That is a Rocket in My Pocket and I’m So Glad to See You Guide to Marxism, 5
11 January, 2013 — The Wolf Report
Devaluation, Realization, Overproduction:
(3) Looked at precisely, that is, the realization process of capital — and money becomes capital only through the realization process– appears at the same time as its devaluation process [Entwertungsprozess], it’s demonetization.And this in two respects. First, to the extent that capital does not increase absolute labor time but rather decreases the relative, necessary labour time, by increasing the forces of production, to that extent does it reduce the costs of its own production– in so far as it was presupposed as a certain sum of commodities, reduces its exchange value: one part pf the capital on hand is constantly devalued owing to a decrease in the costs of production at which it can be reproduced; not because of a decrease in the amount of labor objectified in it, but because of a decrease in the amount of living labour which it is henceforth necessary to objectify in this specific production. This constant devaluation of the existing capital does not belong here, since it already presupposes capital as completed . [bold added--S.A.]…The devaluation being dealt with here is this, that capital has made the transition from the form of money into the form of a commodity, of a product, which has a certain price, which is to be realized. In its money it existed as value. It now exists as product, and only ideally as price; but not as value as such. In order to realize itself, i.e. to maintain and to multiply itself as value, it would first have to make the transition from the form of money into that of use values (raw material-instrument-wages); but it would thereby lose the form of value; and it now has to enter anew into circulation in order to posit this form of general wealth anew.
–Marx, Grundrisse, Notebook IV, The Chapter on Capital: Transition from the process of the production of capital into the process of circulation.–Devaluation of capital itself owing to increase of productive forces. (Competition.) (Capital as unity and contradiction of production process and realization process.) Capital as barrier to production.– Overproduction. (Demand by the workers themselves.)–Barrier to capitalist production. Penguin, 1973
What’s going on here? Well, first off, if Marx wants to exclude one process of the devaluation of capital from this discussion, that’s OK with me. Temporarily.
And this other aspect, process, of devaluation? Marx is once again rotating the commodity, its forced, enforced, unity of the value form through the differing and conflicting moments that constitute and drive the very expression of value in the process of exchange.
No matter how early or late we go back or forge ahead in Marx, no matter where we turn in his critique of capital, we’re never far from the first chapters of Capital, Volume 1. All that was, is, and will be is there– in the exploration and critique of value, use value, exchange value, which categories are, after all, nothing other than the categories of the labor process, and the mediation of that process by the social organization that objectifies that labor.
Marx starts this section with his assertion that the money realizes itself as capital through its devaluation, its demonetization, when we know, or thought we knew, that capital realizes itself through its monetization. M-C-M’, right? Sure. Of course. Maybe.
The demonetization of course is the transformation of money into the particular concrete elements of production for the purposes of aggrandizing, absorbing, soaking up, surplus labor time– expelling labor time, quite literally, as surplus value.
Money capital, money that has accumulated at the end of the circuit of capital, ceases at the very moment of its materialization to exist as capital. It’s miraculous appearanceis not just reward, but disappointment; not just a token of success, but a promise of failure in that in its materialization as expanded value, it is no longer value begetting value. It’s angels wings are feet of clay, or rather, need to be exchanged for feet of clay. It must “de-Midasize” in order to seek out, join with, and engage living labor.
Money loses a bit of its luster as it moves across the ledger page and goes from “NET” to “EXPENSE.”
Realization is not simply the realization of capital as money, but the expansion of the network of the exchange of objectified labor for living labor. Certainly this involves the sale of the commodities extruded by the production process. However, the sale of the commodities is, in itself, not the realization of capital. The sale of commodities in order to purchase living labor, to accumulate the means of production as capital, to “evoke” more surplus value is the realization.
In discussing the creation of absolute surplus value– that surplus value engendered through prolongation of the work time– Marx writes:
A precondition of production based on capital is therefore the production of a constantly widening sphere of circulation, whether the sphere itself is directly expanded or whether more points within it are created as points of production. While circulation appeared at first as a constant magnitude, it here appears as a moving magnitude, being expanded by production itself. Accordingly it already appears as a moment of production itself. Hence, just as capital has the tendency on one side to create ever more surplus labor, so it has the complementary tendency to create more points of exchange; i.e., here, seem from the standpoint of absolute surplus value or surplus labour, to summon up more surplus labour as a complement to itself; i.e. at bottom, to propagate production based on capital, or the mode of production corresponding to it. The tendency to create the world market is directly given in the concept of capital itself. Every limit appears as a barrier to be overcome. Initially, to subjugate every moment of production itself to exchange and to suspend the production of direct use values not entering into exchange, i.e. precisely to posit production based on capital in place of earlier modes of production, which appear primitive [naturwuchsing] from its standpoint. Commerce no longer appears here as a function taking place between independent producers for the exchange of their excess, but rather as an essentially all-embracing presupposition and moment of production itself.
–Grundrisse, op cit
Here Marx has exposed the universe of connections, of exchanges, that every particular capital creates, and requires, in the process of realization. Certainly, consumption is posited as a category distinct from production; yet the distinction is derivative of production for value, and it is through circulation that capital attempts to overcome the distinction, to “summon it up” in the service of more surplus labor.
Here too we get a glimpse into the “gravitational pull” of capital commodity production; and the “plasticity” of value, where capitalist commodity production can reflect, project, assign, value to the products of any mode of production it encounters, as if these commodities were the products of capital commodity production. As if… capital assigns an image of value to these products through the process of exchange.
Here we see that the “unequal exchanges” of capital with non-capitalist modes of production, the exchange of capital‘s commodities requiring less time of reproduction– iron bars, or firearms– with and for those of the non-capitalist modes requiring more time of reproduction–gold, or human beings– is but capital creating for itself those points of exchange where it depletes of its time that non-capitalist mode, subjugating “every moment of production itself to exchange and [to] suspend(ing) the production of direct use values not entering into exchange.”
Turning to the production of relative surplus value, that based on the development of the means of production, on amplifying the productivity of labor through the substitution of already objectified labor for living labor, Marx writes that this requires the
production of new needs and discovery and creation of new use values…. so that the surplus labour gained does not remain a merely quantitative surplus, but rather constantly increases the circle of qualitative difference within labour (hence of surplus labour), makes it more diverse, more internally differentiated.
Labor itself must become more differentiated in the very advance, triumph, of the abstraction labor as value, of human beings rendered, literally, as time.
We thought, or at least I did, that realization was the realization of capital as money and right from jump street Marx straightens us, or me, up and says realization is the realization of money as capital.
And then we thought, or I thought, that the realm of realization, of circulation, created the category of consumption but Marx shows how the process of realization was the creation of those points of exchange where absolute surplus value could be commanded by the as if assignment of value; where the non-capitalist modes could be worked to death.
Now we, okay maybe it’s just me, find that theincreased consumption required for the realization of relative surplus value is in fact the increasing consumption of differentiated labor.
Realization moves through devaluation, demonetization, to the proliferation of greater, and differentiated capitals, and from these capitals reassembles, realizes itself, as value expanding value.
At each point and moment in this process, overproduction, and unevenness, and disproportion are not only inherent but are immanent and imminent. The point, in all senses, of production is the appropriation of surplus value, the compression of the necessary labor for consumption to the minimum and below.
The aggrandizement of labor power as wage-labor, the objectification of labor-time as value, is the overproduction of capital that encumbers capital‘s reproduction, not because production outstrips consumption, not because too little is consumed, but rather because production is for the production of value, and necessary labor is the limit to the production of value. If necessary labor is maintained, surplus labor time is limited. If necessary labor is eliminated, then the need for labor to exchange itself with capital has disappeared. Value itself is no longer necessary to the reproduction of social labor. In between those two poles, value accumulates, necessary labor is reduced, expelled, from production, but the increment of expansion of surplus value decreases. That increment, of course, appears as profit.
Marx moves the discussion of realization to the establishment of the general rate of profit. The point of realization is surplus value commanding new surplus value. The mechanisms of realization are the distribution of profit, the increments of increase among the capitals. Price apportions, allocates, allots the profits, so that the price of a commodity, of any numbers of commodities, above or below its value, including the failure to register or capture any price is essential to the realization of capital.
The establishment of the general rate of profit, or rather, that movements toward establishing a general rate of profit, is not a process creating “equilibrium” among capitals. It is the creation of a dynamic disequilibrium, where capital realizes itself in whole through depreciation of particular capitals and particular capitals realize themselves through the devaluation of capital as a whole.
That “type” of devaluation that Marx initially excluded in his discussion of realization now reappears as an essential element. Surplus value is transferred among the capitals in accordance with their sizes and relative efficiencies. The commodities of the most advanced, efficient capitals, those that in general reduce the proportion of the working period consumed by necessary labor to a minimum, claim a larger portion of the total surplus value by exchanging at prices above their costs of production, but at the general costs of reproduction.
In a sense, what capital practiced in its encounter with non-capitalist modes of production, its “unequal exchanges,” it now practices on itself, on elements of itself.
And, Marx, concludes:
Thus, in a crisis– a general depreciation of prices–there occurs up to a certain moment a general devaluation or destruction of capital. …In general crises, this devaluation extends even to living labour capacity itself. In consequence of what has been indicated above, the destruction of value and capital which takes place in a crisis coincides with–or means the same thing as– a general growth of the productive forces,which, however, takes place not by means of a real increase of the productive force of labour (the extent to which this happens in consequence of crises is beside the point here), but by means of a decrease of the existing value of raw materials, machines, labour capacity….In the same way, on the other hand, a sudden general increase in the force of production would relatively devalue all present values which labour objectifies at the lower stage of the productive forces, and hence would destroy present capital as well as present labouring capacity. The other side of the crisis resolves itself into a real decrease in production, in living labour– in order to restore the correct relation between necessary and surplus labour, on which, in the last analysis, everything rests. [bold added, SA].
Everything, realization, circulation, consumption, depends in the last analysis, as it does in the first, on the correct relation between necessary and surplus labor.
That’s exactly where we are today.
January 12, 2013