Critique of Capitalist Political-Economy:

The accumulation of capital and the contradiction between prices and wages during commodity-exchange

Preface:

The purpose of this pamphlet is to examine a specific contradiction within capitalism, which can only be described as a contradiction between the  total wages that are provided to the working class within a given period of production (say a month) and in a given area (say a nation, or a community) - and the total prices of those commodities as they are sold back to the same waged workers that produced them. For the purposes of investigating the contradiction between wages and prices, The assumption being made is that most or all of the commodities being produced in a nation, are being sold within the borders of that nation. However, the investigation will start with a smaller example, the size of a community, such as to analyze capitalist production and exchange within the size of a community, then the investigation will scale up to the size of a nation, and eventually the whole world as the arguments presented in the pamphlet are furthered and advanced.

The analysis of this pamphlet starts with a straight-forward example of how production works in a typical workplace operating under the capitalist mode of production. A basic understanding of how commodity production works within capitalism is absolutely necessary to properly understand the nature of how commodities are exchanged within capitalism. As this pamphlet will explain, there is no easy route to solving this major contradiction present within capitalism. The pamphlet will explain why raising prices, lowering prices, raising wages, or lower wages, simply does not solve the contradiction. This pamphlet will further explain why the assumption of per-existing wealthy capitalist do not solve this contradiction as well, because it begs the question of where the other wealthy capitalist got their wealth in the first place?

As the analysis follows through with its basic conclusions, and generates a new premise, that is the premise of the nature of the contradiction itself, it then becomes necessary to investigate what could possibly be suppressing this contradiction in the real world. Therefore, this pamphlet goes on to explain how the nature of an imperialistic globalized capitalism, and the printing of money in institutions such as the federal reserve, play a major role in suppressing the contradiction.


A basic example of capitalist production within a single workplace with average production:

1.	Example: "Say that a wealthy capitalist owns an auto-plant. Lets say that the capitalist wants to produce a specific type of auto-part. Lets assume that the cost of materials for this specific auto-part is 20 shillings, and lets assume that the cost to run the machines is 1 shilling. This brings the initial cost of producing an auto-part to 21 shillings. Now, lets assume that the capitalist hires a worker for 3 shillings an hour, and the worker can produce 1 auto part on average an hour (which just so happens to be the average time to produce that auto-part in the industry). So to the workers perspective, the amount of value their labor added to the commodity is just 3 shillings. however the capitalist calculates that if they sold the auto-part at 33 shillings, they would make 9 shillings per single auto-part sold. This means, that to the capitalist perspective, the labor-power invested into refining the materials into a finished auto part adds a total of 12 shillings of value to the product, where the worker gets 3 shillings and the capitalist gets 9 shillings. So here in lies the problem, the workers labor is what adds the extra value to a commodity to lead up to what its price will be in the market, its exchange-value, yet the capitalist gets to own 3/4's of the proceeds despite investing no labor into the product themselves. The workers labor-power may have added the 12 shillings of value to refining a single unit of a specific auto-part, yet they only get 3 shillings of the of the total 12. So therefore, the capitalist directly owns the labor of the worker, and gets to reap most of the rewards of the workers labor for themselves - the surplus value of the workers labor. And this process of being able to reap the rewards of someone else's labor to generate a profit/surplus-value, is innately and unavoidably exploitative"

An inherent contradiction between wages and prices during commodity-exchange:

2.	With the example in mind of how the capitalist is able to generate a profit within the production and exchange of a single workplace, the next step is to consider how commodities are exchanged within a domestic capitalist economy, especially if the commodities are initially produced within that same domestic economy that they are exchanged in – such as a nation, or a community producing commodities for its own consumption, for instance. What can be concluded from a domestic capitalist economy that produces commodities for its own use (and not for exports), is that there is an inherent Contradiction between prices and wages that inherently becomes present. This contradiction becomes particularly prevalent in an economy that is not globalized, and where the division of labor is internally domesticated in a given capitalist country. This is because in order to produce a profit, the capitalist must minimize the wages that they give to workers to produce any service or commodity, so that the capitalist can maximize their degree of profit as they sell the commodity. however, what this model doesn't account for is the fact that the very commodities that workers are given a wage to produce, are being sold back to the workers at a higher price, so as to produce a profit for the capitalist. In other words, the workers produce all the commodities of a domestic economy for a cumulative level of 'wages' between all of them, and yet, the collective working class has to 'buy' back all of the commodities they produced, which are collectively being sold at a higher price than all of the wages given to the workers.

	So here in lies a primary contradiction of capitalism: the capitalist expects to make a profit by minimizing wages and maximizing prices, and yet, by keeping wages low, this means that the wage-laborers would have less money to buy all the commodities that they produced, and not be able to buy all of the commodities they produced as a result, thus making it impossible for the capitalist system as a whole to generate a profit, and thus accumulate capital, from wage-labor alone. For example, if the total wages of a given economy for one month of production were 1 million shillings, and the total prices of all commodities produced within that one month were being sold at 2 million shillings, this means that the workers would only be able to buy approximately 'half' of all of the commodities they produced. The resulting rule of capitalism that can be extracted from this example, is that The total price of all commodities produced within a local economy for domestic use, are greater The total wages provided within that domestic economy.

The contradiction of domestic capitalist production for domestic consumption :

	The problem is not solved by either decreasing prices or raising up wages, or on the contrary, decreasing wages and raising prices, because neither of these actions would result in an increase of profits, and lead back to the exact same problem for the capitalist system in terms of total profits generated by capitalist on the macro-level of domestic scale production: say for example, capitalist production within a community for the domestic use of that community. The conclusion from this is that capitalist production within a community to serve that communities needs, becomes inherently contradictory, due to the contradiction that would be generated between domestic wages and domestic prices within that community. This shows that the capitalist system, at least on a small domestic scale, is not internally sustainable when relegated to produce and sell commodities for local consumption. By the same reasoning, it is also unsustainable for capitalist production in a single nation to focus on producing goods for the nations own consumption, because the contradiction between wages and prices would present itself yet again, thus preventing the capitalist system as a whole within that nation from generating profits, especially if this nation has similar wage conditions across the whole nation. The contradiction shows that the capitalist system simple cannot sustain itself without some kind of external factors that would influence its ability to accumulate capital, and therefore net a profit from selling commodities to the general public.

primitive accumulation and where capitalism got it's initial capital throughout the centuries:

	The contradiction is still not resolved, even if we consider that other wealthy capitalist would use their wealth to buy up the remainder of the commodities for 1 million shillings, because the other capitalist in the system have to generate their own wealth through the same system of production and exchange of commodities, by minimizing wages and maximizing prices in order to net a profit. This begs the question of where the initial capital of capitalism came from before the system was fully developed,  and this 'initial capital' of capitalism can be traced back to the primitive accumulation of capital from previous class systems throughout the centuries, such as serfdom and slavery, the direct colonial exploits of European nations between the 16th and early 20th century, and the funding of primitive forms of capitalism by feudal states before the end of serfdom. In short, the initial capital for capitalism to fund its own creation, was accumulated by the historical exploitation of people, and therefore a creation of accumulated exploitation throughout the centuries.

How the global division of labor exploits the world and how the printing of money allows capitalism to accumulate capital despite the contradiction between wages and prices:

3. 	The mathematical conclusions that show a contradiction between commodity-exchange and wages within a small scale, definitely begs the question of how the capitalist system as a whole scales up to generate a profit in the globalized capitalist economy. If there is an inherent contradiction for capitalism to be able to profit as a whole system within a whole community, and if we considered the world as a gigantically scaled up version of a community by which the capitalist control production with mega-corporations, then how does the capitalist system as a whole generate profits? The answer lies within two major aspects of globalized capitalism:

A. The division of labor across the world by which capitalist from the first world can pay very low wages to third world workers thus resulting in very cheap imports for the first world. So this explains precisely why we have a globalized capitalist world which necessitates that global labor must be divided between very low wage workers in the third world, and higher waged workers in the first world. This is because by giving workers a very low wage in one location, and then selling those commodities at a much higher price to higher waged workers in another location, means that the global capitalist system can generate a profit and suppress its own contradiction between wages and prices!! This means that the notion that the third world could ever “catch up” is an illusion, because the capitalist system absolutely requires extremely cheap labor, including slave labor in certain locations to produce the commodities, so that the capitalist can generate a profit by selling those commodities to higher waged labor in another part of the world.


B. the merger of financial institutions that consistently print and distribute money for major corporations. So not only is the contradiction of commodity exchange and wages 'disguised' by the capitalist exploiting other nations for low wage labor, then selling the commodities back to first world workers at levels their wages can afford, but further more, the printing and distributing of money to corporations becomes an absolute necessity for the capitalist system to suppress the inherent contradiction present within capitalism, especially when it comes down to the price-wage contradiction and the exchange of commodities inherently bound to this contradiction. The consistent printing of money for corporations is a mechanism to disguise the fact that the capitalist system as a whole is inherently contradictory and cannot produce a net-profit from globalized wage-labor alone. It compensates for the fact that the collective wages of the world for a given time period, will never be able to afford the much higher prices of commodities within that same time period. So, an institution that prints money and hands it out through no-interest loan banks, by which the capitalist collectively control this institution for their own interest, can therefore be used to strategically distribute money to artificially generate "profits".