Marxism - primary contradiction of capitalism

Question

After writing a long post, i decided to keep only the summary : I understand that in the marxist framework a mode of production is constituted by :

• the relations of production
• the productive forces

And that the engine of the (r)evolution of the mode of production, and its development is the contradiction between the 2. At some point the relations of production are an obstacle to the development of the productive forces. So my questions are :

• how is it exactly that private property of means of production (the relations of production) and a socialized production (the productive forces) through the development of capitalism and an increasingly large-scale industry, constitute a contradiction, and the main one, in capitalist mode of production ?
• how does that contradiction manifests itself ? Through economic crises, i've also read "the destruction of productive forces during those crises", but how are economic crises manifestations of this contradiction ?
• how, according to marxism, is this supposed to lead to a socialist mode of production ? Taking from Lenin and his book on imperialism, that contradiction is being "solved" by ever-increasing concentration of capital, leading to monopolies in different branches of production, and the merger of branches of production, for example financial capital, being the merger of bank capital and industrial capital. And one can see how one large monopolistic company in one branch can purchase or merge with another monopolistic company of another branch. How is socialism supposed to happen or being brought ?

Thank you

Answer 1

how is it exactly that private property of means of production (the relations of production) and a socialized production (the productive forces) through the development of capitalism and an increasingly large-scale industry, constitute a contradiction, and the main one, in capitalist mode of production ?

Well.

If the property of means of production is private, and production is essentially production of commodities, then production is led by competition. Competition forces each private producer of commodities to seek to offer their commodities at the lowest price. This in turn makes each producer of commodities seek to systematically increase surplus value, which, barred the primitive and inefficient method of reducing wages and extending labour hours, is only possible through increased productivity of labour, which is only possible through increasing the composition of capital - ie, by improving the means of production so that workers produce more per unit of time.

Problem is, value is a function of labour time. So while the individual producer, when succeeding to increase the productivity of his/her unit of production, makes superprofits as long as the competition remains at an archaic level of productivity, the effect of the increase of productivity, as it spreads among all the productive system (or as it leads the least productive producers into bankrupcy), is to lower the value of each commodity, as it embodies lesser and lesser amounts of human labour.

In philosophical terms, this means that there is a contradiction between value and wealth; while value is the form of most wealth in a capitalist society, its relation to its substance, wealth, is doublefold:

1. Synchronically, value is proportional to wealth: two coats are the double wealth as one coat, and the value of two coats is the double of the value of one coat;
2. Diachronically, value is proportional only to labour time; doubling the wealth by halving the labour time to produce it doesn't double the value. When you are able to produce two coats in the time you formerly produced only one, wealth is doubled, but value remains the same.

At some point in the development of such a system, increasing the productivity is no longer worth the pain: gains of productivity will no longer result in increased profits. If the proportion between dead labour and live labour in a low-tech environment is 1/1, then profits will expand quite nicely by turning that proportion to 2/1. But when the proportion is already 100/1, increases in it will have very little effect on profits; the system no longer rewards gains of productivity - and has therefore come to be "an obstacle to the development of the productive forces" as you put it.

how does that contradiction manifests itself ? Through economic crises, i've also read "the destruction of productive forces during those crises", but how are economic crises manifestations of this contradiction ?

Economic crises in capitalism are basically crises of overproduction. As each producer of commodities seeks to offer the lowest possible prices, and to sell the largest possible amount of individual commodities in order to compensate for lower prices, time comes when there are too many commodities in the market, and part of them becomes unsalable. Part of these commodities being productive forces themselves, if they are not sold and subsequently used, they are wasted, which is in itself a form of "destruction of productive forces".

Economic crises tend to unleash political crises, in which further destruction of productive forces may happen, in the form of wars, sabotage, etc.

how, according to marxism, is this supposed to lead to a socialist mode of production ? Taking from Lenin and his book on imperialism, that contradiction is being "solved" by ever-increasing concentration of capital, leading to monopolies in different branches of production, and the merger of branches of production, for example financial capital, being the merger of bank capital and industrial capital. And one can see how one large monopolistic company in one branch can purchase or merge with another monopolistic company of another branch. How is socialism supposed to happen or being brought ?

The short answer is it doesn't. Socialism is thought to be only possible via a political revolution, which is a deliberate action by human agents. What the development of the capitalist system provide are merely conditions for such a revolution, which may be summarised as,

1. Suppression of scarcity: under previous modes of production, the amount of wealth generated by human labour was always unsufficient to provide a rich, meaningful life for all mankind if it was equitatively divided;
2. Destruction of petty, "idylic" previous relations that tied human beings to their country, province, town or hamlet;
3. Creation of the means for social control of production, via automation of decision making;
4. Creation of a mass of individuals who are denied access to most of the wealth created, although being responsible for the creation of all value, which is thought to provide the "human agents" required for the deliberate action of revolution.

The crises of capitalism, on the other hand, provide the empirical evidence that the system is unable to work smoothly, and that the "fixes" it needs to reboot itself into a new cycle of prosperity are too costly in terms of human lives and suffering to be continuously tolerated for an indeterminate lapse of time; and also the political fractures that may make the deliberate action of revolution possible.

Answer 2

I suppose @Atif is not quite right in saying "Makers of wealth are not the workers alone (as Communism think)". Communism says that wealth is the result of human labor. And that's all. If an entrepreneur works (mentally) he creates wealth as well. But this wealth can by materialized only by physical labor. The philosopher creates wealth by his mental labor, but if his ideas are not shared with other people his wealth remains unuseful for mankind.

The main idea is that the only way to create wealth is physical labor. Making shoes, writing a poem, explaining theory to other listeners - all of this is physical HUMAN labor. And this human labor creates real wealth, useful for other people.

The main difference between a worker and an entrepreneur is the duration of labor. A worker works 8 hours a day and gets a minimal salary, but the entrepreneur works one hour a week and gets much much more income. The main idea of business is that other people work for you. They work harder than you, but get less than you. This is the main point of capitalism and its weak spot.

Hope my English is good enough to explain matters clearly.

Answer 3

Private property rights is necessary in order to accumulate wealth and thereby concentrate capital. With increasing concentration of capital the workers becomes relatively poorer and according to some interpretations of marxism even absolutely poorer. This happens such an extent that labour cannot reproduce itself, when wages falls below what is necessary eat and drink enough to be able to go to work tomorrow. This reveal an internal inconsistency in the capitalist system because labour is necessary to uphold production in the first place, without labour capital is dead. According to one interpretation it leads to a socialist mode of production through revolution, where the impoverished develop class consciousness and unite to overthrow the system.

Answer 4

There is only one problem with Capitalism. Its that the equation between supply and demand don't balance.

Capital Comes From Production

Capitalism favors accumulation of capital (ofcourse). The capital comes from production. A part of production is not consumed, its accumulated in form of capital.

More capital means more production in next cycle. Then even more in next cycle, and so on. This perpetuates because it makes its supporters (capitalists) stronger.

Capitalists Will Always Out-Produce Non-Capitalists

Politically, capitalist countries will always out-produce non-capitalist countries and therefore beat them in all material wars and gathering of human talent. Economically, capitalist companies will always beat non-capitalist companies because of sheer production.

Tried And Failed Methods Against Capitalism

Different techniques have been tried to beat capitalists in production. British Mercantilism failed, inspite of its control on markets (colonies) it just couldn't out-produce america (note that pricing is a derivative here, not a primary, because if you can out-produce you can always offer low price). German and Italian Fascism failed because of their focus on quality. Soviet Communism failed too, but why? Soviet State itself can easily out-produce private companies in capitalist countries and Soviet Union was a very large country, in population, area, raw materials, everything needed for production.

Note that other communisms didn't fail. Cuba survived.

Why Did Soviet Communism Failed

Soviet Communism failed because it was focused on accumulation of capital. Soviet State invested heavily in production. Be it factories or power plants.

Soviet Communism not only failed, it failed faster than Capitalism.

The reason Soviet Communism failed is that it don't balance the equation between supply and demand. There was a lot of supply, but there wasn't enough demand. You know demand as an economic term means not only there is desire to buy there must also be money available to buy.

Soviet Communism didn't pay the workers and the managers enough. They were paid just enough to get by, not get anything comfortable, yet alone even any minor luxury in life.

Lots of stuff was produced and stored and ruined in godowns.

This ofcourse leads to a regressive cycle. In next cycle less stuff is produced because the state bureaucracy see little demand last year. This goes on for a while till everybody got fed up and basically resigned from communism ideal.

Why Would Capitalism Fail

The right way ofcourse is to produce what people desire. Things of utility and quality. Capitalist countries are great in this. They not only out-produce in quantity, they also out-produce in quality and in whats needed and wanted by consumers. This is, however, where goodness of Capitalism ends.

You see Capitalism to be capitalism has to forever accumulate capital. It cannot afford distributing everything that is produced to workers and managers. Its death of capitalism if that ever happen. Some must be saved for next cycle. This is the poison of Capitalism.

Karl Marx was half right ofcourse. Production should be distributed to workers and supervisors. But thats only half of what should happen. The other half is, it should be distributed to entrepreneurs (managers of business), or you would soon have no wealth to distribute.

Makers of wealth is not workers alone (as Communism think). Makers of wealth is not entrepreneurs alone (as Capitalism think). They are both. All the surplus thats left after costs of production, and the costs includes living costs for workers such as rent, food, medical etc, must be distributed to both workers and entrepreneurs (managers).

Why Did Cuba Survive

Cuba didnt go on path of extreme production. It never focused on accumulation of capital. Whatever is produced is more or less consumed.

Cuba distributed whatever is produced more or less evenly. But its not the reason why it survived. You see even Feudalism survive.

The Equation Must Be Balanced, Equal Distribution Or Not

Whats produced don't have to be distributed evenly. The distribution can be very lop-sided. System will still survive. The only requirement is, nothing is kept aside. Everything thats produced is consumed by someone.

See this is why capitalist countries thrive in wars. They produce more and consume less, and still survive. Its because a lot thats produced is just destroyed.

As long as the equation between supply and demand, which is another way of saying production and consumption, is balanced, system survive. It don't thrive though. You cannot have it both ways. Either you have a steady state or a dynamic state.