Overaccumulation of Capital

Description

Benjamin Kunkel, paraphrasing David Harvey:

"Overaccumulated capital can be defined as capital unable to realise the expected rate of profit. Whether in the form of money, physical plant, commodities for sale or labour power (the latter being, in Marx’s terms, mere ‘variable capital’), it can only be invested, utilised, sold or hired, as the case may be, with reduced profitability or at a loss. Overaccumulation will then be variously reflected in money hoarded or gambled rather than invested; in underused factories or vacant storefronts; in half-finished goods or unsold inventories; and in idle workers, even as the need for all these things goes unmet. In such cases, the most basic of the contradictions Marx discovered in capitalism – between use value and exchange value – reasserts itself. For at times of crisis, it’s not that too much wealth exists to make use of – in fact, ‘too little is produced to decently and humanely satisfy the wants of the great mass’ – but that ‘too many means of labour and necessities of life are produced’ to serve ‘as means for the exploitation of labourers at a certain rate of profit’. A portion of the overaccumulated capital will then be devalued, until what survives can seek a satisfactory profitability again. Thus asset prices plunge, firms go bankrupt, physical inventories languish and wages are reduced, though this devaluation is no more equally divided among the respective social groups (rentiers, industrialists, merchants, labourers) than prosperity was during the good times." (http://www.lrb.co.uk/v33/n03/benjamin-kunkel/how-much-is-too-much)