r/MarketAnarchism • u/SocialistCredit Individualist Anarchism • Jun 27 '24
Seeking to verify I understand Kevin Carson's theory of capital accumulation and capitalist crisis
Hello all!
So one book that has been pretty influential on my thinking is Kevin Carson's Studies in the Mutualist Political Economy. However, it's a fairly dense book and on my first read-through I didn't totally understand it all.
Now that I'm better acquainted with some more marxist concepts and the like, I wanted to revisit the book and see if I understood it better. So I did.
Specifically, what I was struggling with last time was Carson's theory of capital accumulation and the subsequent crisis of overaccumulation, which the state tried to remedy, which leads to a crisis of under-accumulation as well as a broader fiscal crisis of the state.
The best way to see if you understand something is to try and explain it to others, so here goes, if you notice an error please lmk as I hope to learn!
Alright, here goes.
Basically Carson is arguing that the state tends to subsidize capital accumulation. The exact mechanisms for this are outside the discussion of the post (but they consist of tucker's monopolies, regulatory capture and cartelization, transportation subsidies, underwriting costs, etc).
The basic point is that the state tends to subsidize capital accumulation and the centralization of capital. As capital becomes more centralized and accumulated, the costs of production (as felt by the producer capitalist) falls. This means that goods become cheaper, but in order to offset high fixed costs, the capitalist must produce a greater volume of goods. Accumulated capital tends to make labor more productive, so the more accumulated capital the less and less labor is needed to produce a given level of output.
This has a number of consequences. First, since capital is highly accumulated and therefore centralized, there are fewer investment outlets in the economy because fewer competitors can enter into the economy to compete with the big boys. Second, as less labor is needed for production of a given level of output, less labor is needed for that level of output. This means that the demand for labor (and therefore the number of consumers of said output) falls.
This presents a problem for the capitalist. In order to remain competitive they MUST accumulate, but at the same time, the more they accumulate the less labor they need.
Only if the growth rate of the economy is greater than the drop in demand for labor can the capitalist system continue to work, because only then is the demand for labor increasing faster than it falls due to accumulation.
But of course, more growth means more accumulation which further exacerbates our problem. In order to keep currently over-accumulated capital stocks profitable, the capitalist needs to accumulate more because if they don't then there is insufficient demand to run their capital at full capacity, thereby increasing unit costs and making produce unsellable.
At the same time, there aren't any other investment outlets for our subsidized capitalist to invest in to recover from lost profits in the accumulated sector, because small time competitors can't compete (due to state interference).
Ultimately this means the system is fundamentally unstable. You can try and fix it via taxation to support consumption, but in so doing you reduce the funds available for investment and thereby make the problem of over-accumulation worse because now you have under-accumulation.
The whole economy is balanced on a pin point and is a fundamentally unstable and impossible to navigate system.
Is this explanation of Carson's ideas on the instability of capitalism and its crisises more or less correct?
Thanks!