What Is Capital Accumulation?

Capital accumulation is the conversion of surplus value into capital, that is, the capitalization of surplus value. Capital owners use part of the profits earned from laborers for personal consumption, and the other part is converted into capital, which is used to purchase additional capital and labor factors needed to expand the scale of production. Therefore, surplus value is the source of capital accumulation, and capital accumulation is the prerequisite for enterprises to expand reproduction.

Capital Accumulation

From

Divided in profit

Capital accumulation is an inevitable trend in the development of production.

1. Chasing profits is the motive and purpose of enterprise production.

1) Two conditions must be met for the establishment of an enterprise-led market economy system: a large amount of personal freedom and ownership

The scale of capital accumulation is determined by the factors that determine the amount of surplus value. The factors that determine the amount of surplus value are:

The level of surplus value. The higher the rate of surplus value, the more surplus value obtained by the same amount of variable capital, and the larger the scale of capital accumulation; otherwise the opposite is true.

The level of social labor productivity. Increasing labor productivity can reduce the value of unit commodities, thereby reducing the value of labor, increasing the rate of surplus value, and accelerating capital accumulation; the reduction in the value of commodities can also enable more labor with the same amount of variable capital Constant capital is reflected in more means of production, which produces more surplus value and increases capital accumulation.

The difference between the capital used and the capital consumed. The capital used refers to the capital that plays a full role in the production process; the capital spent refers to the value of that part of the capital that is transferred to the new product every year. The difference between the capital used and the capital paid depends on the age and quantity of labor materials used. The better the quality of labor materials, the longer the useful life and the larger the quantity, the greater the difference between the capital used and the capital spent. In the production process, although the value of labor data is gradually transferred to the product, its use value still continues to play a role in production as a whole, so it provides capitalists with unpaid services just like air and natural forces. The greater the difference between the capital used and the capital paid, the more unpaid services are provided to the capitalist and the more capital is accumulated.

Increase in prepaid capital. Given the constant ratio of constant and variable capital and the rate of surplus value, the more capital the capitalist pays in advance, the more workers are exploited, the more surplus value is obtained, and the capital accumulation will increase.

The conversion of surplus value into capital is the capitalization of surplus value. Capitalists use part of the surplus value exploited from wage labor for personal consumption, and convert part of it into capital for purchasing additional means of production and labor needed to expand the scale of production. Therefore, surplus value is the source of capital accumulation, and capital accumulation is the prerequisite for the expansion of capitalist reproduction. Because the main form of capital accumulation is as follows: The law of surplus value is the intrinsic driving force of capital accumulation. In order to occupy more surplus value, in addition to increasing the level of exploitation of workers, capitalists must also increase the amount of capital in order to expand the scale of production and the scope of exploitation. The enthusiastic pursuit of surplus value has driven capitalists to continuously accumulate capital. The law of capitalist competition and production anarchy is the external pressure of capital accumulation. In capitalist competition, big capital is always in a favorable position. In order to be in a favorable position in the competition, save themselves, and defeat their opponents, the capitalists can only continue to accumulate capital and expand the scale of capital. The fierce competition in capitalist reproduction forces capitalists to continue to accumulate capital. The essence of capital accumulation is that in the expansion and reproduction of capitalism, capitalists use the surplus value of unpaid possession to continuously expand the size of capital and the exploitation of wage labor, and continue to occupy more surplus value.

In the process of capital accumulation, individual capital is increased through the forms of capital accumulation, accumulation, and concentration, so that social wealth is conducive to the concentration of a small number of capitalists. At the same time, with the development of capital accumulation, capitalists will inevitably continue to improve technology and increase labor productivity, so that the organic composition of capital changes qualitatively, and the ratio of variable capital to total capital is getting smaller and smaller. The continuous improvement of the organic composition of capital requires the expansion of the size of individual capital, thereby further exacerbating the concentration of social wealth. It can be seen that, from the bourgeois side, the process of capital accumulation is the process of the expansion of capital scale and the concentration of social wealth, as well as the continuous improvement of the organic composition of capital.

From the working class's perspective, the process of increasing the organic composition of capital is the process by which they become unemployed and fall into poverty. Because with the increase of capital accumulation and the increase of total capital, although the absolute amount of variable capital will also increase, due to the increase in the organic composition of capital, the relative amount of variable capital will gradually decrease. Moreover, when some departments or enterprises adopt new technology and equipment to rapidly increase the organic composition of capital, the demand for capital will definitely decrease. At the same time, due to the widespread use of machines, a large number of women and children entered the factory, and bankrupt farmers and craftsmen and some small and medium capitalists also joined the ranks of hired laborers, making the proletarian ranks constantly grow. These two completely opposing trends will inevitably lead to a relative surplus, which will cause a large number of workers to lose their jobs and bring the proletariat into poverty. It can be seen that the relative surplus population is an inevitable product of capital accumulation and development, and it is also a lever for capital accumulation, and even a condition for the existence and development of capitalist production methods. Therefore, the process of capital accumulation and the improvement of the organic composition of capital is the process of forming the industrial reserve army and the poverty process of the proletariat of the creators of social wealth.

Marx's Capital

Marx revealed the general law of capitalist accumulation through the analysis of the mechanism of the organic formation of capital in the process of capital accumulation: "The greater the wealth of a society, the capital that performs its functions, the greater the scale and capacity of its growth. The greater the absolute number of workers and their labor productivity, the larger the reserve army of the industry. The available labor force is developed for the same reasons as the expansion of capital. Therefore, the relative volume of the reserve army of industry and the power of wealth It grows together. But compared to the active labor force, the larger the reserve army, the more the surplus population, and their poverty is inversely proportional to the labor torture. Finally, the poorer the working class and the industrial reserve army, the more the The greater the number of poor people officially considered to be in need of relief. This is the absolute, general law of capitalist accumulation. "(Marx's Capital, Vol. 1) In a nutshell, first, the greater the capital to perform functions , The greater the social labor productivity, the larger the industrial reserve force; second, the larger the industrial reserve force, the more often the surplus The larger the population, the poorer they are. Third, the larger the industrial reserve, the greater the number of poor people who are often unemployed and in need of relief. Combining these three points into one sentence is: the larger the capital for performing functions, the larger the industrial reserve army, and the more the poor need relief due to unemployment and poverty. Because of this law, the phenomenon of polarization in capitalist society is developing day by day. "This law restricts the accumulation of poverty that is compatible with the accumulation of capital. Therefore, at one pole is the accumulation of wealth, while at the other, that is, the class that produces its products as capital, is poverty and labor torture Accumulation of slavery, ignorance, rudeness, and moral degradation. "