therefore draw their income in the form of goods suitable for this purpose.’[261]

The misrepresentation of capitalist economy has never been formulated more crudely, and there is no doubt that Rodbertus claims the palm of ‘priority’—not so much over Marx as over all popular economists—with full justification. To leave the reader in no doubt about the utter muddle he has made, he goes on, in the same letter, to rank capitalist surplus value as an economic category on the same level as the revenue of the ancient slave-owner:

‘The first state (that of slavery) goes with the most primitive natural economy: that portion of the labour product which is withheld from the income of workers or slaves and forms the master’s or owner’s property, will undividedly accrue to the one man who owns the land, the capital, the worker and the labour product; there is not even a distinction of thought between rent and capital profits.—The second state entails the most complicated money economy: that portion of the labour product, withheld from the income of the now emancipated workers, and accruing to the respective owners of land, and capital, will be further divided among the owners of the raw material and the manufactured product respectively; the one rent of the former state will be split up into ground rent and capital profits, and will have to be differentiated accordingly.’[262]

Rodbertus regards the splitting-up of the surplus value ‘withheld’ from the workers’ ‘income’ as the most striking difference between exploitation by slavery and modern capitalist exploitation. It is not the specific historical form of sharing out newly created value among labour and capital, but the distribution of the surplus value among the various people it benefits, which, irrelevant to the productive process, is yet the decisive fact in the capitalist mode of production. In all other respects, capitalist surplus value remains just the same as the old ‘single rent’ of the slave-owner: a private fund for the exploiter’s own consumption!