In Marxian economics, economic reproduction refers to recurrent (or cyclical) processes.In a recurrent process, the same event repeats itself on multiple occasions. In a cyclical process, a sequence of events repeats itself on a regular basis. Michel Aglietta viewed economic reproduction as the process whereby the initial conditions necessary for economic activity to occur are constantly re-created.Michel Aglietta, A theory of capitalist regulation. London: NLB, 1979 (expanded edition, 2015). Marx viewed reproduction as the process by which society re-created itself, both materially and socially.
Economic reproduction involves: the physical production and distribution of goods and services, the trade (the circulation via exchanges and transactions) of goods and services, the consumption of goods and services (both productive or intermediate consumption and final consumption), the reproduction of voluntary and involuntary social relations, involving competition and cooperation (including the social relations of the class hierarchy).
Karl Marx developed the original insights of Quesnay to model the circulation of capital, money, and commodities in the second volume of Das Kapital to show how the reproduction process that must occur in any type of society can take place in capitalist society by means of the circulation of capital.Karl Marx, Capital, Volume II. Penguin Classics, 1992.
Marx distinguishes between "simple reproduction" and "expanded (or enlarged) reproduction".Karl Marx, Capital, Volume I. Penguin Classics, 1990, chapter 23 and Capital, Volume II. Penguin Classics, 1992, chapter 20 and 21. In the former case, no economic growth occurs, while in the latter case, more is produced than is needed to maintain the economy at the given level, making economic growth possible. In the capitalist mode of production, the difference is that in the former case, the new surplus value created by wage-labour is spent by the employer on consumption (or hoarded), whereas in the latter case, part of it is reinvested in production.
Ernest Mandel additionally refers in his two-volume Marxist Economic Theory to contracted reproduction, meaning production on a smaller and smaller scale, in which case business operating at a loss outnumbers growing business (e.g., in wars, depressions, or disasters).Ernest Mandel, Marxist Economic Theory, Volume 1. London: Merlin, 1968, chapter 10: "Reproduction and growth of the national income", p. 331. See also Joseph Tainter et al., The Collapse of Complex Societies. Cambridge: Cambridge University Press, 1990. Reproduction in this case continues to occur, but investment, employment, and output fall absolutely, so that the national income falls. In the Great Depression of the 1930s, for example, about one-quarter of the workers became unemployed; as a result of the 2008–9 slump, the unemployed labour force increased by about 30 million workers (a number approximately equal to the total workforce of France, or Britain).According to the International Labour Organization.
Theoretical approach
As an approach to studying economic activity, economic reproduction contrasts with equilibrium economics, because economic reproduction is concerned not with statics or with how economic development gravitates towards an equilibrium, but rather with dynamics—that is, the motion of an economy. It is not concerned with the conditions of a perfect match between supply and demand under ideal conditions but rather with the quantitative proportions between different economic activities or sectors that are necessary in any real economy so that economic activity can continue and grow. It is concerned with all the conditions for that, including the social and technical conditions necessary for the economic process. Reproduction economics does not assume that society is kept in balance by market mechanisms.
Wassily Leontief developed Marx's idea further in his input-output economics (see also input-output model).W. Leontief, “Quantitative Input and Output Relations in the Economic System of the United States”. In: Review of Economics and Statistics Vol. 18, 1936, pp. 105-125; “Interrelation of Prices, Output, Savings and Investment”. In: Review of Economics and Statistics, Vol. 18, 1937, pp. 109-132 respectively; "The significance of Marxian economics for present-day economic theory". The American Economic Review, Vol. 28, No. 1, March 1938. However, there is a major difference between Leontief and Marx. By treating gross profit as a "factor input" as well as a factor output, the respective total values of the input and output in Leontief's model are always exactly equal. In Marx's model, the output in an accounting period is normally always higher in value than the input. This is what Marx believed capitalists to be in business for: to produce a product sold at a higher value than the sum of input costs, thus generating profit. The profit in Marx's theory is not an "input" (it is not part of the capital advanced), but a business result, the yield of capital on an investment.
In Marx's view, economic reproduction in any society has five main features:
the production of reproducible products (goods or services) replacing, maintaining, or adding to the stock of society's physical assets the physical maintenance of the (working) population and their dependents through household consumptionFor more detail, William James Booth, Households: on the moral architecture of the economy. Ithaca, NY: Cornell University Press, 2003. the reproduction and growth of the total population, including procreation and childrearingFor more detail, see Bonnie Fox, Hidden in the Household: Women's Domestic Labour Under Capitalism. Women's Press, 1980. the reproduction, enforcement, and maintenance of social relations, in particular the relations of production that characterize the social hierarchy, and property rightsKarl Marx, Capital, Volume I. Penguin Classics, 1990, chapter 23. the maintenance and reproduction of trading and distribution relations (the systems, institutions, and organizations enabling market trade and non-market allocation of resources)
What is specific to capitalist society is that these reproduction processes are accomplished primarily via the intermediary of commercial trade; that is, they are mediated by the market. Reproduction on a larger and larger scale becomes conditional on successfully making money. It means that these processes tend to be increasingly reorganized to bring them in line with the requirements of the accumulation of capital.
Marx's argument is that by producing an output value the equivalent to their own labor cost plus a surplus value (or gross profit) appropriated by capitalists, waged workers accomplish many of the processes involved at the same time. Part of the role of the state is to secure those general (collective) conditions for the reproduction and maintenance of society that individuals and private enterprise cannot secure by themselves for one reason or another (e.g., because they transcend competing interests, because they are too costly for private agencies, because it is technically not possible to privatize them, or because they are not sufficiently profitable or too risky).Bob Jessop, The Capitalist State: Marxist Theories and Methods. Oxford: Blackwell, 1982; Jessop, State Theory: Putting the Capitalist State in Its Place. Cambridge: Polity, 1990; Jessop, The Future of the Capitalist State. Cambridge: Polity 2002. Ecologists would nowadays probably add as a "reproduction condition" good stewardship for the physical environment.Harry Rothman, Murderous providence; a study of pollution in industrial societies. London: R. Hart-Davis, 1972. Sustainable development cannot occur if the natural environment is constantly depleted without being restored. The recycling of wastes and waste materials can be considered as a necessary and integral part of society's reproduction process.
Each of these six features is the subject of much political controversy in society. Many different opinions exist about their relative importance and their effects on each other. Economists and businesspeople are often primarily concerned with the economic effects, but other intellectuals and workers are often more concerned with the non-economic effects for the health, security, and well-being of citizens. Thus, governments usually have both economic policies and social policies, population policies, environmental policies, and so on.
Economic reproduction in capitalism
According to Marx, in a capitalist society, economic reproduction is conditional on capital accumulation.Karl Marx, Capital, Volume I. Penguin Classics, 1990, chapter 25 and Capital, Volume II. Penguin Classics, 1992, chapter 21. If workers fail to produce more capital, economic reproduction begins to break down. Therefore, economic reproduction in capitalist society is necessarily expanded reproduction and requires market growth. Capital must grow, otherwise the whole process breaks down. Thus, economic growth is not simply desirable but also necessary in capitalism, not just because of population growth, but for commercial reasons.Karl Marx, Capital, Volume I. Penguin Classics, 1990, chapter 25.
In this light, the ecological vision of a "zero-growth society" appears rather utopian; or, at the very least, its achievement would require the abolition of capitalism. Some would argue that population growth makes economic growth absolutely necessary. Others argue that population growth must be restricted with birth control methods because otherwise there will be too many people for the available resources. The real argument, though, is not about growth or the lack thereof, but rather about the kind of growth that is best for the (enlarged) reproduction of the human species as such.Daniel Susskind, Growth: A History and a Reckoning. London: Allen Lane, 2024. Ecologists may validly argue that some types of growth undermine important conditions for human survival in the longer term without invalidating other kinds of growth that are beneficial. However, there is much dispute about which kinds of economic growth are beneficial or harmful.
Capital accumulation (the amassing of wealth in the form of capital assets) can occur either by producing a net addition to the stock of capital assets or by transferring wealth from one owner to another. In the former case, the total stock of capital grows. In the latter case, the accumulation of one owner occurs at the expense of the other, there is no net growth. These two ways are usually combined, meaning that all or most owners make gains, but in unequal amounts. In considering the economic reproduction process as a whole, one therefore has to consider both the production of new resources and the transfer (distribution) of resources. As a corollary, supposing that there is no net growth of output and capital, capital accumulation can continue only if some people and organizations get richer while other people and organizations get poorer. Typically, if output growth slows down, socio-economic inequality (as measured, e.g., by the Gini coefficient) increases.
Nine factors not theorized by Marx
There were nine main factors that Marx disregarded in his construction of reproduction schemes when he modelled the circulation of capital (through the constant transformations of money-capital into production-capital and commodity-capital and vice versa). These omissions have been noted by various Marxist and non-Marxist authors.
The sphere of consumption. Marx did not go into detail about how capitalist business reshapes, reorganizes, and restructures the mode of consumption so that it becomes more profitable. He concerned himself primarily with the capitalist mode of production, not with the capitalist mode of consumption.Ben Fine, The world of consumption. The material and cultural revisited, 2nd edition. London: Routledge, 2002, p. 60.