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Accumulation of capital: Chapter 14 Malthus

Accumulation of capital
Chapter 14 Malthus
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table of contents
  1. Book taken from the pages of Marxists.org
  2. Chapter 1 The Object of Our Investigation
  3. Chapter 2 Quesnays and Adam Smiths Analyses of the Process of Reproduction
  4. Chapter 3 A Criticism of Smiths Analysis
  5. Chapter 4 Marxs Scheme of Simple Reproduction
  6. Chapter 5 The Circulation of Money
  7. Chapter 6 Enlarged Reproduction
  8. Chapter 7 Analysis of Marxs Diagram of Enlarged Reproduction
  9. Chapter 8 Marxs Attempt to Resolve the Difficulty
  10. Chapter 9 The Difficulty Viewed from the Angle of the Process of Circulation
  11. Chapter 10 Sismondis Theory of Reproduction
  12. Chapter 11 MacCulloch v. Sismondi
  13. Chapter 12 Ricardo v. Sismondi
  14. Chapter 13 Say v. Sismondi
  15. Chapter 14 Malthus
  16. Chapter 15 v. Kirchmanns Theory of Reproduction
  17. Chapter 16 Rodbertus Criticism of the Classical School
  18. Chapter 17 Rodbertus Analysis of Reproduction
  19. Chapter 18 A New Version of the Problem
  20. Chapter 19 Vorontsov and His Surplus
  21. Chapter 20 Nikolayon
  22. Chapter 21 Struves Third Persons and Three World Empires
  23. Chapter 22 Bulgakov and His Completion of Marxs Analysis
  24. Chapter 23 Tugan Baranovski and His Lack of Proportion
  25. Chapter 24 The End of Russian Legalist Marxism
  26. Chapter 25 Contradictions Within the Diagram of Enlarged Reproduction
  27. Chapter 26 The Reproduction of Capital and Its Social Setting
  28. Chapter 27 The Struggle Against Natural Economy
  29. Chapter 28 The Introduction of Commodity Economy
  30. Chapter 29 The Struggle Against Peasant Economy
  31. Chapter 30 International Loans
  32. Chapter 31 Protective Tariffs and Accumulation
  33. Chapter 32 Militarism as a Province of Accumulation

Chapter 14
Malthus

At the same time as Sismondi, Malthus also waged war against some of the teachings of Ricardo. Sismondi, in the second edition of his work as well as in his polemics, repeatedly referred to Malthus as an authority on his side. Thus he formulated the common aims of his campaign against Ricardo in the Revue Encyclopédique:

Mr. Malthus, on the other hand, has maintained in England, as I have tried to do on the Continent, that consumption is not the necessary consequence of production, that the needs and desires of man, though they are truly without limits, are only satisfied by consumption in so far as means of exchange go with them. We have affirmed that it is not enough to create these means of exchange, to make them circulate among those who have these desires and wants; that it can even happen frequently that the means of exchange increase in society together with a decrease in the demand for labour, or wages, so that the desires and wants of one part of the population cannot be satisfied and consumption also decreases. Finally, we have claimed that the unmistakable sign of prosperity in a society is not an increasing production of wealth, but an increasing demand for labour, or the offer of more and more wages in compensation for this labour. Messrs. Ricardo and Say, though not denying that an increasing demand for labour is a symptom of prosperity, maintained that it inevitably results from an increase of production. As for Mr. Malthus and myself, we regard these two increases as resulting from independent causes which may at times even be in opposition. According to our view, if the demand for labour has not preceded and determined production, the market will be flooded, and then new production becomes a cause of ruin, not of enjoyment.(1)

These remarks suggest far-reaching agreement, a brotherhood in arms of Sismondi and Malthus, at least in their opposition against Ricardo and his school. Marx considers the Principles of Political Economy, which Malthus published in 1820, an outright plagiarism of the Nouveaux Principes which had been published the year before. Yet Sismondi and Malthus are frequently at odds regarding the problem with which we are here concerned.

Sismondi is critical of capitalist production, he attacks it sharply, even denounces it, while Malthus stands for the defence. This does not mean that he denies its inherent contradictions, as Say or MacCulloch had done. On the contrary he raises them quite unmercifully to the status of a natural law and asserts their absolute sanctity. Sismondis guiding principle is the interests of the workers. He aspires, though rather generally and vaguely, towards a thoroughgoing reform of distribution in favour of the proletariat. Malthus provides the ideology for those strata who are the parasites of capitalist exploitation, who live on ground rent and draw upon the common wealth; and advocates the allocation of the greatest possible portion of the surplus value to these unproductive consumers. Sismondis general approach is predominantly ethical, it is the approach of the social reformer. Improving upon the classics, he stresses, in opposition to them, that consumption is the only end of accumulation, and pleads for restricted accumulation. Malthus, on the contrary, bluntly declares that production has no other purpose than accumulation and advocates unlimited accumulation by the capitalists, to be supplemented and assured by the unlimited consumption of their parasites. Finally, Sismondi starts off with a critical analysis of the reproductive process, of the relation between capital and income from the point of view of society; while Malthus, opposing Ricardo, begins with an absurd theory of value from which he derives an equally absurd theory of surplus value, attempting to explain capitalist profits as an addition to the price over and above the value of commodities.(2)

Malthus opposes the postulate that supply and demand are identical with a detailed critique in chapter vi of his Definitions in Political Economy.(3) In his Elements of Political Economy, James Mill had declared:

What is it that is necessarily meant, when we say that the supply and the demand are accommodated to one another? It is this: that goods which have been produced by a certain quantity of labour, exchange for goods which have been produced by an equal quantity of labour. Let this proposition be duly attended to, and all the rest is clear. Thus, if a pair of shoes is produced with an equal quantity of labour as a hat, so long as a hat exchanges for a pair of shoes, so long the supply and demand are accommodated to one another. If it should so happen, that shoes fell in value, as compared with hats, which is the same thing as hats rising in value compared with shoes, this would simply imply that more shoes had been brought to market, as compared with hats. Shoes would then be in more than the due abundance. Why? Because in them the produce of a certain quantity of labour would not exchange for the produce of an equal quantity. But for the very same reason hats would be in less than the due abundance, because the produce of a certain quantity of labour in them would exchange for the produce of more than an equal quantity in shoes.(4)

Against such trite tautologies, Malthus marshals a twofold argument. He first draws Mills attention to the fact that he is building without solid foundations. In fact, he argues, even without an alteration in the ratio of exchange between hats and shoes, there may yet be too great a quantity of both in relation to the demand. This will result in both being sold at less than the cost of production plus an appropriate profit.

But can it be said on this account, he asks, that the supply of hats is suited to the demand for hats, or the supply of shoes suited to the demand for shoes, when they are both so abundant that neither of them will exchange for what will fulfil the conditions of their continued supply?(5)

In other words, Malthus confronts Mill with the possibility of general over-production: ... when they are compared with the costs of production ... it is evident that ... they may all fall or rise at the same time.(6)

Secondly, he protests against the way in which Mill, Ricardo and company are wont to model their postulates on a system of barter:

The hop planter who takes a hundred bags of hops to Weyhill fair, thinks little more about the supply of hats and shoes than he does about the spots in the sun. What does he think about, then? and what does he want to exchange his hops for? Mr. Mill seems to be of opinion that it would show great ignorance of political economy, to say that what he wants is money; yet, notwithstanding the probable imputation of this great ignorance, I have no hesitation in distinctly asserting, that it really is money which he wants ...(7)

For the rest, Malthus is content to describe the machinery by which an excessive supply can depress prices below the cost of production and so automatically bring about a restriction of production, and vice versa.

But this tendency, in the natural course of things, to cure a glut or a scarcity, is no ... proof that such evils have never existed.(8)

It is clear that in spite of his contrary views on the question of crises, Malthus thinks along the same lines as Ricardo, Mill, Say, and MacCulloch. For him, too, everything can be reduced to barter. The social reproductive process with its large categories and interrelations which claimed the whole of Sismondis attention, is here completely ignored.

In view of so many contradictions within the fundamental approach, the criticism of Sismondi and Malthus have only a few points in common:

  1. Contrary to Say and the followers of Ricardo, they both deny the hypothesis of a pre-established balance of consumption and production.
  2. They both maintain that not only partial but also universal crises are possible.

But here their agreement ends. If Sismondi seeks the cause of crises in the low level of wages and the capitalists limited capacity for consumption, Malthus, on the other hand, transforms the fact of low wages into a natural law of population movements; for the capitalists limited capacity for consumption, however, he finds a substitute in the consumption of the parasites on surplus value such as the landed gentry and the clergy with their unlimited capacity for wealth and luxury. The church with a capacious maw is blest.

Both Malthus and Sismondi look for a category of consumers who buy without selling, in order to redeem capitalist accumulation and save it from a precarious position. But Sismondi needs them to get rid of the surplus product of society over and above the consumption of the workers and capitalists, that is to say, to get rid of the capitalised part of the surplus value. Malthus wants them as producers of profit in general. It remains entirely his secret, of course, how the rentiers and the incumbents of the state can assist the capitalists in appropriating their profits by buying commodities at an increased price, since they themselves obtain their purchasing power mainly from these capitalists. In view of these profound contrasts, the alliance between Malthus and Sismondi does not go very deep. And if Malthus, as Marx has it, distorts Sismondis Nouveaux Principes into a Malthusian caricature, Sismondi in turn stresses only what is common to them both and quotes Malthus in support, giving the latters critique of Ricardo a somewhat Sismondian cast. On occasion, no doubt, Sismondi actually succumbs to the influence of Malthus; for instance, he takes over the latters theory of reckless state expenditure as an emergency measure in aid of accumulation and so becomes involved in contradictions with his own initial assumptions.

On the whole, Malthus neither rendered an original contribution to the problem of reproduction, nor even grasped it fully. In his controversy with the followers of Ricardo, he operated with the concepts of simple commodity circulation, just as they did in their controversy with Sismondi. His quarrel with that school turns on the unproductive consumption by the parasites of the surplus value; it is not a quarrel about the social foundations of capitalist reproduction. Malthus edifice tumbles to the ground as soon as the absurd mistakes in his theory of profits are uncovered. Sismondis criticism remains valid, and his problems remain unsolved even if we accept Ricardos theory of value with all its consequences.

Footnotes

(1)Nouveaux Principes ..., vol.ii, p.409

(2) Cf. Marx, Theorien über den Mehrwert, vol.iii, pp.1-29, which give a detailed analysis of Malthus theory of value and profits.

(3) Dedicated to James Mill and published in 1827.

(4) James Mill, Elements of Political Economy (3rd edition, London 1826), pp.239-40.

(5) Malthus, Definitions in Political Economy (London 1827), p.51.

(6)Ibid., pp.64.

(7)Ibid., pp.53-4.

(8)Ibid., pp.62-3.


The Accumulation of Capital

Last updated on: 12.12.2008

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