Overproduction at the root of capitalism's crisis

The following is part of correspondence that has been continuing for some years.

Dear ICC,

I am perplexed by what seems to be a contradiction in your politics. On the one hand Marxists argue that only communism can release the full potentials of production to meet the needs of the working class of the world, yet argue that there is a glut of markets following capitalist over-production. Of course there is overproduction of some things and under-production of others, but even so, has capitalism already reached its giddy limit of possible production or not? If greater production is still possible within all the evils of capitalism, would it be more persuasive to argue for equitable distribution of the current over-production, to get back by and to the working class what is being withheld from it?

I have been reading from your website the 'Debate with Red and Black Notes: The irrationality of capitalist war', from Internationalism 130, where it is said that in its period of decadence "capitalist relations of production come to serve as a brake on the development of the productive forces, in which capitalism has become a fully regressive mode of production", whereas the article goes on to tell of "decadence - marked by a permanent global crisis of overproduction".

This apparent contradiction between restrained productive capacity and current overproduction under capitalism persists in puzzling me, and maybe others too. I am not saying that what you say is mistaken, but would appreciate an explanation on this for the working class.

Regards, D

Our Reply

Dear D,

Thank you for your question, which we will try to answer succinctly. We would like, with your permission, to publish your letter and our reply in World Revolution.

The tendency toward overproduction in capitalism does indeed lead to the squandering and destruction of the productive forces.

Why? In the capitalist system, contrary to previous modes of production, supply precedes demand. Its productive capacities and output are driven forward by the competitive drive for profit inherent in generalised commodity production, rather than by the growth of, and capacity for, consumption. As a result modern capitalism has led to 'plethoric' crises since its inception, regularly overflowing the limits of the market for its products, and leading to bankruptcies, unemployment, unsold goods, stagnation and decline in production. "Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed; and why? Because there is too much civilisation, too much means of subsistence, too much industry, too much commerce". Marx and Engels, Communist Manifesto.

Up to a certain point in capitalism's historical trajectory the periodic destruction of the productive forces was nevertheless a stimulus to revolutionising technology, the better exploitation of existing markets and the search for new ones, in other words to the long term advancement of the productive forces of mankind. However the periodic wastage of production could only intensify over time and eventually become a chronic problem during capitalism's decadent period when the growth of world production has become burdened by colossal debt, massive military expenditure, and the enormous costs of bloated state machines, which over the past 80 years has lead to repeated devastation on a catastrophic scale. Capitalism continues to augment production but the latter is more and more oriented toward waste and destruction, thus posing the alternative: socialism or barbarism.

But you ask why it is not possible for capitalism to be forced (or persuaded) to redistribute its surplus to the working class, presumably for nothing or for next to nothing. If that were to happen capitalism would be finished, since such philanthropy would lead to a collapse in prices and then profits. That's why capitalism prefers to throw unsold products away rather than give them away. It would rather destroy food than feed the starving millions, even though it has more than enough means to assuage human hunger on a world scale.

Capitalism is only interested in hungry mouths if they are connected to deep pockets - and most of them aren't. It lacks solvent buyers to realise the profit contained in its products. Giving them away free or selling them at prices below their value would not in any away resolve its crises of realisation or overproduction.

This brings us to an aspect of the original problem of overproduction: the working class can't buy back all that it produces because it is only paid the price of its labour power: capitalism 'withholds' - as you put it - the surplus value that workers create.

Capitalism therefore can't redistribute the fruits of workers' labour - as the left and leftists would have us believe. It is increasingly forced to waste them. The liberation of the productive forces demands capitalism be overthrown.

Hope this helps your understanding; we would also suggest studying our pamphlet The Decadence of Capitalism and related articles in the International Review.

Fraternally, ICC.