The Importance of Marxism—(continued) (1940)

From the September 1940 issue of the Socialist Standard

Continued from the August 1940 issue.

In the concluding paragraph of last month’s article we stated that surplus-value is produced in industry. Let us now examine the productive process.

Constant and Variable Capital

The capital of the industrialist can be divided into two parts. One part consists of buildings, machinery and raw materials, the other of human labour-power. Marx calls the former part constant capital, because its value undergoes no change in the process of production but is simply transferred to the article; whereas the latter part Marx refers to as variable capital on account of the fact that in the productive process it produces a greater value than that contained within itself. This distinction in the two aspects of capital is not one made by the capitalist. The latter usually lumps the whole of his capital together and calculates his profit on the total sum invested. If he makes any distinction at all it is between what he calls fixed capital, i.e., buildings and machinery, and circulating capital, i.e., raw materials and wages, etc. The Marxian classification, however, enables us to penetrate the inner mechanism of capitalist production. Its full meaning will become clear at later stages of the argument.

Labour and Labour-Power

During the course of our discussion we have frequently used the expression “labour-power.” So as to avoid all possible misunderstanding, let us give the Marxian definition of the term : —

“By labour-power or capacity for labour is to be understood the aggregate of those mental and physical capabilities existing in a human being, which he exercises whenever he produces a use-value of any description” (page 186, Vol. I, Modern Library Ed.). Labour-power is therefore the energy contained within a worker’s body and brain. On the other hand “labour” is the energy thrown out from his body, the juice itself, so to speak. When this energy is incorporated in a product it forms the substance of value. The capitalist economists were wrong in assuming that the worker sells his “labour” to the capitalist. The worker cannot sell something that does not belong to him. What he in fact sells is his labouring-power for a day, or a week, or a month, and so on.

Wages

Wages are the price of labour-power. The value of labour-power is determined by the labour time required to reproduce it, which, in effect, means the labour time required to produce the food, clothing and shelter necessary to keep the worker (and his family, if he has one) alive. Wages are therefore determined by the cost of subsistence of the worker. It must not be assumed, however, that the worker’s standard of living is a fixed quantity. On the contrary the standard is influenced by the climate of a country and by historical factors. So Marx points out: —

“His natural wants, such as food, clothing, fuel, and housing, vary according to the climate and other physical conditions of his country. On the other hand, the number and extent of his so-called necessary wants, as also the mode of satisfying them, are themselves the product of historical development, and depend, therefore, to a great extent on the degree of civilisation of a country, more particularly on the conditions under which, and consequently on the habits and degree of comfort in which, the class of free labourers has been formed. In contradiction, therefore, to the case of other commodities, there enters into the determination of the value of labour-power a historical and moral element. Nevertheless, in a given country at a given period, the average quantity of the means of subsistence necessary for the labourer are practically known” (page 190).

As far as the skilled worker is concerned, his labouring-power possesses a greater value than that of the unskilled worker because more labour time has been required to produce it, i.e., to train him, consequently he can command a higher price for his commodity on the market. Let us assume, for the sake of example, that the means of subsistence necessary to maintain the worker for a day can be produced in four hours. Let us also assume that in four hours 12s. gold can be produced. In that case, if the worker, say, sells his labouring-power to the capitalist for a day and receives the sum of 12s., he is getting a price corresponding to the full value of his day’s labour-power. Utilising this example let us see what happens in the factory. Our figures are, of course, quite arbitrary, but they will serve the purpose of illustration.

The Production of Surplus Value

Let us assume that the factory owner is a manufacturing furrier, selling, say, marmot coats at £10 3s. per coat, that he has bought the labour-power of a worker for a day (8 hours) and that the worker produces the entire coat, from start to finish. For the production of marmot coats the factory owner requires buildings, machines, benches, boards, skins, lining, etc., and labour-power. Now let us set down the expenditure of the capitalist on a single coat :—

If, according to the above example, the worker produced only one coat a day, the capitalist would actually lose. But let us assume that the worker can produce a coat in one hour. In that case, after eight hours he will have produced eight coats, each valued at £10 3s., making a total value of £81 4s. (£80 being previous value, and 24s. fresh value), thus producing a surplus value of 12s. Now let us set down the expenditure of the factory owner for a day:—

The value of the coats is £81 4s., and the capitalist has made a surplus-value of 12s., or appropriated four hours of labour for nothing if he sells the goods at their value.

Rate of Surplus Value

As we have seen, surplus-value is labour-time for which the capitalist does not return any equivalent. It does not matter whether we regard surplus-value from the aspect of time work or piece work. The formula for surplus value can be expressed : —

With regard to the formula (b) Marx says : —

“After the investigations we have given above, it is no longer possible to be misled by the formula unpaid labour/paid labour, into concluding, that the capitalist pays for labour and not for labour-power. This formula is only a popular expression for surplus-labour/ necessary-labour. The capitalist pays the value, so far as price coincides with value, of the labour-power, and receives in exchange the disposal of the living labour-power itself. His usufruct is spread over two periods. During one the labourer produces a value that is only equal to the value of his labour-power; he produces its equivalent. Thus the capitalist receives in return for his advance of the price of the labour-power, a product of the same price. It is the same as if he had bought the product ready made in the market. During the other period, the period of surplus-labour, the usufruct of the labour-power creates a value for the capitalist, that costs him no equivalent. This expenditure of labour-power comes to him gratis. In this sense it is that surplus-labour can be called unpaid labour (pages 584-585).

Marx calls the surplus value, calculated on the variable capital, “the rate of surplus value.” In the instance we have given it would be 100 per cent. The rate of surplus value discloses the degree of exploitation of the worker. Once we know the length of exploitation, which may vary, how long the worker has been engaged in producing his wages and surplus value, we then know the degree of exploitation of the proletarian.

Solomon Goldstein

(To be continued.)