Capital Accumulation and Technical Change

Bob Milward
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Bob Milward: University of Central Lancashire

Chapter 7 in Marxian Political Economy, 2000, pp 85-95 from Palgrave Macmillan

Abstract: Abstract Capital accumulation for Marx is promoted by competition, which compels individual capitalists to invest and accumulate in order to survive. In addition, those firms which grow faster will benefit from economies of scale and increasing returns through an expansion of their market share and subsequent higher profits. However, the process of capital accumulation does not proceed in a smooth and orderly manner because when expected profits are low, capitalists halt the process of investment and accumulation and hence precipitate a general crisis involving unsold goods and high unemployment. Therefore, accumulation is a cyclical process in which forces unique to capitalism work to reassert the cycle of accumulation and investment. As unemployment rises, the real wage falls and profits rise, leading to a new cycle of accumulation and investment. The dynamic nature of the capitalist mode of production is identified with several elements that are inherent to the system and Marx shows how the system itself involves the capitalist imperative to accumulate and the competitive process leads to the requirement to innovate and to introduce labour-saving techniques into the production process. This ensures the rising productivity of labour and therefore economic growth. However, this dynamic brings with it the seeds of its own destruction, and Marx is able to illustrate why the very success of the capitalist mode of production will lead to its eventual demise as this success is based upon conflict and contradiction.

Keywords: Technical Change; Real Wage; Capital Accumulation; Labour Power; Organic Composition (search for similar items in EconPapers)
Date: 2000
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DOI: 10.1057/9780230287488_7

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