After reading capital vol II, I’ve tried writing a pamphlet about what I’ve learned to summarize. You can read the PDF for it here: https://drive.proton.me/urls/NGTP9JGZWC#dvtnXnUjvK9y

The pamphlet is machine translated from my mother tongue, but I’ve looked over it quickly. Please tell me if there is anything weird and I’ll fix it :D

Raw text for convenience: (stuff in square brackets are “additions” to the main text in their own boxes)

Capital Vol 2 Summarized

Where Marx explains the circulation of capital. Read the pamphlet to understand more about how money, commodities, and production circulates, why the credit system emerges, and under which conditions capital can accumulate.

[The booklet assumes that you are familiar with Vol. I, either by having read it yourself, read the previous booklet, or similar. But all readers can read and understand the examples in the black boxes. Note also that this is my best attempt to explain Capital Vol. II. Let any errors rest on me, and not on Marx.]

[Commodities can only be made through labour, and have only socially necessary (read: average) labour-time in common. Thus labour is the source of all value, and nature together with labour is the source of all wealth. Machines are part of society’s wealth, but all machines are created by human labour. Labour not only creates new value, it also preserves all existing value. Without the workers’ creative fire, all the world’s commodities and machines would stand idle and rot. When labour is the source and preserver of all value, should not and cannot working people demand to collectively own everything they and only they create?]

The circuit of capital

The circulation of capital can be viewed as three circuits. The circuit of money, of commodities, and of production. The unity or composition of these circuits is the circuit of industrial capital.

I’ll start by explaining the three circuits in the circuit of industrial capital. This is a bit technical, with some different terms, but it’s important for the rest of Volume 2. All the same, it’s not really that complicated. The concept is that a capitalist has money. With that money they buy commodities and labour-power. Then the workers work, and make new commodities. The capitalist sells those commodities for more money. Then they buy new commodities and new labour-power, and so on. The point is that if you look at this cycle from three different starting points (the money the capitalist has to buy commodities, the commodities produced by production, or the production process itself) then you get different insights into capitalism.

The circuit of money is M–C…P…–C’–M’. M is money, C is commodities (labour-power and means of production), P is the production process and … means that production takes time even under ideal conditions, C’ is the commodities produced and can be means of consumption or means of production, and the mark ’ indicates that the commodities may be qualitatively different or have increased quantitatively in material mass and exchange-value. Since M’ is also an increase, the capitalist can replace the costs in money and have a surplus for their own consumption or to expand production. As Marx showed in Vol. 1, only labour creates value, and therefore P is the only step that creates surplus-value. But for the capitalist it can appear as if money itself creates value, because they see that they put money in and get more out.

The circuit of commodities is C’–M’…P…C’’ and shows how commodities are both a necessary input for production and that the purchase of new such commodities is a prerequisite for reproduction. We see that it is actually the commodities that are the connecting link in the circulation and bind one round of production to the next. We start at C’ because commodities are always the result of previous production. I mark the result as C’‘; Marx also calls it C’, but they are separate commodities from the first C’, so I use double notation for clarity.

The circuit of production is P…C’–M’–C’'…P. Because production takes time, it can appear as though it is merely an interruption in the circulation of commodities, even though it is production and the labour within it that are the source of all value. For production to increase, one usually has to hire more labour-power or acquire new machines and thus increase the capital that production encompasses.

Because the cycles repeat, they also merge into one another. The three cycles are really three contradictory presentations that, by virtue of their repetition, constitute a unity: the circuit of industrial capital. At the same time, even though the formulas may make it look as if this proceeds in a straight line, in reality there is a great mass of different capital flows moving in parallel and continuously through the cycle; they flow into one another and thereby make the necessary means of consumption and means of production available for one another. From the standpoint of exchange-value, the cycle constitutes a constant alternation and increase of quantity (amount of capital) through the abstract social relations of ownership. From the standpoint of use-value, production is a constant transformation of physical quality into another physical quality, for example through a machine and a worker being worn down to make many other commodities, or cloth and thread being transformed into a jacket. Capitalism is an economic system with an inherent tendency to increase productivity, which can increase the quantity of use-values that can be produced in a working hour (and hence the total economic material mass), but this is a physical change that would be just as real under a different economic (social) system with productivity growth.

[Did you know that Marx has two concepts of value? One is exchange-value, which concerns how many socially necessary labour-hours are needed to make a product. That is the actual quantitative foundation for how much commodities are worth in relation to one another. The other concept of value is use-value, which is the qualitative way the commodity is useful for human beings. The distinction between exchange-value and use-value is important in Marxist theory, as are the concepts of quantity and quality. That is because they are important in the dialectical-materialist method of analysis, which Marx uses to uncover how the economy really hangs together, and which can be used to understand all other parts of the world.]

[From the worker’s point of view, the circulation is L–M–C–L’. That is, labour-power yields money, which yields means of consumption, which makes it possible to do more labour. The workers’ circulation has no room for appropriating capital, and this is in fact the case for the vast majority of workers, including in Norway. We save up a little for emergencies, and we may own a home and have something in a pension savings fund, but even what we save we use, by and large, entirely to cover consumption for ourselves and our families. Almost all ownership of actual industrial capital is owned by capitalists, even though many like to think that ordinary people are rich in this country (and many indeed have a high standard of living). It is not because we do anything wrong, but because capitalism as a system keeps us as a class propertyless, while ownership accumulates among those who already have the most.]

[Each one of the three sub-circuits can explain aspects of capitalism, its function, and its dysfunction (economic crises). When we go to work, we usually work about a month (20–25 days) before we get paid. That means we give the labour in advance, and are in principle paid from the results of the labour. This means that the capitalists as a whole don’t need to have as much money on hand, and can instead aim to earn the wages back. That is why we also see many struggle to get all the wages they’ve worked for paid out when a company goes bankrupt. When the capitalists no longer need to have as much money on hand, it removes a limitation on the circulation of money and thereby on the circuit of industrial capital as a whole. In Norway, the labour movement has therefore fought through laws and regulations that are supposed to guarantee workers’ wages in the event of bankruptcy. Even so, it is common for workers to face long delays in wage payments due to processing times, and if you are self-employed in a sole proprietorship (ENK) or similar, you can end up not getting paid the money you’ve worked for.

Another example is the commodity form. Economic crises are usually caused by more commodities being produced than can be disposed of. Then commodities pile up in warehouses or the like, gradually deteriorating along with the means of production lying idle and the workers standing with cap in hand, until surplus-value and profit can once again be realised through sales so that the economy can get going again. The commodity form is especially vulnerable. While money and labour can to a greater extent be moved around as needed, physical commodities are much more locked in, and if they cannot be put to use, they bring the whole cycle to a halt. Then the invested capital is also locked up in the rotting commodities. While the commodities rot, the money sits safely as accumulated hoard, and working people have to fend for themselves.]

Relations of Production

The development of new means of production changes the value of commodities (because they now require less labour-time to produce on average). This inflicts so-called “moral depreciation” on means of production, because it leads to the loss of part of the capital investment (because sales cannot be realised at “original exchange-value”). This causes values (and also prices) to fluctuate, which requires a reserve fund (saved-up money) to normalise the circuit. Marx also uses the terms “supply” of money and supply of commodities (which can stabilise deliveries of raw materials). Capitalism has a tendency to develop monopolies. One of the reasons is the necessity of reserve funds and that it costs more and more to run competitive production, so that only persons who manage large amounts of capital can compete. As part of the circuit of money, money accumulates as a hoard. In this context that means saving up money to preserve it in money form in a bank (or in principle in a chest, mattress, or something similar). But capitalists don’t do this to swim in coins like Scrooge McDuck. Capitalists do it because money reserves are a necessary part of the circulation. Money must be saved up to pay for larger investments, to pay for labour and means of production while waiting to realise sales from the previous round of production, and to normalise costs when exchange-values and prices fluctuate. When hoarding is economically necessary in capitalism, and not just done for pleasure, we refer to it as a reserve fund.

As the reserve fund develops, capitalists see that a lot of money lies idle, not invested in the circuit of industrial capital. This is an obstacle to their accumulation of capital and to the development of society’s productive forces. Hence the credit system develops. The credit system allows money to be invested in other things while it lies idle, by being lent out to other capitalists and entrepreneurs. This is in reality a socialization of the reserve fund in the bank, since the bank must still have sufficient liquidity to support withdrawals when needed. Money can also end up in the “financial world,” but that is not a topic until the next volume. Marx nonetheless briefly notes that “latent money-capital” can accumulate. Latent money-capital is in practice a legal claim that can be exchanged for future labour-power and commodities and hence a share of production (this probably plays out differently with today’s money system than with the gold standard of Marx’s time, but that goes beyond the book and it is essentially true that saved-up money can be exchanged for the same things)

[Reflection: You buy a hot dog at the gas station, and the store clerk heats the hot dog for you. Is the store clerk doing productive labor, according to Marx’s category of productive labor? What are the sources of the hot dogs’ exchange value?]

Fixed and Circulating Capital

In addition to variable and constant capital, Marx has concepts of fixed and circulating capital. Circulating capital is all capital that circulates completely in one turnover of the circuit of industrial capital. To circulate completely in one turnover means that the thing is used up qualitatively - the working day is over, the chemical reagents are used up, the pencils are sharpened down - and that they have therefore also transferred all their exchange-value in one cycle. It thus comprises variable capital (labour) as well as constant capital (means of production in the form of raw materials, semi-finished products, and auxiliary materials). Fixed capital is capital that does not circulate completely in one turnover, such as industrial buildings and machinery. Fixed capital is always constant capital. Variable capital is always circulating capital. Constant capital can be either fixed or circulating capital.

More on the Circulation of Capital

Turnover time is the time it takes to complete one cycle in the circuit of industrial capital. This can refer to all capital in society generally, or a specific capital. Below we mainly discuss social capital (all of society’s capital). In any case, turnover time consists of two parts: circulation time and production time. Circulation time consists of selling time and buying time. Selling time is the time it takes to sell the commodities that are made. Buying time is the time it takes to buy raw materials, semi-finished products, auxiliary materials, and labour-power needed for production. Production time consists of working time and waiting time. Working time is the time when someone is working. Waiting time is the time one must wait for time-consuming processes, such as the ageing of wine and cheese. But since it is primarily during working time that productive labour is performed, working time is the main source of surplus-value, and it is therefore desirable to minimise all the other parts of turnover time. It is nonetheless possible to create surplus-value outside working time, for example through necessary labour during waiting time, or through necessary transport of commodities.

Turnover time and its components differ from sector to sector. That is because each sector has different naturally given characteristics, needs, and limitations, as well as different technology. Technological changes can therefore alter how long the various parts of circulation time take. Local conditions can also make some time periods different from the sector average, for example transport frequency, storage, and availability of means of transport.

Turnover time is especially important for the capitalist because it has a particular impact on the annual rate of surplus-value. This is because the annual rate of surplus-value is given by the mass of surplus-value produced divided by the variable capital advanced. If you have a shorter turnover time, you get more turnovers per year, and the amount of variable capital you must invest at any given time decreases. That means that when turnover time falls, you can invest less money and still earn just as much per year. Let’s say, for example, that the capitalist pays 5,000 dollars for labour-power in total over a year. If there are ten turnovers in a year, they only need to lay out 500 dollars at any given time, which they earn back in each period. That means that even though they spend 5,000 in total over the year, it only costs 500 at any one time. If they instead paid 5,000 for one working period, they would have to lock up 4,500 dollars more. But with ten turnovers a year, they can get ten times the return per krone locked up in investment that year as they would have gotten with one turnover, even though the total wage expense is the same. A faster turnover period thus enables the capitalist to extract more surplus-value per unit of capital. Therefore, the velocity of turnover is extremely important in capitalism. The different sub-times also have their own effects on how capitalism functions. One example is that buying time affects how much money and commodities one must have in supply, and the longer the circulation time, the greater the risk of technological revolution and moral depreciation. Marx refers to the reduction in supply as a result of reduced turnover time as “freed money-capital.”

The steps in the circulation correspond to the different periods in turnover time. M–C corresponds to buying time. …P… is production time, i.e. working time and waiting time. C’–M’ is selling time. But there is much else that happens in trade, such as things being stored, bookkeeping being done, and contents being recorded, even though they do not appear in this formula. How do they connect with the sequence of formulas? Things like bookkeeping and storage are important because they are either useful or necessary in practice for a specific economic period. Marx fully agrees with that. But Marx’s point is that they are not part of the very essence of the capital cycle in commodity production. On the contrary, they come in addition as a superstructure. But precisely because they are superstructure, we can also use Marx’s circulation formulas to understand things like storage and bookkeeping.

Because only the working period is the source of surplus-value, capitalism must try to minimise the other parts. Trading people like wholesalers and merchants reduce selling and buying time, for example. This is why commercial capitalists and commercial workers can also make money, because they get a share of the extra surplus-value that is extracted through increased circulation. Similar conditions apply with bookkeeping/accounting and much else. Another example is commodity supply (storage). Storage is completely necessary for a well-functioning market, but by its nature increases circulation time by the time commodities lie in storage, which can also entail maintenance work that does not add surplus-value (because it does not lead to new physical use-values). Hence we see in our time the “just-in-time” paradigm in production and warehouse management, where one tries to store as little as possible in order to reduce circulation time. JIT works great until the circulation is disturbed by things like stuck container ships in the Suez Canal or global pandemics, which reveals the underlying contradiction between using storage to stabilise circulation and the need to minimise storage (and therefore stabilisation) in order to minimise turnover time.

Surplus-value is mainly created in the working period. In practice, therefore, a capitalist will not buy means of labour and working time, make commodities, wait to sell them, and only then start the cycle again. Then they would only be able to extract surplus-value for a fraction of the time. Instead, the capitalist will keep the workers going continuously, to maximise the surplus-value they extract and to transfer the value (wear out) the fixed capital as quickly as possible. They will wear out the fixed capital to avoid moral depreciation, and to be able to reinvest the money as quickly as possible. Therefore they must have a money supply/reserve fund to finance means of labour and working time in the period between sales, and continuously build up a commodity supply and lock up fixed capital as well. The longer the selling time, the larger this supply must be. The relative proportion of production time to circulation period also has an effect. The money-capital that must be held in reserve is one of the reasons for the emergence of the credit system, which, as mentioned, socialises the reserve fund and thus minimises it.

Economic departements

Marx describes how the economy can be divided into two departments. Department I, which is production of means of production, and Department II, which is production of means of consumption. Department II in turn consists of IIa for necessary means of consumption (relative to a cultural standard) and IIb for luxury goods, primarily for capitalists. He examines the departments in order to clarify the conditions under which the economy maintains itself and under which it grows. That it maintains itself is called simple reproduction. That it grows is called expanded reproduction. The names refer to the fact that all means of production, raw materials, and human beings wear out, and therefore they must be reproduced to keep the economy at the same or an increased level. The mathematical pieces we look at to understand how the departments can reproduce themselves are called reproduction schemes.

Each year a department produces the exchange-value (c + v + s), where c is worn-down constant capital as well as all other consumed means of production (like raw materials and semi-finished products), v is necessary working time to reproduce labour-power under the given cultural standard, and s is surplus-value. One can also divide the products it produces into a part corresponding to the exchange-value of worn constant capital, to the exchange-value of labour, and to surplus-value.

In Department I the capitalists can buy means of production from one another and thus replace the worn-down constant capital ©. The capitalists and workers must buy means of consumption from Department II with the wages (v) and the surplus-value (s). In the model, workers must spend their entire wage (v), while capitalists must at least spend a part of the surplus-value (s).

In Department II the capitalists and workers can buy means of consumption with v and s internally within the department. But Department II must replace the worn-down constant capital, i.e. the worn-down means of production, by buying new means of production from I. Thus there is exchange of means of consumption and means of production between I and II. For the economy to balance, these must stand in the right proportion to one another. If that does not happen, you get overproduction in one department, with consequences such as the deterioration of capital or workers being unable to afford their means of subsistence. Simple reproduction, as mentioned, preserves society’s economic totality in the form of accumulated labour-time. But it can involve qualitative changes, for example switching from growing wheat to growing rice. Simply put, it means that society does not become “richer.” Simple reproduction occurs if the capitalists spend all their surplus-value on means of consumption. Then it must hold that I(v + s) = II© for the trade between the departments to balance.

Expanded reproduction increases society’s accumulated exchange-value and material substance (in capitalism this means increased capital). Society thus becomes richer in the form of accumulated capital and the material mass of use-values. This occurs if the capitalist does not spend all the surplus-value on consumption, since workers, as explained, usually must spend all of their wages. Here it holds that: I(v + s) > II©, so that there is a surplus product of means of production that can expand production in addition to covering the year’s wear and tear. In addition, there must be a correct proportion between firms that have saved up money and firms that spend money reserves at any given time so that the circulation of money balances (something that is especially important under the gold standard). The growth of production can be in both departments or in one, and as long as it is possible to balance the equation on paper, the economy can be in equilibrium.

One can fiddle with maths regarding these “reproduction schemes” and arrive at all sorts of results, but the point is that Marxist economic theory explains how capital can be maintained and increased, and that while it is possible to make the equation balance, there is also the possibility that it does not balance and that an economic crisis occurs. Note that even if an economic crisis can disrupt the reproduction of capital one year, capital can still increase on average over several years. The reproduction schemes also do not take into account technological progress, value revolutions, and other tendencies in capitalism that complicate things and make it harder to balance the equation year by year. Moreover, in reality it is not only how much exchange-value exists in the different departments that matters, but also that they produce the commodities that can be used to expand and maintain production.
 What we get from the reproduction schemes is not a complete and perfect model of all aspects of the economy, but an understanding of the conditions that cause the economy to shrink, persist, or grow. There are also some important underlying points. The first is that even though it is theoretically possible for capitalism to achieve a “perfect balance” one year, it need not happen in practice. It is more likely that it can achieve a rough balance, with some unnecessary waste, or that it does not achieve balance and creates a crisis. This is because capitalists compete against each other and try to become as rich as possible. They do not necessarily try to achieve a perfect balance in the economy, even though they can cooperate in some ways through the state and other organisations. But generally they only try to achieve the highest possible return on their investments over time. It is, however, possible to achieve better balances in the economy than the capitalists manage by employing experts and computer technology to calculate and balance. Then one can also direct the development of production towards what people actually need, and not just towards what squeezes out the most surplus-value from working people. Then we are talking about a planned economy, that is, socialism and eventually communism, which is only possible if working people take political power from the capitalists and create a state and an economy for and by workers and their allies, and dismantle the state and the economy that the capitalists have built to serve their interests. The second important point is that one must choose how much of production should go to developing the productive forces (Department I) and how much should go to means of consumption (Department II), and how much of the expansion should take place in Department I and Department II. This is a political question that is highly relevant to the history of socialism, as socialist states, in contrast to the capitalists, have consciously had to relate to this together with the people. In the best periods this has meant close cooperation and dialogue between subject experts, workers’ councils at the individual factories, the people’s mass organisations, the workers’ communist party, the economic planners, and other political parties. In any case, it is something quite different from how it works in capitalist countries today, where working people barely get to choose who will throw money and subsidies after the capitalists’ poorly planned industrial adventures and who will privatise the public services that working people have built up.

On Productive Labour

An important concept in Marx is “productive labour.” This is a challenging concept because it has a double meaning. In general, for all economic systems, productive labour is something that creates use-value for human beings, something directly useful. Often this means creating a commodity, but it can also mean transport or another action that changes the physical world, as many “services” also do. Services are then a type of commodity that is consumed immediately. In this sense, productive labour is all use of humanity’s free creative power through labour to do something useful. But to be productive labour within capitalism specifically, something more is required. The main essence of capitalism is surplus-value—that a share of the working hours in a day goes to the capital owner (or alternatively to oneself if one is petty bourgeois)—and that capital circulates as described in the circuit of industrial capital. This dual perspective creates some challenging technicalities. A cook who makes food that is eaten generally always performs productive labour. But if a capitalist hires a private cook, and the cook’s wages become a pure expense, no surplus-value is created and it does not enter the capital valorisation cycle. But if, as is the case for most services today, one hires an employee from a company that thereby appropriates surplus-value, then it does in fact create surplus-value. The way I read Marx, this challenge stems from Marx discussing what productive labour is in general, and specifically for capitalism. Generally, it is the application of humanity’s creative fire to do something useful through labour. Specifically in capitalism, productive labour must also create surplus-value. Productive labour in capitalism will therefore typically take place in the productive stage (working time) of the capital circuit, or possibly with commodity transport and the like.

In addition, it is also characteristic of capitalism that most use-values are created under industrial (or manufactory) conditions. Here I think of industrial conditions as the application of machinery on a large scale to create a great mass of commodities (or alternatively services, but I can’t think of any examples of that, since even places like call centres, which are certainly gruelling and machine-supported, primarily consist of human labour—and if we’re talking about AI, it’s strictly speaking the AI “minutes”/tokens that are the commodity produced industrially in data centres, and not the service it is used for as such). Therefore I like to think of productive labour as three categories: useful and physically creative labour, surplus-value-creating labour, and surplus-value-creating labour in the form of labour under industrial conditions. The last category is not a category directly in Marx, but I think it reflects an important aspect of productive labour in capitalism, and also tidies up some of the terminology that is known to cause discussion and confusion. For example: if I make dinner for my partner, it is useful and physically creative labour. If I hire cooks and make burgers to order, it is surplus-value-creating labour. If I create a factory that uses workers and industrial machines and an industrial-scale transport system to sell frozen pizza to all of Norway, that is surplus-value-creating labour under industrial conditions. If my partner and I have children, raise them, and teach them everything we can, that is also useful and physically creative labour of a human being and hence of labour-power. But is creating human minds with unique qualities through education and art and culture, which thereby can exercise their labour-power in qualitatively different ways, productive labour? Yes, in the sense of being generally creative and useful I would argue it is. Child-rearing can also be surplus-value-creating with cultural products and private schools. As Marx explains in Vol. I, useful training increases the relative economic value of labour-power. Child-rearing is nonetheless typically not industrial production of things to be sold, for formally we do not have slavery; we are rather free to be slaves of wages our whole lives instead.

In addition we have workers who are clearly not productive, because they do not create anything new as such. But that does not mean they do not do anything useful or necessary. Productivity is not a moral judgement in Marxism, even though it is easy for those of us who have grown up under capitalism to tie our self-image to “productivity.” In Marxism, productivity is a description of purely economic, and not moral, conditions. Non-productive labour includes, among other things, labour with circulation that in itself does not create anything new. Examples are arranging purchases and sales for a factory chain to wholesalers, working in a shop that sells commodities to consumers, or working in a warehouse. All the same, all of this is completely necessary for capitalism and thus useful in labour as it is; it’s just not “productive” labour. Much of the work finance people do is also completely necessary for capitalism, since the credit system and financial market are absolutely necessary to allocate capital and thus estimate the prices of all things (and in my opinion perhaps to absorb a surplus of monetary units that no longer have a fixed gold value and withdraw them from circulation to avoid deflation of the value of money, a thought I will explore more on a later occasion). The other category is state and administration workers. It is completely necessary and useful to plan who shall work when, and to ensure that firms follow the rules imposed on them for the common good (often including the capitalists’ good). But it does not create anything new. Some types of labour also serve only the capital owner’s interests and do not contribute much that is useful to society at large.

The point I want to make is precisely that workers under industrial conditions, which will primarily mean workers in factories and in commodity transport, have a special position in capitalism, because they are the ones who work at the heart of the economy. If they all strike, the economy stops on the day. If they decide to take ownership and organise the economy in a different way, only violence can stop them. In contrast to many other types of labour, there is no emergency solution that can be used temporarily, no way to work around it, no suffering one can accept: if industry stops, society stops. Everyone in the working class has revolutionary potential, by virtue of the fact that labour creates everything in society, and that the working class necessarily becomes an outward-looking and organised class through the conditions of production, a class that does not need to exploit anyone else. But because industry is so central, workers there have a special power. And you and I also partake in that power, even if we do not work in industry, if we support industrial workers in revolutionary strike action, and resist all forms of strikebreaking and forced labour. If only hairdressers strike, you can manage to cut your own hair or let it grow. But if hairdressers strike together with other workers, they are together twice as strong, and if everyone organises and takes ownership together with industrial and transport workers, the working class is unbeatable.

A digression on consumption time: I also want to propose adding “consumption time” as an essential time period for capitalism. This is not really an innovative concept from me, but it is something beyond Vol. II that we can well draw into the discussion of turnover time. The discussion that follows is self-developed. If a market can absorb a quantity Q of a type of use-value, and such a use-value on average lasts for a time period F (consumption time), then the market can absorb Q commodities per F. If F_year indicates how many consumption times there are per year, the market can absorb QF_year per year. If x is the number of people in the market, and q is the consumption of the use-value for an average person (per F), then Q = xq, and the market can absorb xqF_year per year. q is of course socially and historically determined, and can vary, and can be limited by many factors such as (but not necessarily only) biology, wages, and culture. In that case, you will get overproduction if you produce more commodities of a category than xqF_year permits, regardless of turnover time. Since a relative reduction of turnover time will mean a relative increase in total production without a reduction in the scale of production per turnover time, xqF_year is effectively a limit on both the total scale of production and on turnover time. (This follows from the fact that competing capitalists will not coordinate production exactly, but will all try to exploit lower turnover time with the same scale until overproduction forces them to adjust.) Let’s say that the sector has an average turnover time of O, and produces a quantity of commodities that has a use-value we call “UV” per turnover. If we define O_year as the number of turnovers per year, we can set up an equation expressing that production per year must equal consumption per year: O_yearUV = qxF_year. If O_yearUV > qxF_year, an overproduction crisis will occur. Correspondingly, this means that the exchange-value to be realised as sales must be payable with money. If EV(x) is a function giving the average exchange-value of a single commodity from a set, we thus get that O_year*EV(UV)UV = EV(q)qxF_year.

The concept of consumption time and market saturation can be used to explain important aspects of modern capitalism. Phenomena such as advertising, “hyper-palatable” food, fashion trends, great variety in consumer products, consumer lifestyles, and easily available consumer loans all try to increase q. Getting access to or control over new markets increases x, and is a well-known driving force of imperialism. Many Marxists in our time emphasise the role of people in the imperial core as “consumers” to ensure sufficient demand for the market. In our time we also see “enshittification” as a trend. On a superficial level, one can view this as “rent-seeking” behaviour, where one makes products worse and thereby saves costs, but charges the same price, in order to make more money. But as Marxists we know that the value of a commodity, and therefore also its price, is connected with the labour-time put into the commodity. If you reduce labour-time, commodity value also falls, and thus price as well. We must instead explain the phenomenon in other ways. First, I will point out that poor materials mean more wear and tear, which means more frequent purchases of new commodities, e.g. “fast fashion.” This reduces F, and thus allows more commodities to be produced. Cheaper raw materials and materials used in production reduce the share of constant capital, and thus increase the rate of profit, as long as the saving is not eaten up by more wear and tear, wastage, or less efficient labour/lower labour intensity. Because we today have money that is not tied to a fixed amount of gold, the price expression of the value of a commodity need not be tied to a specific amount of money. It can be inflated freely, and thus effectively reduce wages, which means an increase in surplus-value. Correspondingly, the labour-time in a commodity can be reduced, and the price expression remain the same, so as to correspondingly lower real wages. In some cases, enshittification may perhaps be explained through cartel or monopoly power, but we also see enshittification for types of commodities where one would not typically expect monopoly powers with monopoly profits. Enshittification is often associated with changes in the conditions of production, for example through offshoring, where one can be competitive due to cheaper labour-power despite a lower technical level of the means of production—which then will also usually mean a lower share of fixed constant capital. AI is another example, which is primarily used to try to reduce turnover time by reducing the socially necessary labour-time for various types of commodities. But if enshittification actually reduces the value of the commodity, it must also increase consumption per consumption time correspondingly (i.e., EV(q) and q must be proportional) if the market’s capacity for exchange-value is to remain constant—that presupposes that real wages do not actually fall. Enshittification thus contains an internal contradiction between reducing wages and preserving the market capacity for use-value. Even if real wages do not fall, a reduced consumption time will mean that turnover time can decrease further (in practice, because one can reduce turnover time without reducing the scale of production, which is a necessity to avoid crisis in industries with competition due to the anarchy of production). A lower turnover time will, as shown, yield a higher rate of profit. But even if the equation balances for production and for the capitalist, the workers are left with qualitatively worse commodities and the circulation labour of buying new commodities more regularly, and possibly searching for producers who still make higher-quality commodities.

A digression on child-rearing: There is a fundamental contradiction in capitalism that it depends on the reproduction of humanity and thus of labour-power, but does not want to pay (primarily women) for this useful and necessary labour. Instead, the reproduction of labour-power is to a large degree made a private responsibility, which it can only do by creating atomised societies with “nuclear families,” and thus counteracting the socialisation of child-rearing and thereby making it even less attractive for parents (and especially women) to take on all the unpaid labour of raising children. Which parents do not know that raising children without even a grandmother nearby is an incredible toil, to the point that one might say that the “real holiday” is when one is at work? This leads to population decline (which is not really a problem, because productivity growth means we are more than capable of looking after our elderly; the only problem is that this will eat up a little more of the capitalists’ profit that they squeeze out of us, and a socialist globe could have a higher standard of living if we had a non-violent population decline), but even worse is that many who actually wish to start families and experience one of the greatest things in many human lives opt out because of the toil, the isolation, and the economic cost, and that those who choose to become parents have to toil more than should be necessary. Therefore, the socialisation of child-rearing, and the lightening of the burden on parents, is something that can only be achieved in a socialist society.

Reflection questions:

1. What is the circuit of industrial capital?
2. What are the components of the circuit of industrial capital?
3. What does Marx mean by departments/sectors, and which ones exist?
4. What is turnover time, and what are its components?
5. Why is turnover time important for capitalism?
6. What does it mean for labour to be productive in a Marxist sense?
7. What is moral depreciation?
8. What is a hoard in a Marxist sense?
9. What is the difference between fixed and circulating capital, and how does this relate to variable and constant capital?
10. Why is Marx’s economic analysis of capitalism useful for understanding capitalism as we see it today?
11. What is the difference between exchange-value and use-value?
12. What is surplus-value?