In Marx’s circuit of capital, capital’s primary objective is the smooth expanded accumulation of itself with the generation of surplus value during the production process. The circulation of capital takes place in three stages. The first stage occurs in the circulation sphere, the second occurs in the production sphere and the third in the sphere of realization. For the circular movement of capital to be successfully completed, everything must go well for capital in the labor and commodity markets where the means of production and labour power are purchased during the first stage; in the production process where surplus value is generated and finally in the commodity market where the final product is sold, and the surplus value realized (third stage). The three stages of the circular movement of capital must occur and furthermore must occur in proper relation to each other for the unity of the whole process to be realized. All this is no easy affair because working class struggles threaten disruption in all three stages. Such disruption can lead to crisis. The crisis of capital is thus seen as the product of class struggle. Capital is not interested in the sphere of reproduction where workers reproduce their labour power.

In the first stage of the circulation of capital, the capitalist appears as buyer in the labor and commodity markets. In the labour market, money capital is in the procession of the capitalist while labor power, understood as the capacity of the worker to work, is in the procession of the worker. The capitalist exchanges his sum of money for labor power and this also means that the worker transforms his labor power into monetary wages. An antagonistic class relationship is presupposed in this social relationship. A class relation of struggle exists between the capitalists and the workers as they face each other in the labor market. The workers would like to sell their labour power for more monetary wages to eat well and live like human beings. The capitalists would like to buy the workers’ labour power for less money since, for them, wages represent cost. As soon as money capital is exchanged for labour power, the labour power comes under the control (supposedly) of the capitalist to productively consume to generate surplus value.

In the commodity markets, the means of production which are materials and personal factors used in the production of the desired final product are the procession of other capitalists. The capitalist must purchase the means of production and have them at hand as soon as he purchases the labour power. The quantity and volume of means of production must be sufficient for the utilization of the labour power purchased. If the mean of production is less than the labor power required to transform it, then the capitalist cannot utilize the excess labour power nor can he utilize the excess means of production, if it is too much. The purchase and ownership of the means of production by the capitalist implies that a definite stage in the development of trade, necessary for capital’s control of production, has been reached (i.e., capitalist production has extended into a social condition with the separation of labour power from the means of production). Further economic development under capitalist production, once it is established, reproduces this separation, and expands its scope until it becomes the prevailing social condition.

The possibilities of crisis are moments where the accumulation process could be interrupted. These possibilities exist because the accumulation process consist of moments which are separated in time and space. In the first stage, there is the possibility that no means of production or labour power is available. The worker might refuse to sell his labour power because he still has access to land or because monetary wages are too low. The means of production may be unavailable in the market. Secondly, the relative prices of the means of production and labour power may lead to a situation where money capital cannot buy both in the right proportion. Thirdly, the price of labour power and the means of production  might put them beyond the range of economically profitable production activity despite their availability. Also, the rate of exploitation, intensity of work or the length of the working day might not be enough to produce prrojected surplus value during the anticipated production process. Finally, natural disasters might lead to scarcity of food and raw materials thereby creating a possibility of crisis by raising the price of labour power and the means of production. Thus, there are numerous reasons why a struggle between capital and the working class might explode in the labour market. These struggles might erupt over “whether labor power will be sold, or how much (length of workday and intensity) or at what price (wages and benefits) or over control of access to land.”

The predisposition to crisis is the tendency of the possibility of crisis to actualize. For instance, in the first stage of the circular movement of capital, the non-availability of labour power could lead to wage increases, less money capital for the means of production and disproportionality. Capital often responds to excessive wage hikes by reorganizing the production process through technological changes thereby inducing a temporary shortage of skilled labor and unemployed workers struggles for income and access to the means of subsistence. Furthermore, workers will struggle against new technical divisions imposed on them in their effort to achieve a new composition based on the new division of labor. This usually results in a new balance of power between workers and capital. Finally, the labour market has the antagonistic nature of capitalist class relations embedded within it as workers want more money for less work while capitalists want more work done for less money. In the case of the purchase of the means of production, natural disasters, shortages, bad harvests, the exhaustion of raw materials, or devalued exchange rates might affect the availability and price of the means of production. Technological changes also might increase the tendency for the possibility of crisis to actualize by leading to disproportionality and the interuption of the circulation of capital. The form now achieved by the capital value from its original money form implies it must move from the circulation sphere and enter the production sphere (into productive consumption) for the circular movement of capital to continue. Next time, we will examine the predisposition and possibilities of crisis in the sphere of production during the circular movement of capital.

Izielen Agbon

May 27, 2024


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