While the banking system objectively strives to achieve that balance (and thus represents a force of social accounting and centralization far superior to anything private ownership could accomplish in the realm of production), it does not have the means to ensure automatic and continual balancing. Here there appears a further cause of discontinuity or interruption of expanded production – a cause which, though derived from monetary phenomena, is of course essentially rooted in the contradictory nature of the commodity and of the production of value and surplus-value.

It follows that a series of proportions, additional to those which emerge prima facie from the reproduction schemas, play an important role in amplifying, if not triggering off, the trade cycle. The way in which the total money stock is divided between circulating money and hoarded money112; the way in which circulating money is divided between circulating money capital and circulating revenue; the way in which hoarded money is divided between latent (potential) productive capital (i.e. money capital which will tend to contribute to increased production of surplus-value) and capital which is more or less permanently hoarded (i.e. withdrawn from both the sphere of production and the sphere of circulation of commodities) – all these proportions significantly influence the volume and rhythm of capital accumulation.113

Keynes was correct when he discarded the assumption of more or less permanent full employment of manpower and capital (or at least, the hypothesis that it could be achieved automatically through the operation of market forces). He was also right to point out that capital or revenue not spent (i.e. hoarded) is an important source of disequilibrium and under-employment of productive resources in an economy based upon generalized commodity production. In fact, Marx had argued as much sixty-five years earlier, in Capital Volume 2. But the latter’s understanding of the fundamental mechanisms of the capitalist mode of production proved more profound than that of Keynes. For Marx went a step further by distinguishing between productive investment (i.e. investment leading to increased production of surplus-value) and unproductive ‘investment’ (which cannot directly augment the total social wealth and real income, but only contribute indirectly to re-allocation and redeployment of existing resources). After all, building pyramids and digging canals in order to fill them up again does not have the same effect upon economic growth, capital accumulation and expanded reproduction as building new factories and opening up new oil fields. Buying government bonds in order to finance the building of pyramids is evidently not the same kind of activity as the investment of productive capital.114

From the elements of monetary analysis dispersed throughout Volume 2, it is possible to identify, within the framework of Marxist economic theory, four distinct causes of rising commodity prices. These causes are the following.

(a) A fall in the average productivity of labour in a given branch of output (for example, in certain agricultural or mining branches, where a decline in natural fertility is not completely offset by technological progress); prices would then rise as the result of an increase in value of particular commodities (i.e. in the quantity of social labour necessary for their production).

(b) A sudden increase of labour productivity in the gold-mining industry (and thus a decline in the value of gold); all other things remaining equal, the same mass of commodities would then be exchanged for a greater amount of gold (produced by the same quantity of labour as before). In other words, the gold price of commodities would rise.

(c) An upward trend of market price-fluctuations around an unchanged axis of values. This may occur, even when the gold currency remains stable and when there is no paper money inflation, at that precise stage of the trade cycle marked by the periodic contraction of the hoarded part of money as compared to the circulating part.

(d) An inflationary movement of money signs. In this case, a constant amount of gold, which exchanges against the same amount of commodities as before on the basis of an unaltered quantity of socially necessary labour, becomes represented by a greater sum of paper money signs (or of bank money, credit money).115

13. GROWTH AND CRISIS

The central ‘message’ of Volume 2, like that of Volume 1, refers to a terrifyingly dynamic process. Volume 1 indicates why capital, by its very essence, is value in perpetual search of additional value, produced by the workers in the process of production. The unquenchable thirst for surplus-value is the fundamental motor of economic growth, technological revolution, ‘research and development’ spending, improvement of communications, ‘third-world aid’, the sales drive and market research. A corresponding quest for individual enrichment appears at the core of every level of bourgeois society, together with increasing alienation of workers and all human beings, and a growing threat that the forces of production will be transformed into forces of destruction. Paradoxically, mankind increasingly loses control over its own products and productive endeavour at the very moment when its mastery of nature and natural forces seems to be developing by leaps and bounds.116

In Volume 2 of Capital, we follow the commodities, containing the surplus-value produced by the workers, on their travels outside the factory. A ‘spiralling movement’ of growth is unleashed – a veritable avalanche.117 The sale of commodities at their value enables profit to be realized and additional capital to be accumulated. More capital begets more surplus-value, which in turn begets more capital. Obstacles on the road of self-expansion – such as the enforced lingering of commodities in the sphere of circulation, or the protracted character of the production process itself – are swept away by the avalanche, thanks to social division of labour within the capitalist class; the appearance of commercial and banking capital; and the constant striving to accelerate the transport of commodities, build up a world-wide system of communications and reduce the length of the circulation process to a minimum. An immense mountain of commodities is distributed with lightning speed around the globe, so that a steadily growing stream of value (money capital) may be concentrated in the hands of an ever smaller percentage (if not necessarily a shrinking absolute number) of the world’s active population. Today’s real masters are to be found in probably no more than 1,000 or 2,000 firms the world over.118

This frenetic search for additional wealth in order to create even more wealth becomes increasingly divorced from basic human needs and interests, increasingly opposed to the ‘production of a rich individuality’ and the ‘rich development of social relations’ encompassing all human beings. But the process cannot continue smoothly and uninterruptedly: capital is powerless to overcome the basic contradictions of the commodity and private property. From both sides, the contradictions of production for its own sake (i.e.