"Contradictions of Capitalism"

New here.
Wondering about what people mean when they say "heighten the contradictions of capitalism".
Like, I understand the tactic of spreading consciousness, but what are the actual contradictions within Capitalism?

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"So if we want to understand how all of these different social antagonisms relate to one another we need to start with the commodity.

As we’ve already seen, the commodity contains a contradiction: it has a use-value and a value. (As we saw, value lies behind exchange value. So while at first we said the contradiction was between use-value and exchange-value, we later refined this to use-value and value.) At first glance this does not seem all that antagonistic……So already the fact that we produce for exchange and not directly for use expresses a social antagonism between the propertied and the propertyless. There is an underlying coercion already at work in the “free market”. And this coercion requires some threat of violence to enforce it whether it be a state, private military, or hired thugs. Violence was necessary to privatize the means of production and it remains necessary to enforce all of the legal aspects of property…..You could be paid $5 an hour yet produce $20 worth of commodity value an hour. (1) If this happened you would be being exploited. In fact your rate of exploitation would be 400%. Exploitation is made possible by the contradiction between the use-value and exchange-value of labor power."

Start with understanding what a commodity is (Use-value vs Value) and it gets you into thinking how contradictions come about in how capitalists have to enforce this fetishism, the idea commodity overproduction and crashes, etc.

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The principle among them is the tendency of the rate of profit to fall. To summarise: when a company's profit falls it takes on debt to reinvest in more efficient production. Now this will make production costs lower and deal with the immediate fiscal issues; but it will lead to more production. This will in turn lower the price of the good produced and thus the cycle begins again. This is one of hte contradictions inherent to capitalism: it trends towards more efficient production but said trend is inherently self destructive and with the market means of exchange it will eventually reach a point of no return where overproduction cannot be stopped and more efficiencies cannot be made.
You want an RL example of this: agriculture in every MEDC. It is heavily subsidised and planned in the west because it hit the 0-point back in the 1920s: read up on what happened to American farmers before WWII. This was only halted because of large scale government intervention that: short term literally just destroyed produce to drive prices up and long term implemented systems of paying farmers to grow certain crops or not grow at all to keep prices afloat above the rate of profit. This actually makes agriculture (In the economic west anyways) the best candidate for socialisation: since the need for planning and the requirement of coordination is already there, doing so in a socialist manner would not be that difficult to achieve.

The phrase "contradictions of capitalism" refers to conflicts of interests between employers/employees, rent-collectors/rent-payers, moneylenders and debt peons. Heightened contradictions, i.e., accelerating the visibility of conflicts of interests within capitalism, help people to shed false notions of class cooperation or the existence of general shared interests of members of warring classes.

this is pretty plainly not true, taking on debt is literally the last option on the table when a company is on fiscal trouble.
doesn't sound like a bad thing, and industries that get here shift their focus to marketing or just paying out dividends.
what does this even mean?

none of those are conflicts of interest, they're just normal conflicts. even in a communism what's best for you as an individual isn't going to be what's best for the larger group

Crisis of overproduction

Most major investments are made on debt: be it direct borrowing, selling shares, selling equity in the new project or what have you.
A small farmer is not going to be able to reinvest their profits in marketing. Besides, when more efficiencies cannot be made there is very little more that can be done without some monumental breakthrough that changes the nature of production: which most small producers cannot either produce themself or can afford if they are in such a precarious position already.
Basically a deflation spiral: prices of a commodity drop, producers produce more to compensate, prices drop further ad infinitum. Again the example I cite is agriculture in the US in the 1920s: this was only stopped when the government stepped in and slaughtered 8 million pigs and let them rot to drive prices up, and ever since it has been rigging production to make sure there is enough scarcity to maintain the prices.

these aren't debt. and direct borrowing rarely happens unless the return is secure or through accounting shenanigans
small farms don't exist anymore outside of people who retire on the country side.
the farming industry has a huge marketing budget. eg. eating "organic", Got Milk?™, the food pyramid.
before the great depression, when we were still on the gold standard and modern monetary policy was in it's infancy. that deflationary spiral is basically impossible in a modern economy.

Really not true lad.
That is true, but again that doesn't deal with the fundamentality of the problem: which is overproduction.
Then why is agriculture in the west still so reliant on the same forms of management? I mean the falling rate of profit in agriculture can be seen right now in the UK with mil prices: which have been under the cost of production for years now.

depends on what you mean by small
still don't see how this is a problem. at worst some people will have to stop being farmers and then prices will go back up.
I assume you mean milk and it's the same thing. farmers who can't make it with the new prices leave and less milk is produced overall, not more.

These are the predictions the labor theory of value makes:

1) a tendency for the value rate of profit to fall

2) the relative immiseration of the proletariat, i.e., an increase in the rate of surplus-value extraction in relation to productivity per time

3) an inherent tendency toward technological change

4) an increase in the physical ratio of machinery and raw materials to current labor

5) a tendency for technological change to substitute machinery for labor even in capitalist economies which are "labor-abundant" or "capital scarce"

6) an inherent conflict between workers and capitalists over the length of the working day

7) class conflict over the pace and intensity of labor effort

8) periodically recurrent recessions and unemployment (boom-and-busts)

9) a tendency for capital to concentrate

10) a tendency for capital to centralize

11) a decline in the percentage of self-employed producers and an increase in the percentage of the labor force who are employees (proletarians)

Except observation evidence shows this is not what happens. For starters most of the time they go into debt, their property gets repossessed and then the subsequent tenants also go into farming. And production doesn't decrease when there are those that fall out of the business; because there are constant increases in production by the rest of the market that keeps prices low. History shows us the only full-hardy solution is to reset the market entirely.

I don't know enough to comment on the UK markets but I'm guessing it's heavily subsidized like the US's, but that's an entirely different problem.
ideally you'd sell your farm before going into bankruptcy, believe most farmers have enough crop insurance to survive at least one bad harvest.
not that there's necessarily a new farmer for every one that leaves. if there's no money in being a farmer there will just be less of them. the land could be used for something else entirely.
and the next isn't going to farm the same thing knowing that the last guy couldn't make a profit with it.
what history are you talking about?

Wow you are dense. Let me lay this out for you. Let's say you have a society of one hundred people. You have a business. You have a machine that makes one bread a day. You sell that bread for just about whatever you want, or have to. Another guy starts making bread, at the same rate, and he undercuts you. No one buys your bread, so now you undercut him. Eventually, to compete with eachother, you will both reach the lowest possible price to sell bread, because you CAN'T sell the bread at a higher price; people will just go to the other bread seller. You also can't sell your bread for lower, you will eventually lose your business. So now, you are both pretty fucked, anyone that comes and buys bread from you is more or less random, as it is functionally the same as the other guys bread. However, you suddenly figure out a way to make TWO pieces of bread a day. In a day, your produce double the amount of bread produced in relation to your competitor. Now, you could sell it at its straight worth, and buy whatever necessities of life, but why do that when you can undercut your competitor slightly? You sell one piece of bread at slightly less than your competitor, and now people will buy from your store. Now, your competitor HAS to do the same, or gain some other advantage over you, or his business will close. So let's say this happens for a while and now the previous price of (say) ten dollars for a "bread" is now one dollar. However, unless the machinery costs one tenth less, and your labor likewise, you will have to sell so much extra bread to cover this disparity. However, there is a limit to how much bread the population needs, an eventually people won't have any reason to buy extra bread. You could potentially get extra people, extra need for your bread, whatever, but in the end what you will require is growth. Perhaps this growth will come in the form of cheaper machinery, materials, etc… It doesn't matter. This need for infinite growth in an obviously finite world is an obvious contradiction with reality. Of course, the liberal answer is that we will simply expand forever and ever, and all the lives lost when this fails ""accidently"" are chalked up as casualties, when we could easily just plan around these problems. A first-grader could tell you that if you don't have much of something, you shouldn't use it in hopes of finding something new unless you absolutely have to, but this is Capitalism. This is why Capitalism is doomed. No one has infinite growth, and we repeatedly come against this in the form of crashes, artificial scarcity, etc… Seriously, what is a bubble other than value that didn't come through?

Competition is NOT a contradiction.

What's being described there is not just competition but how the refinement of production within capitalism sabotages itself.

this whole thing sounds like a giant straw man used to bash capitalism without acknowledging how it actually works. nobody thinks a specific industry grows without constraint; we're not making significantly more bread today than we were a decade ago. you live in this world, this should be obvious?
not sure what you're implying with this. wouldn't we still be riding horses if that attitude was prevalent?

That's the reality, but the forces of capital reproduction demands that it grows without constraint, creating the contradiction that leads to crashes, and eventually capitalism's inevitable demise as a system.

And the BIGGIE


Compound growth is growth that operates along an exponential curve; at some point, enormous sums of money are produced, with no profitable outlet; initially much may be absorbed by tapping new labour pools and trading in fictitious assets, but eventually this will no longer be enough to absorb the profits produced. This will lead to contraction, massive devaluation of Capital, and an enormous financial crisis that threatens to topple the entire system. We are already approaching a "singularity" on the growth curve, perhaps in mere decades.


Capital is also inefficient, but while this often derives from certain contradictions, at other times it is merely Capital working properly. Marx deals in depth with the inefficiencies of the system in Capital; production in vol. 1, distribution in vol. 2, the dynamics as a whole in vol. 3, but far less with the actual contradictions, which must often be derived from his analysis.

I think the tendency of the rate of profit to fall is given a lot of deference because it was one of the central problems of capitalism in general as far as classical economics was concerned. Marx wasn't the only one who thought it was the case, they all did, Marx just explained it a little differently.

On one hand I think it could be considered "true", but in such a way that its most apparent expression would be identifiable as something everybody worries about still. I don't know if I misunderstand it, but as I do grasp it it is the change in the net costs of the capitalists from labor to fixed capital (mainly considered machines, but I guess it could be anything that is used to improve productivity). Since the costs of the capitalist are ultimately sourced in the wages used to buy the end goods of the economy, the declining proportion of wage share would seem to constrict profit as well. The fullest expression of this I talked about before would be significant automation which resulted in mass unemployment, which would seem to be a breakdown in the circuit of exchange that directs the system. If people aren't getting wages to buy the goods, then demand can't effectively be expressed and the maximization of the number value which moves production is going to be disrupted. Solving that with "UBI" or a "Job Gaurantee" or whatever may be possible, but I think could fundamentally change the political economy such that we wouldn't be living in classical capitalism as Marx thought of it.

But aside from that it is often argued by some marxists that a significant portion of the move to financial profits has resulted from a squeezing of the profit rate in normal productive business activity. I really don't know if that can be justified, in an intuitive and even neoclassical way you can say it makes sense because money is supposed to flow wherever there is a difference in profit, which would tend to smooth out the yield on investment for different but similar industries (to some extent), but I think that is starting to cross into an area where people other than Marx have described the problem in more detail, like Minsky.

take 'contradiction' in this sense to mean 'antagonism' or 'conflict'. Basically capitalism gets all tangled up in the consequences of its attempts to avoid crisis and keep the rate of profit up.

I've seen a few posts now pointing me to 'reality' or 'history', but I've yet to see any relevant specifics come out.
the adoption of new technologies and products is pretty clearly capped by population and appetite. you don't buy more smartphones every year so factories can make more, cheaper ones. you buy a new model because of wear on the old one, for a new feature, fashion, but just how many phones exist doesn't have any bearing on your desire to buy one.

note really sure what the point you're trying to make is

The point was that you were responding to a guy responding to your responding to a guy and the "Law of the Tendency of the Rate of Profit to Fall". I also assumed you were the OP, so I was saying both in response to the OP and the general discussion about the LTFRP that that particular "contradiction" isn't necessarily one that causes crises on its own on a regular basis, but could also be considered in its fullest form as a fundamental crises of automation, which isn't restricted to Marxists but that is basically something that the LTFRP, as I understand it, would describe.

Then in response to the notion of debt creating crises in production I referenced how the ongoing study of "financialization" in the economy could be partially described by Marx, his posthumously organized works as the latter 2 volumes of capital covers some of his unfinished ideas on banking, but is probably more thoroughly studied by somebody like Minsky, among others.

So LTFRP is a contradiction elaborated upon by Marx, from the classical economic tradition, and would probably predict a crisis in increasing automation.

I meant you responding to a guy about LTFRP, in case that mistake made this unintelligible.

under8ted post.
pretty much all of these happened

Adam Smith, Wealth of Nations, book 1 chapter 11:
More specifics about China back then, B1C9 "Of the Profits of Stock":
And before that, B1C8 "Of the Wages of Labour":

Like how business owners must earn a profit but workers must improve their wages

The fact that we have to live with unevolved monkey men from Honduras

Yeah its a shame I have to share a country with non-whites like yourself.

You would feel right at home then.

stagnating real wages despite increases in productivity due to falling rate of profit