“Could you explain that word, please?”
“If a worker produces a commodity, this commodity has a certain
exchange-value.”
“Yes.”
“If you now deduct the workers’ wages and the other production costs
from the exchange-value, there will always be a certain sum left over. This
sum was what Marx called profit. In other words, the capitalist pockets a value
that was actually created by the worker. That is what is meant by exploitation.”
“I see.”
“So now the capitalist invests some of his profit in new capital—for
instance, in modernizing the production plant in the hope of producing his
commodity even more cheaply, and thereby increasing his profit in the future.”
“That sounds logical.”
“Yes, it can seem logical. But both in this and in other areas, in the long
term it will not go the way the capitalist has imagined.”
“How do you mean?”
“Marx believed there were a number of inherent contradictions in the
capitalist method of production. Capitalism is an economic system which is
self-destructive because it lacks rational control.”
“That’s good, isn’t it, for the oppressed?”
“Yes; it is inherent in the capitalist system that it is marching toward its
own destruction. In that sense, capitalism is ‘progressive’ because it is a stage
on the way to communism.”
“Can you give an example of capitalism being self-destructive?”
“We said that the capitalist had a good surplus of money, and he uses
part of this surplus to modernize the factory. But he also spends money on
violin lessons. Moreover, his wife has become accustomed to a luxurious way
of life.”
“No doubt.”
“He buys new machinery and so no longer needs so many employees.
He does this to increase his competitive power.”
“I get it.”
“But he is not the only one thinking in this way, which means that
production as a whole is continually being made more effective. Factories
become bigger and bigger, and are gradually concentrated in fewer and fewer
hands. What happens then, Sophie?”
“Er. . .”
“Fewer and fewer workers are required, which means there are more
and more unemployed. There are therefore increasing social problems, and
crises such as these are a signal that capitalism is marching toward its own
destruction. But capitalism has a number of other self-destructive elements.
Whenever profit has to be tied up in the means of production without leaving a
big enough surplus to keep production going at competitive prices . . .”
“Yes?”
“, . . what does the capitalist do then? Can you tell me?”
“No, I’m afraid I can’t.”
“Imagine if you were a factory owner. You cannot make ends meet. You
cannot buy the raw materials you need to keep producing. You are facing
bankruptcy. So now my question is, what can you do to economize?”
“Maybe I could cut down on wages?”