Political Economic Organization - Essay Example

Political Economic Organization and the Production of Generalized Market Relations Question a) Explain at least two ways that increasing productivity has been achieved, using the ideas of Adam Smith and Karl Marx. As an example, Smith introduces that 10 workers can only produce 200 pins per day, which equals that a worker can produce 20 pins per day if they work alone. However, if they divide production processes into eighteen simple tasks, they can produce 48,000 pins per day, which is equivalent to 4,800 pins apiece. It is because they do not waste any time between each task, improve technical proficiency, and trigger inventions of new technologies and/or methods for further productivity (Smith 8). Marx introduces absolute and relative surplus value. Absolute surplus value is obtained through lengthening their work hours; on the other hand, relative surplus value is obtained by increasing labor productivity through mechanization. Marx criticizes such mechanization depersonalizes the production process and accelerates over-accumulation for capitalists (Marx 221). As new technology increases productivity, the necessary labor time is supposed to be shortened. In reality, however, shorter necessary labor time turned out more surplus labor time which is extra time over the necessary labor time to generate capitalists’ profits. It is attributed to the idea that capitalists purchased fixed-working hours. b) Explain how ever-increasing productivity can be a problem for capitalists, using the concepts of socially necessary labor time and the organic composition of capital. In order to pursue higher surplus labor time, capitalists keep re-investing its capital being generated through surplus labor time in inventing new technology. It spurs more surplus labor time and less socially necessary labor time, which in turn accelerates larger over-accumulation and lower organic composition of capital. However, decreasing the organic composition of capital at a rapid rate is problematic from the following perspectives: (1) generating high unemployment, and as a result over-production being unable to be absorbed; and (2) technological advance at a rapid speed outdates machinery that capitalist invested in. Through such competitions pursuing cheapening products, larger capitalists beat smaller capitalists since such price competition depends largely on the productivity of labor, hence dependence on the scale of production (Marx 777). Smaller capitalists are unable to update machineries as frequently as large capitalists are able to. It generates monopolistic market, and smaller capitalists beaten by larger capitalists turn into working-class. Considering these facts, no one can absorb a large amount of production that winner capitalists generated. c) Using specific historical examples from lecture and/or readings, describe how time-space compression and mass consumption have been mobilized to mitigate the problems described in (b) It is apparent that increased production has to go hand in hand with increased consumption in order to avoid problems associated with over production. It is believed that rapid deployment of new organizational forms and technologies was part of the contributing factors of overproduction. In this regard, such measures were needed in order to have speedy consumption. Improved systems of communication and information flow made it easier and possible to circulate commodities within a greater speed. For example, the growth in the US in the 19th century saw new techniques of for moving products. International marketing for US manufacturers started. This did not only help lower the unit cost and efficient return on investment, but also helped to reduce cost of working and fixed capital. By integrating mass production with mass distribution, a single enterprise involved in many transactions and processes involved in making and selling products. This was in line with mobilization of fashion in mass as opposed to elite markets. In addition, there was continued emphasis in the values and virtues of instantaneity and disposability. Individuals were also forced to cope with disposability, novelty for instant obsolesce. By taking advantage of technological advance, Britain increased coal production and iron production, and as a result lowered manufacturing and transportation costs. As an example, by utilizing iron and coal, the Cornish high-pressure engines built steam railways, and thus shortened carrying time between the coal pit and factories. It spurred over-production; however, lower transportation cost enables capitalists to access other markets and mass consumption to absorb the large amount of production. What is more, the constantly accelerating energy supply alternated human settlements since people are less dependent on traditional resources such as traditional material flows and resources. For example, people who live along river in order to utilize water-driven manufacturing and carrying can alternate their methods through employing steam-powered manufacturing and steam railways. Its manufacturing and transportation innovations alternated human settlement and accelerated a large number of populations are concentrated together in a town, since its size was no longer limited by traditional energy supply. d) Define overaccumulation and explain at least two ways that capitalist states have attempted to mitigate this problem, using the concepts of the spatio-temporal fix and imperialism. Use at least one specific historical example from lecture and/or readings. Overaccumulation is referred to as the situation in which excessive investment has taken place and goods can not be brought to the market profitability (Smith 12). It is believed that, when economy reaches overaccumulation stage, it becomes difficult to bring resources together in a profitable way to meet social needs. One of the ways that have been used to mitigate the problem has been adapting the system of hiring fewer laborers and using more machinery. However, this approach has been criticized for its tendency to create increasing unemployment (Marx 284). Another way of mitigating the problem of overaccumulation by capitalist is through accumulation through dispossession mainly by releasing as set of assets at very low cost. It is also apparent that capitalist use spatial fix to resolve the problem of overaccumulation. This is practiced by moving capital or labor to new areas with intentions of beginning new production. The main target involves areas with higher demand. The tactics involved includes opening up these new space by endowing it with necessary infrastructure. Once the new market has been fully adequately produced, the surpluses of labor and capital can be absorbed in the new market. However, this has also the problem of contradicting material meaning of the expression by threatening values already fixed in place. In addition, spatial fixes has been associated with interregional vitality as well as redirection of capital flows from one area to another. Question 2 a) Using at least one specific example from lecture and/or readings, explain how pre-capitalist relationships to land changed and how this related to the formation of a general market. Through enclosures, traditional open-field system of farming is destroyed, and generated landowners who possess large private property and landless working class. It compelled labor-class to sell labor power to survive. The state even protected powerful landowning class from imports of cheap grain, kept agricultural prices and profits high through Corn Laws in 1815. However, increasing voices from new elites who engage themselves in manufacturing opposed against Corn Law, and the state repealed the law in 1846. It allowed the influx of cheap food into Britain, and cheapened the cost of living, which in turn lowered wages. These processes benefits new elites and brought them higher profits on the one hand, but old elites who have been benefiting from large landownership, on the other hand, waned. Through repealing Corn Law, an increasing amount of food imports forms a general market. The processes accelerate capitalists’ over-accumulation due to cheaper wages, and it created a world-scale division of labor. b) Describe how the processes described in (a) changed both the form and geography of labor relations in England in the lead-up to/during the Industrial Revolution, using Marx’s idea of the value of labor-power. However, since Britain imposed the Gold Standard and free trade on other states, an increasing export to Britain led to a large outflow of gold reserve, which in turn left less money available in the economy. It leads to less capital available for domestic investment, and thus shrunk the Britain economy and hence lowering wages. Therefore, in terms of the value of labor-power, due to lowering wages through a world-division of labor, it takes longer time to reproduce themselves and eventually spurred over-accumulation of capitalists and financers. c) Using the example of grain production in the U.S. Midwest, explain how both technological and financial innovations were employed to create a national market in food. The US market revolution was a remarkable change on the labor system. Commerce was revolutionized by improvements in transportation communication, and technology advancements. This also involved change in the agricultural industry. For example, invention of horse-pulled steel plow replaced the difficult oxen-driven wooden plows. This enabled farmers to till land faster and more cheaply. Repairs on plows were reduced by almost a half. In addition, there was also invention of mechanical mower- reaper that facilitated wheat farming. The Midwest region has been known for its vast agricultural innovations. Aside from having embraced several agricultural innovations, the region had to balance agriculture with finance and services. For example, railroads, was a major means of transporting their farm produce to other regions. This led to increased grain production in the US. Financial institutions were established with an aim of financing farmers. This was a big boost to farmers that did not have capital to invest in farming. d) Discuss how both changed forms of business organization and restructured urban space helped create a U.S. national market in the 19th century, using at least one specific historical example from lecture and/or reading. Capitalist development and urbanization have been argued to go together. In fact, the intensification of production has been associated with processes of capitalist growth, where rural population is pushed into the cities. According to Marx, it is as a result of such developments that capitalist arises. In fact, it is believed that capital accumulation also shapes and builds natural environments and cities. New York City became more important than other areas due to expansion of rail road, which connected east and west. Business organisation can be seen in terms of facilitation of business activities as a result of the need to have standard time lines, organized management and the need to have large amounts of funds for various economic developments. Increased production of cotton enabled New York City to develop into a trade city. A new market and demand for textile machines slowly developed due to unprecedented volume of cotton trade. Towards 1970s, merchants living in the eastern ports expanded trade to other markets. In addition, the railroad and telegraph facilitated communication, which in turn facilitated production and distribution of farm produce. Managers needed to coordinate and control increased number of operating units. On the other hand, farming business, for example, expanded due to transportation costs and increased merchants. There was also a shift in how faming business was done as a result of sharecropping, whereby tenant farmers shared half of their crops with the landowners with at least in exchange of other commodities. As a result, many people needed to have residential houses in the city, and this called for development of another booming business of urban real estate. Works cited: Marx, Karl. Capital: A Critique of Political Economy - Vol. I-Part I: The Process of Capitalist Production. Cosimo, Inc., 2007. Print. Smith, Adam. An inquiry into the nature and causes of the wealth of nations. Lawrence, KS: Digireads.com Publishing, 2009. Print. Read More