Chapter 4 Capital Accumulation and the Composition of Capital This essay examines Marx’s concept of the composition of capital.1 Although this concept is essential for understanding the relationship between values and prices, technical change, accumulation, and other critically important structures and processes under capitalism – for example, the occ is the pivot of the transformation problem and the tendency of the rate of profit to fall, and it plays a critical role in Marx’s theory of rent – the composition of capital has tended to be explained cursorily and understood only superficially and – often – incorrectly in the literature. This essay shows that a clear understanding of the composition of capital can contribute to the development of Marx’s theory of value, exploitation and capital accumulation. The argument is developed in five sections. The first summarises Marx’s theory of capital, exploitation and accumulation, which underpins the concepts of composition of capital. The second briefly reviews some of the best-known interpretations of the composition of capital, in order to illustrate the diversity of the literature on this topic. The third follows Marx’s analysis of the composition of capital in the absence of technical change. Each concept used by Marx is defined and its introduction justified. The fourth discusses how the technical (tcc), organic (occ) and value composition of capital (vcc) are affected by technical progress. It will be shown that one of Marx’s aims in distinguishing the occ from the vcc is for a focused analysis of a particular case, where the accumulation of capital occurs with technologi- cal change. The fifth summarises the main findings. The contrast between the static and dynamic cases is essential, not only to the orderly introduction of the concepts, but also to the appreciation of their contradictions, limits and shifts. Moreover, this arrangement is useful in its direct connection with the levels of analysis of the composition of capital. 1 Based on The Value of Marx, London: Routledge, 2002, ch.6, ‘Capital Accumulation and the Composition of Capital’, Research in Political Economy 19, 2001, pp. 69–85, and on ‘A Note on Marx’s Analysis of the Composition of Capital’, Capital & Class 50, 1993, pp. 127–146. © koninklijke brill nv, leiden, ���9 | doi:�0.��63/9789004393�0�_006 <UN> Capital Accumulation and the Composition of Capital 85 1 Capital and Exploitation For Marx, capital is a social relation between two classes, capitalists and work- ers. This relation is established when the means of production are monopo- lised by the capitalists, that employ wage workers in production for profit. Once this class relation of production is posited, capital exists in and through things, namely, the means of production, commodities, money and financial assets employed in the process of valorisation: Capital is not a thing, any more than money is a thing. In capital, as in money, certain specific social relations of production between people ap- pear as relations of things to people, or else certain social relations appear as the natural properties of things in society … Capital and wage-labour … only express two aspects of the self-same relationship. Money cannot be- come capital unless it is exchanged for labour-power … Conversely, work can only be wage-labour when its own material conditions confront it as autonomous powers, alien property, value existing for itself and main- taining itself, in short as capital … Wage-labour is then a necessary condi- tion for the formation of capital and remains the essential prerequisite of capitalist production.2 Capital 1, pp. 1005–1006 There is a relationship of mutual implication between capitalism (the mode of social production), wage labour (the form of social labour), and the commod- ity (the typical form of the output): [The] relation between generalised commodity production [gcp] … wage labor and capitalist production is one of reciprocal implication. First … when labor becomes wage labor … commodity production is gen- eralised. On the one hand wage labor implies gcp … On the other hand, gcp implies wage labor … Marx shows … that capitalist production is commodity production as the general form of production while, at the same time, emphasizing that it is only on the basis of the capitalist mode of production that all or even the majority of products of labor assume commodity form … Finally, the relation of wage labor and capital is also 2 Chattopadhyay (1994, p. 18) rightly argues that ‘Marx’s starting point in the treatment of capi- tal is conceiving capital as a social totality, capital representing a class opposed not so much to the individual laborers as to the wage laborers as a class’. <UN>.