The Accumulation of Capital — Section 2, Chapter 14 : Historical Exposition of the Problem: Malthus

By Rosa Luxemburg

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Untitled Anarchism The Accumulation of Capital Section 2, Chapter 14

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(1871 - 1919)

Rosa Luxemburg (German: [ˈʁoːza ˈlʊksəmbʊʁk] (About this soundlisten); Polish: Róża Luksemburg; also Rozalia Luksenburg; 5 March 1871 – 15 January 1919) was a Polish Marxist, philosopher, economist, anti-war activist and revolutionary socialist who became a naturalized German citizen at the age of 28. Successively, she was a member of the Social Democracy of the Kingdom of Poland and Lithuania (SDKPiL), the Social Democratic Party of Germany (SPD), the Independent Social Democratic Party (USPD) and the Communist Party of Germany (KPD). (From: Wikipedia.org.)


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Section 2, Chapter 14

At the same time as Sismondi, Malthus also waged war against some of the teachings of Ricardo. Sismondi, in the second edition of his work as well as in his polemics, repeatedly referred to Malthus as an authority on his side. Thus he formulated the common aims of his campaign against Ricardo in the Revue Encyclopédique:

‘Mr. Malthus, on the other hand, has maintained in England, as I have tried to do on the Continent, that consumption is not the necessary consequence of production, that the needs and desires of man, though they are truly without limits, are only satisfied by consumption in so far as means of exchange go with them. We have affirmed that it is not enough to create these means of exchange, to make them circulate among those who have these desires and wants; that it can even happen frequently that the means of exchange increase in society together with a decrease in the demand for labor, or wages, so that the desires and wants of one part of the population cannot be satisfied and consumption also decreases. Finally, we have claimed that the unmistakable sign of prosperity in a society is not an increasing production of wealth, but an increasing demand for labor, or the offer of more and more wages in compensation for this labor. Messrs. Ricardo and Say, though not denying that an increasing demand for labor is a symptom of prosperity, maintained that it inevitably results from an increase of production. As for Mr. Malthus and myself, we regard these two increases as resulting from independent causes which may at times even be in opposition. According to our view, if the demand for labor has not preceded and determined production, the market will be flooded, and then new production becomes a cause of ruin, not of enjoyment.’(1)

These remarks suggest far-reaching agreement, a brotherhood in arms of Sismondi and Malthus, at least in their opposition against Ricardo and his school. Marx considers the Principles of Political Economy, which Malthus published in 1820, an outright plagiarism of the Nouveaux Principes which had been published the year before. Yet Sismondi and Malthus are frequently at odds regarding the problem with which we are here concerned.

Sismondi is critical of capitalist production, he attacks it sharply, even denounces it, while Malthus stands for the defense. This does not mean that he denies its inherent contradictions, as Say or MacCulloch had done. On the contrary he raises them quite unmercifully to the status of a natural law and asserts their absolute sanctity. Sismondi’s guiding principle is the interests of the workers. He aspires, though rather generally and vaguely, towards a thoroughgoing reform of distribution in favor of the proletariat. Malthus provides the ideology for those strata who are the parasites of capitalist exploitation, who live on ground rent and draw upon the common wealth; and advocates the allocation of the greatest possible portion of the surplus value to these ‘unproductive consumers’. Sismondi’s general approach is predominantly ethical, it is the approach of the social reformer. Improving upon the classics, he stresses, in opposition to them, that ‘consumption is the only end of accumulation’, and pleads for restricted accumulation. Malthus, on the contrary, bluntly declares that production has no other purpose than accumulation and advocates unlimited accumulation by the capitalists, to be supplemented and assured by the unlimited consumption of their parasites. Finally, Sismondi starts off with a critical analysis of the reproductive process, of the relation between capital and income from the point of view of society; while Malthus, opposing Ricardo, begins with an absurd theory of value from which he derives an equally absurd theory of surplus value, attempting to explain capitalist profits as an addition to the price over and above the value of commodities.(2)

Malthus opposes the postulate that supply and demand are identical with a detailed critique in chapter vi of his Definitions in Political Economy.(3) In his Elements of Political Economy, James Mill had declared:

‘What is it that is necessarily meant, when we say that the supply and the demand are accommodated to one another? It is this: that goods which have been produced by a certain quantity of labor, exchange for goods which have been produced by an equal quantity of labor. Let this proposition be duly attended to, and all the rest is clear. – Thus, if a pair of shoes is produced with an equal quantity of labor as a hat, so long as a hat exchanges for a pair of shoes, so long the supply and demand are accommodated to one another. If it should so happen, that shoes fell in value, as compared with hats, which is the same thing as hats rising in value compared with shoes, this would simply imply that more shoes had been brought to market, as compared with hats. Shoes would then be in more than the due abundance. Why? Because in them the produce of a certain quantity of labor would not exchange for the produce of an equal quantity. But for the very same reason hats would be in less than the due abundance, because the produce of a certain quantity of labor in them would exchange for the produce of more than an equal quantity in shoes.’(4)

Against such trite tautologies, Malthus marshals a twofold argument. He first draws Mill’s attention to the fact that he is building without solid foundations. In fact, he argues, even without an alteration in the ratio of exchange between hats and shoes, there may yet be too great a quantity of both in relation to the demand. This will result in both being sold at less than the cost of production plus an appropriate profit.

‘But can it be said on this account’, he asks, ‘that the supply of hats is suited to the demand for hats, or the supply of shoes suited to the demand for shoes, when they are both so abundant that neither of them will exchange for what will fulfill the conditions of their continued supply?’(5)

In other words, Malthus confronts Mill with the possibility of general over-production: ‘... when they are compared with the costs of production ... it is evident that ... they may all fall or rise at the same time’.(6)

Secondly, he protests against the way in which Mill, Ricardo and company are wont to model their postulates on a system of barter:

‘The hop planter who takes a hundred bags of hops to Weyhill fair, thinks little more about the supply of hats and shoes than he does about the spots in the sun. What does he think about, then? and what does he want to exchange his hops for? Mr. Mill seems to be of opinion that it would show great ignorance of political economy, to say that what he wants is money; yet, notwithstanding the probable imputation of this great ignorance, I have no hesitation in distinctly asserting, that it really is money which he wants ...’(7)

For the rest, Malthus is content to describe the machinery by which an excessive supply can depress prices below the cost of production and so automatically bring about a restriction of production, and vice versa.

‘But this tendency, in the natural course of things, to cure a glut or a scarcity, is no ... proof that such evils have never existed.’(8)

It is clear that in spite of his contrary views on the question of crises, Malthus thinks along the same lines as Ricardo, Mill, Say, and MacCulloch. For him, too, everything can be reduced to barter. The social reproductive process with its large categories and interrelations which claimed the whole of Sismondi’s attention, is here completely ignored.

In view of so many contradictions within the fundamental approach, the criticism of Sismondi and Malthus have only a few points in common:

  1. Contrary to Say and the followers of Ricardo, they both deny the hypothesis of a pre-established balance of consumption and production.
  2. They both maintain that not only partial but also universal crises are possible.

But here their agreement ends. If Sismondi seeks the cause of crises in the low level of wages and the capitalists’ limited capacity for consumption, Malthus, on the other hand, transforms the fact of low wages into a natural law of population movements; for the capitalists’ limited capacity for consumption, however, he finds a substitute in the consumption of the parasites on surplus value such as the landed gentry and the clergy with their unlimited capacity for wealth and luxury. ‘The church with a capacious maw is blest.’

Both Malthus and Sismondi look for a category of consumers who buy without selling, in order to redeem capitalist accumulation and save it from a precarious position. But Sismondi needs them to get rid of the surplus product of society over and above the consumption of the workers and capitalists, that is to say, to get rid of the capitalized part of the surplus value. Malthus wants them as ‘producers’ of profit in general. It remains entirely his secret, of course, how the rentiers and the incumbents of the state can assist the capitalists in appropriating their profits by buying commodities at an increased price, since they themselves obtain their purchasing power mainly from these capitalists. In view of these profound contrasts, the alliance between Malthus and Sismondi does not go very deep. And if Malthus, as Marx has it, distorts Sismondi’s Nouveaux Principes into a Malthusian caricature, Sismondi in turn stresses only what is common to them both and quotes Malthus in support, giving the latter’s critique of Ricardo a somewhat Sismondian cast. On occasion, no doubt, Sismondi actually succumbs to the influence of Malthus; for instance, he takes over the latter’s theory of reckless state expenditure as an emergency measure in aid of accumulation and so becomes involved in contradictions with his own initial assumptions.

On the whole, Malthus neither rendered an original contribution to the problem of reproduction, nor even grasped it fully. In his controversy with the followers of Ricardo, he operated with the concepts of simple commodity circulation, just as they did in their controversy with Sismondi. His quarrel with that school turns on the ‘unproductive consumption’ by the parasites of the surplus value; it is not a quarrel about the social foundations of capitalist reproduction. Malthus’ edifice tumbles to the ground as soon as the absurd mistakes in his theory of profits are uncovered. Sismondi’s criticism remains valid, and his problems remain unsolved even if we accept Ricardo’s theory of value with all its consequences.


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Footnotes

(1)Nouveaux Principes ..., vol.ii, p.409

(2) Cf. Marx, Theorien über den Mehrwert, vol.iii, pp.1-29, which give a detailed analysis of Malthus’ theory of value and profits.

(3) Dedicated to James Mill and published in 1827.

(4) James Mill, Elements of Political Economy (3rd edition, London 1826), pp.239-40.

(5) Malthus, Definitions in Political Economy (London 1827), p.51.

(6)Ibid., pp.64.

(7)Ibid., pp.53-4.

(8)Ibid., pp.62-3.

From : Marxists.org

(1871 - 1919)

Rosa Luxemburg (German: [ˈʁoːza ˈlʊksəmbʊʁk] (About this soundlisten); Polish: Róża Luksemburg; also Rozalia Luksenburg; 5 March 1871 – 15 January 1919) was a Polish Marxist, philosopher, economist, anti-war activist and revolutionary socialist who became a naturalized German citizen at the age of 28. Successively, she was a member of the Social Democracy of the Kingdom of Poland and Lithuania (SDKPiL), the Social Democratic Party of Germany (SPD), the Independent Social Democratic Party (USPD) and the Communist Party of Germany (KPD). (From: Wikipedia.org.)

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