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Capital, Absolute Over-Accumulation and the Fascist State

Tokyo after the massive firebombing attack of March 10, 1945, the single most destructive raid in military aviation history. The bombing of Tokyo in World War II cut the city's industrial productivity in half.


In Capital , Volume 3, Chapter 15, Section III, Marx asks, “When would over-production of capital be absolute?” He is speaking here not merely of commodity overproduction, but of the over-accumulation of all the elements of Capital.

There would be absolute over-production of capital as soon as additional capital for purposes of capitalist production = 0. The purpose of capitalist production, however, is self-expansion of capital, i.e., appropriation of surplus-labour, production of surplus-value, of profit. As soon as capital would, therefore, have grown in such a ratio to the labouring population that neither the absolute working-time supplied by this population, nor the relative surplus working-time, could be expanded any further (this last would not be feasible at any rate in the case when the demand for labour were so strong that there were a tendency for wages to rise); at a point, therefore, when the increased capital produced just as much, or even less, surplus-value than it did before its increase, there would be absolute over-production of capital; i.e., the increased capital C + ΔC would produce no more, or even less, profit than capital C before its expansion by ΔC. In both cases there would be a steep and sudden fall in the general rate of profit, but this time due to a change in the composition of capital not caused by the development of the productive forces, but rather by a rise in the money-value of the variable capital (because of increased wages) and the corresponding reduction in the proportion of surplus-labour to necessary labour.

In other words, the capitalist succeeds in wresting additional surplus from the worker, but this surplus produces a contraction of profit. In theory, the mass of profit is equal to the mass of surplus value. But this surplus value has to be realized as profit; it has to be sold. If this is not accomplished, or is accomplished only in part or at a loss, Marx argues, surplus has been created, but it is not realized.

The result is the formation of a mass of forcibly idled capital and a mass of forcibly idled workers — a classical depression. Now, he explains, it is entirely possible to put these two masses together and produce more goods, but that would only further hurt profits. And, since the motive of capitalist production is profit, production halts at the point where the mass of profit cannot be increased.

It is important to state that this result is NOT a defect of Capital — absolutely NOT a defect. Yes, production halts before want is satisfied, but that isn’t the point: Capital is concerned only with maximizing profit — not human need. If you want to run a charity Gandhi, go run one! If, however, you want to maximize profits, you stop at the point where profit is maximized.

The mode of production develops the productive capacity of labor with an eye toward the production of surplus value (profit). This production of surplus value, however, is also the expenditure of labor beyond the time necessary to produce wages and capitalist consumption. Any additional capitalist investment beyond this point would, by definition, result in superfluous output that cannot increase profits.

In a closed system, where export of this excess capital is not possible, production would halt leaving both excess labor powers and idled capital. As a result, both the value of the sum of wages and of the excess capital would fall as competitive pressures increased within each class. This would lead to a further fall in the actual quantity of the labor powers and the mass of capital employed. Unable to expand into new markets, Capital would, instead, begin to implode in on itself.

The problem is simple: One worker can produce enough for two, three, or ten, but this can only be done profitably if those others have the wages to purchase what has been produced. The surplus produced must now be sold before the capital can be reinvested, and this further investment can only take place if it is profitable to do so. If, it is not profitable to expand production with the additional surplus, the production of surplus itself must contract.

With the absolute over-accumulation of capital, the conditions under which surplus is produced stands in absolute contradiction with the conditions under which this surplus is realized. Capital undertakes production only to make a profit, but the surplus necessary for this profit wipes out profit. The capitalist class as a whole is empirically confronted with the need to progressively reduce productive activity.

Want increases, but this want only compels further contraction of productive activity. The very increase in want itself presupposes the further contraction of productive activity — the inability of the mass of society to buy what has been produced. At the same time, absolute over-accumulation presupposes the accelerated concentration and centralization of capitals as smaller capitals are idled altogether. To operate profitably the scale of production must increase, but this is only possible for the very biggest capitals. Finally, even the biggest capitals are no longer profitable, and all productive activity grinds to a halt.

This process takes place in any case in a closed system and does not in any way depend on processes outside capital itself. And I don’t think any process outside Capital can reverse, slow or otherwise counter this process. Assuming a closed system it is inevitable. In an open system, where the export of capital is still possible, it takes longer — but even an open system is located in a closed one. (For this reason, protectionism only accelerates the decline of a capitalist economy.)

According to Marx’s theory, the mass of surplus value is a direct function of the rate of surplus value times the mass of the working population. If the rate should increase, and the population is held constant, the mass of surplus value increases; and, vice versa. The working population, however, labors for so many hours at a time and, this length of individual working time has bearing on the rate of surplus value. All else being held constant, if the hours are longer, the rate of surplus value increases. If the hours are shorter, the rate decreases.

The absolute contradiction between the conditions of production, and the conditions of realization, of surplus value resolve into this: X hours of surplus labor time is expended, but Y hours of surplus labor time can be realized in the form of profit. Where X is greater than Y. The difference between X and Y is labor time that cannot be realized as profit.

I think, in Marx’s model of absolute over-accumulation Y = 0. Which is to say, none of the expended surplus labor time can be realized as profit. (I am assuming I understand him correctly and that I am not just blowing smoke.) While the rate of surplus value continues to increase, the rate of profit has dropped to zero – thus capitalist production grinds to a halt.

But this point only represents two different quantities of labor time, X and Y, which, divided by the number of workers employed productively, gives us the normal working day. Over-accumulation of capital leads to the formation of a mass of unemployed workers, but this formation is just a proportional reduction of the sum of hours of work. It is the reduction of social hours of work, while individual hours of work continues as before – the reduction of work is shared unequally.

Some workers are idled altogether, another group can only find limited work, and still another can find work only at reduced wages. Yesterday, everyone was employed and at good wages — life was good. Today, everyone suffers from too little work and falling wages.

When work is plentiful, competition between workers is muted and unions grow. Some even imagine the political conquest of power. When work becomes scarce, the competitive divisions within the class grow more pronounced — each worker becomes a petty commodity seller. The consciousness of the class as a class dissolves to reveal a mass of squabbling wage slaves fighting over the table scraps of Capital. Each is compelled, under penalty of starvation, to employ every advantage —  race, nationality, language, religion, gender — for survival.

These circumstances lead not as Marxists like Wolff imagine to new opportunities for the workers’ cause, but their further degradation. As a class they only have the “opportunity” for misery and the reproduction of their miserable existence as wage slaves — for the employment of their bodies and capacities as mere means of survival, a foul, detestable act which fills the air with the stench of the slave markets.

Hitler was carried to power on the shoulders of the unemployed, and Auschwitz was a smooth operation modeled on the factory floor.

The result of depression is not the opportunity for liberation of the working class, but emergence of a fascist State of the Hitler type. This Fascist State absorbs the mass of unemployed labor power and idle capital to produce an unprecedented outburst of global violence. With the Fascist State we see not simply war between nations, but the deliberate targeting of civilians and productive infrastructure. Entire cities are targeted not to undermine the enemies capacity to fight, but the capacity to produce. Civilian populations are targeted for extermination; industrial infrastructure, roads, communications far from the battle are leveled.

The absolute hostility of the Fascist State to productive activity is seen in the determination with which it destroys the productive capacity of its foes. Its nature is revealed: that it is parasitic; that it is inimical to the productive employment of human capacity; that it thrives on scarcity; that it is only the expression of hunger, scarcity and want organized as a definite body of parasites on society; that its sole activity is the manufacture of scarcity, hunger and want; and its sole purpose is to expand the scale of this activity.

In area after area, wherever the State extends is vile tentacles, it does so not to increase the productive capacity of society, but to destroy it. Education, health-care, agriculture, industry — this mass of vile pestilence knows nothing of these things save turning them into a means to waste labor, or worse, instruments for its own expansion. In their stead, it posits the empty activity of the bureaucrat, the financier, those whose work does not touch on any of these activities. Those who exist only to interfere with productive activity and to reduce it to just another mode of the State’s own existence.

It doesn’t matter what children learn, only that massive quantities of resources are consumed in this activity. It matters not whether the sick are treated, only that an ever increasing volume of superfluous activity can be expended on “health-care”. The best of all possible worlds: those areas where nothing is produced, yet vast resources are idled (ex. strategic petroleum reserves) or destroyed (ex. wars of aggression).

While Capital is production run amok — production for the sake of production — the State is consumption for the sake of Capital. What matters is not that children be housed, fed, educated, but that surplus value produced by Capital be consumed in its entirety. The expansion of the State is not determined by any need to satisfy wants, but to satisfy the conditions for the self-expansion of capital, but, the condition for the self-expansion of Capital is the extension of the hours of social labor beyond its necessary limit.

Hence, the tendency toward constant expansion of the Fascist State is a law.

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