Notes on Ricardo

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Translator’s Note: Henryk Grossman’s comment in letter was the first to draw attention to in these paragraphs by Marx. “I have found a very important and clear confirmation of the theory of overaccumulation in Marx as early as 1845, in the new Marx collected works.” (Letter from Henryk Grossman to Paul Mattick, 6 March 1933, held in the Paul Mattick Papers, International Institute of Social History, Amsterdam. Original in German.) This and other letters and works will be published in a collection of Grossman’s writings being edited by Rick Kuhn.

[415] Ricardo explains the decline in profit on capital or interest thus: the more capitals grow, even though the kinds of application proliferate as capital does, in terms of the greater difficulty of procuring the first and most necessary means of life. He leaves competition entirely out of play. If capitals — understood on the assumption of private ownership — were not too numerous in relation to the application of capital then competition would be entirely inexplicable, as competition is not possible unless there are 20 instead of 3, thus there is a superfluity of capitals in relation to their application.

Further, in the place mentioned in Smith, 2 points should be differentiated, which Smith confounds, under the assumptions he makes:

1) Accumulation in the sense that one and the same capital expands

2) Accumulation as a distributed action, as a result of many capitals.

Competition lies in the latter point. That a capital can still be so big and always find application is self-evident. The disproportion does not result from the disproportion between the huge size of the capital on the one hand and the number of possible applications on the other. It springs from the multiplicity of capitals, their division and mutually hostile action. Smith can regard 1 and 2 as the same thing because he assumes one country, experiencing progressive prosperity. And under the assumption of private property, the first stage of rapid accumulation and the reproduction of capital are the same. It is understood that if accumulated capitals are concentrated in a few hands, competition ceases and, despite accumulation, profits — as monopoly profits — rocket.

Economics not only has the miracle of over-production and extreme poverty but also of growth of capitals, in the forms of their application, on the one hand, and lack of productive opportunities due to this growth, on the other hand.

In the current situation Ricardo’s doctrine only shows the most important thing: how competition amongst capitalists, which occurs during progressive accumulation, and the decline in their profits, does not, as Smith assumes, determine the necessity of a rise in wages. The number of workers is now in all countries higher than demand for them and more can be recruited daily from the unemployed proletariat [416], as they are, for their part, daily recruited. Conversely, the consequence of accumulation with competition is that the wage is depressed further and further.

What Ricardo and, just as little Mr Say (who agrees with him and first raised the principle that demand for products is only limited by production), cannot answer is: where do competition and the consequent bankruptcies, trade crises etc. come from, if every capital finds its appropriate employment? If this employment is always in proportion to the numbers of capitals? In this one sentence, their chief principle, competition, is revoked, as also the basis for this principle and their entire wisdom, namely that every individual (understood as an individual who is not without money) best knows what is appropriate for his interest and consequently (the content of this ‘consequently’ is difficult) for that of society. How did these wise individuals come to ruin themselves and others, if there is profitable, available employment for every capital?