The Origin of Surplus Value—Primitive Accumulation
Marx realized that a complete explanation of the processes at work in the capitalist economy had to account for the beginning of that system. His theories of value, wages, and surplus value simply explained the system as a going affair and analyzed phenomena that were parts of a complex set of processes and institutions already existing. Where did the first capitalist employers come from? Where did they get their surplus funds to hire the first workers on a contractual wage basis? How did free laborers with the power to sell their own services arise from an environment characterized by the feudal system of serfdom?
Once the processes of capitalism were set in motion, according to Marxian theory, capitalist employers used surplus value to enlarge the funds they used to hire labor. But where did the first surplus value come from, and of what did this original fund consist?
It therefore seems likely that the capitalist, once upon a time, became possessed of money, by some accumulation that took place independently of the unpaid labor of others, and that this was, therefore, how he was enabled to frequent the market as a buyer of labor power.
He, who before was the money owner, now strides in front as capitalist; the possessor of labor power follows as his labor.
Once such a fund of money existed, and concurrently there were workers not only free but under pressure to sell their labor power for money, the two essential ingredients of the capitalist system prevailed. Its evolution from that point on could be a self-contained thing, since capital funds accumulated from surplus value.
Marx contended that the capitalist system had its origin in some historical events that, consistent with his economic interpretation of history, were caused by changes in the mode of production. Such events he found in the England of the late fifteenth and early sixteenth centuries, and in other European countries at various times before the advent of capitalism. These years he refers to as a period of "primitive accumulation." "Primitive accumulation creates, at the one pole, the 'free' proletariat; at the other, the owner of money, the capitalist"—that is, the original proletarians and the original capitalist employers.
The expropriation of the agricultural producer, of the peasant, from the soil, is the basis of the whole process. The history of this expropriation, in different countries, assumes different aspects, and runs through its various phases in different orders of succession, and at different periods. In England alone . . . has it the classic form.
The processes of "expropriation" during those centuries were traced in detail by Marx, who pointed out how, through the intermingling of economic developments and the ruthless use of force by those in power, the old feudal relationships were broken and a peasant agricultural economy was uprooted. The rights of lords to receive services were transformed into money payments, while the rights of peasants to use certain lands were abolished and the land was transferred to uses that had come to be more profitable, notably raising sheep. The elements in this transition are summarized by Marx as follows:
The spoliation of the church's property, the fraudulent alienation of the state domains, the robbery of the common lands, the usurpation of feudal and clan property, and its transformation into modern private property under circumstances of reckless terrorism, were just so many idyllic methods of primitive accumulation. They conquered the field for capitalistic agriculture, made the soil part and parcel of capital, and created for the town industries the necessary supply of a "free" and outlawed proletariat.
Herein were the sources of the original capital funds in the form of money and of the original free proletariat, who, having no rights to land on which they might produce for themselves, could live only by selling their labor power to those possessing money funds. The origins of capitalism, according to Marx, were "the expropriation of the immediate producers, i.e., the dissolution of private property based on the labor of its owner" or "a series of historical processes, resulting in a decomposition of the original union existing between the laboring man and his means of labor." This newer form of economic relationship "has no natural basis, neither is its social basis one that is common to all historical periods. It is clearly the result of a past historical development, the product of many economical revolutions, of the extinction of a whole series of older forms of social production."
Capital Accumulation Proceeds from Surplus Value
Once the period of primitive accumulation is past, capital accumulation proceeds by accretions from surplus value. All surplus value realized becomes the property of the capitalist. Portions of this surplus are used for his personal consumption; others are used to hire labor to engage in further production for the further acquisition of surplus value. All funds advanced to labor Marx calls capital, distinguishing funds put into tangible equipment ("constant capital") from those going to pay labor's current wages ("variable capital"). Since it is obvious that such a use of surplus value for capital purposes will not be undertaken unless the capitalist expects to get back more than he has laid out, and since the value processes of a capitalist economy work inevitably to that end, surplus value results from these outlays of capital in production. From these surpluses over and above the original outlays, still more capital is put into the next productive operation, and so on under capitalism in a never-ending spiral of capital accumulation from surplus value. Marx points out emphatically that "by the side of the newly formed capital, the original capital continues to reproduce itself, and to produce surplus value, and that this is also true of all accumulated capital, and the additional capital engendered by it."
After the process of capital accumulation is set in motion, it is "the laborers' own labor, realized as a product, which is advanced to him by the capitalist"; "the produce of the labor of those who do work gets unavoidably accumulated in the hands of those who do not work and becomes in their hands the most powerful means to enslave the very men who produced it." "Employing surplus value as capital, reconverting it into capital, is called accumulation of capital."
Abstinence Is Not the True Source of Capital
Marx was aware of the claims of political economists that, in using funds they acquired to hire more labor in the productive process, capitalists were "abstaining" or "saving." Economists contended that capital accumulation could not take place without such abstinence, which thereby became just as essential to further production as labor power and therefore just as deserving of reward. To this Marx issued a double reply. First, as has been noted, he contended that the original capital funds were merely taken by force from expropriated peasant workers. Second, the funds "saved" by modern capitalists were also stolen, but in a different manner, since they came from surplus value. Marx proposes the question, Should anyone be compensated for saving rather than consuming funds that in any event he has stolen? In the following satirical passage, Marx suggests that since the capitalist finds it a hardship to save what he has stolen, he be freed from this burden by being kept from stealing:
The simple dictates of humanity therefore plainly enjoin the release of the capitalist from this martyrdom and temptation, in the same way that the Georgian slave owner was lately delivered, by the abolition of slavery, from the painful dilemma, whether to squander the surplus product lashed out of his niggers, entirely in champagne, or whether to reconvert a part of it, into more niggers and more land.
Exploitation of Labor Inherent in Capitalism
To Marx the essence of the workings of the capitalist system is embodied in the value and wage-determining processes and in the accumulation of capital. These he did not condemn. They were part and parcel of the entire capitalist order. As inseparable parts of it they could not stand alone, nor could the capitalist order exist without them. They were not immortal in themselves but only because they, as inherent parts of an entire economic system, yielded results that Marx held to be contrary to human welfare and internally inconsistent. We will now turn to an examination of the consequences Marx held to be the inevitable outcome of the economic processes at work in capitalism.