Final notes on labour for the classic school

Small final note on capital concentration 

To obtain a complete picture of Marx’s system, the full development contained in Capital should be explored, which is beyond the scope of this article. Nevertheless, apart from the theory of surplus value, one more thing is essential to take away from Marx’s Capital, the idea of capital concentration. 

According to Marx, the hallmark of the individual behaviour of capitalists is the pursuit of profit as a purpose in itself, which forces them into two kinds of competition: the first with workers in the labour markets over wages and conditions of work, and the second with other capitalists in the commodity markets over the expansion of market share at the expense of their competitors. Capitalists cope with these two types of competition through the introduction of more fixed capital. As a consequence, mechanisation of the labour process is used to raise the productivity of labour. The introduction of fixed capital both increases the scale of operation needed for minimum efficiency and reduces the unit cost of production. The latter implies that by reducing their prices, innovative firms are able to expand their market share at the expense of less efficient firms. Thus, the process of capital accumulation leads to a small number of top firms controlling an increasing share of the total market. This is the reason why concentration of capital is the expected outcome implied by the nature of capital and by the operation of competition, which by no means diminishes over time. 

If there is a grand prediction that has been historically validated, it is Marx’s law of increasing concentration of capital.