Capitalism has no more 'live labor to suck'.

[Anarcho-Brocialist]

I have a theory, maybe many share the same, that Capitalism is unable to continue to expand. With this, the means of production which evolves around capital, is no longer producing the needs of the people; making it nonviable. The natural way of production revolves around mans needs and doesn't need capital to sustain productive.

Now, onto the reasoning of my theory :

As we've seen the economic crisis hit worldwide. Growth is stagnant worldwide, poverty rates are rising, wages are being cut, unemployment rampant. European and American business are losing on investments in foreign markets, governments are fighting endless conflicts, almost every western nation is in some kind of debt, and the standards of living is lowering annually.

Do you think that Capitalism can no longer expand, like I do?

[Sinister Cultural Marxist]

Capitalism can expand under 3 conditions (from what I've read in history)

(1) The exploitation of new sources of workers who are willing to sell their labor for a low price. Such places exist, like Africa, Bangladesh and Burma where such conditions still exist, even though China has left it and India will soon enough too. Thus, once China and India are no longer appropriate places to export labor, the Capitalists will find new havens.

(2) Technology always makes labor more efficient and can create all sorts of new efficiencies as well as economic demands which did not exist before. Think of the dot-com boom or the industrial era.

(3) Unexploited territory still exists in places like Canada, Russia, and parts of the USA, as well as other places. Greenland and Antarctica, with global warming, will also free more territory for exploitation by Capitalists. Now multibillionaires are looking to invest in asteroid mining-even if it's still a pipe dream, it could happen in a few decades.

Thus, there is always room for Capital to grow. The question is, can it grow fast enough to compensate for its failures and instabilities? And will these methods for Capitalism to "save itself" ultimately cause more damage in the long-run?

It would certainly seem that, for the time being, Capitalism is on the decline, and that decline could well be terminal. But Marxists have been burned before by predicting that Capitalism was dead for good, before some new innovation or unexploited population and territory came to be conquered by international Capital.

[Workers-Control-Over-Prod]

Capitalism can expand under 3 conditions (from what I've read in history)

(1) The exploitation of new sources of workers who are willing to sell their labor for a low price. Such places exist, like Africa, Bangladesh and Burma where such conditions still exist, even though China has left it and India will soon enough too. Thus, once China and India are no longer appropriate places to export labor, the Capitalists will find new havens.

(2) Technology always makes labor more efficient and can create all sorts of new efficiencies as well as economic demands which did not exist before. Think of the dot-com boom or the industrial era.

(3) Unexploited territory still exists in places like Canada, Russia, and parts of the USA, as well as other places. Greenland and Antarctica, with global warming, will also free more territory for exploitation by Capitalists. Now multibillionaires are looking to invest in asteroid mining-even if it's still a pipe dream, it could happen in a few decades.

Thus, there is always room for Capital to grow. The question is, can it grow fast enough to compensate for its failures and instabilities? And will these methods for Capitalism to "save itself" ultimately cause more damage in the long-run?

It would certainly seem that, for the time being, Capitalism is on the decline, and that decline could well be terminal. But Marxists have been burned before by predicting that Capitalism was dead for good, before some new innovation or unexploited population and territory came to be conquered by international Capital.

I disagree very much with what you have said. For one, technology is the enemy of dead labor: capital, which relies on live labor for its existence. The computer development in the late 90's appeared certainly a huge boom as companies were competing at an immensely rapid pace in a relatively small place of the world for investment. But what happened simultaneously, is that the rate of profit fell as masses of labor increasingly were and are replaced by machines (for the individual capitalist to lower prices to the competition). But, as the individual companies profit from the increased use of machines replacing exploitable labor, the system as a whole which relies on profit for reproduction and expansion of capital value; capitalists find the production process increasingly unprofitable for investment.

Besides the falling rate of profit (which is at a historical low at the moment with roughly 2% in 2010 compared to 50% in 1850), once imperialism cannot expand to new territories, once it cannot find more markets to capitalise on (by privatising masses of operations, buying up land, dispossessing peasants and turning them into wage slaves and consumers; proletarians), it cannot further keep up its reproduction and expansive cycle; imperialism dies with "the death shudders of capitalism" as Rosa Luxemburg poignantly put it.

[Workers-Control-Over-Prod]

The Production sector's growth is constantly falling, in Germany in 2008 the BIP fell by 5%, insane amounts that have never been seen before.

[Sinister Cultural Marxist]

I disagree very much with what you have said. For one, technology is the enemy of dead labor: capital, which relies on live labor for its existence. The computer development in the late 90's appeared certainly a huge boom as companies were competing at an immensely rapid pace in a relatively small place of the world for investment. But what happened simultaneously, is that the rate of profit fell as masses of labor increasingly were and are replaced by machines (for the individual capitalist to lower prices to the competition). But, as the individual companies profit from the increased use of machines replacing exploitable labor, the system as a whole which relies on profit for reproduction and expansion of capital value; capitalists find the production process increasingly unprofitable for investment.


I think new technology works differently from old technology which is merely spreading to different enterprises. New technology can reduce the amount of dead labor you need to pay for to get something which you can do completely new and innovative things with which you could not do before. A modern computer can do a lot more than an old computer from the 60s, yet the modern computer costs much less and is far more accessible.

The falling rate of profit from investment happens because the ratio of labor:fixed capital required by the investor to make a return is increasingly weighted as fixed capital, however this is not always the case with technological advance. Technological advance can open new industries which did not exist before, as they can do things which could not be done without that technology. The new technology can also be produced in a way which contains as much or even less labor within it, too. So my modern laptop probably does not contain much more "dead labor" than my laptop 15 years ago, and I can start some new industry which never existed before, thereby increasing the total value in society.

That's how it seems technological advancement works ... without the invention of the personal computer and the internet, I doubt the US economy would have lasted as long and as well as it has.



Besides the falling rate of profit (which is at a historical low at the moment with roughly 2% in 2010 compared to 50% in 1850), once imperialism cannot expand to new territories, once it cannot find more markets to capitalise on (by privatising masses of operations, buying up land, dispossessing peasants and turning them into wage slaves and consumers; proletarians), it cannot further keep up its reproduction and expansive cycle; imperialism dies with "the death shudders of capitalism" as Rosa Luxemburg poignantly put it.

Well that was #1 and #3, no? It seems you only disagree with me about the effect of technology

[ed miliband]

http://en.wikipedia.org/wiki/Tendency_of_the_rate_of_profit_to_fall

[robbo203]

Besides the falling rate of profit (which is at a historical low at the moment with roughly 2% in 2010 compared to 50% in 1850), once imperialism cannot expand to new territories, once it cannot find more markets to capitalise on (by privatising masses of operations, buying up land, dispossessing peasants and turning them into wage slaves and consumers; proletarians), it cannot further keep up its reproduction and expansive cycle; imperialism dies with "the death shudders of capitalism" as Rosa Luxemburg poignantly put it.

No


From http://www.capitalism-and-crisis.info/en/Welcome/New


The three phases after World War II and their determinants [1]


1) From the end of the war up to 1965, the profit rate remains at a high level (figure 1) due to labour productivity gains (figure 2), which tend to reduce the value organic composition of capital (figure 3, as well as figure 1 for the inverse of this composition). This reduction in the composition of capital is sufficient to compensate the reduction in the rate of surplus value (figure 1). The latter is due to the fact that real wage increase more than labour productivity (figure 2 [2]).

2) From 1965 to 1979, the profit rate continuously goes down due to the decline in the rate of surplus value (figure 1). This decline in the rate of surplus value is first coupled with a stable composition of capital (1963-73), then with a rising composition (1973-84) (figures 3 and 1). Firms compensate this decline in the profit rate through massive cuts in employment (figure 4). The growing industrial reserve army during the seventies results in a slowing down of the rate of increase of real wage (figures 2 and 4).

3) From 1979 to 2001, this slowing down of the rate of increase of real wage, compared to the rate of increase of labour productivity, results in a remarkable recovery of the rate of surplus value and, consequently, of the profit rate, but not so much of economic growth. The latter will be mainly stimulated by indebtedness of an Anglo-Saxon type as we know it today.

[Thirsty Crow]

Do you think that Capitalism can no longer expand, like I do?
Capital expands, accumulates (which is synonymous to "the economy grows") at certain conditions - not every set of economic and political conditions are favourable for this accumulation.

The thing is that such conditions can be renewed - the classic example would be the massive destruction of capital in WW II which set the stage for the post-war boom. So, generally speaking, capital can expand, but not under the actual conditions we all face now - it would take a very healthy devaluation (either of capital-value or of physical capital - by means of war - or a combination of the two) to occur in order that a satisfactory profitability might be achieved (and it is profitability that is the condition of investemnt - in other words, there will be insufficient investment, and thus significant rate of unemployment, if the prospects for a healthy return on invested capital are slim).

[Workers-Control-Over-Prod]

No


From http://www.capitalism-and-crisis.info/en/Welcome/New


The three phases after World War II and their determinants [1]


1) From the end of the war up to 1965, the profit rate remains at a high level (figure 1) due to labour productivity gains (figure 2), which tend to reduce the value organic composition of capital (figure 3, as well as figure 1 for the inverse of this composition). This reduction in the composition of capital is sufficient to compensate the reduction in the rate of surplus value (figure 1). The latter is due to the fact that real wage increase more than labour productivity (figure 2 [2]).

2) From 1965 to 1979, the profit rate continuously goes down due to the decline in the rate of surplus value (figure 1). This decline in the rate of surplus value is first coupled with a stable composition of capital (1963-73), then with a rising composition (1973-84) (figures 3 and 1). Firms compensate this decline in the profit rate through massive cuts in employment (figure 4). The growing industrial reserve army during the seventies results in a slowing down of the rate of increase of real wage (figures 2 and 4).

3) From 1979 to 2001, this slowing down of the rate of increase of real wage, compared to the rate of increase of labour productivity, results in a remarkable recovery of the rate of surplus value and, consequently, of the profit rate, but not so much of economic growth. The latter will be mainly stimulated by indebtedness of an Anglo-Saxon type as we know it today.


So you are saying that as wages have been stagnating for the working class in the USA since the late 70's (Germany since the 90's), that this led to a failure in growth, even while rising consumption was fueled by debt? That makes no sense, mainly it has been the failing investment (i.e. unprofitability) into the economy (production process), and the subsequent financialisation of capitalism starting in the late 70's (the same time the rate of profit in the production sector fell massively in the US) that has led to slow growth.

The Production Process and production sectors (especially the means of production sector) are at an all time low. These statistics i agree, give quite a different picture, since i assume they point to the rate of profit for the whole economy and not the production process, which is really the crucial point here.

If you look at the rate of profit in the production sector, you see a definite and clear trend down. The rate of profit for the USA was in 2010 at 2%, and the German GNP also shows quite a clear trend downward.... BUT even more importantly to the analysis of the Falling rate of profit in the production sector, is the financialisation of capitalism. Especially starting in the late 70's, the rate of profit in the production process started plummeting as masses of workers were replaced by computers etc., wages were thereby stagnated by the capitalists, workers (especially in the USA) made to work more and more hours, and women entering the work force in a massive way to keep up. The rate of profit in the productions sector of capitalism, is as low as it has never been. I can recommend reading Kliman's book from 2012 "The failure of Capitalist Production" and Norbert Nelte's writing that are available online.

[u.s.red]

The rate of profit in the productions sector of capitalism, is as low as it has never been. I can recommend reading Kliman's book from 2012 "The failure of Capitalist Production" and Norbert Nelte's writing that are available online.

Your graph of the fall in the rate of profit from 1850 to the present is very dramatic. The capitalist dead-enders are always saying that Marx's tendency of the decline in the rate of profit has never been demonstrated. I've noticed over the last couple of years that more analysis is showing exactly what Marx predicted.

[Lowtech]

hmmm, no one has ever been willing to sell their labor at a low price, just those selling their labor at whatever businesses are offering to pay them for it. most simply assume this is the way of things and accept it as "market dependent" and something they cannot change. assuming there are people willing to sell their labor at anything below what they aught to be paid, is a capitalist justification for exploitation.

[Vladimir Innit Lenin]

The religious Middle East and North Africa are now ripe for imperialist exploitation; all they needed were the 'revolutions' of 2011 to spark their move towards a more rampant Capitalism. Once they move towards secularism in the medium-run, they'll be able to liberalise their credit markets and will also be able to raise huge amounts of capital from foreign investment.

I expect sub-saharan Africa to be next. It has such little infrastructure, it's just asking to be exploited - I don't mean the exploitation it currently endures, or has endured since the 1960s, I mean it being welcomed into the financial fray, with aid being replaced by large-scale foreign direct investment, infrastructure projects, fully functional capital/credit markets and a huge chunk of surplus to be taken by the Capitalists.

[Tim Cornelis]

As we've seen the economic crisis hit worldwide.

Just the Western world.


Growth is stagnant worldwide,

I don't know about other countries, but Angola and Turkey have a growth rate of 8-9%.

[Luís Henrique]

Just the Western world.

How much time before it hits China - US's largest creditor?


I don't know about other countries, but Angola and Turkey have a growth rate of 8-9%.

9% of almost nothing is almost nothing, too.

The system is global; the countries that have not been hitten by the crisis yet will be hitten by it soon.

Luís Henrique

[A Marxist Historian]

I think new technology works differently from old technology which is merely spreading to different enterprises. New technology can reduce the amount of dead labor you need to pay for to get something which you can do completely new and innovative things with which you could not do before. A modern computer can do a lot more than an old computer from the 60s, yet the modern computer costs much less and is far more accessible.

The falling rate of profit from investment happens because the ratio of labor:fixed capital required by the investor to make a return is increasingly weighted as fixed capital, however this is not always the case with technological advance. Technological advance can open new industries which did not exist before, as they can do things which could not be done without that technology. The new technology can also be produced in a way which contains as much or even less labor within it, too. So my modern laptop probably does not contain much more "dead labor" than my laptop 15 years ago, and I can start some new industry which never existed before, thereby increasing the total value in society.

That's how it seems technological advancement works ... without the invention of the personal computer and the internet, I doubt the US economy would have lasted as long and as well as it has.



Well that was #1 and #3, no? It seems you only disagree with me about the effect of technology

Bad economics. Computers and the Internet are used to control production. In the production sector, they replace large quantities of white collar human labor with hardware. Not that much surplus value is generated in the computer industry itself.

And the overwhelming bulk of that surplus value is generated elsewhere. Computers are built overseas. Apple has over 300,000 employees in China, much more than in the USA.

So the computer revolution has in fact raised the overall organic composition of capital, lowering the overall rate of profit, and helped move a lot of production from the imperial centers to the Third World, intensifying the mechanism Lenin and Hilferding explained of monopoly superprofits through imperial exploitation.

-M.H.-

[A Marxist Historian]

How much time before it hits China - US's largest creditor?



9% of almost nothing is almost nothing, too.

The system is global; the countries that have not been hitten by the crisis yet will be hitten by it soon.

Luís Henrique

China has been partially immune, because it isn't a capitalist country. In particular, the banking sector is run according to the wishes of the CCP, not according to capitalist profit principles. So you just didn't have the financial bust in China you did elsewhere. And the banking sector, and especially the essentially phony Chinese "stock market," just don't matter as much in China as elsewhere, as they are both under rigid CCP control.

But, the more pro-market measures the CCP undertakes, the more vulnerable to capitalist crisis China will become. However the rebelliousness of the Chinese workers and peasants definitely puts limits on that. The CCP is very insecure in power, as the recent top level purge demonstrates.

As for the high growth rates in certain Third World countries, Brazil is another example, they are because of the extreme character of the economic collapse in all the imperialist centers without exception of the last few years. Stuff hasta get produced somewhere. Brazil and India are apparently both headed into economic crisis, and it's safe to say that Turkey and poor Angola are not far behind.

-M.H.-

[Luís Henrique]

China has been partially immune, because it isn't a capitalist country.

They have been building whole cities that remain uninhabited because no one can afford to buy the houses.


the rebelliousness of the Chinese workers and peasants definitely puts limits on that.

China wasn't really affected by the 1929 crisis. This is unlikely to happen again. Imagine levels of unemployment in China in the "Western" levels of 20-30%. That means 100 million unemployed. That can no longer return to subsistence economy as they would certainly have half a century ago.


As for the high growth rates in certain Third World countries, Brazil is another example, they are because of the extreme character of the economic collapse in all the imperialist centers without exception of the last few years. Stuff hasta get produced somewhere. Brazil and India are apparently both headed into economic crisis, and it's safe to say that Turkey and poor Angola are not far behind.

I think we are. Stuff has to get produced somewhere, but it has to be bought somewhere too, or the system will stall. Who's going to buy Brazilian soy, Chinese gadgets, Russian oil, if the centre of imperialism collapses?

Luís Henrique

[Luís Henrique]

The religious Middle East and North Africa are now ripe for imperialist exploitation; all they needed were the 'revolutions' of 2011 to spark their move towards a more rampant Capitalism. Once they move towards secularism in the medium-run, they'll be able to liberalise their credit markets and will also be able to raise huge amounts of capital from foreign investment.

And what would such foreign investment do, in countries that do not have a proper infrastructure, nor a working class used to Chinese-level wages?

These countries have not been able to industrialise, but the over-reactionary nature of their ruling classes is a symptom rather than a cause of that.


I expect sub-saharan Africa to be next. It has such little infrastructure, it's just asking to be exploited - I don't mean the exploitation it currently endures, or has endured since the 1960s, I mean it being welcomed into the financial fray, with aid being replaced by large-scale foreign direct investment, infrastructure projects, fully functional capital/credit markets and a huge chunk of surplus to be taken by the Capitalists.

Who's going to pay for that?

Capitalists need to sell commodities. Poor people don't buy commodities.

Luís Henrique

[Vladimir Innit Lenin]

And what would such foreign investment do, in countries that do not have a proper infrastructure, nor a working class used to Chinese-level wages?

These countries have not been able to industrialise, but the over-reactionary nature of their ruling classes is a symptom rather than a cause of that.



Who's going to pay for that?

Capitalists need to sell commodities. Poor people don't buy commodities.

Luís Henrique

Foreign investment could be used to fund capital-intensive infrastructure projects, industrial projects, and then healthcare/education provision for the newly-industrial class.

The question relating to sub-saharan Africa and its need to industrialise is trickier. Objectively, it would be best if the west stopped its patronising, quasi-racist attitude towards Africa and withdrew much of its 'aid' and 'advisory programs', cancelled its outstanding debt repayments unilaterally with no strings attached and adopted a policy of quasi-fairtrade with Africa. If Africa is left alone, it would surely in time be able to industrialise. The contemporaneous influence of today's developed countries arguably plays some part in Africa's woes, exacerbates conflict/corruption and thus prevents institutions and infrastructure developing. To be honest it just looks bleak for Africa.

[Workers-Control-Over-Prod]

Just the Western world.



I don't know about other countries, but Angola and Turkey have a growth rate of 8-9%.

We are in a Global Recession. http://tradingeconomics.com/

[SpatialDisplacement]

This is my first post on Revleft and let me apologize in advance if it comes off as brash etc. Had a few pops so my articulation may not be the best. Having said that, I will address the OP's theory as best I can right now.

Let me begin by saying the overall theory presented in this thread is far too simplistic and, in my opinion, wrong.

For starters, there is nothing within the laws of capitalism which suggest that an ever expanding labour force is required to maintain the system (in the short term and relative long term). Indeed, as Marx showed in volume 2 of Capital, the wage rate can and will fluctuate around its value dependent on the material conditions present. On the one hand, if labour is serving as a barrier to accumulation, technological innovation will drive labour to the point whereby reserve armies of labour will drive the wage rate below it's value - at this point, technological innovation will be foregone as investment in variable capital will be better equipped to allow for further accumulation. What this suggests is that the labour pool is in ever flux dependent on capital's need. Granted, in the long term such policies would ultimately result in a crisis of effective demand, leading to it's eventual doom; however this would only be true if what I cited was the only countervailing tendency against what you suggest.

A reserve army of labour can be held in perpetual limbo (as seen in Latin America's agricultural industry) without immediate impact if the investment in constant capital results in cheaper subsistence commodities. That is, as the reserve army drives down wages, constant capital could also correspondingly drive down the value of labour-power (cheaper commodities required for subsistence results in a workforce that requires less wages).

These are merely two theoretical examples which dispel one of the notion that a limited labour supply will eventually lead to capitalism's doom. Of course, notwithstanding these examples, your theory is empirically wrong.

The global labour force is not even close to being used up. As others have stated, the spatial limitations have not even yet been reached. There are spaces on Earth which capital has yet to truly reach. Africa comes to mind right away. Moreover, the social relations in areas which capital has begun to breach traditional structures. Islamic countries, in many cases, still adhere to segregation standards whereby women largely still only serve in the home. Once the women are "freed" in these countries, the labour force will be doubled whereby the cost of reproducing a family will remain nearly unchanged.

On a final note, I will agree with another's mention of destructive actions which lead to further accumulation. World wars. "Acts of God". Environmental degradation. All these areas, in part, allow for further accumulation without actually addressing the zero sum thesis of population. In a sick and demented sense one could even argue that the environmentally destructive actions of capital eventually allow for it's further accumulation. That is, as it destroys, it allows for new markets to restore said destruction. Much the same can be said for World Wars etc. This alone is enough to incite a revolution in my opinion (a peaceful one at that!)

To the OP. Please don't take this post personally. I am certain we are on the same page in terms of our end game. I would much rather not sit around and watch the above mentioned happen. But a word of caution. Synthesizing the the Theory of Value with population dynamics is an extremely tricky task that, to my knowledge at least, has yet been nailed down.

Without trying to sound patronizing I give you full props for trying to look at potential cracks within the system. Not enough people try and for that reason I give you full marks.

[SpatialDisplacement]

I would also like to add that citing market dynamics as a sign of global trends has nothing to do with value theory. Prices can fluctuate and decrease while surplus values can remain constant and even expand.

[Vladimir Innit Lenin]

If anybody wants a good expose of population (and, for amusement/interest, a very strong rebuttal of Malthus) I suggest you check Bebel's Women and Socialism. I think the chapter on population is at the end. It's on marxists.org

[A Marxist Historian]

They have been building whole cities that remain uninhabited because no one can afford to buy the houses.



China wasn't really affected by the 1929 crisis. This is unlikely to happen again. Imagine levels of unemployment in China in the "Western" levels of 20-30%. That means 100 million unemployed. That can no longer return to subsistence economy as they would certainly have half a century ago.



I think we are. Stuff has to get produced somewhere, but it has to be bought somewhere too, or the system will stall. Who's going to buy Brazilian soy, Chinese gadgets, Russian oil, if the centre of imperialism collapses?

Luís Henrique

I hadn't heard of building uninhabited cities, but that kind of economic insanity is if anything more typical of Stalinist regimes than of capitalist. Some of the stuff that went on in the early 1930s in the USSR during the "First Five Year Plan" was equally absurd.

What will doubtless happen with those cities, if they have any economic utility, is that prices will get knocked way down. In a capitalist country that would mean the builders going bankrupt and a big crisis. In China? Well, if the builders were private sector who cares? If state sector, no big deal really, just more money thrown down the drain by stupid bureaucrats, not for the first time.

If you get 20-30% levels of unemployment in China, the whole country will erupt and explode. But there's no reason for that to happen. The Chinese government is sitting on huge piles of dollars, and the number of things China needs is still extremely large. Send 'em to school, have 'em build schools and hospitals, etc. etc.

In fact, that's exactly how China avoided the economic collapse that all the "state caps" were predicting after the 2008 financial collapse, with foreign markets for Chinese goods shrinking dramatically.

The government simply shifted away from foreign exports and built up the state sector again, creating huge amounts of infrastructure, *most* of which is very useful.

China has a third of the population of planet earth. China really doesn't need to have an export economy, that's a conscious choice of the Dengists, which seemed very wise in the short term but over the long term was a mistake, which they should be getting out of ASAP.

-M.H.-