Idiot's guide to Luxemburg's core argument

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Idiot's guide to Luxemburg's core argument
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To understand the world as it is it seems rather essential to me to understand Luxemburg's core argument about accumulation. It directly follows from the concept of surplus value, derived by not paying for all labor done.

This is an attempt to follow-up this discussion - without necessity to read it, but recommended. (Title of this topic is a quote from this.)

What do you think about this?



c + v + s = t
constant capital + variable capital + surplus value = total value produced (in a given period of time)

s = k + acc
Surplus value consists of: value k intended for capitalist’s consumption and value acc intended for capital accumulation, consisting of constant and variable virtual additional capital:  acc = c-acc + v-acc.



When ignoring the possibility of credit, in a closed capitalist system following applies:

Production can create a market for itself, and there can exist enough purchasing power in the system to realize all value produced, because each unit of value created can generate an appropriate unit of purchasing power. This basically show Marx' reproduction schemes. – But this won’t help.

If the system bought all its commodities itself, in the system as a whole all unpaid labor would be paid (which is the source of surplus value). All individual capitalists could realize surplus value at different points in time, but the system as a whole would not realize surplus value and therefore could not accumulate capital.

With constant capital, this is rather clear: when a capitalist X purchases a machine M from a capitalist Y, he pays according to the value c[M] + v[M] + s[M] = t[M] and thereby realizes s[M].

With variable capital, it is the same: when a worker Z of capitalist X buys some bread from capitalist Y, she pays according to the value c[B] + v[B] + s[B] = t[B] and thereby realizes s[B]. The purchasing power of Z is provided by capitalist X, ie. finally X realizes s[B].

If the system buys all its commodities itself, all labor is paid and no surplus value is left in the system, which could serve as virtual capital acc.

This means: new markets are not needed in order to sell commodities which the system itself could not buy due to a lack of solvent demand. The system could buy all its commodities, and – at least theoretically after a reformist redistribution – sufficient solvent demand can exist. But in order to accumulate capital, the system must not buy all its commodities by itself.

(The same problem applies to the tendency of the rate of profit to fall. In the rate of profit s/(c+v), s and v represent living labor, and c dead labor. If the organic composition of capital c/v increases, dead labor increases relative to living labor. The tendency of the rate of profit to fall follows from the fact, that capitalists must pay for dead labor completely, ie. including s[M]. If capitalists purchase means of production from other capitalists they pay for the labor embodied within these means of production, including the surplus labor, which the capitalists producing these means of production have acquired without paying for it. Therefore, the higher the value of means of production in relation to total capital value, the lower the share of labor remaining unpaid.)

Marx’ “restricted consumption of the masses” in this sense means: there is a restriction to sell all consumption goods to the masses, because some labor must remain unpaid if capitalism shall function.

This restriction does not apply to non-capitalist economies of commodity production (simple commodity production). These economies function on the basis of C1 – M – C2 (commodity – money – another commodity), not on the basis of M – C – M+ (money – commodity – more money). In simple commodity production, selling of surplus product to buyers inside of the system is sufficient for economic growth; in capitalism not.

The capitalist system needs to realize value in the amount of acc to be able to accumulate capital in the amount of acc, but it is unable to use its own purchasing power for realization.

Somehow, the capitalist system needs a value inflow in the amount of acc. This value inflow can be  achieved by export surpluses. Additionally or alternatively, value inflow can take place in rather hidden ways, for example in export sales prices exceeding value, or in import sales prices below value, or in currency exchange differences, or in interest gained from money lending and forwarded to industrial capital, or in adult immigrants whose “production” has been payed for by the (domestic agrarian, or foreign) economies they came from so variable capital of the capitalist system does not need to completely cover worker’s reproduction.



The system not necessarily needs a money inflow, because it can create money out of thin air.

Such money can transform commodities (including labor force) into capital by bringing them under control of borrowers organizing capitalist production. Credits used in this way for productive investments normally are serviced by commodity sales. In this context, all capitalist crises seem to be caused by insufficient sales. But underlying is the running need for value inflows from outside of the system in the amount of acc.

Creating money out of thin air works fine as long as an appropriate quantity of value flows into the system, in a more or less hidden way. If too little value flows into the system, the finance system can collapse. Prior to this, the system can grow for a while on thin air / Ponzi scheme.

WW1 and WW2 basically were about reorganization of global value flows.



New markets emerged by

  • Freeing-up agricultural labor from pure subsistence production (tractors, chemicals), enabling for unequal exchange of capitalist commodities with goods from simple commodity production.
  • Hundreds of millions of workers, produced in simple commodity production became available for capitalist exploitation.
  • New technologies.
    Stuff like uranium, lithium or DNA became usable as capital. This is like discovering new continents.

State economies grew in large parts of the world: new non-capitalist areas for the capitalist nations, capable of growth according to the logic of C1 – M – C2, producing more and more value and accordingly solvency.

Additionally: Growth of state sectors within capitalist nations, producing value, feeding the capitalist part of the economy. 

This essay is not at all

This essay is not at all satisfactory.

It uses the sophistry of the straw man:

_ simplify capitalism to abstractions,

_ show that these abstractions are contradictory.

Marxists must formally forbid formulas that are not based on economic statistics.

"The total labour-power of society, which is embodied in the sum total of the values of all commodities produced by that society, counts here as one homogeneous mass of human labour-power, composed though it be of innumerable individual units."

Karl Marx, le Capital, Livre I chapitre 1, p. 43, ES, 1976 (French).


"The total labour-power of society" ⇔ "the sum total of the values of all commodities produced by that society"

What was "The total labour-power of society" in 2017, according to the World Bank? 3,5 billions of workers. So "the sum total of the values of all commodities produced by that society" in 2017 was 3,5 billions of workers working for one year.

Already, that, many Marxists do not manage to understand it.

"3.5 billion of working workers" are "work".

"one year" is duration.

"We now know the substance of value: it is work, we know the measure of its quantity: it is the duration of work."

Karl Marx, le Capital, Livre I chapitre 1, p. 45, ES, 1976 (French).

Work × duration = value.

I stop here because if you refuse to rely on the statistics of the real economy, it is useless to discuss: we are in full economic idealism.