The Unfinished System of Karl Marx by Judith Dellheim & Frieder Otto Wolf

Author:Judith Dellheim & Frieder Otto Wolf
Language: eng
Format: epub
Publisher: Springer International Publishing, Cham

Manifestation of the Immanent Contradiction in the Production of Surplus Value: Structural Capital Overaccumulation, Financial Instability Through Rising Indebtedness, and the Tendency Towards Secular Stagnation in Capitalist Wealth Production

The accelerated capital accumulation characteristic of the twofold law of the tendency of the rate of profit to fall and the sum of profit to increase is, for its part, contradictorily determined as an intercyclical steady expression of the immanent contradiction of surplus value production (between increased productivity and valorisation ). This expresses itself in a tendency for accumulation dynamics to decline (sinking accumulation rate), as well as a tendency towards a decline in the growth rate of productive employment, the value product and the amount of surplus value in respect of profit. If limitations on the accumulation rate through individual consumption of a share of the surplus value or profit was the accentuating characteristic of the immanent limits of the progress of accelerated accumulation under earlier conditions, then under developed conditions antagonistic relations of distribution constitute a mere reflection of the fundamental production relations sub alia specie. In both cases, the enforcement of these limitations means that predatory competition between (reproductive) capital reinvestment and the valorisation of existing original capital gains acceptance to a growing extent. Renewed investment does not lead to corresponding growth in production and employment, but rather takes existing value creation and employment out of circulation. The cause of this constellation is that too much capital has already been accumulated for further increases to the total sum of profit to be realised on the macroeconomic level. Expressed differently, the general rate of profit in such an instance has gradually declined in the preceding phase of accelerated capital accumulation to such an extent that reinvestment of additional capital can only be expected to ensure increased valorisation or ensure rising marginal capital efficiency when functioning capital is devalued somewhere else.

Manifestations of this accelerated capital accumulation exhaustion and its replacement by not only cyclical but also structural capital overaccumulation are manifold. Superficially, the difference between expected returns on real investments and the money interest rate no longer yields a level of entrepreneurial profit justifying the risk of reproductive capital investment at a higher level. The consequence is a redirection of capital capable of being invested in interest-bearing valorisation through the purchase of fictitious capital with the expectation of profit from price shifting speculation. Increased redirection of freed up money capital into financial investment forms either leads to an increased supply of lending capital on money capital markets and lower interest rates there, and/or finances consumptive credits to the general public and private households to a growing extent.15 Both alternatives open up new latitudes for (reproductive) capital accumulation: interest rate reductions due to a growing supply of money capital on the credit and capital markets improve investment calculations, as they now have access to possibilities precluded while money interest rates remained high. The financing of consumptive credit to public and private households stabilises consumptive demand and feeds new sales potential through an attenuation of antagonism in the distribution relation.

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