Class 17: Capital Chapters 21-24: Accumulation, Reproduction

(bouncy music) - We're moving from simple reproduction to expanded reproduction or how surplus value becomes capital, which are the same thing. Two, the general law of capitalist accumulation. These are sections about accumulation and accumulation is really the name of the whole. The whole is driven by the need to accumulate, pressures to accumulate, which come from inside the system. And they in fact cause all of the effects that we've read about up 'til now, all of the local effects like commodification and reification, which we've been calling operations. Capital is often seen as an economic book or a book in economics. It's sometimes seen as a book of philosophy, which develops a set of categories. We've been using a slightly different categorial term operations and I wanna tell you where we're headed to. Some of those operations are reification, some of them are immiseration. The ones we're headed to are new when you look at the system from the expanded entryway or the wide entry point, which is the hole or accumulation. Now, it's the hole from the perspective of production, volume two is circulation, and volume three purports to be the whole from the perspective of the whole. Hard to imagine any of this really, especially volume three. The operations we're heading for from the perspective or standpoint of production to get the whole of the production process, which serves accumulation are expansion and contraction and attraction and repulsion. These are operative terms in Marxist text. They're not thematized as categories as such, but these are the things that become possible when you get the whole production system in place. The expansion of the whole production system, the contraction which takes place. Marx will show in cycles. And the attraction and repulsion, which apply both to capitals and laborers, these are the forces that work when you look at the thing as a whole just to go back to simple reproduction. So that's what we're heading for to understand these operations. We may not get to it until next week, but one thing I know is true, we'll get through this book. That's pretty good because we're taking it very carefully and understanding all of its pieces. Next year, I'm gonna let AI teach it and actually, let AI learn so you don't need to be here and I here. But in the meantime, while we're still reading whole books, we're doing it very carefully and at a slow pace because in fact this book, as you've seen, every part that comes later builds on what came before. You really can't understand it otherwise. It isn't just a basket of disconnected information or information that's all connected in the same way. It's not. You have to follow the dialectic. It has to install itself in you. Just to go back about simple reproduction, the model of simple reproduction, which is the way the system happens again the next year is that two times is not a mere repetition. Simple reproduction is necessary for the system to become an accumulation engine for capital to be in charge, but it's not sufficient. It needs to be actually included in expansion, expanding reproduction, but you need to understand simple reproduction, which has the shape of a circle. I mentioned that Marx restarts the book in chapter 21 to talk about the flux of renewal of all the elements which have to renew themselves. Why they have to enlarge themselves is another question. Every time that reproduces, the system, the first time it reproduces, that is the second time around with capital. Again, this is an analytic category. You can't pin it to a particular historical year, but the second time it goes around, everything has different characteristics. First of all, you start, the whole system starts working towards producing a labor fund as opposed to just paying labor power.

It has to produce a labor fund that will cover some of next year's startup costs. Does that make sense? So the first year is already involved in the production of the second year. That's one of the new characteristics and the second year is different because it's working on the basis of a labor fund. Another way the second time is different is that in the second time around, you've repaid the original outlay, let's say, and so it turns the premise where you advanced capital into a result. You get back what you advanced. The second year is about the return and the erasure of any original accumulation. It turns out that according to a very famous critique by Rosa Luxemburg, it is not true that capital doesn't need more original accumulation at every turn, but Marx is showing how in an ideal system, you would overcome that. You've advanced the capital. By the end of the second year, you've advanced no capital. Even your position as a capitalist is fictitious. It all came from the workers. So in order to repay the original outlay, you have to get more, and that accumulation has to be kept from the worker. Another type of reproduction, I'm just reiterating what we did last time is that in the second time around, the capitalist is feeding the worker so they will continue. The first time around, they're trying to get them tied into the system. Now, capital going into the second time around is dedicated to assuming the individual life actions of the workers. And finally, simple reproduction is made to reproduce the capital, what Marx calls the capital relation. I just wanna read to you on the bottom of page 31, this is the most important thing that reproduction does. It keeps the workers separate from the means of production. This becomes a result, not a premise. You don't have to fight to keep them away from the means. You don't have to take away their tools or get rid of artisan work. You just have to reproduce their misery so that they don't have the wherewithal to have capital themselves. You have to keep them from saving. Lots of things have to happen. This is the bottom of 531. When the capitalist production process takes its course, it reproduces the separation between labor power and the things the worker needs to perform his labor. In doing so, it reproduces and perpetuates the condition of the worker's exploitation. This is what simple reproduction does differently the second time around. It is now dedicated to continue to making the exploitation endemic to the system. It keeps forcing the worker to sell his labor power in order to live, and it keeps enabling the capitalist to buy labor power as a way of acquiring wealth. That is to say as soon as capitalism works, it reproduces the capital relation because the capitalists have the capital and the workers have just their subsistence. This is a difference when you go around the second time. first time, it's pretty contingent. You don't know how it's gonna work, but it establishes itself. No longer is it a matter of chance when a capitalist and worker encounter each other in the commodity market as buyer and seller. The production process itself makes that happen. So one of the important things in the production process is to reproduce the capital relation to make sure there is no excess among the workers for them to, for example, found a version of your corporation on associated free labor. They should not have enough capital to do that. "The system acts," he says, "as a self-perpetuating trap, continuously thrusting the one person back into the commodity market as the seller of his labor power while continuously transforming his product into the other person's means of purchasing. " Anything that happens when you reproduce capital has to include this. It can't let that slide. So that's simple reproduction. Are there questions about that before we move on? It is analytically a part of expanded reproduction, a condition for the possibility of expanded reproduction. - If we say that the second time is different from the first time, the second time is about not only reproducing capital, but also producing these relations and what- - Yeah. - Are we just making a distinction between the first time at all the subsequent times? - Yes. - So all these says what times end up being the same? - In terms of simple reproduction? Yes, that's a baseline requirement

that those relations be reproduced and that the division between capitalists and labor is reproduced in all of its qualitative distinctions, laborers being exploited, all of those things. So there has to be a certain amount of energy put in the system in let's say modes of education, modes of disinformation. Some of it is natural that the capitalists capitalize more and more, technologize more and take the skills away from workers. That is to say de-skilled labor force is better and that keeps the labor force from taking over. You can see there is a movement towards what some Marxists think and what Marx and angles at different times thought would be the total destitution of the proletariat, leaving them with absolutely nothing, making the revolutionary force congeal, if you wanna put it that way. So if there's nothing left to have and nothing left to lose, the proletariat might take power. This movement, a kind of internal revolutionary movement to capital is not so explicit in this volume, but it's a thought Marx had had. We'll see it on page 691, but that's the only place it really turns up here. Other questions about simple reproduction? Good. How surplus value is transformed into capital. This is our second motto at three times is the charm. Now, we're coming to the, in a sense, the climax of this book. If this book is a story about value, it's climax is how capital works or how value not only valorizes itself but continues to valorize itself and valorizes itself at a higher level each time. He says on page 545 that the motto of the capitalist is accumulate, accumulate. This is, he says, "Moses and the prophets for the bible of capitalists, accumulate, accumulate. " Of course, this phrase is spoken through their mask by the persona that they are by capital using them as puppets according to Marx and we'll get this great profile of the capitalist in these chapters. The question now is how we get from surplus value to capital. Anyone want to posit how we might get there? What's the difference between surplus value and capital? - Okay, surplus value can be used either be reinvested into the production system or it can be used for consumption - given back to the workers as higher wages. There's all sorts of ways to do that and sometimes it is, but that's true. Soon we'll get into this all important division between revenue and capital. Capital is the back transformation of surplus value into means of production. So capital requires this coming back around and the coming back around, which we're gonna deal with now is where some of these accumulation effects happen, right? It accumulates rather than dissipates because it comes back around and gets reinvested. He says, "Reminding us that surplus value is distinct from other types of value in that it comes fully from unpaid labor, which is the result of the capital relation. " And you'll notice he's trying to get this perpetuum mobile effect of capital described to you all. Capitalists then reinvest it as capital, employing more labor, reproducing the division and the capital relation, which perpetuates the unpaid labor source of surplus value. You see how it's a kind of perpetual motion machine. That's what he wants to lay out for you. You have to enforce something like the capital relation at the beginning, but after you've enforced it, it takes over as a kind of trap. This is a, maybe not exactly the way capital works, maybe not the way it's working exactly now, but it's an ingenious idea for understanding why this class relation is so intractable. He has a very strong reading of that, that under capital in a capital system

it is absolutely intractable, the class relation. We're gonna get there. This is on page 533. When surplus value is used as capital or transformed back into capital, the accumulation of capital occurs so that capital is accumulation. That's what it means from the beginning. It isn't simply an inert thing that sits there like surplus value could be. We know it comes from a questionable source, a concealed source. We know there's some incentive for capitalists to get this source because it pays for their own subsistence, but nowhere there is it said why it has to accumulate. One of the propositions recently given by my 15-year-old son is that capitalists are greedy. I said, "Well, I'll give you the page to read in capital. " I said "No. " And he was like, "Are you sure? " The answer is that capital increases itself and we're gonna see now how that happens. So capital is value advanced in view of value returned that gets reversed, transformed back into capital and goes back into the system. From the perspective of the commodity, we see a circuit of transformations. You remember this, the commodity transforms into money or it becomes a relative to an absolute or an independent exchange variable and the independent steps out and becomes money and the money produces commodities again. Capital becomes labor, which combines with raw materials. The labor and raw materials go together into a commodity and the commodity goes back into money. This is not saying anything yet about capital, although this is the basic material exchange or circulation that makes capital possible. From the perspective of reproduction, we're now focused only on the way the whole effort of production is to get back to the starting point as quickly as possible, as efficiently as possible to have that return to reinvest, right? Because of course, you need to reproduce so the return has to come back. But something's happened. If you look on page 534, Marx gives you a starting point. It starts from, I don't know how to do the pound sign. Does it go here? Does that look like vaguely, whatever. You start with 10,000. Let's take a look. This is capital number one. Sorry, this is not even capital number one yet. This turns, here's capital number one. Oh my god, it's so bad. Over the year, because you have a, well, let's see if I can reconstruct this in my head. Yeah, you have a 100% rate of exploitation. 8,000 of whatever they are go for means of production. 2,000 go for variable capital or labor power. Remember this. And since you have a 100% rate of exploitation, you've got 2,000 extra back on this investment. So you end up with 12,000, whatever these are. Some sort of currency there that they used. That is you have an 80% outlay for fixed capital, a 20% outlay for variable capital at a rate of a hundred percent exploitation. At the end of the second year, sorry, first year, you have 12,000. You notice you have a 20% rate of for variable capital. So you have this extra capital here of 2000. If you take 20% of that at a hundred percent rate of exploitation

you'll get that back and at the end of the second year, you'll have this much. The third time, the end of the second year, you put in 10,000, you get 12,000. You put in 12,000, you get 12,400. It looks like that 400 came from your capital, from the capital that grew on your first initial outlay and makes everything look as though, this is the logic of appearances, capital grew itself. This is really the climax of the book. I have to say. Here, to get this 400, no extra money was advanced. I am feeling very moved by this. On the middle of page 536, it's really astounding what he can show with his mishmash of Ricardo and Hagel and his own ingenuity and reading a lot of the actual data. A sum of value that amounts to 10,000 and belongs to the capitalist is needed to create surplus capital number one, 2,000, middle of page 536. What is required to create surplus capital number two, 400 pounds is nothing, but the existence of surplus capital number one. Owning yesterday's unpaid labor now appears as the sole precondition for appropriating today's unpaid living labor on an ever larger scale. And you can see how this will continue to produce more just by itself or so it appears. I would say read very carefully page 536 and 537 if you want to understand how capitalism works. This leads to what you could call a compounding accumulation and that compounding accumulation is the basis, although it all comes from unpaid labor, it's the basis for the fantasies about capital's growth independently of anyone's inputs. So there's a double concealment here that he wants to expose to you that this apparently automatic accumulation hides the reverse transformation of capital into investment, right? It's technically not going to the workers and capitalists. It gets retransformed and reinvested. It hides that reinvestment and retransformation and it hides also the basis for this, which is exploitation of labor or the production of surplus value. That's why he had to teach you surplus value before he could tell you anything about capital. Capital is a form that seems to operate on its own, but it depends on labor that is unpaid to make surplus value and capitalists who are now tied to one operation, which is the retransformation of their profits back into means of production for the next cycle. Now, the third degree of accumulation, reproduction becomes the starting point, becomes the drive, it becomes the desire. How do we get to the 400? capital seeming to propagate itself? This is the impetus for endless ideology about how capital works. Marx just fished out a few from the 19th century, but we have plenty and plenty of billionaires who think through their ingenuity capital is multiplying itself. But it has a strange requirement for this to continue to happen and that is that the whole system has to continually expand, to accommodate the expanding accumulation. Isn't accumulation if you take it home and put it in your yacht. He will talk about why luxury buying is important. And of course, capitalists think their yachts are investments and their houses are investments. I have a billionaire friend, legacy from high school. He says, "I like land. " I like it too, but in a different way. But all of this is places to park your money that are not back investing in your own business let's say, but they also investments just in different sectors. The strange requirement of making this happen is that the whole system continually expand in order to put that 400 to work, which is the capital plus, the plus

the more of more, the accumulation on the accumulation so that every accumulation is in view of the next accumulation, which will be a fraction of it. It will always need more raw materials, it'll always need more labor. It'll always, because of competition, need more technology. It will need more capitalists though fewer in number. It will produce more waste and more pollution, will rely more and more on colonization, imperialism, theft, and subsection to fuel its voracious appetite. I wrote that sentence. Not bad, Marxists. Okay. In this way, the capital relation becomes entrenched because only existing capitalists can start a cycle 'cause only they have capital to reinvest. This is by the way why you see whole dynasties forming now of capitalists who pass this on to their children, which is anti-capitalist. A great book if you wanna read it is "Counterrevolution" by Melinda Cooper that tracks the way this happened with the Koch brothers and other neoliberal ideologues. Okay. Questions about that? Yeah. - I didn't say that, well, I guess I'm not super clear where the 400 comes from, but also why do you say that the market is capitalist? - Well, capitalism implies free and everyone enters independently and with the same means or that those people who made the money are the ones who have the money, but heirs didn't make any money. So a truly free market would mean socializing the wealth immediately upon a billionaire's death would've to go be distributed to everybody. But that's right, you don't exactly see where the 400 comes from. That's exactly right. That's the confusing part. It comes from the same process where you have now an extra 2,000, right? You've put 2,000 in labor power. They have, let's say, reproduced this for themselves to feed themselves whatever size of workforce this is in the first half of the day. And the second half of the day, they've made 2,000 for you. So you end up with 12,000. When you reinvest this 2,000, the new 2,000 the next year at the same rate of exploitation, you're making another 400 and it seems like it came from nothing. Yeah. - So just a little bit. Like if you put it again, the 12,000, 12,400, like that's the initial advance stop that you have on credit? - We're just concerned with what you get from the 2,000 that came purely as unpaid labor. It is true that there might be a different ratio depending how much the means of production costs the next year, but he just wants to show you in a fairly formalized analytic ideal situation. When you take the 2,000 that was, let's say unpaid or surplus value extra and you reinvest that under the same conditions, you're getting something for which you didn't lay out anything. Okay, how surplus value is transformed into capital. Anything unclear about that still? Yeah. - So the 400 is just like an arbitrary number you're just using, like what's the rate? - No, because the rate, 2,000 is 20% of this, of the whole, of the total 'cause you have to, remember, we learned not to take it of the internal comparison. It has to be to the total value of the day. 2,000 is 20% of this. That's very poorly written out. We're gonna do it in a better way. The 2,000 surplus value equals 20% of the 10,000 pounds of capital laid out, right? 2,000 was laid out on labor power or variable capital. 8,000 is constant capital. So at the same rate of exploitation, we learned that we had to compare it to the total outlay, not just to the outlay for constant capital, which reduces it. When you compare it to the total outlay, you get a rate of exploitation of 20%.

Since you've made now 2,000 on top of this original 10,000, right? At a hundred percent rate of exploitation, you reinvest the 2,000 because he's separating out just to say, again, he's separating out the surplus value, you get 400. It's not dollars but pounds. You get 400 as 20% of this. That is a return that seems to be clear of any investment that you made. Lucia. - That is not Ms. Bowsy. - Me either. - But, so what about the 100? So my understanding of the original 12,000 that was made out of the 10,000 back. The 2,000 of the 10,000 was buried and that there was a hundred rate of exploitation, but then you get 4,000 in total. Well, 4,000 - Yes, - But then, that's also happening alongside the equation of 20% of the 10,000, weeks, 2,000, but then the second year, 20% is only applied to that variable 2,000 that was made, but not the original 4,000 of the 2,000 that was made out of the hundred rate of exploitation. - Right. Right, because you come back with 12,000, right? He hasn't done this part of the calculation for you, but at the end of the first year, you have 12,000 and you put that back into the production process. The percentage of that, let's say, that will be means of production will be higher than the previous year. So he has assumed that the means of production would be this year 10,000 and 2,000 would go for labor power. - Wouldn't that lower the rate of exploitation? - Say we're 100% rate of exploitation, less than 2,000 the labor power- - Right. Yeah, I'm not sure exactly what he assumes, but he does want to show that, well, I guess what you would say is, oh, here's the way to look at it is this would be Marx's way. I'm not sure if this is right economically, but let's just say this remains the same. So you just take that out of the equation. 10,000 is reinvested in that way, produces its own 2,000 again, right? That would be simple reproduction. Nothing would've really expanded there, but the extra 2,000 that you've made has its own life, its own afterlife. And insofar as it's living on its own, the same thing is happening. It's splitting between means of production and labor power, the rate of exploitation being the same without doing the internal calculations, you get to a 400 pound surplus value. - The basic point is that the exploited value goes back and creates more exploited value. - Exactly - Impression that you are getting money from nothing that you had first. - It gives you the impression that a capitalist is a kind of world genius that can make something out of nothing and that it gives you the incentive as a capitalist to become a capitalist and to get a certain initial outlay after which the machine takes over for you. But we are now gonna see in these chapters how this expanding reproduction, which will happen. Each time simple reproduction happens, the surplus value return will be more. That it has a set of consequences that are very serious for the world. First thing he does in this chapter is dispel a few confusions. One of them is that capitalists are greedy and they just want to have fancy houses and boats and things like that. Another one of them is that to be a good capitalist, you have to practice a kind of Protestant self-denial, a position that was put forward by Nassau Senior who Marx never tires of ridiculing. He was a sometime economist, a government official, and he claimed capitalists need to check their impulses. But Marx will show you that the capitalist is only motivated by accumulation. If you take it for yourself, you are no longer a capitalist. So if you wanna stay a capitalist, if you want your industry to continue, especially with the forces of competition 'cause another business owner has now machines

and is making more of a return, if you don't wanna drop out of your class, accumulation has to be your first motive. There are certain situations in which you can skim more off the top and others in which you can skim less off the top. If the business cycle contracts, you find them selling their yachts. If the business cycle expands, but that's never at the expense of this 400. The third time around, profit on profit, mystical growth of capital. This pressure to accumulate, this inner pressure to accumulate changes the whole system. It makes the unit of capital no longer an individual business owner, but the biggest business owner you can possibly be. It makes the unit of labor no longer the laborer or even a cooperating group, but a workforce or a labor population that can be moved around. Because remember, with every influx of this mystical plus, you need more means of production, which means you need more extractive industries, you need more agriculture to feed the workers, and then you need the production workers who are doing this and you need the machinery because you need to get profit out of this. surplus value out of this rather than fall into the value trap of increasing productivity without increasing value. So you have to be constantly expanding the whole system. What we get out of this, he will tell us is two very clear functional roles. This is what the classes are made up of. The proletariat is a machine for producing surplus value. The capitalist transforming surplus value into capital and reinvesting it. Anything else is superfluous. The capitalist has no choice, but to reinvest the revenue in general. Because it's expanding and the tendency of capital is for capital, for, because of the way you're investing into machinery for industries to contract around one or two capitalists, the tendency of capitals is to attract to one another. So you see mergers and acquisitions. When I went to present this book at a law school, I won't say which, there was a lot of budding lawyers in the audience and one said to me, "Well, it was very honest moment. Most of us are going into mergers and acquisitions. What do you ask us to do with this book? " I said, "Well, at a minimum know what you're getting into. " Capitals tend to attract. Things tend to concentrate, capitals tend to attract, not to fragment and go to a multiplicity of capitalists because it's very hard to put a lot of workers and a lot of means of production into motion in a scattered way. You tend to have more capital, more investment in means of production and means of labor. And so you can start out at a higher place. Other businesses can't even get started because you have so much of an advantage. Okay, so the extent of accumulation is, depends on the division between revenue and capital. That's the first thing he said. But it isn't just the arbitrary will of the capitalist that they're like, "Well, this year I'm not gonna take a vacation. " It really is dictated by the expanding and contracting cycles of capital by competition, by what they need to do to keep making more of more. So capital always takes precedence over revenue. That's Marxist's first point. How does accumulation, how does the extent of accumulation, how is it determined outside the division between revenue and capital? Well, we know one way it's determined, by the degree of exploitation. So if you can raise the degree of exploitation here, get a higher yield of unpaid labor, you're still in good. This is, remember, we said, now we're looking from the perspective of accumulation at what we decided before was the capitalists need to reproduce labor or to pay them for their cost of subsistence. Now, it looks like not just an individual capitalist and an individual laborer. It looks like a capitalist putting together a labor fund

to cover what the laborers need as a mass, as a population for the next year. And what Marx reminds us is that in times of contraction, capitalists can dip into the labor fund because they're gonna need to let a bunch of those laborers go anyway. So it actually works the other way around to be a support for capitalists. It's like a hedge against the future. Things contract. Not only can they fire a lot of people, but they can use what we're going to be wages to bolster their bottom line. We see this happen all the time, just so you know. Remember that in order to increase the extent of accumulation, that's what we're talking about here, right? Outside of the division between revenue and capital. We can do it through a higher degree of exploitation, but every time you exploit more, you produce more surplus value by extending the working day or increasing the intensity of work, you have to increase the size of your enterprise, require more means of production. Remember this. So all of these things require that your enterprise and the whole sector and the whole economy grows. These are the consequences. You can ring more surplus value out of your workers, but that comes at the cost of growing the whole thing 'cause you're putting more labor power to work. You're making more products. "This also brings with it," he says, "as a warning, an increasing exploitation of nature. " Again, agricultural and extractive production has to increase to support. This is not just an innocent move from 2,000 pounds to 400 pounds to 2,400 pounds. Adding this, it involves mobilizing all of nature to support this accumulation drive. Another way you can increase the extent of accumulation outside capitalists not buying yachts, is to increase productivity. Again, we're looking back at productivity from the perspective of accumulation. But again, if you increase productivity, as you will remember, this produces a value trap because the more you make with the same effort or the same time, the lower the value of each of those things. It requires you to cheapen the means of subsistence, as we've said. And to do this, it initiates a technological race, the end of which we have not yet seen. The technological race, which helps you to ring value out of productivity increases, also changes the whole nature of the field of the capital system. It means when a new technology comes into play, gets adopted, a whole working population may get thrown out of work and a whole other working population may need to be brought from another part of the world or from locally or children in Marxist time, a population that hadn't historically worked, needs to be brought into the workforce to do something completely different. There's a sentence, a chilling sentence I wanna read to you from 554 so you understand a little bit the cost of innovation and technology free of charge. This capital incorporates into its new form the social progress that was achieved behind the back of its old form. He is talking about science as a power that enlarges capital in the form of engineering, but so-called basic or pure science feeds engineering in this way. And capital will incorporate this, what Marx calls social progress into its new form. It gets this free of charge. Scientists are just producing. We pay for it through taxes to universities and research and capital incorporates it, as he says, achieved behind the back of its old form. Whatever form capitalist took, let's say the, what is the Taylorist version with the conveyor belts? - Assembly. - Assembly line version, thank you. The assembly line version. When assembly lines are taken over by robots, the robots are being developed as the assembly line version is rolled out, is rolling along. Robots are being made and isn't that the assembly line goes out of work, but it becomes modified and becomes automatized and the new technology steps onto the scene, puts all those people out of work.

Even though everyone has been conscious that these technical developments have been in preparation the whole time. Does that make sense? Capital is preparing for the obsolescence of the current form at an ever increasing rate. Another operation that you could put up there is obsoleting. Okay, I wanna stop and see if there's questions. Before I do that, let me just give you the punchline of the whole book, the general law of capitalistic accumulation. You've finally gotten to it. It's like not even Thanksgiving yet. We can be thanks and giving thanks for this, Marx's formulation of the general law of capitalistic accumulation. It's not economistic, it's social. The richer capital gets as a whole, the poorer the people get as a whole. This is on page 589, just to, I'm forecasting. What you get to at the center of the general law chapter, which is extremely important. The richer capital gets as a whole, the bigger it expands, the more immiserated is the vast majority of the population or the non-capitalist. This is the law of capitalistic accumulation. This is the center of the production process, the progressive immiserated of the majority. If you follow his argument, if you take it to be right, it puts to rest the great stupidity and lie of capitalists and their henchman, the economists, that there's some way the capital system can benefit everybody. Marx says this is absolutely impossible by the structure of the system. If the capitalists and their henchmen don't believe this, but they say it just for their own purposes, then it's a lie. If they believe it, then it's a great stupidity or a self lie, this is Marx, or something like a disavow of the obvious facts. Disavowal could be another operation going on here. I'm quoting Caleb Smith, a colleague of mine who's working on disavowal. The capitalist says, "Well I know, but nevertheless we have no choice but to do this. " Nevertheless, everyone's gonna, a floating tide raises all boats, or what is it? Rising tide raises all underpants, something. Something, like some ridiculous little phrase that keeps people going. So we get here to the great lie. It's not an economic issue, it's not an issue of mathematics. It is a mechanism, a set of operations that raise up the top. Although capitalists, you know, could tend to get less and less for themselves, depending how capitalism goes. That's possible. We're in a time of great opulence, but it is certainly a process of the commiseration of the majority. You have two minutes. What are your reactions to that? It's the climax of everything. Yeah. - I wanna go back to people talks, right? - Yeah. - Well, I got questions. While this year you have been vulnerable though, what is it that Marx had assumed? So I mean looking at the problem, looking at the way we break it down, is it fair to say that he's assuming that the verbal components and constant components of the 2,000, which is the soccer that you would capital, yes, remain constant? - Yes. - Maybe the softball also remains constant, I just wanted to say. - Yes, that's what he's assuming. But you also can see if you have this 2,000 more that in order to, let's say the production process stays the same. Now, if technology enters the scene right here, everything can change. But if the production process stays the same, what the capitalist is able to do is put this to work in the same way that previously they put that to work, the components will be the same. So 80% of this will go to means of production and 20% will go to labor and you'll come out with this in surplus value. Again, he freezes other variables to be able to show you the process and that's an important kind of analytic tool that he uses. - Yeah, okay, so a follow question would be, so as long as for example, we say 2,000, we get 400 and everyone take product, we say maybe 400 because 20 pounds, right? Which would be 5% or, before Mindre, I say. In that scenario, it doesn't seem like the exploited labor is going on. It's just original capital beginning the premiums of exploited labor and just reproducing, except as well as producing surplus value.

- That's right, yeah. - I think that, this like one way to read this climax just as integral, like progress narratives, like really, this narrative that like by accumulating, we're making life better for everybody better and better. Marx is just trying to say actually- - Yeah, - This is the opposite of progress. - True. It's definitely regress. There's no question. To be honest, I'm not sure that progress, as a kind of cultural focus and a focus of critique was in their lexicon in the mid 19th century, but you're right. From the perspective of a progress myth, you would want to say Marx shows that accumulation and progress are mutually incompatible. - What about there is progress but it's not personal? - Well, there's only technological progress. That's where he uses that term progress. So I guess what you would say is, here's what you would have to say. The idea that there is a cultural progress that is somehow good is a bad echo of capital's investment in technological progress. There never was any reason to think that progress was a desired effect in societies. It's funny because technological progress produces the desire to have social progress, to be progressive, to be progressivist, but maybe progress here is really the wrong word. (ambient music)