Based on statistical data describing the growth of industrial products in the world’s major countries, we have repeatedly formulated the law of growth in capitalist industry ⁽¹⁾, which we will summarise here in three points.

The various national capitalisms do not appear simultaneously in history. On the contrary, the capitalist mode of production – after experiencing early but unsuccessful developments, particularly in the Mediterranean basin – takes hold for the first time of the entirety of a national economy in England; from there, it sets out to conquer the world, which it gradually does amid terrible political, military, and social convulsions. First Western Europe, then the Americas, later the immense Russia and, finally, today, the Asian and African continents have successively fallen under its control. Capital, using both brute force and economic ‘persuasion’, alternating between ruin and massacre, sending gunboats, expeditionary corps, or atomic fleets where explorers, missionaries, and merchants have failed, capital, everywhere, clears a path for its commodities, erodes and then ruins the economic formations that have preceded it, destroys centuries-old empires, sweeps away age-old customs and traditions, reduces living humanity to the role of proletarian, of a modern slave. Everywhere, upon these bloody ruins, capital establishes its empire. It shapes the world in its image until it becomes the very image of the world, the dominant mode of production on a world scale.

This process of expansion has a decisive consequence: the uneven development of the various national capitalisms that ‘coexist’, to use the terminology dear to Mr. Khrushchev, on the surface of the globe. Some recent nations are barely emerging from a pre-capitalist mode of production, are still at the stage of the expropriation of independent producers (artisans and above all peasants), which will throw them, as wage-earners, into the productive penal colonies of capital – and it is at that level that the young capitalist nations born of the anti-colonial wave of this post-war period are – whereas old England, once mistress of the world, having even lost its place as ‘brilliant second’, is going through its phase of senile imperialism, victim of the capitalist boomerang that made it sow the ferments of capitalist development in the four corners of the world, from which the colossi of today were born.

Capitalism, therefore, develops in an uneven, turbulent, and catastrophic manner: commercial competition, crises of overproduction, class wars, and national wars are the milestones of its development, marked, in each determinate period, not only by the unequal power of the various national capitalisms, but also by their unequal age. By considering the ‘date of birth’ of the various national capitalisms, i.e. the period when it can be considered that the capitalist mode of production has become dominant within their borders, the main capitalist countries can be classified into young capitalisms – the Afro-Asian and South American nations – mature capitalisms – the U.S.S.R. and Japan – senile capitalisms – the U.S.A. and the countries of Western Europe.

The countries of young capitalism accumulate at a rapid pace, the countries of old capitalism at a slow pace. A single country, over the course of its history, therefore passes successively through all the intermediate stages, from the exuberance of the rates of industrialisation to the very low growth rates of rotten imperialism.

But in presenting this second aspect of the historical evolution of capitalism, the utmost precision is required if we are to avoid ambiguities that favour a gradualist view of the history of class societies, which readily depicts the decline of a mode of production as the decline in the material quantity of ‘goods’ ⁽²⁾ it produces.

Marxism – and historical reality! – are completely foreign to this evolutionary view, which compares the history of modes of production to a kind of sinusoidal curve: at first, capitalism produces a lot and the curve representing its production rises vertiginously, but when it reaches maturity, its production slowly declines. The production curve, starting from a very low point, would therefore rise to a peak – the apogee of capitalism – in order to then slowly decline. It is at the bottom of the decline that the transition to a higher mode of production would occur. Such a way of presenting the facts, apart from being completely unrealistic and continually contradicted by the very data of capitalist production, only translates the theoretical nullity, political incapacity, and social cowardice of the famous ‘middle classes’. Frightened by the vertiginous development of capitalist production, the stranglehold on all economic activities that capital assumes, and their own ruin that both entail, the middle classes dream, alternately, of a ‘democratic socialism’ – established peacefully and, why not, since Mr. Thorez allows for all hopes despite his few meagre seats in the Chamber, through parliamentary means – which would protect them from monopolies, or else of an equally illusory return to the small independent family economy.

Mr. Khrushchev’s ‘peaceful competition’, while in reality nothing more than an elegant phrase to designate commercial competition on the world market between two imperialist super-states, plays the same role of disarming the proletariat by accrediting the idea of a progressive triumph of socialism, and therefore of a parallel and ‘non-violent’ disappearance of capitalism. The entire ‘theoretical’ and political arsenal of the so-called communists harmoniously complements this ‘competition’ by returning to the most hackneyed petty-bourgeois slogans and completely renouncing the entire proletarian doctrine. These gentlemen advocate pacifism to prevent wars – the entire Marxist analysis of capitalism shows, as Lenin already reminded Kautsky, who dreamed of ‘ultra-imperialism’, of a peaceful balance between States thrown body and soul into economic competition, that wars are the inevitable product of the capitalist mode of production; rejecting petty-bourgeois pacifism, which disarms the proletariat and leaves it defenceless against imperialist war, Lenin proclaimed revolutionary defeatism, the necessity of transforming imperialist war into civil war. Our current ‘communists’ have discovered the peaceful path to socialism – Marxism, the history of proletarian struggles from the revolt of the Equals to the October Revolution via the Commune, and the daily reality of capitalist society know only class struggle leading to class war. But there is even more in the jumble that serves as doctrine for the degenerate communists: the use of parliament to achieve socialism – all Marxist doctrine, all the entire history of class societies teach us precisely that the State is not this mythical organism hovering above the classes, adored by the idiotic democratism of the petty-bourgeois philistine, but the instrument of the domination of a class; the glorious Commune of 1871 showed once and for all that the task of the revolutionary proletariat was not to lay siege from within, to gradually conquer the bourgeois State, but to destroy it; true to this teaching, the Bolshevik Revolution reserved for the Constituent Assembly the fate it deserved: it had it dispersed with kicks in the arse, bayonets not being necessary in such cases. Our vintage ‘communists’ of 1962 speak only of people’s democracy, uniting in a single expression the two key words of the petty bourgeoisie: democracy (dictatorship, Caesarism, fascism: what horror!) and the people (all united! Classes? Never heard of them!); the masters of Marxism, for their part, never spoke of anything but the dictatorship of the proletariat. Finally, to crown the edifice (but hurry, it is already shaking on its foundations), our modern revisionists have invented national roads to socialism, the ‘struggle’ against monopolies and ‘support’ for small peasant property, – but the national framework, the nation, is precisely the vital environment of capitalism: the destruction of the latter cannot allow the former to survive; socialism is international by nature; moreover, the most developed, most concentrated capitalism (the famous monopolies, precisely) is the antechamber of socialism, whereas the small property-owning producer, morally narrow-minded, economically backward, and politically reactionary, is its mortal enemy!

The Marxist perspective on the transition to socialism therefore has nothing to do with a supposed decline in productive forces or production within capitalism: capitalism will die precisely because of its hyperproductive madness. The capitalist mode of production constantly raises – if one considers the historical average emerging from situations of opposing trends – global industrial production. Better still, it constantly increases, albeit less markedly of course, the quantity of industrial products available per capita ⁽³⁾. Let us therefore clarify what we mean by the rate of increase in production ⁽⁴⁾ and see what its decline over time means, during the ‘aging’ of capitalism.

Let us take a numerical example, borrowed from reality. In 1946, industrial production in England was at index 125; the following year, in 1947, the index was 129. Production had therefore increased. We call the difference between production in a given year and production in the previous year the absolute increase in production. Here, the absolute increase is 129 – 125 = 4 index points. We call the ratio between the absolute increase in production and production in the previous year the relative increase in production ⁽⁴⁾. In our example, this ratio is 4/125 = 0.032, or, expressed as a percentage, 3.2%. It is not only legitimate, but also necessary to consider this relative increase and not just the absolute increase, particularly if we want to compare the development of two (or more) different capitalisms. Knowing that the first has an absolute increase in production of 100 and the second of 500 teaches us nothing about the relative speed of increase of these two capitalisms. On the other hand, if we know that the previous production of the first capitalism was 1,000 and that of the second was 10,000, we see that their respective rates are 10% and 5%. Here we have a comparative element that did not exist when considering absolute increases alone.

It is therefore this relative increase in production that historically declines as capitalism ages. But this law, like all the laws governing capitalism, only asserts itself in the long term, amid disorderly deviations that reflect the intrinsic anarchy of capitalist production. It is pointless to try to verify it by considering the growth rates in production year by year: we will find ourselves faced with figures that vary in a disorderly manner, sometimes falling, sometimes rising in an apparently inexplicable way. This law, which asserts itself as the result of countervailing movements that cancel each other out, can only be verified if we consider a sufficiently long enough period for these opposing movements to cancel out, revealing a historical trend. It is this historical trend that interests us, but before illustrating it with examples taken from the industrial development of the main capitalist countries, let us return briefly to the nature of these disorderly movements that affect the annual growth rate of production.

The cycle of capitalist production can be subdivided into several periods that succeed one another in time. First, there is a period of intense accumulation, during which growth rates remain at a high level; this period ends in a general crisis of overproduction, lasting several years, during which production not only fails to increase but actually declines sharply: high growth rates are thus followed by negative rates; once the crisis is over, production regains its momentum and accumulation returns to high rates; this momentum finally breaks in a general war, which, from the point of view that interests us here, is nothing more than the capitalist way of averting a new crisis. The result, in terms of accumulation rates, is identical to that of an overproduction crisis, with the aggravating circumstance that the negative growth rates in production are accompanied this time by massive destruction of fixed capital (buildings, various production facilities, machinery, etc.) and... variable capital, i.e. the labour power of living human beings. The above is sufficient to understand that the law of the decline in relative production growth only comes into play, only manifests itself, if we consider very long periods of time so that, once deviations are compensated for, a general trend emerges.

One further remark is necessary. If young capitalism accumulates quickly, senile capitalism can be momentarily ‘rejuvenated’, and this in two ways. First, through a crisis of overproduction which, by destroying products and maintaining a negative production growth rate for several years, paves the way for a new capitalist expansion. Secondly, and more importantly, capitalism emerges rejuvenated from a war – whether victorious or not – provided that it has led to the massive destruction of productive facilities, disrupted the country’s productive infrastructure (promises of lucrative reconstruction and ‘public utility’ works that delight private interests), and reduced national production to an extremely low level. Capitalism literally thrives on catastrophes that disrupt the fate of humanity: the German ‘miracle’, French ‘prosperity’, Japan’s vertiginous growth rates, the Soviet expansion are no mystery ⁽⁵⁾. They were born directly from the unprecedented suffering imposed on humanity during the last world war, from the massacres, famines, epidemics, bombings that destroyed factories, railway stations, bridges, port facilities, canals, and piled up corpses. The natural manure of the current prosperity of the ‘rejuvenated’ capitalist world is this immense mass grave of the millions of dead from the last war!

Let us now consider the evolution of accumulation rates for some major capitalist countries: England, France, Germany, the United States, and Russia. The table below provides a synthetic view of industrial growth in the capitalist world, indicating, for each of the countries considered, the average rate of increase in production over historical periods long enough for particular economic situations to be cancelled out: The general law that we have stated, which is completely obscured in an analysis covering only a few years for the reasons already indicated, is fully verified here. Some clarifications are nevertheless essential regarding the method used to compile this table. The documentary sources are the publications of various national statistical institutes; the reference year for all countries is 1913. How are the boundaries of the various historical periods (or cycles) that we distinguish for each country chosen? This is an important question, because everyone knows that it is easy to make statistics say what you want them to say, provided you are skilled enough, and the various statistical institutes engage in a ‘competition’ in this domain of a most Khrushchevian kind. Capitalist production does not grow along a harmonious curve, but follows a ‘sawtooth’ trajectory: after a more or less steady rise, we see a fall in production, followed by a recovery that eventually exceeds the previously reached level, and this succession of ‘booms’ and ‘depressions’ repeats itself continuously. Let us consider an arbitrary example to better understand this:

Year 1: production index = 100. Year 2: production index = 90. Year 3: production index = 110. Year 4: production index = 80.

Production began by falling from 100 to 90, then rose again to 110, and finally fell again to 80. We would say that the index for year 2 is a minimum peak on the curve (production is lower than in the immediately preceding and following years), and that the index for year 3 is a maximum peak (production is higher than in the previous and following years). In order to eliminate from the analysis these peaks and troughs that cancel each other out (but at what cost to humanity!), we consider a kind of ideal curve running from one maximum peak to another maximum peak. The historical periods that we distinguish in our table are therefore always between two production maxima.

Let us now examine the table. We note that in all the countries considered, material production grew enormously during the historical period in question: it became 9 times greater in England, 12 times in France, 27 times in Germany, 190 times in America and 488 times in Russia (for the period 1913-1961 alone): there is therefore no question of a decline in productive forces! Furthermore, several conclusions can be drawn from this table ⁽⁶⁾. First of all, and this is the essential point, the law of declining rates of accumulation is fully verified in each country: one need only consult, for a given country, the figures in column III to see this. Secondly, at a given time, the growth rates of different countries vary according to the age of their capitalism, with the younger accumulating faster: one need only scan our table horizontally, considering the columns III of the different countries, to be convinced of this. We have therefore arranged the five nations considered in the order of their seniority in the capitalist form. Finally, so-called socialist Russia is by no means exempt from this law ⁽⁷⁾.

The development of capitalist industry is therefore accompanied by two phenomena: uneven development and differences in the rates of accumulation depending on whether we are dealing with young or old capitalism. These two factors, combined with what could be called the potential power index of each national capitalism, and which would include the evaluation of factors as diverse as the size of the national territory, its natural resources in the broadest sense (agricultural value of the soil, subsoil wealth, climate, waterways, geographical location), population density and growth, and even the characteristics of national history, determine the terms of the ongoing war waged by capitalist nations (or groups of nations) for global hegemony. Frantic competition in the world market, the race for financial domination where the colonial system has failed, the division of the world and its contestation, the gigantic crises that suffocate production – and consequently people – under a pile of unsold commodities, and the imperialist wars that resolve, through ruin and massacre, the problems posed by mad accumulation, – the whole life of capitalism and all its manifestations stem from this incentive to produce ever more, to ever widen the base of production in order to prevent a decline in the rate of accumulation from leading to a decline in the mass of profits.

So far, we have attempted to give an idea of the evolution of capitalist production by taking as our starting point its external manifestations, that is, the quantitative vicissitudes of its industrial production. But what is the link between material industrial production and the deep mechanisms of capitalism, or, to put the same question differently, what relationship can we establish between the law of accumulation as we have been able to formulate it on the basis of the statistical data themselves and Marx’s classical analysis of capital? The answer is quite clear, even if it disappoints the ‘modernisers’, the whole cohort of current ‘revisionists’ who are striving to renovate what they have never managed to assimilate: the real development of capitalist industry obeys the laws formulated by Marx more than a century ago. Not, of course, in the sense that the will of capitalists bends to these laws, but because they are the scientific equation of the capitalist mode of production.

The concept of value is at the centre of the Marxist critique of political economy. Very early on, the official economists scoffed at this intangible value, which is almost never realised in individual exchanges, and all vulgar economics turned its back on it to devote itself to the ‘study’ of market prices. In doing so, it revealed its veneration for capitalist idols – only the price, i.e. money, what one pockets, interests the bourgeoisie! – while at the same time demonstrating its theoretical and scientific incapacity. Similarly, in the natural sciences, mechanics only made decisive progress when the quantity ‘mass’ – which no one has ever seen or touched – was considered, instead of focusing solely on weight, whose variations for the same body (when moving on the surface of the planet or climbing a mountain peak, for example) were confusing. Only the hypothesis of the existence of a mass could account for the multiple variations in weight. The concept of value plays the same role in political economy: it is only on the basis of value that the inextricable variations, in one direction or another, of prices can be understood and explained.

For Marx, the value (or exchange value) of an object produced by human labour is the socially necessary labour time required to reproduce it systematically. Every product is, in a sense, a sum of crystallised labour hours, a certain expenditure of materialised labour power ⁽⁸⁾. The value of a product is therefore proportional to the average number of human labour hours it contains. The monetary value of a commodity is only an index of this value proportional to the necessary labour time, money, currency being originally just another commodity like any other. The fact that this special commodity is gradually confined to an exclusive role as a medium of exchange, or rather that gold gradually supplants other commodities in this special role, is due to its particular physical characteristics (resistance to wear and tear, considerable value within a small volume). The replacement of gold by paper money fundamentally changes nothing – speculation aside! – as these papers function as symbols of value accepted by all ⁽⁹⁾.

At the dawn of the development of commodity exchange, when it mainly involved surpluses that one community of producers exchanged for the surpluses of another community, exchange remained occasional, fortuitous, and non-necessary. It is certain that at that time, the use value of commodities (their ability to satisfy a human need) often outweighed their exchange value. Yet, in the measure that exchange develops, that it becomes regular and determines certain producers to produce for exchange, commodities are increasingly exchanged according to their value.

Indeed, in the earliest historical manifestations of regular exchanges, while the social and technical division of labour is still in its infancy, each buyer is well acquainted with the conditions of production of the objects that he acquires:

‘[T]he peasant of the Middle Ages knew fairly accurately the labour-time required for the manufacture of the articles obtained by him in barter. The smith and the cartwright of the village worked under his eyes (...) The peasants, as well as the people from whom they bought, were themselves workers; the exchanged articles were each one’s own products. What had they expended in making these products? Labour and labour alone: to replace tools, to produce raw material, and to process it, they spent nothing but their own labour-power; how then could they exchange these products of theirs for those of other labouring producers otherwise than in the ratio of labour expended on them? Not only was the labour-time spent on these products the only suitable measure for the quantitative determination of the values to be exchanged: no other way was at all possible (...) No other exchange is possible in the whole period of peasant natural economy than that in which the exchanged quantities of commodities tend to be measured more and more according to the amounts of labour embodied in them’ (Engels, Supplement to Book III of Capital, Capital, Book III).

Even before the emergence of capitalism, commodity production had thus developed by necessarily grounding itself on the law of value. But capitalism, if it presupposes the existence of commodity production, will impart upon it a new impetus and transform all social production into the production of commodities. Exchange, which was initially only an exception affecting only a small part of the products of human labour, goes on developing until becoming, with capitalism, the rule for all human production. Today, everything is a commodity – not only the products of human labour, but human labour itself, or, more precisely, human labour power.

During a long historical process that we will not even attempt to outline here, but which plunges its roots in the development of international trade, whose decisive growth dates back to the 15th century, capitalism, initially purely commercial, gradually seizes the various existing branches of production and revolutionises them completely by seizing the means of production, while at the same time ruining independent producers (artisans and peasants) who are forced to sell their labour power. This takeover of social production by capitalism will itself come into conflict with the law of value which up to that point regulated the exchange of commodities. The capitalist mode of production, indeed, is driven by the appropriation of unpaid labour and the realisation of a profit. It matters little to the capitalist whether he manufactures toothbrushes rather than cars or democratic newspapers: the main thing is that it be sold by bringing in a profit. What determines the capitalist to produce a commodity is the size of the ratio between the costs he will have to incur (the capital he will have to invest) and the profit he will draw from the sale. Starting from a stage of society where production entailed exchange only occasionally, we have passed through a stage where production was partly carried out for the sake of exchange, to finally arrive at a production for the sake of profit.

What does the capital advance that must be granted in order to produce consist of? First, constant capital – wear and tear on machinery, raw and auxiliary materials – which our capitalist will acquire on the market at their value and which will transfer this value to the product. Secondly, variable capital (or wages) intended to purchase the labour power of a certain number of workers. This labour power, having become a commodity like any other, is paid for at its value, represented by all the products necessary for the maintenance of the worker and his family (or, which amounts to the same thing, by the sum of money corresponding to them). But the use of this commodity produces precisely labour, i.e. value: the capitalist has therefore made himself master of a special commodity that produces value. If the length of the working day is 10 hours, if 5 hours of labour reproduces the wage paid to the worker, the capitalist will be left with 5 hours of labour for which nothing has been paid, 5 hours of surplus labour. This surplus labour of the workers corresponds to the surplus value (or profit) pocketed by the capitalist. The value equation of a commodity can therefore be represented by:

This is where a difficulty arises. Given the rate of surplus value ⁽¹⁰⁾, it is easy to see that different products, corresponding to the same advance of capital, may contain more or less surplus value depending on whether the capitalist’s advance contains more or less variable capital. Let us take three numerical examples, in which constant capital and variable capital are reduced as a percentage:
 

I.	–	80c	+	20v	+	20s	=	120
II.	–	70c	+	30v	+	30s	=	130
III.	––	60c	+	40v	+	40s	=	140

In these three examples, the capitalist’s advance is the same, 100, but is broken down in different ways into constant and variable capital. It is said that the organic composition, i.e. the ratio between variable capital and constant capital, varies in the three cases. However, in all three cases, the rate of surplus value and therefore the degree of exploitation of the working class is the same:

sv = 2020 = 3030 = 4040 = 100%

Let’s see what happens to the rate of profit:

I. –	sc + v	=	20100	=	20%
II. –	sc + v	=	30100	=	30%
III. –	sc + v	=	40100	=	40%

The rate of profit varies from single to double when moving from capital I to capital III! We can assume that our capitals I, II, and III represent the average capitals of three different branches of production ⁽¹¹⁾: the various capitals invested in a given country cannot be invested according to the same organic composition for reasons of production techniques specific to each branch. But capitalism, if it cannot standardise the organic compositions of all capitals, likewise cannot tolerate that equal capitals, because they are invested in different productive branches, yield a different profit:

‘If we disregard insignificant, fortuitous differences that offset each other, there is no doubt that in reality there is no difference in the average rates of profit between the different branches of production, nor can there be, without the whole system of capitalist production being abolished. It would therefore seem that the theory of value is incompatible here with the actual movement and objective phenomena accompanying production, and that we must therefore give up trying to understand these phenomena (Marx, Capital, Book III)’.

In reality, the apparent contradiction is resolved by the establishment of an average rate of profit, a general rate of profit that is the end point of a certain development of capitalist production. With commodities selling at their value, very different rates of profit are established in the various productive branches. Consequently, the capitals from productive branches with low rates of profit will rush to branches that, on the contrary, offer high rates of profit. This influx of capital will ultimately lead to overproduction in the productive branch in question, thereby causing a fall in the rate of profit. Thus, through the natural movement of capital and the play of competition, a general rate of profit tends to be established for the entirety of production for a given country and for a given period. However, its definitive triumph is only ensured by the development of the credit system, through the spread of the banking system, which, by ensuring the concentration of the various scattered capitals and, consequently, their extreme mobility, completely ‘depersonalises’ them, making the entire social capital act as a whole. All real differences between the particular technical conditions of production disappear, the individual capitals manifesting themselves only as particular fractions of this total social capital and receiving their profit only in proportion to their share in the total capital.

Let us return to our example of three capitals with different organic compositions and assume, for the sake of simplicity, that all social production consists solely of these three productive branches. Earlier, we deliberately compared, in each branch of production, an identical advance of capital, 100 in our example. But in reality, the total capital of the various branches is far from equal, with some far outweighing others (in terms of the size of fixed installations, consumption of raw materials, and the number of workers employed). Let us therefore assume that the advance in branch I is four times greater than that in branch II, and that the latter is itself three times greater than branch III ⁽¹²⁾. To obtain the total social capital, we simply add up the various components of capital I, II and III:

I.	960c	+	240v	+	240s	=	1,440
II.	210c	+	90v	+	90s	=	390
III.	60c	+	40v	+	40s	=	140
Total Capital:	1,230c	+	370v	+	370s	=	1,970

The rate of surplus value for this total capital has, of course, not changed:
sv = 370370 = 100%

But what is the rate of profit for the entire social capital?
sc + v = 3701,600 = 23⅛%

This rate of profit on total capital gradually asserts itself as the general rate of profit, applicable to all branches of production. The products of each branch will no longer be sold at their value, as determined, on one hand, by the rate of surplus value and, on the other, by their particular organic composition; they will be sold at their price of production, which results from applying the average rate of profit to the advance of capital, regardless of its particular composition.

The average rate of profit now being known – in our example, 23⅛ % – as well as the advance made in each case by the capitalist (c + v), we can easily calculate the total profit and therefore the price of production: So we have:
sc + v = 23⅛%

Let us see what the results are in each case:

I. –	c + v	=	960 + 240	=	1,200
p		=	1,200 × 23⅛100	=	277.5
price of production		=	1,200 + 277.5	=	1,477.5
II. –	c + v	=	210 + 90	=	300
p		=	300 × 23⅛100	=	69.375
price of production		=	300 + 69.375	=	369.375
III. –	c + v	=	60 + 40	=	100
p		=	100 × 23⅛100	=	23.125
price of production		=	100 + 23.125	=	123.125

Let us summarise these results in a table:

This table allows us to draw several conclusions:

1. The products of each branch of production are sold at their price of production, which is generally different from their value.

2. This price of production corresponds to the value if the organic composition of capital is equivalent to the average organic composition ⁽¹³⁾; it is higher than the value where the organic composition is above the average and lower than the value if the organic composition is below the average.

3. The mass of surplus value actually extracted from the working class in each branch of production does not correspond to the mass of profit that capital appropriates in that branch. But the total surplus value extracted from the working class as a whole is distributed, in the form of profits, among the various capitals in proportion to their size and regardless of their organic composition: the total mass of profit is equal to the total mass of surplus value.

Total capital – or, if you will, all capitalists – thus presents itself as the exploiter of the entire working class:

‘(...) [A] capitalist who would not in his line of production employ any variable capital, and therefore any labourer (in reality an exaggerated assumption), would nonetheless be as much interested in the exploitation of the working-class by capital, and would derive his profit quite as much from unpaid surplus-labour, as, say, a capitalist who would employ only variable capital (another exaggeration), and who would thus invest his entire capital in wages (...) in each particular sphere of production the individual capitalist, as well as the capitalists as a whole, take direct part in the exploitation of the total working-class by the totality of capital and in the degree of that exploitation, not only out of general class sympathy, but also for direct economic reasons. For, assuming all other conditions – among them the value of the total advanced constant capital – to be given, the average rate of profit depends on the intensity of exploitation of the sum total of labour by the sum total of capital’ ⁽¹⁴⁾.

The law of value, which seemed to have been undermined, in reality governs the relationship between total capital and total labour power. Here, through seemingly cold economic analysis, we see class relations, the fundamental, visceral antagonism of capitalist society: that which pits the entire proletariat against the blind force of capital, against the sprawling organism that ensures its preservation and development: the class State, against all those – statesmen, priests, or politicians – who preach preservation or reform where history demands revolution.

We have seen that the establishment of an average rate of profit reduces the various capitals employed in particular spheres of production to mere fractions of the total capital: the average rate of profit derives from a general equalisation of particular rates of profit. Regardless of the actual organic composition specific to its particular branch of production, a given capital participates in the total mass of profit as if it had the average organic composition of total capital.

How does this average organic composition evolve? While it is clear that the total mass of capital constantly grows throughout history, it is equally clear that its variable fraction grows less rapidly than its constant fraction. In other words, the average organic composition constantly rises: the same capital advance, 100 for example, will contain more variable capital, 50 for example, in a young capitalism than in a developed capitalism, where the variable capital will only represent 10, for example. This rise in the average organic composition corresponds to a commonly observed phenomenon: the rise in labour productivity.

What does this mean? Quite simply that capitalism constantly reduces the labour time needed to produce a given object. How does it achieve this? By using more machines and larger, more sophisticated production facilities, which allow the same number of workers, in the same amount of time, to process more raw and auxiliary materials. From the first looms to modern transfer machines through assembly lines, capitalist industry has multiplied labour productivity in gigantic proportions. But this increased productivity presupposes, as we have seen, a relative increase in constant capital in relation to variable capital: in a single working day, a worker operates larger and more complex machines and processes more raw materials. The average organic composition of capital will therefore change. If, at a given moment, all social capital could be represented by the following productive equation:
I. – 50c + 50v + 50s
later it will have become, for example:
II. – 90c + 10v + 10s

When the social capital passes from composition I to composition II, the rate of profit obviously changes:

I. –	sc + v	=	50100	=	50%
II. –	sc + v	=	10100	=	10%

Therefore, as the average organic composition rises, the average rate of profit falls. This result may seem absurd: while the pursuit of profit is the engine of the capitalist economy, its development leads to a fall in the rate of profit. But this fall actually results from the incentive to appropriate more profit. The capitalist never introduces a new machine solely to improve labour productivity ⁽¹⁵⁾; if they invest more constant capital, thereby improving production techniques, it is to obtain the same product at a lower cost, i.e. to lower production costs. They thus place themselves in a privileged position vis-à-vis their competitors, realising a temporary surplus profit that raises the rate of profit on their capital above the social average. But competition will ultimately force other capitalists to introduce these technical improvements themselves, thereby raising the average organic composition and lowering the average rate of profit below its previous level. It is therefore the pursuit of an above-average rate of profit that ends up generating its opposite, a decline in the average rate of profit itself. If we consider, on the other hand, that the introduction of technical improvements is all the more important when the productive branch in question has a larger and more concentrated total capital (think, for example, of modern steel production), if we take into account, therefore, the fact that the rise in organic composition is faster precisely in productive branches that have a decisive economic weight, it is easy to understand that the fall in the rate of profit is the very law of capitalist expansion.

However, the fall in the rate of profit does not in any way determine the fall in the mass of profit, quite the contrary. If we want to return to our two examples of the organic composition of capital for two successive periods, we must admit that in moving from I to II, the total capital has, for example, increased tenfold. So in reality we have:

I. –	50c	+	50v	+	50s
II. –	900c	+	100v	+	100s

While the average rate of profit has become five times smaller, the mass of profit, however, has doubled, going from 50 to 100 ⁽¹⁶⁾.

Let us now take a step back. Analysing the evolution of industrial production in the main capitalist countries on the basis of statistical data on their physical volume, we were able to conclude that its average relative increase was historically declining; returning then to Marx’s classical analysis of capital, we learned from it that the fundamental law of capitalist accumulation was precisely the tendency for the rate of profit to fall. What links can be established between these two results?

The fact that we have considered material industrial production in one case and only values in the other is not a problem, because what has interested us in both cases were ratios – profit rates or relative increases – and not gross figures. Let us consider the industrial production of a given country expressed by its index. Suppose that the index is 100 in the first year and becomes 110 in the following year. The entire industrial capital has therefore produced a stock of commodities in the first year whose magnitude is proportional to 100, whereas the entire industrial capital in the following year has produced a stock proportional to 110. We can reasonably assume that the average organic composition of capital remains virtually unchanged within the span of a year. If labour productivity does not vary, where can the increase in production come from? It can only arise from an increase in capital. This, in turn, can only come from an investment of the surplus value realised in the first year. Suppose, for the sake of simplicity, that all the surplus value realised in the first year is capitalised. All the increase in production therefore derives from the investment of the total surplus value from the previous cycle.

Let us pause for a moment to consider the productive equation of all industrial capital employed: c + v + s. It symbolises two things. Taken as a whole, it represents the value of all industrial output during a given period – one year in our case. On the other hand, it indicates the various parts that make up the value of the products: constant capital, variable capital, and surplus value (or profit). Before the products are sold, before their value materialises in money, they exist only as objects produced by human labour, manifesting only in their material, physical form. It is precisely this physical magnitude of the products that the industrial production index represents. Let us imagine all the commodities produced in a year as stored in a huge warehouse; nothing prevents us from separating them into three distinct ‘piles’. The first will represent the value of constant capital, the second that of variable capital, and finally the third that of profit. We will simply have expressed the different components of the value of commodities as fractions of those same commodities; we will have expressed the various fractions (c, v, and s) in parts proportional to their product. We therefore see that it makes no difference whether we consider the equation c + v + s as expressed in values or in physical quantities. We can therefore write:

Year I. –	c₁	+	v₁	+	s₁
Year II. –	c₂	+	v₂	+	s₂

But we assumed above that all surplus value was capitalised. In the second year, the capital advanced is therefore equal to c₁ + v₁ + s₁. We can write:

c₂+ v₂ = c₁ + v₁ + s₁

Let us calculate the rate of profit for the second year:

s₂c₂ + v₂ = s₂c₁ + v₁ + s₁

Now we know that c₁ + v₁ + s₁ = 100; we can easily deduce that s₂ = 10. Replacing the letters with their values; we get:

rate of profit = 10100 = 10%

Now let’s calculate the relative increase in annual production. We have:

Absolute increase	=	110 – 100	=	10
Relative increase	=	10100	=	10%

We therefore see that, assuming that the organic composition of capital does not vary within the span of a year and that all surplus value is capitalised, the rate of profit is equal to the relative increase in production. Our first assumption is perfectly acceptable if we want to determine a historical trend rather than a temporary economic situation; we should also note that our study of production indices spans over a century – from 1859 to 1961. As for the second, the reasoning would not change if we assumed that only a fraction of the surplus value is invested, as is actually the case in reality; simply, the rate of profit and the relative increase would be proportional, but their evolution over time would continue in the same direction.

We therefore see that the rate of profit evolves in parallel with the annual relative increase in production, which inexorably declines throughout the history of capitalism, as we have shown. To be more precise, we should say that the decline in the rate of accumulation is, in reality, merely the manifestation, at the level of material production, of the fall in the rate of profit. Does capital feed on the continual growth of the mass of its profit? Certainly, but, tormented by the fall in its rate, it can only pursue the pursuit of profit by continuously expanding the mass of production, by achieving expanded accumulation. The capitalist mode of production finds its engine in its own contradictions. Driven to produce by its thirst for profit, it is condemned to generate the very limitation of its profit. It can therefore only escape this contradiction by momentarily pushing it aside, only to see it reappear further on, ever more threatening, swelling at the same pace as itself. Is the rate of profit falling? Then it is necessary to accumulate even more, to erect everywhere these temples of the new religion that are productive facilities, to annex ever new living labour power and crush it ever more under the weight of dead labour, of machines. Are the country’s borders too narrow? Then they must be crossed in order to spread all over the world the gospel of capital: the commodity. Foreign capital stands in the way? It must be defeated, through economic competition today, through imperialist war tomorrow! It must seize weaker or less developed nations, export capital there that produces more profit there than in the metropolises, and use them as a springboard in the struggle for world market domination.

That is the history of capitalist expansion! But behind this relentless race to produce more and more, to accumulate more and more, to exploit more and more, looms the shadow that delights revolutionaries: that of economic crisis. The euphoria of today’s capitalist world, born of the latest imperialist massacre, will tomorrow be echoed by the death knell of ‘Black Fridays’, which will once again rally the proletariat. Then, from the very volcanism of production, the flame of class war will be reborn.