The Accumulation of Capital

sts under the immediate impact of the first crises of 1815 and 1818-19 in England. Even then it had

ent bankruptcies-and on the other hand the glaring poverty of the toiling masses-for the first time all this starkly met the eyes of theorists who had preached the gospel of the beautiful harmonies of bourgeois laissez-faire and had sung its praises in all keys. All contemporary trade reports, periodicals and travellers' notes told of the losses sustained by English merchants. In Italy, Germany, Russia, and Brazil, the English disposed of their commodity stocks at a loss of anything between 25 per cent and 331?3 per cent. People at the Cape of Good Hope in 1818 complained that all the shops were floo

rkers. The Edinburgh Review of 1820[147] quotes an address by the No

otatoes and salt, for that more wholesome food an Englishman's table used to abound with, we have repeatedly retired, after a heavy day's labour, and have been under the necessity of putting our ch

strial state, constituted himself spokesman for a generous social reform, whereas the petty-bourgeois Swiss rather lost himself in sweeping denunciations of the imperfections of the existing social or

first crisis. In the second edition of his Nouveaux Principes d'économie Politique Ou De La Richesse Dans Ses Rapp

ilst every one of its leading men, meeting on Exchange, can dispose of thousands. At the same time, in the streets of London, and in those of the other great towns of England, the shops display goods sufficient for the consumption of the world.-But have riches secured to the English merchant the kind of happiness which they ought to secure him? No: in no country are failures so frequent, nowhere are those colossal fortunes, sufficient in themselves to supply a public loan to uphold an Empire, or a republic, overthrown with as much rapidity. All complain that business is scarce, difficult, not remunerative. Twice, within an interval of a few years, a terrible crisis has ruined part of the bankers, and spread desolation among all the English manufacturers. At the same time another crisis has ruined the farmers, and been felt in its rebound by retail dealers. On the other hand, commerce, in spite of its immense extent, has ceased to call for young men who have their fortunes to make; every place is occupied, in the superior ranks of society no less than in the inferior; the greater number offer their labour in vain, without being able to obtain remuneration.-Has, then, this national opulence, whose material progress strikes every eye, nevertheless tended to the advantage of the poor? Not so. The people of England are destitute of comfort now, and of security for the future. There are no longer yeomen, they have been obliged to become day labourers. In the towns there are scarcely any longer artisans, or independent heads of a small business, but only manufacturers. The operative, to employ a word which the system has created, does not know what it is to have a station; he only gains wages, and as these wages cannot suffice for all seasons, he is

n of the middle classes; the impoverishment of the workers; the displacement of the worker by the machine; unemployment; the dangers of the credit system; social antagonisms; the insecurity of existence; crises and anarchy. His harsh, emphatic scepticism struck a specially shrill discord with th

only those will work hard and untiringly who have to do so in o

acity, is a blessing for mankind, it is made into a scourge for

more than it costs, but because he does not pay all the costs, because he does not accord the labourer a remuneration equal to his work. Such an industr

each year by new labours, the other have previously acquired permanent rights b

hould diminish the working population by that much. To this danger i

e we have left the working classes without security, just as we already condemn, as th

ion which might try to gloss over the dark aspects of capitalist enrichment he exposed, as merely temporar

uch prolonged suffering as the mere frictions which always accompany a change. Going back to the origin of income, I believe to have shown

etermined by the former appears to him the source of all evil. This is the point

capitalist production is encouraged to expand indefinitely without any

l be destroyed. But as, in the fortune of the public, the capital of one becomes the income of another, they have been perplexed to decide what was capital, and what income, and they have therefore found it more simple to leave the latter entirely out of their calculations. By neglecting a quality so essential to be determined, Say and Ricardo have arrived at the conclusion, that consumption is an unlimited power, or at least havi

As usual, Sismondi starts his investigation with Robinson Crusoe. For such a one, the distinction between capital and income was still 'confused'; it becomes 'essential' only in society. Yet in society, too, this distinction is very difficult, largely on account of the already familiar myth

nd to hand, successively acquires different denominations; the value which becomes detached from an object that has been consumed, appears as a metaphysical quantity which o

both supplies raw materials and provides the means to support human labour. Income, on the other hand, is a concept of value. It indicates the amount to which an individual or individuals can dispose over part of the wealth of society or of the aggregate social product. In view of Sismondi's insistence that social income is part of social wealth, we might assume him to understand by social income the actual annual fund for consumption. The remaining part of wealth that has not been consumed, then, is the capital of society. Thus we obtain at least a vague outline of the required dis

ich man has subjugated the forces of nature, every worker can

to explain the actual origin of exploitation in a way typical of bourgeois economics: 'But even though his labour produces wealth, this wealth, if he is called upon

uite in accord with the followers of Ricardo and Malthus. But now he comes to the r

t directs to the uses of man. The master of the land on which labour is performed, reserves a share in the fruits of la

terials, often coming from far away, on which he must exercise his industry. Even less does he possess that complicated and costly machinery which facilitates his work and makes it infinitely more productive. The rich man who possesses his consumption goods, his raw mate

taken off twice, by landlord and capitalist, is the wage of labour, the income

ital profits; as for the part of the social product which is consumed in form of wages, it certainly does reproduce itself; it becomes the labour power of the wage labourer, for him a commodity by whose sale he li

rk themselves, and exploitation becomes the actual foundation of the distribution of income owing to the divorce of the worker from his means of prod

for immediate or almost immediate use, and the other which he will not need until it is to afford him new production. Thus one part of his corn must feed him until the next harvest, another part, reserved for sowing, is to

. First, means of production are capital not intrinsically, but only under quite definite historical conditions; secondly, the concept of capital covers more than just t

apitalist, he listed means of subsistence for the workers together with means of production as component parts of capital-again a mistake in view of the material aspects of the reproduction of individual capitals. Ye

ndeed, he has the proper instinct that the core of the relation of exploitation is the very fact of exchange with living

rt of his income into capital, and in fact, this is the way in which new capital is always formed.... The corn he has reaped over and above what he must eat while he is working, and over and above what he will have to sow in order to maintain the same level of exploitation, is wealth which he can give away, squander a

, and although the reproduction of fixed capital is completely ignored. Circulating capital apparently is also superfluous for the expansion of reproduction, for accumulation: the whole capitalis

he poor, because he himself shares out the annual product; and whatever he calls income, he will keep for hi

the origin of capital. Surplus value arises from the exchange of capital for labou

capital and income. Sismondi now attempts to represent the various elements of prod

alth accumulated by society is devoted by every one who possesses it to render labour more profitable by slow consumption, and make the blind forces of nature execute the work of man; this part is called fixed capital and comprises reclaiming, irrigation, factories, the tools of trade, and mechanical contrivances of every description. A second part of wealth is destined for immediate consumption, to reproduce itself in the work

g capital. For 'all that is created', is destined for human consumption, though fixed capital is consumed 'mediately' while the circulating capital 'passes into the consumption fund of the worker whose wage it forms'.[168] Thus we are a little nearer to the division of the social product into constant capital (means of production),

so abstract and requires such great power of concentration to grasp it properly'.[168] Thus again we put on blinkers with a focus on

be their expenditure; they will be in a position to afford this expenditure at the price of their revenue, that is to say their labour; for the farmer it will be an exchange: he will have converted his 30 sacks into fixed capital. In the end, he is left with 40 sacks. He will sow them that year, instead of the 20 he had sown the previous year; this constitutes his circulating capital which he will have doubled. Thus the 100 sacks will have been consumed, but of these 100 sacks 70 are a real investment for him, which will reappear with great increase, some of them at the very next harvest, and the others in all sub

indefinitely increase the production of the society. But what about the consumption of society? This is determined by the various kinds of income. Sismondi explains this important s

t arising from wealth. The second is the capacity for work which springs from life. This time we understand by wealth both territ

our power, or better, its equivalent, the variable capital. This, then, though still far too vague, is our division into constant capital,

two parts: one we have just discussed-the profit resulting from wealth; the other is the capacity for work, wh

nstant capital has disappeared. We have arrived at Smith's dogma that the commodity price is resolved into v + s (or is

pital profits and rents, and is thus represented by v + s; on the other hand, the aggregate social product, in terms of value, is equally resolved in

ur for it, convert it into capital and reproduce it; in part by the capitalists who, exchanging their income for it

oduction and Consumption', Sismondi finally sets up the following precise law of reproduction:

and there can be no solution to the problem of accumulation. Sismondi's theory in fact amounts to a denial of the possibility of accumulation. The aggregate social demand being the bulk of wages given to the wo

oduction of the previous year. Besides, if production gradually increases, the exchange, at

is final conclusion, and prefers a 'middle course', necessitating a somewhat obscure subterfuge: 'If this loss is not heavy, and evenly distributed, everyone will bear wit

becomes the solution of Sismondi: putting the dampers on accumulation. He constantly polemises against the classical school which advocates unrestricted development

ndi, e.g. the Russian Marxist Ilyin,[175] think that pointing out this fundamental error in the analysis of the aggregate product can justify a cavalier dismissal of Sismondi's entire theory of accumulation as inadequate, as 'nonsense', they merely demonstrate their own obtuseness in respect of Sismondi's real concern, his ultimate problem. The analysis of Marx at a later date, showing up the crude mistakes of Adam Smith for the first time, is the best proof that the problem of accumulation is far from solved just by attending to the equivalent of the constant capital in the aggregate product. This is proved even more

ductive process gave rise to new fallacies in the theory of accumulation. At present it will suffice to put on record that the deference to Smith's error about the reproduction of aggregate capital is not a weakness unique to Sismondi's position but is rather the common ground on which the first controversy about the problem of accumulation was fought out. Scientific research, not only in this sphere, proceeds in devious ways; it often tackles the upper storeys of the edifice, as it were,