On page 603 of Marx's Capital, Volume I (Progress Publishers edition) there appears the following sentence, in italics: "This is the absolute general law of capitalist accumulation." The emphasis could not have been plainer. Marx had just summed up his critique of Political Economy and the essence of his alternative analysis. This critique and alternative can be summed up even further: once the periodicity of alternative expansion and contractions had been introduced into social production it became self-replicating -- "effects, in their turn, became causes..." -- Given this cyclical fluctuation of booms and busts, a surplus laboring population becomes "the lever of capitalistic accumulation" as well as being a necessary product of that accumulation. This industrial reserve army provides the "free play" that enables capital to contain its losses during the downturn and to take ready advantage of brisk markets in the recovery.
Unemployment is NOT a regrettable side effect of technical progress or "collateral damage" of market exchange. It is the BASIS of continued capitalist accumulation. This explains why it is necessary for economists to ridicule the "fallacy" that reducing working time can ameliorate unemployment. Without unemployment, capital would cease to be "self-expanding". In fact, capital is not self expanding but depends precisely upon that free play provided by the reserve industrial army to appropriate ever more of the energies of an expanding population and of natural resources while paying progressively less for them. Pages 592 to 603 contain a comprehensive and scathing rebuke to the wages-fund doctrine of classical political economy and the emerging but as yet unnamed lump-of-labor fallacy. This intimate relationship between unemployment and accumulation takes on a novel significance in the era of politically-managed business cycles. Initially, job creation was given the rationale given for economic stimulus through government spending and monetary policy. But as job creation has become de-coupled from economic growth strategy that rationale has lost its persuasiveness. The successor to stimulus spending -- "austerity" -- is now being embraced as a job creation program on the conviction (rooted in a restored, covert wages-fund doctrine) that labor markets are not clearing because wages are too high (and "sticky"). But austerity will not work for the simple reason that the political business cycles of the 21st century are NOT the industrial business cycles of the 19th century. Austerity policy is based not on an analysis but on nostalgia for a dogma. There is one point on which the austerians and the stimulators appear to agree -- the exclusion of a third policy approach that would DIRECTLY absorb the unemployed into existing social production. This third approach is taboo because it places the objective of job creation ahead of that of capital accumulation. It is a fallacy in that it doesn't preserve the vital "free play" role performed by the unemployed and thus undermines the basis of capital accumulation. http://ecologicalheadstand.blogspot.com/2011/03/free-play-this-is-absolute-general-law.html -- Sandwichman
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