The Coming of the American Behemoth. Michael Joseph Roberto
leads to their removal from it. What the laboring population produces on top of accumulated capital is the means by which it itself is made relatively superfluous, is turned into a relative surplus-population; and it does this to an always increasing extent.26
For Marx, a surplus laboring population is a necessary product of accumulation and the development of wealth on a capitalist basis. Regardless of its varying rate at any time in the various phases of production, the outcome is always the same. The rise in constant capital and the diminution of variable capital mean that “with the greater breadth and fullness of all sources of wealth, there is also an extension of the scale on which greater attraction of labourers by capital is accompanied by their greater repulsion.” As Marx concludes, “This is a law of population peculiar to the capitalist mode of production.”27 It also is the cause of a disposable industrial reserve army, which is always available to be exploited by capital. Labor ultimately loses out as some workers wind up in lower-paying jobs in lesser industries while others are entirely thrown out of employment. But the one continuous factor is the growth of the reserve army of labor. As Marx says, “The course characteristic of modern industry … depends on the constant formation, the greater or lesser absorption, and the re-formation of the industrial reserve army or surplus-population. In their turn, the varying phases of the industrial cycle recruit the surplus-population, and become one of the most energetic agents of its reproduction.”28
Marx goes to great lengths to explain how work performed by an increasing reserve army of labor takes various forms. At each stage in accumulation, the capitalist can utilize whatever labor he employs to set into motion more production by increased use of machinery, which then allows him to replace skilled laborers with the less skilled, male with female, and adults with children. Nevertheless, the supply of available labor is always greater than the demand for it. Moreover, those who are employed are often forced “to submit to over-work and to subjugation under the dictates of capital.”29
Marx identifies various forms of superfluous labor subject to the worst of conditions. An example of what he calls “floating” employment are young boys—he likely had in mind the doffers who crawled into industrial machinery to clean it, then perhaps mangled or killed because they could not finish before the bell rang to restart the machine—and who became unemployed if they reached manhood. For Marx, this was a glaring contradiction of the needs of accumulation and its impact on labor, particularly when capitalists complained that they needed more of these young hands while many thousands of men were out of work. Another example was in agriculture, where capitalist innovation caused demand for agricultural labor to fall. Here the contradiction was more extreme compared with industry, where the advance of one phase of production might call for additional labor from an existing surplus pool that could be channeled into secondary capitalist enterprises. This was not the case in agriculture, where machines did away entirely with the need for agricultural labor. The workers might find their way to the city, but they would only augment the industrial reserve army there. For Marx, those left behind in the countryside made up a “latent” surplus population that only grew larger. “The agricultural labourer is therefore reduced to the minimum of wages, and always stands with one foot already in the swamp of pauperism.”30
The third example, which made up “the broad basis of special branches of capitalist exploitation,” was that part of the active labor army that faced extremely irregular employment. “Hence,” Marx said, “it furnishes to capital an inexhaustible reservoir of disposable labour-power” whose “conditions of life sink below the average normal level of the working class.” Apart from the “dangerous classes” that consist of criminals, prostitutes, etc., paupers fall into three categories: those able to work, orphans and pauper children, and the demoralized and ragged. As Marx writes, “pauperism is the hospital of the active labour army and the dead weight of the industrial reserve army.”31
From this he concludes:
The greater the social wealth, the functioning capital, the extent and energy of its growth, and, therefore, also the absolute mass of the proletariat and the productiveness of its labour, the greater is the industrial reserve army. The same causes which develop the expansive power of capital, develop also the labour-power at its disposal. The relative mass of the industrial reserve army increases therefore with the potential energy of wealth. But the greater this reserve army in proportion to the active labour-army, the greater is the mass of a consolidated surplus-population, whose misery is in inverse ratio to its torment of labour. The more extensive, finally, the lazarus-layers of the working class, and the industrial reserve army, the greater is official pauperism. This is the absolute general law of capitalist accumulation.32
For Marx, the increasing subjugation of labor by capital is characterized by the growth of a relative surplus population and a reserve army of labor always at the ready to be exploited by capitalists. This is the most important dynamic in capitalist accumulation. At the same time, the growth of a reserve army of labor establishes the basis of a coming crisis of the entire system.
CAPITALIST ACCUMULATION AND ITS CONTRADICTIONS IN THE GREAT BOOM
Marx discovered the general law of capitalist accumulation in the actual conditions of modern production in England in the 1860s, then the center of capitalist industry in the world economy. The sudden emergence of the United States as the new industrial leader in the 1920s created conditions and processes that developed on much greater levels and degrees of complexity. But the result was still the same. In a rising sea of plenty, more and more working Americans found themselves unemployed or displaced in ways that consigned them to poverty and pauperism. Meanwhile, the rich got richer until their speculative excesses created the bust.
In 1934, Lewis Corey applied Marx’s law of capitalist accumulation to explain the root causes of the Great Depression. With a thorough analysis of statistical evidence in The Decline of American Capitalism, Corey explained why the unprecedented buildup of the means of production raised the profits for capitalists to new heights but at the expense of workers who were increasingly displaced from production. “Precisely because it is the most highly developed,” Corey wrote, “American industry offers the fullest confirmation of the analysis Karl Marx made of the laws of capitalist production.”33
Corey revealed that the value of constant capital rose more than wages and the output of manufactured goods during the 1920s. Between 1923 and 1929, constant capital in goods had increased by more than four times that of variable capital. Affirming one of Marx’s principal arguments about capitalist accumulation, Corey showed that the average American worker in 1929, the year of the Wall Street crash, was earning about the same in wages as in 1923. But during that same period, workers set in motion nearly one-third more constant capital, one-sixth more materials, and one-fifth more output. As the capitalist mode of production expanded to new heights, profits rose and wages fell. “As wages are the price of labor-power, of the worker’s skill and muscle and nerves,” Corey wrote, “the fall in wages involves displacement of labor and unemployment.”34
Corey also showed that a qualitative advance in the numbers of displaced workers had occurred between 1923 and 1929, the most prosperous years of the Great Boom. Relative displacement—the number of workers set free from the most mechanized areas of production who found work in less-developed industries or in other areas of the economy—had become a trend. In every year of the period, the number of workers in manufactures was lower than it was in 1919. As capital investment rose 19.1 percent, the absolute displacement of a little more than a million workers contributed to the number of about two million unemployed workers annually in that six-year period.
These major developments defined the U.S. economy during the prosperous 1920s. Productivity rose dramatically because of a massive transformation in constant capital resulting from mechanization. Although this presented the potential of plenty for workers—and was trumpeted by capitalist apologists as the key to universal prosperity—it had the opposite effect. As Corey observed, rising constant capital intensity was an “expression of economic progress” that concealed the contradiction of rising displacement and impoverishment for the majority of the U.S. population. As Corey argued, the growth in capitalist production based on greater use of machines, “simultaneously and