Laws of Concentration and Centralization: A Modern Review

Laws of Concentration and Centralization: A Modern Review Sourish Dutta Abstract Though the basic (late 1860s) Marxian model, under capitalist mode of production, assumes (more or less) perfectly competitive markets with a large number of small firms in each industry, Marx was cognizant of the growing size of firms, the consequent weakening of competition, and the growth of monopolistic power. Hence, capital has the inclination for concentration and centralization in the hands of richest capitalists. Actually, the concentration and centralization of capital are two capital accumulation techniques. Such concentration and centralization of capital can be clearly detected at this modern time—especially in the USA—in the massive occurrences of the mergers, acquisitions and conglomerates. In this assignment, henceforth, I will be trying to cultivate an analytical discussion about these two interlinked concepts and their implications and repercussions in this modern world of capitalism. Prologue The contemporary financial catastrophe of 2008 brings back the Marxian laws of concentration and centralization of capital in the modern form. They are often confused but must be clearly distinguished. Marx explained it most famously in chapter 25 of volume 1 of Capital. Though his dynamic intellectual exploration engrossed in the industrial capital, the same tendency holds with respect to financial capital in present scenario. With the increasing mass of wealth which functions as capital, accumulation increases the concentration of that wealth in the hands of individual capitalists, and thereby widens the basis of production on a large scale and of the specific methods of capitalist production†¦ It is concentration of capitals already formed, destruction of their individual independence, expropriation of capitalist by capitalist, transformation of many small into few large capitals. This process differs from the former in this, that it only presupposes a change in the distribution of capital already to hand, and functioning†¦ Capital grows in one place to a huge mass in a single hand, because it has in another place been lost by many. This is centralisation proper, as distinct from accumulation and concentration. In brief, by concentration we make out the upsurge of capital that is due to the capitalisation of the surplus value originated through accumulation of surplus value of labour. Indeed, increasing concentration of capital occurs as individual capitalists accumulate more and more capital, thereby increasing the absolute amount of capital under their control. The size of the firm or economic unit of production is increased correspondingly, and the degree of competition in the market tends to be diminished; under centralisation we understand the joining together of various individual capital units which thus form a new larger unit. Actually, more important reason for the reduction of competition is the centralization of capital. Centralization occurs through a redistribution of already existing capital in a manner that places its ownership and control in fewer and fewer hands. Marx maintained that larger firms would be able to achieve economies of scale and thus produce at lower average costs than would smaller firms. However, concentration and centralisation, influence one another. A great concentration of capital accelerates the absorption of small-scale enterprises by large-scale ones; conversely, centralisation aids the increase of individual capital units and so accelerates the process of concentration[1],[2]. Beside this, recent experience of financial crisis also conveys a new phenomenal dimension in the context of Marxian crisis in capitalist mode of production. This phenomenon gives rise to the doctrine of Too Big to Fail (TBTF)[3]. Rationale behind these laws The main logic behind these two laws of capitalism is the force of capital accumulation or the self-expansion of capital. Here we have to note two distinct concepts, namely, individual capital and social capital. Marx observes: The fact that the social capital is equal to the sum of the individual capitals (including the joint-stock capital or the state capital, so far as governments employ productive wage-labour in mines, railways etc., perform the function of industrial capitalists), and that the aggregate movement of social capital is equal to the algebraic sum of the movements of the individual capitals, does not in any way preclude the possibility that this movement as the movement of a single individual capital, may present other phenomena than the same movement does when considered from the point of view of a part of the aggregate movement of social capital, hence in its interconnection with the movements of its other parts. †¦Every individual capital forms, however, but an individualised fraction, a fraction endowed with individual life, as it were, of the aggregate social capital, just as every individual capitalist is but an individual element of the capitalist class. The movement of the soci al capital consists of the totality of the movements of its individualised fractional parts, the turnovers of the individual capitals. The self-expansion of individual capital is accomplished through the appropriation of surplus value by maximizing the rate of profit, while the movement of the social capital leads to the equalisation of rates of profit. Individual capital is a thing as well as a relation, and so is the social capital; moreover, the social capital denotes another dimension of social relation, namely, the relation between industrial, financial and commercial branches, and also between branches, sectors and departments of the productive system. Nevertheless, it is also to be noted that in a capitalist economy, state capital is an integral part of social capital. In juridical form, state capital is indeed different from private joint-stock capital, but its movements determine, and are determined by, the movements of social capital. Concentration The other name of self-expansion of individual capital is concentration of capital, according to Marx. It has nothing to do with the statistical concept of concentration ratio on the pattern of Gini, Lorenz or Atkinson. The concentration of capital in the Marxian sense is measured in absolute terms with reference to a single individual capital, without regard to the rest of the individual capitals; in other words, it is not a ratio of any two magnitudes. At one place Marx says that simple concentration of the means of production and of the command over labour is identical with accumulation, and at another he equates the rate of self-expansion of the total capital with the rate of profit. Every individual capital is a larger or smaller concentration of the means of production, with a corresponding command over a larger or smaller labour-army, says Marx. Every accumulation becomes the means of new accumulation. Clearly, by concentration Marx does not mean anything like the Gini coefficient or the Lorenz ratio. Now, accumulation is the prime mover of capitalism, and concentration increases with accumulation. Since the rate of profit is uniform throughout the economy, should every capitalist accumulate the entire profits (or equal pro- portion of profit) then each individual capital would grow at the same rate. In that event, there would be a continuous rise in the concentration of capital in the Marxian sense, but not so in the usual statistical sense. To put it differently, a constancy in the statistical concentration ratio does not imply a cessation of the Marxian concentration of capital. Movements of social capital tend to bring about equalisation of profit rate throughout the economy, but in fact profit rates do vary from one branch of production to another at any given period. Besides, as we know, one portion (of the surplus value) if employed as capital, is accumulated 13 and the portion of this plough-back may not be the same for every individual capita- list. A bigger capitalist accumulates a larger percentage of the surplus value appropriated by him. Hence, the rates of self- expansion of various individual capitals-that is to say, their rates of concentration-differ. If the bigger capital effects a higher rate of self-expansion, then the statistical concentration ratio would rise with the Marxian concentration of capital. With the rising concentration of capital a qualitative change takes place-the organic composition of capital goes up, and hence the rate of profit declines bringing in its trail a crisis which we shall take up for discussion below. [1] http://www.economictheories.org/2008/07/karl-marx-concentration-and.html [2]N.I. Bukharin: Imperialism and World Economy [3] According to some economists, when banks and finance corporations become too big, their failure has systemic implications, inflicting collateral damage on individuals who may have nothing directly to do with those banks or corporations. Governments then feel compelled to rescue these large entities in order to minimize the collateral damage, and the anticipation of such bailout promotes reckless behaviour.

Essay --

Lisette Galvan Outlining - Position Paper Title: Should the Level of Immigration Be Heightened and Border Security Tightened? Thesis statement : I truly believe that the level of immigration should be increased but only with the exception that border security should be better utilized. If people from other countries want to better their lives here and agree to â€Å"play by the rules† then it should be allowed and put into law. Immigration seems to a big issue these days in America.The main concern that many Americans have is that immigrants will swipe the available jobs that are offered here and will consequently leave the natural born citizens with nothing. The idea that drug dealers and terrorists are more prevalent to enter the country is also a strong fear. There are obviously many in the U.S. who are here illegally that should not be but there should be a way that they can earn citizenship. Essay Map If someone is not of Native American descent, their ancestors are immigrants. The economy will improve Border Security needs to be stronger. Immigration reform should be put in...

Module 5 Lab (5.09) Essay

Your first lab link can be found at Temper Tantrums. A written transcript is also available for this lab. 1.How can parents avoid temper tantrums? ⠁Æ'To avoid temper tantrums parents can be better prepared for the situation so when it happens they know what to do. 2.What are the A, B, Cs? ⠁Æ'A stands for the attributes you want your child to have ⠁Æ'B stands for the behavior you want to go along with those attributes. ⠁Æ'C stands for the consequence that will be given, positive or negative. 3.Do you think using consequences and following the ABC process will help shape a child’s behavior? Why or why not? ⠁Æ'Yes, I think using consequences and following the ABC process will help shape a child’s behavior because it gives the child a set of expectations you want from them and because naturally humans are born to please they are going to try their hardest to live by those expectations you have provided them. Your second lab link can be found at Developing Language Skills in Babies. A written transcript is also available for this lab. 1.What are some of the reasons why people may not talk to babies as much today as they used to? ⠁Æ'We don’t really know the exact reason why people are not talking to their babies as much some may say it is due to the busy life style we have or that everyone is isolated within the house and not together as a family in a room. 2.Why do you think developing language skills is important for a child? ⠁Æ'Developing language skills as a child is important because when children are younger it is easier for them to learn and develop and they should learn to be good communicators. 3.What are some of the ways that parents can encourage the development of language skills? ⠁Æ'One way parents can help encourage development of language skills is by giving them their undivided attention and contently talking to them because most of their learning is through imitation. Your third lab link can be found at The Importance of Bedtime Reading. A written transcript is also available for this lab. 1.How many parents never read to their children at bedtime according to the study? What might prevent parents from reading to children? ⠁Æ'One in ten parents never read their children bed time stories. Being busy with other things is what prevents parents from reading their children bedtime stories. 2.What are some of the benefits of reading to children? Include infancy through young school age children. ⠁Æ'Some benefits is it teaches children skills such as concentrating and listening. 3.Did your parents or other caregivers read to you as a child? What effect do you think this had on you? ⠁Æ'Yes my parents read to me when i was a child and i think the affect it had on me was it made me a better listener.

Pet Therapy - 1435 Words

Pet Therapy 1 Does Pet Therapy Improve the Health of Those Who Use it? English Composition Pet Therapy 2 This paper reviews the possible beneficial effects pet therapy can have on individuals in both a hospital setting, as well as the every growing technique of home health care. Pet Therapy is a fairly new and changing technique in the health care field. The hope of pet therapy is that during visits to the hospital it will help divert parent and children’s attention during painful procedures. Thus making the visit a more enjoyable and tolerant experience. It also examines the possible effect of lowering blood pressure on individuals who recently suffered a myocardial infarction or experience cardiovascular problems.†¦show more content†¦This in turn, gives those in the health care field more options to try and achieve positive results from those whom they are taking care of in their specific health care setting. Hooker et. al (2002) claim that during the 1980s the nursing literature began to conduct research on the subject of pet therapy, as well as the beginning of Scientific nursing research. Published results found that in non-hyper extensive individuals, petting their own dog would help lower their blood pressure. Hooker et. al (2002) also claims that the study reviewed the one-year survival rate of patients discharged after experiencing a myocardial infarction or angina. Findings indicated that those whom had experienced the pet therapy had an increased rate of survival than those whom didn’t use pet therapy. Hooker et. al (2002) also state’s that Pet Therapy 5 studies showed that the presence of a dog on children at rest and during mildly stressful activities would in fact lower blood pressure. The most recent studies the researcher could find have taken place in the 1990s. Health care is experiencing a vast increase in the use of home health care. 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