As was announced in the first summary report of the meeting, which appeared in issue no. 12 of the journal, the speakers were not able to present even relative conclusions of the theoretical research work on Marxist economics. However, due to the breadth, depth and difficulty of the research, these conclusions will not be immediate, nor should we expect the unravelling of who-knows-what mysteries or novelties.

The theory of ‘waste’ is a central thesis of Marxism not only from an economic point of view, but first and foremost from a revolutionary point of view. The discussion of the theory began at the meeting in Genoa on 4-5 November 1951, the written report of which appeared in issues 1 and 2 of this year’s journal. Waste is the squandering of productive forces, products and social wealth. Using the method of the ‘three moments’, the dialectical key to the reading of Capital and Marxism, waste at the enterprise level, i.e. in the first moment, would be reduced to the exploitation of wage labour by capitalists; but that would always be little. In fact, Marx struck down Lassalle’s notion of ‘undiminished fruit of labour’, making it clear that even in communist society, the surplus product would exist, but its form and social destination would be radically transformed.

It is in the second moment, within capitalist society taken as a whole, in the corporate whole, that most human labour is uselessly consumed. This social ‘waste’ is most evident and criminal when comparing capitalist society and the future, communist society. It is, in fact, the communist model of the organisation of production and the form of human labour that fully emphasises the nefarious features of the capitalist mode of production, once it is unanimously admitted that in history the forms of production succeed one another on the basis of the increase in productive forces. For capitalist society, according to its apologists, there is no waste, no unnecessary labour, no destruction of wealth, except in an entirely accidental manner, as in wars between states. Marx, on the other hand, constantly emphasises the destructive character of capitalism, based on the continuous juxtapositions between capitalist society and communist society.

The ‘faux frais’, the false expenses of capital circulation proper to an exchange-based society and exasperated by ‘free competition’ on the basis of a corporate, mercantile and monetary economy; militarism, the very notions of homeland and the family, constitute elements of effective destruction or irrational utilisation of labour and wealth: narrow forms of the atrophying of labour productivity. Crises are, therefore, the natural outcome of the multiple manifestations of ‘waste’, the periodic and recurring result of the accumulation of uselessly produced surplus labour, irrationally reproduced, on the basis of social production and private appropriation.

The dates we give in this text are taken from Marxist texts, and therefore signify crises that were the subject of reflection and study by our masters. The series opens with the crisis of 1800, which, according to Ricardo, was caused by the grain famine due to a poor harvest and occurred only in England. The next one occurred in 1815, for the same reasons – in Ricardo’s opinion – as the previous one.

The crisis of 1825, on the other hand, had its epicentre in the United States of America and India, and was a so-called commercial crisis. Marx (Capital, Vol. III Part V) characterises commercial crises as follows: ‘The most general and palpable phenomenon in commercial crises is the sudden general decline in prices following a prolonged overall rise’. The crises of these years all manifested themselves under the guise of commercial crises, i.e. due to foreign market restrictions, and the phenomena they generated were more or less the same, more or less accentuated. Marx also dedicates a lengthy piece of writing to the crisis of 1847-48 in the Neue Rheinische Zeitung, in addition to constant references in other texts, particularly in Capital. In this text Marx examines all the phenomena before and after the crises themselves. Prosperity, the prosperity of today, precedes critical travail. ‘The years 1843-5’, Marx writes, ‘were years of industrial and commercial prosperity, a necessary sequel to the almost uninterrupted industrial depression of 1837-42. As is always the case, prosperity very rapidly encouraged speculation. Speculation regularly occurs in periods when overproduction is already in full swing. It provides overproduction with temporary market outlets, while for this very reason precipitating the outbreak of the crisis and increasing its force. The crisis itself first breaks out in the area of speculation; only later does it hit production (...) we cannot at this moment give a complete history of the post-1845 crisis, we shall enumerate only the most significant of these symptoms of overproduction’.

Our opportunists would like prosperity without scheming, boom without speculation: our master teaches that in a capitalist regime, prosperity is the mother of speculation, into which the immediate effects of incipient overproduction are initially poured. Marx already traces the sinusoid of capitalist production, with its periodic ups and downs of productive exaltation and depression. The crisis is preceded by a period of intense productive upswing, which is in turn preceded by a period of crisis. The characteristic feature of affluent production then was the rush to invest in railways. Today, the productive content of wealth is the universal speculation of international lines of communication: motorways, tunnels, transatlantic liners, fighter jets, missiles, and the great Barnum of cosmonautics.

The classic prediction of the historical catastrophe of capitalism can still be found in this text: ‘[S]laves will be emancipated, because they will have become useless as slaves. Wage labour will be abolished in Europe in just the same way, as soon as it becomes not only unnecessary for production, but in fact a hindrance to it’. Whenever the crisis erupts in the midst of the blissful apparent eternity of capitalism, the futility of capitalist forms of the economy appears in meridian light: nothing has any value any more, money serves at most for physiological needs, the untouchable categories of capital’s economy blow up, it is chaos.

Marx also carries out a ‘bird’s eye’ analysis of the most volcanic American productive machine, in which he sees a powerful hotbed of the contradictions of capitalism and the future centre of the unbridled development of the world bourgeoisie: ‘The prosperity in England and America soon made itself felt on the European continent. The world market links every corner of the earth and forces it to submit to capital’. The two centres, England and America, of world capitalism are ‘the demiurge of the bourgeois cosmos’ from which ‘the initial process’ of crises and prosperity originates. Thus, ‘while, therefore, the crises first produce revolutions on the Continent, the foundation for these is, nevertheless, always laid in England. Violent outbreaks must naturally occur rather in the extremities of the bourgeois body than its heart, since the possibility of adjustment is greater here than there. On the other hand, the degree to which Continental revolutions react on England is at the same time the barometer which indicates how far these revolutions really call in question the bourgeois conditions of life, or how far they only hit their political formations’. This valuable theoretical lesson, drawn from the economic entanglement that had already enveloped the two continents, but still predominantly Europe and Britain, and from which the crisis of 1847 exploded, anticipates and sanctions the validity of the revolutionary position defended by Lenin and the Italian Left, for whom the October Revolution would have resisted any reactionary comeback on condition that the European powerhouses, notably Germany, of capitalist imperialism collapsed.

The closure to this text constitutes a tremendous slap in the face to voluntarists and immediatists of all times: ‘With this general prosperity, in which the productive forces of bourgeois society develop as luxuriantly as is at all possible within bourgeois relationships, there can be no talk of a real revolution. Such a revolution is only possible in the periods where both these factors, the modern productive forces and the bourgeois forms of production, come in collision with each other. The various quarrels in which the representatives of the individual factions of the Continental party of Order now indulge and mutually compromise themselves, far from providing the occasion for new revolutions are, on the contrary, possible only because the basis of the relationships is momentarily so secure and, what the reaction does not know, so bourgeois’. ‘All reactionary attempts to hold up bourgeois development will rebound off it just as certainly as all moral indignation and all enthusiastic proclamations of the democrats. A new revolution is possible only in consequence of a new crisis. It is, however, just as certain as this crisis...’

The new crisis of 1857 had its epicentre in the United States, but soon infected England and Germany. In Great Britain, agriculture itself was plunged into economic depression, as Marx had already felt in 1850. To the extent that capitalist forms of production seize every branch of productive activity, channels open up through which the crisis flows. The entire economy is thus subject to crises!

Theory of crises

From ‘73 to ‘78 the crisis became chronic in the US and in ‘75 it rebounded again in England. The last date to be found in Marx’s texts is 1879, of which he gives a cursory mention in his letter to Danielson, a Russian economist translating the 1st volume of Capital. In it, Marx again highlighted the desolation of the economy and especially the apparent tranquillity of the banks and railways, which accumulate debts and shares every day.

Marx notes that crises recur roughly every ten years, and while his concern to grasp the reasons for this near-constant periodicity is always alive in the search for the immediate phenomena that develop before and during the crises themselves, nevertheless, and above all, his interest in contingent facts serves to demonstrate the validity of the doctrine. How many times has it been necessary to mock the petty-bourgeois habit of correcting the nefariousness of capitalism with the proposal to a return to simple commodity production! Marx took Proudhon’s as a scapegoat and demonstrated that the diseases of mature capitalism had their origin in capital itself, in the simple categories of capitalist economy. It was not necessary to resort to expanded reproduction to explain the crisis, even if overproduction flooded the channels of the economy. Marx always speaks of relative overproduction: ‘To say that there is no general over-production, but rather a disproportion within the various branches of production, is no more than to say that under capitalist production the proportionality of the individual branches of production springs as a continual process from disproportionality, because the cohesion of the aggregate production imposes itself as a blind law upon the agents of production, and not as a law which, being understood and hence controlled by their common mind, brings the productive process under their joint control (...) but the entire capitalist mode of production is only a relative one, whose barriers are not absolute. They are absolute only for this mode, i.e., on its basis’ (Capital, Vol. III, Part III).

On the other hand, the entire capitalist economy is ready to provide the simplest and most complex forms of crisis. ‘The most abstract form of crisis (and therefore the formal possibility of crisis) is thus the metamorphosis of the commodity itself; the contradiction of exchange-value and use-value, and furthermore of money and commodity, comprised within the unity of the commodity, exists in metamorphosis only as an involved movement’ (Theories of Surplus Value, Ch. XVII). The primary form of the crisis is already in the commodity, that is, in the fact that it is both a product to satisfy a need and the bearer of value, of average social labour and surplus value. It is therefore in the social contradiction on which capitalist production rests that the content and cause of crises must be sought.

Lenin’s lesson on the causes of crises is perfect: ‘Crises are possible (…) because the collective character of production comes into conflict with the individual character of appropriation’ (A Characterisation of Economic Romanticism). Marx again in a succinct form: ‘Three cardinal facts of capitalist production: 1) Concentration of means of production in few hands, whereby they cease to appear as the property of the immediate labourers and turn into social production capacities. Even if initially they are the private property of capitalists. These are the trustees of bourgeois society, but they pocket all the proceeds of this trusteeship. 2) Organisation of labour itself into social labour: through co-operation, division of labour, and the uniting of labour with the natural sciences. In these two senses, the capitalist mode of production abolishes private property and private labour, even though in contradictory forms. 3) Creation of the world-market. The stupendous productivity developing under the capitalist mode of production relative to population, and the increase, if not in the same proportion, of capital-values (not just of their material substance), which grow much more rapidly than the population, contradict the basis, which constantly narrows in relation to the expanding wealth, and for which all this immense productiveness works. They also contradict the conditions under which this swelling capital augments its value. Hence the [origin of the] crises’. (Capital, Vol. 3 Part III). And another quotation among a thousand: ‘Capital comes more and more to the fore as a social power, whose agent is the capitalist. This social power no longer stands in any possible relation to that which the labour of a single individual can create. It becomes an alienated, independent, social power, which stands opposed to society as an object, and as an object that is the capitalist’s source of power. The contradiction between the general social power into which capital develops, on the one hand, and the private power of the individual capitalists over these social conditions of production, on the other, becomes ever more irreconcilable, and yet contains the solution of the problem, because it implies at the same time the transformation of the conditions of production into general, common, social, conditions. This transformation stems from the development of the productive forces under capitalist production, and from the ways and means by which this development takes place’ (Ibid.).

Unfortunately, the translations of Marxist texts, monopolised by the rich opportunist powerhouses, are always interestingly weak and fail to render the true sense of the original text. Indeed, by capitalist one must not only mean the capitalist-man, but above all the capitalist enterprise, the agent of capitalist production, the impersonal and anonymous capitalist productive organisation. Otherwise it would be a complete misunderstanding of state capitalism, in which there are no capitalists understood as individual masters of the means of production, whereas there are, as in Russia, the ‘trustees pocketing the proceeds of bourgeois society’ mentioned by Marx above. The trustees of the ‘prophet’ Karl are today called economic operators.

Marx’s analysis of the origin of crises then appears in meridian light: on the one hand, the socialisation of the productive forces, social production; on the other, the private control of the means of production and the productive forces themselves by individual production units. This is where social chaos lies: capitalist production units can no longer contain the growing social forces of production, companies are too cramped to organise labour power, control surplus labour and distribute it throughout society. Consequently, the anarchy of production, the relative overpopulation of producers, and the continuous destruction of wealth, constitute the stigmata of capitalism. And this is so even when the most advanced concentration of scattered capital induces bourgeois agents to rant about programming, control of production, planning. In reality, they feel the absolute and urgent need to plan production, but they clash in the insurmountable contradictions between associated production and corporate, private appropriation of surplus value. The crux of the matter is all here: it is not merely an economic phenomenon, but essentially a social one: the production of surplus value and profit is the beginning and end of the capitalist mode of production. Capitalism could and should – this is its historical merit – socialise production, but not appropriation, which has remained at the private and pecuniary level, for everyone, bourgeois and proletarian.

Our revolutionary critique of the pretence of planning in the USSR, for example, starts from this general observation, where it is quite natural that centralised control of production and consumption, and of appropriation, should be dismantled, because the basis of the Russian economy is the enterprise, with its positive balance sheet aimed at realising surplus value and profit, and wages paid in money.

Marx, in a long letter to Engels dated 6 July 1863 from London (Capital, Vol. II), draws up two complicated tables, the first of which is entitled ‘Table of the Reproduction Process’ and the second ‘Tableau Économique of the Overall Reproduction Process’. In them appear the two departments of production, the first being the means of production (production of constant capital) and the second being the means of consumption (production of the means of subsistence). In the first table, Marx also includes among the constituent elements of capital the portion of fixed capital that enters directly, though in monetary accounting terms, into the product, but he is concerned above all with the exchange between the two departments of production and the decomposition of profit, a derivative of surplus value, into industrial profit, interest, and rent. However, in order to understand the general question of ‘waste’ and the recurring phenomenon of economic crises, it is not so much a matter of looking at the intertwining of expanded reproduction as it is of looking at simple reproduction. Not that in expanded reproduction the production of capital ceases as such or manifests anomalies that would be alien to simple reproduction. This false interpretation, as Marx’s quotations amply attest, is convenient for opportunism only to justify the total renunciation of revolutionary struggle. Marx devotes no fewer than four Sections of Book II of Capital to expanded reproduction, certainly not to find anything new that rectifies or refutes the old, but solely to complete the analysis of the capitalist mode of production. The fabric of the capitalist economy lies in the turnover of the simple constituent parts of capital and their metamorphoses, from which the complex phenomena of accumulation then begin. It is an old trick of philosophy, supposed science of sciences, to resolve through logic the phenomena of political economy, which are dialectical; or at most to oppose the micro to the macro and see everything in quantitative terms: more steel, more freedom, more commodities, more everything!

In his correspondence dated 2 March 1858, Marx notes the close link between production cyclicality and fixed constant capital: ‘The average period for the replacement of machinery is one important factor in explaining the multi-year cycle which has been a feature of industrial development ever since the consolidation of big industry’. And in his reply of 4 March, Engels confirms Marx’s intuition and informs him of the way in which capitalists calculate the depreciation of fixed capital and therefore their estimates of the time needed to rebuild it. He refutes the nonsense of Babbage, who claimed that in Manchester most machinery was renewed every five years, and demonstrates how it is in the interest of capitalist production to have machines and installations that last as long as possible relative to their cost, in order to produce at lower costs. Engels indicates that the lifespan of machinery is ten to thirteen years. Incidentally, for tax purposes, in Italy today an average annual depreciation rate of 8% is recognised, which serves precisely to replenish fixed capital in 12-13 years. From this angle, the rate does not concern fixed installations, buildings, factories, etc., which should last longer. Marx, in this regard, adds another powerful element to our equation of waste. He notes, in fact, how the so-called rationality of buildings in general, and industrial buildings in particular, the supposed harmonious arrangement of departments and production sections within the body of the factory, become useless and must be demolished as soon as a minimal increase in production becomes necessary. It is a periodic ruin of dead capital that could still be used for a very long time if it were arranged with a non-bourgeois, non-immediate rationality. And he proposes, with a brilliant... almost futurist sense, an asymmetrical arrangement of installations, composed of modular elements, as production needs dictate.

In the table, we have allocated ten years to Department I – capital goods – in order to replenish its fixed capital stock, and five years to Department II – consumer goods. For simplicity’s sake, it is assumed that the production of consumer goods coincides with agricultural production. In this, a considerable part of the fixed capital is constituted by livestock (living stock), which must have a rapid replacement cycle.

The constituent elements are the classical components of capital, according to the notations proposed in the Abacus and the algebraic method of writing and reading. Vertical lines: in the first column, the wear and tear of fixed capital c₁ and in the second, circulating constant capital c₂, which together constitute all the constant capital in the third column. It should be clarified that fixed capital is also constant capital, one of its subdivisions. Marx devotes some study to this distinction, not for academic purposes, but to demonstrate how the different classification of expenses concerning fixed capital allows, in large joint-stock companies, an increase in dividends for shareholders. Obviously, not all the value of machinery and installations enters into the commodity, but precisely their depreciation share, only an aliquot part of the value of fixed capital: in our example, 10% per annum, assuming ten years as the time for the reconstitution of fixed capital. Circulating constant capital is made up of raw and auxiliary materials. In the fourth column, variable capital, v, labour power, i.e. wages. In the fifth, surplus value, s. In the sixth, the total value of the product, which according to the usual notation is: k₁ = c + v + s, that is to say, constant capital, in its subdivisions of fixed and circulating capital, plus variable capital/wages, plus surplus value.

In the seventh, the capital that the firm must advance, namely all the constant capital and wage capital and the full value of the fixed capital. It must be clarified, however, that variable capital is advanced prior to the realisation of the overall cost of the commodity produced, but is only spent by the firm after it has been consumed in the product. This clarification is necessary not so much for explaining our table, but rather to anticipate a phenomenon that Marx calls ‘freed capital’ during capital turnover. Indeed, wages are not paid to workers in advance, but after they have performed their labour, whether for a week, a fortnight, or a month, depending on the pay period. Today, for example, it is customary to pay monthly, with fortnightly advances, especially in large firms, which justify this periodicity with the lower burden of interest expenses payable to banks. However, since a certain sum of money corresponding to variable capital must be available in advance, it must be understood in the schema as already consumed. Horizontal lines: the heading, Department I – capital goods or means of production. For this department, it is assumed that each turnover consists of five weeks, i.e. production or working time and the circulation time of the commodity is five weeks; and that the year therefore consists of ten turnovers, assuming 50 weeks for the sake of simplicity. The turnover of capital is, in fact, the total time necessary to fully produce a certain finished commodity and the time necessary for that commodity to undergo the double metamorphosis of exchange: that it be brought to the market to be exchanged, in the sale, for an equivalent mass of money, which in turn is used to purchase raw and auxiliary materials, and wages, in order to resume the production cycle of the given commodity. In our case, then, the same amount of advanced capital will serve to complete ten annual turnovers, given that each turnover lasts five weeks. Let us call t the turnover, a the number of turnovers in the year and C₁ the value of fixed capital in its total cycle. Thus, in the first week, 20 of fixed capital will enter the product, equal to 1/500 of the total fixed capital, its cycle being ten years, or 500 weeks; 60 of circulating constant capital – raw and auxiliary materials; 20 of variable capital – wages; 20 of surplus value. The product at the end of the first week, adding 20 plus 60 plus 20 plus 20, is 120. Assuming a five-week turnover (second horizontal line), the total product at the end of the five-week turnover is 600 and in the year (third horizontal line) 6,000. It remains to clarify the 10,500 of the capital advanced at the beginning of the first week. Before the production cycle begins, in the first week, the firm must have at its disposal a sum of capital equal to the constant capital necessary for the complete production of the commodity, i.e. the raw and auxiliary materials of which the commodity is composed; the quota for depreciation of fixed capital (not concerning ourselves for now, nor in this context, with the contradictory phenomenon whereby fixed capital transfers value to the product and does not incorporate itself into it except in the form of pure value calculated monetarily, thus reconstituting itself in money-form) and wage capital (v); a sum which weekly is 100, which multiplied by 5, the number of weeks needed to release and sell the commodity, makes 500 (c plus v of the 2nd horizontal). To these 500 must be added 10,000, the total value of fixed capital, machinery, and installations, which the firm had to pay in advance in order to start production. As Marx explicitly says (abstracting from the bank deposit that yields interest), the 20 weekly units in column c₁ accumulate over 10 years (500 useful weeks) to 10,000, which will be spent all at once to restore the entire initial c₁. It is clear that the closed cycle of production and circulation (turnover) consists of 5 weeks and that, therefore, in order to produce 6,000 in a year (3rd horizontal – 6th vertical), 500 from the first turnover always suffices, since they are automatically replenished with each turnover.

The phenomenon of the rate of surplus value immediately stands out. Marx distinguishes it into an absolute rate and an annual rate. The absolute rate, i.e. the ratio between surplus value and variable capital in the period (s/v), is always 100/100, i.e. 100%. In our table, in fact, 20/20, 100/100, 1,000/1,000, if we consider the week, the turnover, and the 10 turnovers, they are precisely equal to 100%. But if we instead consider the mass of surplus value realised in the year (5th vertical – 3rd horizontal) in relation to the capital advanced for wages (first turnover), – see 4th vertical – 2nd horizontal – then it is clear that the rate of surplus value is ten times greater than the absolute rate, i.e. 1,000/100, or 1,000%. That is to say, that the annual rate of surplus value is equal to the absolute rate multiplied by the number of turnovers in the year. In effect, that is, a firm does not need to have a wage bill of 1,000 to realise 1,000 in surplus value in a year, but only a reduced wage bill of 100, assuming that this wage bill completes 10 turnovers per year.

Department II – Consumer goods. In this department, turnover occurs only once in the year, having as its presupposition the annual cyclicity of the agricultural harvest. The explanations given for the first department apply to this department, with the sole difference that here the phenomenon of the annual rate of surplus value being greater than the absolute rate does not appear, as the one coincides with the other. This explains, for example, why most capital is invested in industry (Department I) rather than agriculture (Department II). In the former, profit is far greater, as a greater number of turnovers is possible. In the latter, the production cycle is directly bound to natural phenomena which, despite attempts to force them, are virtually unchanged.

The last horizontal partition shows the two social totals, annual and decennial, of the overall production of the two departments, which is obtained by adding the annual elements of Department I (3rd horizontal) to those of Department II (5th horizontal), and likewise the decennial ones.

From the above, one must first pay attention to the stark contradiction between the constituent elements of capital, and notably between the capital advanced and the social product. Circulating constant capital and variable capital – limited to Department I, realm of capitalist production – are fully reconstituted from turnover to turnover for their immediate consumption, their use value being the satisfaction of immediate needs: they could be called everyday commodities. Marx even calls them both circulating capital, due to their characteristics of mobility and consumption. Fixed capital, by contrast, is a special commodity, with properties that transcend its material form, due to the function it performs in capitalist production. It attracts and sucks up living labour in an impressive manner. Our opportunists, in their witch-hunt, teach workers to chase after the capitalist, who realises the rule of the exploitation of man by man. In reality, they conceal the tremendous and impressive social phenomenon of the exploitation of dead capital over living capital, of capital par excellence over wage labour in particular and over social labour in general.

In order to produce, it is inevitable that there already be prepared a growing mass of dead labour in the form of fixed capital, machinery, installations, and tools, whose volume is predominant relative to the other elements of capital. In our schema, we start with 10,000 in fixed capital and only 500 to carry out the first turnover that allows the production of commodities. Now, it is not by the work of the Holy Spirit that a fixed capital of 10,000 is already available. This is the result of the accumulation of surplus value from generations of wage-earning proletarians, crystallised into dead labour, which finds no other justification for its existence except to be set in motion, to be constantly resurrected by the vital breath of living labour. Then to grow again, swell, and require still more labour.

Not only that, but in light of expanded reproduction (since simple reproduction is mainly valid for explaining the former), upon which the modern economy rests, since fixed capital must periodically reconstitute itself not in the same initial natural and technical form, but with increased productive properties, in order to increase labour productivity and reduce production costs, a vast mass of machinery and tools, unused or in any case unable to produce with the competitive properties of the most modern ones, lies idle.

This fixed capital, then – one might ask – does it create or destroy wealth?

And finally, in order to fulfill the aims of a greater realisation of surplus value, the capitalist mode of production is forced to transform a growing portion of the surplus value created by wage labour into fixed capital, with the eternal tautology of the production and reproduction of capital as an end in itself.

It goes without saying that only the proletarian revolution can break this vicious and insane circle, and put an end once and for all to sacrificing the youth of the human species to Moloch.