First stabs at the theory of capital accumulation: the self-perpetuating cycle of wealth inequality

From Esther's Piano

Since starting my Marx rush, I have overheard many interesting remarks exchanged among the coffee drinkers at the anti-union Whole Foods where I type things out. For instance, as I was typing up a post about competition, I was overhearing a young man being interviewed by some special events catering company – which involved the interviewer delicately approaching the fact that the man would fill out a W-9 tax form, or, in other words, would be a subcontractor. However, he was assured, if his subcontracting work met their expectations, they might actually hire him. I have no idea if the young man was secretly amused by this – I was. Marx would have been perfectly at home, listening to that conversation, in which commodifying one’s labor time became, itself, a reward for the piece worker.

Last night, I tried to explain the force of the complex that links ever greater specialization with ever greater routinization of skills to a friend who has an interest in what I am writing – but is not exactly a subscriber to the Daily Worker. More a Texan from the Valley with a sort of Austin liberal outlook – like my own. Anyway, she told me that she found the Escher escalator idea interesting. In her profession – which has to do with a certain branch of medical therapy – she has lately been alarmed by the fact that all the new hires come in armed with masters – in a field which once required, max, a B.A. And she’d been depressed to hear that this field was now being taught all the way to the Ph.d level now.

So I asked if the new hires had some greater skill that they carried with them. She said she really couldn’t see one. She was speaking from 15 years of experience. And she is one of the most fair people I have ever met in my life. I believe her.

In the last post, I promised to approach accumulation – which is dealt with in some of the most entertaining chapters in Capital. Capital is one of those rare books that is both great political economics/social theory and a kind of omnium gatherum like the Anatomy of Melancholy. When Marx explains – beautifully – the stages of the cultural development of the capitalist, from the image of the miser to the bourgeois culture of representation-work – which Veblen will call conspicuous consumption – he leaves a footnote about Balzac that should be put in relation to other of Balzac’s great readers – Oscar Wilde and Marcel Proust, for instance.

28 a ‘Thus in Balzac, who studied all the shadings of greed on such a fundamental level, the old money lender Gobseck is already entering into his second childhood when he begins to make a treasury out of piled up goods.”

It was Marx’s philosophical training that allowed him to see that one moment in the system of production could contain not only many aspects, but many related aspects. Instead of going to school with the utilitarians, he went to school with the Hegelians, and emerged with a sense of narrative depth. Thus, the moment in which an Ardeer cartridge girl finishes the wrapping of one cartridge and turns to the next can be taken, by Marx, not only as a primary moment, an entrance into circuit of exchange and use values that takes us to the unpaid labor that permits Mr. Nobel to sell his dynamite for a profit, but as a moment in which all the dead unpaid labor that has accumulated and been objectified in the cartridge house and with the materials that make the dynamite stick is activated – resurrected from the dead – so that, in a real sense, there is a specter haunting the cartridge girl – the specter of capitalist accumulation.

The correlate of that accumulation is inequality. And there was an influential reading of Marx that stopped there. The social democratic impulse was to use the countervailing tools of the state and labor unions to make a ‘fairer deal’ that would chisel away at that margin of unpaid labor. As a result of that deal, the working class would itself be able to accumulate enough not only for its subsistence and its enjoyment of a greater variety of commodities, but enough to become investors. The working class would, in this way, be on both sides of the table.

I myself, over the years at Limited Inc, have criticized this arrangement as, ultimately, doomed to fail because the working class essentially is investing in a bet against itself – that is, it is invested in the increase in the level of profit that depends upon crushing labor bargaining power to increase its wages. Now, if the worker were financially independent, this bet might pay off – her gain in buying and selling stock – or having some representative invest her money in buying or selling a variety of financial instruments – would be greater than her loss from having her wage increases slowed or stopped. But this is, unfortunately, a absolute misconstruction of the worker’s real economic position. Not only do household expenses depend on income, but social welfare goods – for instance, healthcare or education – often require extraordinary out of pocket expenditure. Meanwhile, the representatives of investment money are notoriously slow on Wall Street. Thus, they often miss big gains and are crushed by big losses. This, again, comes down to the real financial situation of the worker – she can’t really afford to take the risks that would lead to big gains. Nor does she have the training. The bubble that just popped, the housing market, is a perfect instance of what happens when income stagnation is “solved” by asset speculation. Not only does it turn out that, unsurprisingly, information asymmetries are exploited by rentseekers – the mortgage brokers and bankers who ran the game – but the very process actually added to the extraordinary out of pocket expenditure needed for a social welfare good – housing.

A nation of investors is a fool’s paradise.

And so we get back, as we always get back, to the question of the historical conditions under which capital is accumulated.

ps. These remarks could be thought of as glosses on this passage.

Since in every year more workers are employed than in the past year, sooner or later the point must be reached, where the needs of accumulation begin to grow [hinauszuwachsen] beyond the normal addition of labor, where, accordingly, the increase in wages enters. During the whole of the fifteenth and the first half of the eighteenth century, complaints about this were sounded in England. The more or less advantageous circumstances, wherein wage labor maintained and increased itself, did not, however, change the fundamental character of capitalist production. As simple reproduction continually reproduces the relations of capital itself, capitalists on one side, wage labor on the other, so is reproduction reproduced on an expanded scale, or the accumulation inherent to capital relations on a widened scale: more capitalists or greater capitalists on this pole, more wage labor on that. The reproduction of the labor power that capital must unceasingly incorporate as a means of valorization, cannot loosen itself from it, and its bondage to capital is only disguised through the changing of individual capitalists to whom it sells itself, and in that act develops a moment of the reproduction of capital itself. Accumulation of capital is thus multiplication of the proletariat.” [577, p. 763-764 in Fowkes translation]