Daylight robbery. (1911)

 From the March 1911 issue of the Socialist Standard

We are frequently told by our more outspoken enemies that the workers are not robbed, and, there are members of the working class who actually believe it. But the following extract from a recent issue of the “Daily Telegraph” not only completely refutes the former, but may also enlighten the latter.

Under the heading “Census of Production” was given a list of industries concerned mainly with food, drink, and tobacco, and it was stated that the Board of Trade preliminary tables summarising the returns received in respect of those trades give the following results for twelve months:

Gross output from 13 divisions £257,215,000

Net                               „ „ „          £84,325,000

Persons employed                             407,830

The “Daily Telegraph” commented thus, upon the figures:

“The first column represents the gross output, that is the selling value or value of work done. The second shows the net sums realised after deducting the cost of the materials used. The figures denoting the net output express completely, and without duplication, the total amount by which the value of the products of the industries exceeded the value of the materials purchased from the outside, that is they represent the value added to the raw materials in the course of manufacture. This sum constitutes for any industry the fund from which wages, salaries, rents, royalties, rates, taxes, depreciation, advertisement and sales expenses, and all other similar charges, as well as profits, have to be defrayed.”

Now rents, profits, etc., are not paid to the working class, who benefit only under the item wages. On the other hand, no value can be added to raw material except by labour. It follows therefore that while the workers produce the whole of the £84,325,000 worth of wealth which figures as the net output, they are robbed of all that is not included in the term wages.

Now let us do a little sum in simple division. 

The net output, £84,000,000, divided among the 407,830 persons employed, gives over £275 per annum to each. The difference between this sum and the average wage of the workers in those trades shows the extent of the robbery as far as those particular industries are concerned. And if the average rate of wages in these industries is that of the whole country, then these workers are rolled of over three-fourths of their produce.

Criticus

Letter: The Batwa pygmies (2004)

Letter to the Editors from the December 2004 issue of the Socialist Standard

 

The Batwa pygmies

Dear Editors

A new tourist attraction has been discovered here in South West Uganda. The tourist attraction is a group of Batwa pygmies living in the bamboo forests around Mount Muhavura and near Lake Bunyonyi.

There is a gentleman who mobilizes and organizes them, gives them a trip in canoes across and into the middle Islands of Lake Bunyonyi’s camping sites. The pygmies are then paraded in front of tourists. The tourists pay a fee for this service. The Batwa, like the mountain gorillas, are referred to as “endangered species”. In turn the pygmies are paid in kind by the proprietor of this enterprise – they are given second-hand clothes, food, especially local porridge residues and other cheap incentives.

Sometime back it was the Ugandan government which did a similar thing to this when it evicted residents of a place called Mpokya in Western Uganda to give room for apes and other wild animals which the government claimed to be a tourist attraction. The displaced people were not provided alternative sites to occupy. Eventually some of them migrated to join their relatives and friends in other parts of the country but most of them were eaten by the same wild animals.

The Ugandan government and some rich individuals claim to be trying to mobilize resources for poverty reduction but some of them at the same time call it “poverty alleviation”. But most of the mobilized funds and the money gathered in forms of taxes from citizens are squandered by those in government and some to their next of kin, relatives and friends. Uganda was recently ranked as the third most corrupt country in the whole world and also ranks below the 10th poorest country in the whole world.

But be it the case anywhere the poor are not poor because of lack of resources to utilize to eradicate poverty but because of the fact that there exists the rich – the poor are poor because the rich are rich. If you want to get rid of the poor; do one thing – get rid of the rich.

Then the question would be how can this be done. The simple answer becomes: The establishment of a system of society based upon the common ownership and democratic control of the means and instruments for producing and distributing wealth by and in the interest of the whole community. Goods and services would be produced for human good and not for sale and profit. Every member of society (present-day planet earth) would give according to their individual ability and take according to their needs. Then equality in human race would prevail. That’s how we could end dehumanizing acts such as those of parading the Batwa and displacing people for tourist attraction.

J. K. Tukwasibwe, 

Uganda.

Doping horses (1960)

From the November 1960 issue of the Socialist Standard

On Monday, August 8th, five men were accused at Newbury of conspiring to administer drugs to racehorses so as to affect their performance and thereby cheat, defraud and give the run-around to owners, bookmakers and punters. Caffeine, it was alleged, was the drug used. Given between thirty and sixty minutes before a race, it was said to have jacked up the horses’ nerves, muscles and heart, made it more alert and stimulated it to a win. The timing was vital; given six or more hours before the race the drug slowed down the horse, because by then its depressing reaction had had time to work. The chemist who was said to have supplied the caffeine stated that doping of racehorses had been going on for years; he supplied the stuff in return for racing tips.

Of course, this carve up caused quite a fuss and many remedies were suggested. Some people thought that a Tote monopoly of betting would bring a clean up. Others wanted a list of drugs, as distinct from tonics, which it would be prohibited to administer to horses, the trainers to be held responsible for their animals’ conditions. One newspaper showed how deep its love of our dumb friends goes by hoping that, after the clean up has put racing and betting on a sound financial basis, the horses will no more be silent and helpless tools manipulated for sordid and undesirable ends.

Now all this is very touching, as anyone who has lost his lot on the horses will agree. But doping and racketeering are only two of the illegal wavs of making money, if the law can be successfully evaded. There are also legal ways. One is to work for it—not very fruitful. Another is to persuade other people to work for you and to exploit them during the course of production. This is respectable. It also produces some very large fortunes.

The set up here is that we workers work for the capitalists. The capitalists pay us our wages and sell what we produce; they also have to buy materials and machinery. When they have done all this, they have a surplus left over. They have profit. This process continually repeated makes for a fine accumulated sum and it is all fair and square. Not racketeering. Just good, plain exploitation.

When the goods arc produced we do not always find ourselves able to obtain them. They are whisked off to warehouses, stores, shops, and so on, and we can only get them out of these places if we have enough money to meet the price which is asked for them. There they lie in plenty, but alas! for sale only. When people try, by hook or by crook, by fiddle or diddle, to amass a lot of money, what they are really doing is trying to get the power to purchase a lot of these articles which make for a happier and more comfortable life.

Where does dope come into this? Why. for generations, the working class have been doped by capitalism's propaganda. Schools, churches, radio, television, newspapers, political parties—they are all in the act. The Labour Party dished out a large dose of nationalisation, which left the workers' situation unchanged. The Communist Party peddle the dope about the so-called Socialist class emancipation in Russia, which is in fact a ruthless capitalist dictatorship. The Tories tell us that we have never had dope so good.

Amongst gamblers, doping is known as ”fixing ”; if you want to fix a racehorse, give it caffeine. In this sense, capitalists are not fixing workers under the wages system—the whole transaction is fair and above board. Nevertheless, the workers find themselves in a fix by their acceptance of the system. They are perpetually chasing the dream that, if only they can lay hands on a large enough amount of money, they will be able to get all that they need to make life pleasant. It is this bodily occupation and mental illusion that keeps the working class in political ignorance and. consequently, in economic enslavement.

But horses can run without dope and people can live without the artificial incentives of capitalist society. We only need the understanding that all social wealth would be better produced solely for use—made and used how we like. That is the key to the better world which we call Socialism.

However much horse-racing depends upon betting, capitalism is more dependent on the support of the world’s working class. When they have stopped allowing themselves to be exploited, stopped chasing after ephemeral remedies for the many, many unnecessary social problems of capitalism, they will have exposed capitalism's dopers. Socialism will be the surest walk over that ever was.

Joe McGuinness

Analysis of Wealth. III. Exploitation. (1916)

From the August 1916 issue of the Socialist Standard

Link to Part 2.

Just as there are two aspects of a commodity, utility and its exchange-value, so there art two ways of viewing its production, or in other words, the labour process.

At one and the same time the labourer produces a use-value and an exchange-value ; the former by transforming raw material into useful articles, the latter by adding labour thereto.

We have already seen that capital in the process of expansion assumes two forms. Part of it becomes represented by raw material, tools or machinery, etc., the passive factors in wealth production, while the rest is invested in a special commodity, labour-power, the active, value-creating agent. Both these factors are obviously indispensable. Without raw material, etc., the labourer would have nothing in which to embody value ; without the labourer raw material would become useless and valueless. For the only use raw material possesses is to serve as the element of the complete commodity, and its exchange-value only counts in so far as it becomes part of the total value of such complete commodity. Raw material, machinery, etc., lying idle, untouched by labour, rot and rust, and lose their exchange-value along with it.

Hence by transforming them into new commodities the labourer does more than add new value ; he preserves old. In so far as raw material, etc., is so transformed, the labour previously expended upon it counts as part of the total labour necessary in the production of a commodity.

On the other hand, the passive factors in the labour process are incapable of transferring a greater value to the finished product than they already possess. The value of the raw material and machinery does not multiply itself ; it remains constant and is called by Marx constant capital.

In realising the utility of the constant capital the labourer preserves it : that is one aspect of his activities. Let us now turn to his function as the producer of new value.

We have seen in a previous article that the amount of value the labourer adds to the commodity is determined by the length of time he inevitably occupies. Thus in our first example he worked six hours and added a value of three shillings ; in the second instance, by working twelve hours a value of six shillings was produced.

We also saw that the object of the capitalist in purchasing labour-power was to take advantage of its capacity for producing more value than it possessed itself. That in the first case the capitalist realised no surplus-value because the labourer produced no more than the equivalent of his value, but that in the second case the surplus amounted to 3s, the product of the extra six hours labour.

In each of these cases the constant part of capital adds no more than itself to the total value. The amount of the constant capital in the second case is twice that of the first in order that the labourer might work twice as long, but this makes no difference to the result. The new value of 6s. is added by the labourer.

Just as any purchaser seeks to obtain the maximum use-value from his commodity, so the capitalist uses up labour-power to its limit ; seeks to obtain the maximum of value, and therefore of surplus-value, from its exercise. It is the object of the present article to show how this is achieved. One thing must be borne in mind, viz., that the rate of surplus-value is not calculated on the total capital, but only on the part which is expended in the purchase of labour-power. Thus in the above instance, whereas the wages of the labourer were 3s. and the total value produced by him was 6s., the rate of surplus-value was 100 per cent. ; that is to say the surplus was equal to the wages.

When the capitalist speaks of his “rate of profit” he would in this case reckon the 3s. surplus-value in proportion to the total capital advanced, viz., 27s., thus making the rate a little over 11 per cent.

Well as this method may serve him in his conventional dealings, it hides the true extent of the exploitation of labour-power.

We have seen that the capitalist obtains his surplus by prolonging tho labourer’s work beyond the time necessary to reproduce a value equivalent to his wages. It is, therefore, to the capitalist’s interest, to extend the working day as much as possible. The limit in this direction is simply the physical capacity of the labourer.

In order to exert his powers the labourer must have time to eat and sleep and recuperate, but beyond this the capitalist, having purchased these powers, has sole right over their exercise during the period for which he has purchased them. The only difference, in fact, between the wage-labourer and the chattel-slave is that the former sells himself piecemeal, i.e., in periods, while the latter is sold once for life.

It is, of course, possible that the capitalist may use up in one day a greater quantity of labour power than the worker can restore in three (“Capital,” p. 217). In other words, he may use more labour power in a day than he pays for. It is the labourer’s business to claim the price of his commodity, and hence a struggle ensues as to the extent of the working-day.

In sections 5 and 6 of Chap X. (“The Working Day”) Marx shows how the manufacturers succeeded in extending the working day by degrees from the normal day of the Middle Ages to twelve hours in the seventeenth century. Then how, with the introduction of machinery in the eighteenth century, a violent encroachment took place on the remaining leisure of the workers. “All bounds of morals and nature, age and sex, day and night, were broken down” (p. 264).

Men, women, and children were worked to the point of exhaustion, until even the capitalist legislature, threatened by working-class revolt on one hand and the extreme physical and mental deterioration of that class (the source of surplus-value) on the other, were compelled to place legal restraint on private greed by limiting the hours of labour. For years they dallied and toyed with the matter, passing laws and abstaining from granting money for their administration and adopting all manner of devices to render their concessions purely nominal. Only when the most distinguished medical authorities had pointed out the danger to the ruling class of persisting in the industrial murder of children, did this class definitely prescribe that no children under 13 years of age should be worked more than 12 hours in one day. Even then it left, all manner of loopholes for the evasion of the Act (1833), of which the manufacturers, in their blind profit-lust, were not slow to take advantage.

With eloquent thoroughness Marx shows how rival sections of the ruling class exploited the misery of the workers on the political field in order to gain their own ends ; how time and again they betrayed them, and finally only conceded the meagre right of sufficient time in which to eat and sleep after a bitter struggle over every inch of ground for half-a-century.

These passages are indeed enlightening as to the character and methods of our masters, which have changed, if at all, only in the direction of greater duplicity.

The very nature of machinery enables the master class to increase the speed at which their slaves work, thus exhausting them more rapidly and reducing a legally limited working day to nominal value. Hence the workers are under the necessity of continually struggling to obtain still further reductions in the hours of labour. For by so much as the speed at which they work is increased, by so much is their life-time shortened.

Hitherto we have considered only one means of increasing the surplus-value, i.e., the lengthening of the working day. Capital, however, by no means rests content with pushing that to its limit. It is for ever seeking to reduce the value of labour-power and consequently the necessary time spent by the workers in reproducing that value, thus leaving a greater portion of a given working day in which they must produce surplus-value. This result is effected chiefly in two ways.

From the time the capitalist class first assumed control of industry there has gone on an increasing splitting-up of the forces of production among the producers. By concentrating numbers of workers in one workshop the earlier manufacturers were enabled to divide a handicraft into separate parts, each part being taken up by a different worker. Instead of being a skilled craftsman the worker became a mere special cog in a machine, and in this way the time spent in learning his calling was considerably reduced. Another effect of this alteration in the process of production was an increase in the product of a given number of men. The specialisation of individuals economised the time necessary to produce each individual commodity. This resulted in reducing the cost of the articles produced and consequently the maintenance of the labourer. Thus in two ways the exchange-value of labour-power fell ; wages suffered a reduction and the increased product went to the capitalist.

The effects of this division of labour, which Marx defines as Manufacture proper, were insignificant compared with those resulting from the advent of machinery and modern industry. Here the worker loses the last vestige of skill and has his productive capacity enormously increased by being converted into an attendant of a monster which operates not one but many tools at once. The time spent in learning his task now falls to almost nil, while the cost of his necessaries is still further reduced and his wages along with it. Surplus-value increases by leaps and bounds, and since machinery is constantly being improved, more universally and economically adopted, there has as yet been discovered no limit to this increase.

We see, then, that capital grows by securing domination over living labour-power and consuming it to the limit of its capacity. In this process the labourer preserves the constant part of capital, reproduces the equivalent of his wages, and adds a surplus which may be converted into new capital.

Despite various theories concerning the “abstinence” of the capitalist, however, the whole of this surplus-value does not become capital. Quite a considerable portion goes to provide the person of the capitalist with the necessaries, comforts, and luxuries proper to his social status. Still, he does “save” !

What specially interests us here though is that his whole consumption fund, large though it may be, involves no reduction of the amount of his wealth. Even if he consumed the whole of the surplus produced by the labourers he would become no poorer. He would remain a capitalist.

There is, however, another aspect of this relationship. In the course of time the capitalist inevitably spends a sum equivalent to his original capital in his own personal consumption. The capital he has invested therefore becomes practically the creation of the labourer : a sum of accumulated surplus value. If, for instance, the capitalist makes a profit of 20 per cent. per annum and consumes the lot, then in five years he will in effect have consumed the whole of his capital. The sum intact which he still retains is the fruit of his exploitation of labour-power, and it is with this sum that he continues to purchase labour-power.

The reason the labourer offers himself for hire is precisely because he does not possess the means of production. By continually yielding to the capitalist all his product over and above his necessary price, wages, he reproduces his own propertyless condition. Saving by the capitalist, nay, the mere existence of the capitalist, involves the absence of opportunity to save for the worker. The process of exploitation perpetuates itself.

The accumulation of surplus-value, the fruits of the process, simply enables the process to be carried on more extensively. In other words, the workers produce the means for their employment on an ever-increasing scale. Their reward for doing this will be dealt with in a further article.

Eric Boden

A Parable by Leo Tolstoy

From Samuel Leight's 1984 book, The Futility of Reformism

A Parable by Leo Tolstoy

I see mankind asa herd of cattle inside a fenced enclosure. Outside the fence are green pastures and plenty for the cattle to eat, while inside the fence there is not quite grass enough for the cattle. Consequently, the cattle are tramping underfoot what little grass there is and goring each other to death in their struggle for existence.

I saw the owner of the herd come to them, and when he saw their pitiful condition he was filled with compassion for them and thought of all he could do to improve their condition.

So he called his friends together and asked them to assist him in cutting grass from outside the fence and throwing it over the fence to the cattle. And that they called Charity.

Then, because the calves were dying off and not growing up into serviceable cattle, he arranged that they should each have a pint of milk every morning for breakfast.

Because they were dying off in the cold nights, he put up beautiful well-drained and well-ventilated cowsheds for the cattle.

Because they were goring each other in the struggle for existence, he put corks on the horns of the cattle, so that the wounds they gave each other might not be so serious. Then he reserved a part of the enclosure for the old bulls and the old cows over 70 years of age.

In fact, he did everything he could think of to improve the condition of the cattle, and when I asked him why he did not do the one obvious thing, break down the fence, and let the cattle out, he answered: “If I let the cattle out, I should no longer be able to milk them.”

Blogger's Note:

This piece from Tolstoy appeared between chapter one (the introduction) and chapter two in Leight's book. It also appeared in the March 1961 issue of the Socialist Standard. It is possible that is where Leight first saw it.

What drives the capitalist economy (2023)

From the December 2023 issue of the Socialist Standard

One thing that cannot change whilst capitalism lasts is the fact that workers, being forced to sell their working abilities to a capitalist by virtue of being alienated from the means of wealth production, will only be employed by the capitalist on condition that the value of what they are paid falls significantly below the value of their labour input – what they contribute in terms of their labour to the product in question. This surplus value is the source of the capitalist´s unearned income and is realised when that product is sold on the market.

This system cannot possibly allow that the workers should be entitled to the full fruits of their labour. A business, after all, is not a charity; it needs to secure what in economic parlance is called a financial return. The systemic need for a tiny minority to extract an economic surplus from the great majority makes it structurally impossible for all but this minority to live off an unearned income from what they invest.

By ‘need’ is not meant the desire on the part of those comprising this tiny minority to surround themselves with the trappings of ostentatious luxury. Self-enrichment is, in any case, more a want or a whim than a need. In this regard, Victor Hugo´s famous observation that ‘The paradise of the rich is made out of the hell of the poor’ could very easily be misconstrued. It is not out of some particularly malevolent, or sociopathic, disregard on the part of the rich for the plight of the poor (though, doubtless, one or two individuals might well live up to this caricature) that we have a problem of working-class economic distress.

Unfortunately, this way of thinking lends itself to an all too facile – not to say, downright misleading – approach to resolving that problem. According to it, this problem essentially boils down to the moral shortcomings or defects of particular individuals or groups. Thus, it is because of greedy bankers or heartless or uncaring corporations that we have homeless itinerants, grossly polluted waterways and third-world-type sweatshops in which impoverished machinists toil for a pittance in a gruelling twelve hour working day. If only they were more caring, more concerned, these kinds of issues would recede, if not disappear altogether. It is not difficult to see how such thinking can play directly into the hands of those fervent exponents of modern ‘philanthro-capitalism’ and its curious belief that the way forward is to harness old-fashioned patronising capitalist philanthropy with the skills and corporate insights of capitalist entrepreneurship.

The point is that whatever may personally motivate the individual capitalist this is really incidental or secondary to what actually drives the system they conspicuously benefit from. The spectacular personal fortunes of the minority are more the by-product of, than the objective behind, the systemic extraction of economic surpluses from the majority. The primary purpose of this extractive – or more precisely, exploitative – process is, rather, the capitalisation of those very economic surpluses that such a process gives rise to. Transforming them into capital ensures a future flow of such surpluses. It is a cyclical process that repeats itself over and over again and it is essentially what has delivered the grotesquely unequal world we live in today.

In capitalism, market competition between enterprises forces each enterprise to seek out ways in which it can enlarge its share of the market at the expense of its rivals. This is not a matter of choice. Just as the worker is economically compelled to seek paid work in order to live in a society in which almost everything comes with a price tag, so capitalists are economically compelled to become competitive (regardless of what her particular moral outlook on life may be). Failing to keep up with the competition means sooner or later, being squeezed out of the market by one´s more ruthless and single-minded competitors. In other words, being bankrupted, or maybe asset-stripped and gobbled up, by the latter.

To keep up with the competition you need to hold down your operating costs (and, in particular, your wages bill) as far as practically possible and, at the same, time boost your revenue – the money you receive when you sell your commodity on the market. Boosting your revenue typically involves trying to undercut your competitors pricewise. In theory, this should bring in more customers for you and at their expense. However, being able to reduce your prices (and keep financially afloat) requires investing in more productive technology, among other things.

That is where the need to have an economic surplus at your disposal is all-important. It is the very lifeblood of the system itself in much the same way that a vampire depends on the blood of its victims for its own sustenance. It allows you to finance the replacement of outdated and possibly worn-out equipment with new state-of-the-art machinery. Increased productivity means being able to reduce your unit costs – and hence your prices – below what your competitors can afford. The desired effect is to push them out of the market altogether, allowing you to capture their share of that market.

It is a ruthless game in which no prisoners are taken, and no holds are barred. If you don’t do to your opponents what this dog-eat-dog system bids you to do then you can be certain they will try to do it to you. It’s a case of ‘natural selection’ transferred to the economic domain.

In summary, then, businesses survive in the particular niche they occupy only by constantly striving to expand. Driving this whole process is the accumulation of capital out of surplus value.

Robin Cox

The Questions They Ask (1978)

From the November 1978 issue of the Socialist Standard

Questioner: Mr. Speaker, would you please explain ‘Surplus Value’?

Speaker: Surplus Value is unpaid labour. It is work the worker NEVER gets paid for. How can that be? Quite simply. Workers today produce much more value than is required to maintain themselves and family. Let’s say a person works 40 hours a week, 5 days — 8 hours a day. Right. Now, 4 of those hours are the value of their wages, 4 of them go straight to the capitalist, as the sole source of profit. This has all been worked out in typical, rather long-winded German professorial fashion by Marx ("Capital” page 216; Kerr edition), using actual figures of the accounts of the cotton mill managed by his friend Engels. (And he should have known, being a successful mill manager on a salary and 10% of the profits), Marx therefore divided the day into “Necessary” and ‘Surplus” Labour. Necessary — for the worker, “Surplus” — for the Company.

Some people think that Surplus Value is the same as Profit, including some ignorant Trade Union leaders. It is NOT — Surplus Value is the ration of unpaid to paid labour — 4 to 4, or 5 to 3 hours, etc. Profit is what the firm has left, after paying everything: wages, rent, raw materials, taxes, and so on. So what with the investment of £100, Surplus Value could be 100%, i.e. 50 to 50, but profit only 10% — 90 to 10.

Next question . . .

Horatio

The Inevitability of Socialism. (1905)

From the October 1905 issue of the Socialist Standard

We are told by the poet that:—

”Two principles in human nature reign,

Self love to urge and reason to restrain.”

Another principle which manifests itself as an essential feature of our common human nature is sentiment or altruism.

Now if we take these three principles and apply them to our everyday lives do we find anything in them which would lead us to hope for greater progress towards Socialism in the future than in the past? It is natural that man should strive to secure the good things of life—as he understands them—for himself. It is a platitude that the human heart is buoyed up with selfishness. Everywhere we are told that man is ready to secure his own advantage at the expense of his fellow.

A RESULT OF MAN’S SELF-LOVE

is that he naturally envies his fellow who is more richly endowed with the good things of this life. When therefore we have a class who are living in a condition of inferiority to another class we must expect that sooner or later the former will seek for as good conditions as the latter. The working-class in every capitalist country finds itself situated in such a condition of inferiority. Whether it is the means for satisfying the physical, intellectual or emotional side of his nature, the worker is faced with the fact that he receives not the best but the worst which his time and country produces.

It is true that the rich are not altogether free from the evil results of their own advantages. A condition of their class privilege is the exploitation, or robbery, of the worker. When the worker has by his labour turned the raw material into manufactured product the employer takes the whole of the finished article as his own. Out of its value he offers—if he sees the possibility of personal gain—a small fraction to the worker to continue the work of producing.

THE CONSEQUENCE FOR THE WORKER

is cheap clothing, cheap food, insanitary housing, all of them conditions making for the germination of disease. But alas ! it is impossible for the capitalist to give the worker a complete monopoly of disease. The air, impregnated with its germs, is carried by all the winds of Heaven even into the palatial residences of the rich. Here it meets with women and children possessing a hot-house culture, and the results are that the capitalist conscience is for a brief moment awakened. Soon, however, the heart of our modern Pharaoh is hardened, and the conscience is again lulled to sleep. With the worker, however, the trouble is everlasting. Disease is always with him and he tends to become angry with conditions which mean the loss of some loved one through the ravages of a remediable disease.

The spirit of altruism—the desire for the welfare of his fellows is a characteristic of the modern man. We all know how quickly he responds to the telling of the story of some good deed, how he sympathises with the pathos, aye, and with the bathos of many a life history. His heart thrills when he hears of brave men risking their lives for the lives of their fellows, his most popular literature is that wherein

VIRTUE TRIUMPHS AND VICE IS REPELLED.

Vicious and cruel actions raise a storm of indignation within him.

True, all these emotions are futile to prevent him from wrong doing, from, under the influence of competitive conditions, harming as much as possible those with whom he competes. But it shows that man once rid of his sordid capitalist environment would rise to a higher level both of self-esteem and of altruism than is possible in a society based upon the individual ownership of property.

When self-love and altruism combine in the mind of the worker to force him to seek a betterment of the economic conditions of his class he can by the exercise of his reasoning faculties acquire a knowledge of the means whereby such betterment is to be secured. He looks around him and sees the actual conditions of existence—the worker poor, the non-worker rich—and he is constrained to ask why those who do the work of the community are deprived of the fullest measure of enjoyment from the fruits of that work.

This question can only be answered by an investigation into

THE CONDITIONS OF WORK,

of wealth production. This study is two-fold, historical and economical. From historical research the student learns that present day methods of production are of no great antiquity. It is by no means permanent in its nature. He analyses the processes which have led from the old local handicrafts system with its mysteries and jealousy between rival towns to the worldwide capitalist production which now prevails. He sees that in the evolution which led to this result a revolution in industrial processes has occurred, and that the relations of those engaged in industrial operations have also been revolutionised.

Under the handicraft system the worker was the owner of his tool, and of the product of his labour; to-day the worker has ceased to own his tools. The machine has become the most important factor in production, and this is owned by a class who do not take any part in the production. As a result of this

DIVORCE OF THE WORKER

from his means of production, and of his possessing nothing but his power of working, a condition has arisen whereby he can be forced to sell himself in order to maintain his life.

Examining the actual methods of this capitalist system our student finds that so long as the system of capitalist production with its individual ownership of the means of wealth production prevails, so long must the worker sell his activity—become a slave—and so long must the corollaries of this slavery, disease, misery, want, poverty, and degradation continue.

The worker bringing his reason to bear upon the facts acquired by a historical and economic examination of wealth production will be forced to the conclusion that the element which is the cause of all the trouble is the fact that wealth is individually owned, and individually controlled. As a result of this control the owners of wealth are enabled to monopolise all the benefits accruing from science and invention—while the worker is given

A TRAVESTY OF AN EDUCATION

based upon the knowledge of two centuries ago.

When he realises this he will conclude that it is only by removing this refractory element from our modes of wealth production, and taking social possession of what has become a social service, that is to say of the community taking complete ownership and control of the whole of the material conditions of life that a remedy can be obtained from the evils which beset us.

That this time is coming rapidly nearer is every day more apparent. A society based upon the communal ownership of wealth is coming every day more and more near. This society of the future will be based upon a condition which will prevent

A SORDID RIVALRY OF MATERIAL INTERESTS

between man and man. Competition for profit will have vanished. The antagonism of classes will have disappeared, and it will be possible for man to really harmonise his self-interest with the interest of his fellows in a society which satisfies his reason.

Life in such a society where man dominates machinery and wins more and more power over nature, wresting from her her innermost secrets not for the benefit of a few but for the good of all, will be pleasant and men will pass from the cradle to the grave free from any of the carking cares of capitalism. Such a life is possible only when Socialism is achieved, and it is the duty of every man to hasten the day which shall give humanity so great in need of joy.

Robert Elrick

Labour under socialism — intense exertion (1979)

From the October 1979 issue of the Socialist Standard

“In the sweat of thy brow shaft thou labour”; this was Jehovah’s curse upon Adam. Once this is labour for Smith — a curse. Tranquility appears as the adequate state, as identical with ‘freedom’ and ‘happiness’. It seems quite far from Smith’s mind that the individual “in his normal state of health, strength, activity, skill facility”, also needs a normal portion of work and of the suspension of tranquility.

But Smith has no inkling whatever that the overcoming of obstacles is itself a liberating activity . . . hence as self-realisation, hence real freedom whose action is precisely — labour. He is right that in its historic form as slave-labour, serf-labour and wage-labour, labour always appears as repulsive, always as external forced; and not labour by contrast as ‘freedom’, ‘happiness’.

. . . for labour which has not yet created the conditions for itself in which labour becomes attractive work, in no way means it becomes mere fun, mere amusement, as Fourier conceives it.

Really free working, e.g. composing, is, at the same time, precisely the most damned seriousness, the most intense exertion.

(The Making of Marx’s Capital, p.611.)

How well is the "Welfare State"? (1957)

From the August 1957 issue of the Socialist Standard

(Continued from July Socialist Standard).

Working hours and traffic accidents

Traffic accidents in Austria are relatively of the same terrible frequency as in other countries. 30-40 people are on an average killed every week and a thousand injured.

A shocking accident occurred on a winding mountain road near Bolzano (Northern Italy) when, late in the night, an Austrian bus with 42 people aboard fell over a ravine into a narrow river, killing 19 persons and severely injuring most of the others; another case was that of a motor truck running into the Danube near Vienna, which brought to light the conditions under which drivers have to work. Overtime is the regular thing, especially during the tourist season, and it is encouraged by extremely low wages and much unemployment in the winter months. The average wage for drivers is under S.300 for a 48-hour week (about £4 10s.), which many drivers make up to 100 hours or more. One driver worked 48 normal hours and 59 hours overtime. In the goods transport business drivers work on the average a 66-hour week. For the driver who drove his truck into the Danube it was proved that he had been 40 hours behind the wheel, on a tour from Innsbruck to Vienna and back. On a recent tour through Switzerland, Italy and France, this writer personally travelled such distances as Venice-Vienna (400 miles) in a 14-hour day. This after the driver had for nine days been on the road every day, without a single rest day.

It should here be pointed out that when Socialists speak of exploitation of the workers, this term rightly applies to the “normal,” mostly legally fixed working week, say, 40 to 48 hours, in which the employer’s profit must be made—hence it is a process of exploitation. Working 60 or more hours per week must then be described as sweated labour, with, of course, correspondingly increased profit for the employer. But one cannot repeat often enough that working a normal, legally fixed working day of eight hours for wages is a process of EXPLOITATION, since the workers have to produce not only the value of their wages, but the employer’s profit as well. This profit is pocketed by the employer WITHOUT payment to the worker.

As a matter of fact it is this UNPAID labour only that interests the employing class and their managers, and induces them to have the instruments of production under their control operated at all. If there is no profit or no prospect of profit, there is no production, however great or urgent the want and need may be and regardless of people starving and freezing. The employer, the man of business, is by no means a philanthropist. Even if he had sentimental feelings towards the worker and his family, the dictates of his system do not allow him to consider them. Without exploiting the workers the capitalist cannot employ him.

Even relatively good and favourable conditions of work in hygienic installations, with good air, in light and modern workshops and plants, with social service arrangements, family allowances, health insurance, unemployment insurance, old age pensions, etc.—all things that make people talk of a Welfare State—cannot alter the fact of EXPLOITATION and humiliating dependency and worrying insecurity of the worker. The word worker remains even in the most beautiful factories and garden cities synonymous with poverty, and all fine words about security, the nobility and dignity of work cannot remove the stigma of social inferiority and dependency. The reality makes a mockery of all fine phrases.

To remedy this state of affairs the "Socialists” of the type of the "Socialist Party of Austria,” of Scandinavia, of the English Labour Party, the Communist Parties, far from attributing social evils to capitalism, with its profit motive, and far from advocating its abolition, openly stand for the continuance of exploitation through the wages system.

On the question of the hours of labour in the transport industry, the party are now clamouring for more legislation, regulations and restraints, which, even if enacted, will leave things very much where they were before. Similarly, writing of the effects of automation, the Arbeiter Zeitung vaguely proposes a general internationally agreed reduction of working hours to prevent the blessings of automation turning into its opposite. As if any reforms that have in the past been advocated by the “Socialist” Party of Austria and their brother parties elsewhere had ever altered the status of the workers as a propertyless and exploited class. It never occurs to these scribes that what matters to the workers of the world is not what kind of machines are used to turn out goods, but who owns the machines. If they continue to be private or State property, as now, goods can only be produced as commodities; i.e., for sale and profit, and labour-power will also continue to remain a commodity, exposed to all the vicissitudes of the labour market

Decades of labour movements, alleged “Socialist” and “Communist” governments in a number of countries large and small (Sweden, Norway, Denmark, Russia. China and their satellite countries behind the iron curtain) have left Socialism as far away as ever. Nay, there if not even the suggestion there of aiming at the abolition of the profit motive in production. Indeed, the abolition of the wages system and the establishment of a classics, moneyless, frontierless system of society wherein the means of life would be produced for the sole purpose of use, is looked upon as a utopia in those “Socialist” circles as much as in the avowed capitalist quarters. In fostering confusion on the issue, the “Socialist” Party of Austria is hard to beat Here is an example:—

Among the 101 items on their recent election programme was what the Arbeiter Zeitung called “A remarkable aim, opening up far-reaching prospects for the future.” Was it the abolition of exploitation of man by man, with its resultant evils of poverty, insecurity, class conflict and war? Was this “remarkable aim” the establishment of a classless, moneyless, propertyless and povertyless system of society based on common ownership of the means and instruments of wealth production and distribution?

Not on your life! In their own words, the “remarkable aim” is: “To bring Austria in line with the highly developed industrial countries of Western and Northern Europe, to bring “our” country to the level of Denmark or Holland, not to speak of Sweden and Switzerland.” What the conditions in these highly developed industrial countries are was described in an article in the Socialist Standard for July. Denmark, like Sweden and Norway, have social democratic governments, and it speaks volumes for the “Socialist” education these “Socialist” parties provide, that the opium of nationalism and religion, the hoary traditions and superstitions supporting and perpetuating the privileges of a small class of about 10 per cent., including the royal families, can continue to be inculcated into the brain of the young generation, whilst the remaining 90 per cent. of the people consider as unalterable their miserable status of a propertyless class of wage-slaves dependent for their means of livelihood on securing a job with some employer. Was it not Denmark where only recently a 100,000 workers had to go on strike for weeks in order not to allow their wretched standard of living sinking still deeper? Was it not Denmark where police armed with batons and police dogs were sent against the strikers—an episode that prompted a Vienna newspaper to the remark that the “Socialism” of the Danish social democratic party had now literally gone before the dogs! Today it is line-up with the Scandinavian kingdoms, yesterday a former “great Austrian Socialist” recommended Anschluss and voted for Hitler Germany, described the British and the Bolshevik empires—the decisive part of the world—as being under the leadership of the working-class, to-morrow it will be something else, but never Socialism. (The millions of workers in Eastern slave-labour camps and the poverty stricken wage-slaves still outside would no doubt be amazed if told that they are the masters of one-sixth of the earth.)

Rudolf Frank

(To be continued).

Cooking the Books: Sharing with Shah (2009)

The Cooking the Books column from the August 2009 issue of the Socialist Standard

Eddie Shah? Wasn’t he the capitalist who in 1982 tried to break the print unions and provoked a bitter industrial dispute that lasted seven months and which he eventually won thanks to invoking Thatcher’s newly-introduced anti-union laws? Indeed, he is. He has now found another way to exploit the labour of other people:

“The former newspaper owner Eddie Shah is inviting the public to grow vegetables on his land – but demanding that they hand over 60 per cent of their produce. Mr Shah has offered to give over two acres of his estate to be used by gardeners. Most of their vegetables would then be served in his restaurants” (Times, 30 June).

This is not quite a return to feudalism where serfs were obliged to work so many days on the estate of the lord of the manor. It’s the same principle though, and corresponds to one way in which in some countries those who worked the land were exploited in the sense of being deprived of a part of the fruits of their labour. “Sharecropping”, as it was known, was for instance the system that replaced chattel slavery in the American South after the North won the Civil War. The “free” Negroes were still exploited, but by this new method.

 Whereas under the wages system exploitation is hidden, under sharecropping (as well as under serfdom and chattel slavery) it is obvious. The producers directly surrender a part of what they produce to somebody else.

 It was the same when Shah was a newspaper owner, but not so obvious, because it was then done through money and not in kind. Shah paid his journalists, printers and other workers a wage for the use of their working skills (what Marx called their “labour power”) for an agreed period. The amount of money they received corresponded more or less (probably less as he employed non-union labour) to the monetary value of the working skills they sold him. This appears to be a fair transaction. The workers have something to sell; they sell its use for a contracted period; and get paid its value (what it cost to produce, i.e. the costs of the necessities and minor luxuries needed to reproduce it on a weekly or a monthly basis). And that appears to be it.

 But it isn’t. The amount of labour-time required to reproduce a worker’s labour-power for, say, a month (i.e. to produce what he or she needs to consume in a month) is not the same as the value of what a worker can produce in a month. Not at all. In fact it is considerably less. For instance, it might only take 12 days labour-time to produce a worker’s monthly needs. But that doesn’t mean that workers can stop after working only 12 days. They will have contracted to work for the whole month and this they must do. So, they have to work a further 18 days, free, for their employer. This unpaid labour is the source of the employer’s profits and is in fact why the employer employed the worker in the first place. It is as if the worker only kept 40 percent of what they produced. Just as under Shah’s revived sharecropping scheme.

 But Shah needs to be careful. Sharecroppers can organise just as wage and salary workers can. In fact they did organise in America in the 1920s and 1930s. And by asking for 60 percent he is already fixing a higher rate of exploitation than the ex-slaveowners did in the post-slavery South. They only took 50 percent.

Exploitation goes up (1993)

From the June 1993 issue of the Socialist Standard

Everybody has heard of VAT—Value Added Tax. It is ironic that the tax authorities should have recourse to a concept—"value added"—that sounds as if it might have come from Marxian economics. But when you deal with the real world, as the tax authorities do in a way that academic economists don't, you do have to take account of facts such as new value being added to the previously existing value of materials by labour in the course of production.

Value-added, as used by the tax authorities and also by those who compile the National Income statistics, is the difference between the monetary value of the materials and services a firm buys and the monetary value of the output it sells. The Penguin Dictionary of Economics defines it as follows:

The difference between total revenue of a firm, and the cost of bought-in raw materials, services and components. It thus measures the value which the firm has “added" to these bought-in materials and components by its processes of production. Since the total revenue of the firm will be divided among capital charges (including depreciation), rent, dividend payments, wages and the costs of materials, services and components, value added can also be calculated by summing the relevant types of cost and subtracting that total from total revenue.

In other words, value-added is the monetary value of the new wealth produced in a firm, which is divided into the property income of the firm’s owners (profits and the various charges upon it such as rent, interest and taxes) and the wages and salaries of the firm’s employees whose labour produced that new wealth. (Strictly speaking, depreciation, which is a measure of the fixed capital used up in the process of production, should be excluded but as this can't be calculated so easily and so quickly as the other costs this is not always done; value-added including depreciation is known as “gross value added".)

Unpaid labour

This division of value-added into property income and labour income provides a way to measure the exploitation of the workers in a particular firm or industry. This can be expressed in a number of different ways: as the percentage share of wages and salaries (or of profits) in value-added; as the ratio between the amount of profits and the amount of wages and salaries (roughly the equivalent of Marx’s “rate of exploitation"); as the amount of working time spent producing profits (unpaid labour time); and. if the number of workers are known, as the amount of profit per worker.

The Annual Abstract Statistics, published in January each year by the Central Statistical Office, very obligingly provides a set of statistics (Table 8.1) which allows us to calculate what these all are and so the extent of the exploitation of workers in various sectors of industry.

The 1993 edition gives the latest figures, those for 1990, relating to “manufacturing", which covers most of the sectors of the economy where wealth is actually produced. In 1990 the “gross value added" (output) in this sector was £111,051m; the total paid out as wages and salaries was £59,712m; the average number of employees was 4,840,000. This, the Table records, gives a figure for “gross value added per person employed” of £22,945.

The Table stops here but we can use the figures to calculate the extent of exploitation. A figure for profits can be got by deducting “wages and salaries" from “gross value added", which gives £51,339m, so a profit (what might be called “surplus-value added") of £10,607 per worker. The share of wages and salaries in gross value added, as the workers' share in the product of their labour, was 53.8 percent. This meant that in every hour they worked 32 minutes to reproduce the value of their wages and 28 minutes working unpaid to produce profits for their employers. The ratio of profits to wages was 86.0 percent.

More for profits

The Table, together that in previous editions, gives figures going back to 1981 and, once these have been converted into 1990 prices (so as to be comparable), it is possible to see what happened over the ten-year period 1981-90.

Between 1981 and 1990 output (“gross value added") increased in real terms from £97.704m to £111,051m, an increase of £13,347m, or 13.7 percent. Of this increase, £2,051m (15 percent) went to the workers as wages and salaries and £11,296m (85 percent) to the owners as profits. Over the same period the average number of workers fell from 5,778,000 to 4,840,000.

It is clear at a glance that this must mean that exploitation increased, even though the workers’ real wages also went up. A detailed analysis confirms this. Output per worker increased from £16,910 in 1981 to £22,945 in 1990 (36 percent); wages per worker, however, went up by much less, 24 percent, from £9,980 to £12,337, the balance going to profits. So all the measures of the rate of exploitation went up. Profit per worker increased from £6,930 to £10,608; the ratio of profits to wages went up from 69.4 percent to 86.0 percent; and the workers’ share in their product fell from 59.0 percent to 53.8 percent.

1990, it should be noted, as the year the current slump broke out, was not the best year for profits and, as the following table shows, exploitation increased steadily with the recovery from the previous slump in 1982. reaching a peak in 1988.

In any event, what the official government figures confirm is what the workers involved will have known already from personal experience: that in the 1980s the reduced workforce was forced to work harder to produce both more output and bigger profits for their employers. In concrete terms, at the end of the period the employers were extracting an extra £3,677 in profit from each worker left and, for a 40-hour week, had increased the period of unpaid labour time by 2 hours and 5 minutes.

Adam Buick

Who benefits from lower ‘Third World’ wages? (2021)

From the March 2021 issue of the Socialist Standard

We conclude our series refuting the view that workers in the developed capitalist parts of the world exploit workers living in the ‘Third World’.

Third Worldist ‘anti-imperialism’ basically contends that the interests of workers in the Global North are objectively aligned with the capitalists there in seeking to perpetuate the ‘super-exploitation’ of the Global South. Allegedly, this super-exploitation has the effect of raising these workers above the status of an exploited class by enabling them, via a process of ‘unequal exchange’, to receive the full value of their labour contribution.

As Jason Hickel explains:

‘It was the Egyptian economist Samir Amin – a well-known critic of neo-colonialism – who first articulated this argument in the 1970s. He noticed that that if we look at the labour that goes into producing goods for trade between the south and north, we see that workers in the south are paid much less than their northern counterparts – even when adjusted for productivity or units of output per hour. This means that when the north buys goods from the south, they pay far less than those goods would otherwise be worth. In other words, the north effectively siphons uncompensated value out of the south’ (Guardian, 18 May 2017).

While this explanation might seem superficially plausible, there is an intrinsic problem (as we saw last month) with trying to quantify the magnitude of this global transfer of value – let alone quantify the extent to which workers, as opposed to capitalists, in the north allegedly benefit from this transfer – due to value being based on the elusive notion of ‘abstract labour’. Hence the use of price as a surrogate measure. But while the sum of all values must equate with the sum of all prices, for any given commodity, value and price must necessarily diverge under conditions of disequilibrium resulting from the continual adjustment of supply and demand to each other.

Take the commodity, labour power – the skills the worker sells to the capitalist. Its price is the wage that worker receives. However, this transaction is conditional upon the capitalist expecting to make a profit by employing the worker. A business is not a charity. It is not concerned with the well-being of its workforce as such. Competition between businesses pushes such sentiments aside and imposes on all the overriding need to secure a profit.

Without profit the business risks being bankrupted. This is as true in the Global North as in the Global South and it is surely significant that the overwhelming bulk of capital – even foreign direct investment – originating in the North is invested there and not in the South. That wouldn’t happen without the prospect of profit.

Profit is the money form of the economic surplus the worker produces in exchange for a wage. She produces more value than she receives in her wage. Hence she is ‘exploited’. It doesn’t matter whether she is ‘well paid’ or not. Whether she can ‘purchase the product of ten hours of another worker’s labour through one hour of her own’ as Zac Cope puts it, is simply not relevant (Divided World Divided Class: Global Political Economy and the Stratification of Labour Under Capitalism, 2012, p.173) Her means of purchasing that product – her wage – is conditional upon her producing a surplus for her employer in the first instance and, thus, being exploited.

Wage levels and the rate of exploitation

What determines the ‘rate of exploitation’ cannot simply be inferred from the level of wages paid to workers; it must take into account, also, their productivity. Paradoxically, higher paid workers can be subject to a higher rate of exploitation if the ratio of the surplus they produce compared to the size of their wage packet is higher than in the case of a low-paid worker. However, this can change if you reduce the wages of the low-paid worker thereby increasing his rate of exploitation.

Commentators, like John Smith, argue that depressing wages below their value in the Global South – super-exploitation – is now the primary mechanism under capitalism for increasing the rate of exploitation (Imperialism in the Twenty-First Century, 2016). Capital is highly mobile today while labour, hemmed in by national borders, is relatively immobile. This obstructs the equalisation of international wage rates (but not the equalisation of profit rates whereby surplus value is siphoned out of the Global South). Multinational corporations can play one poor country off against another in their quest for lower production costs while a corrupt ‘comprador bourgeoisie’ running these countries assists in this race to the bottom by imposing political repression and banning trade unions.

This argument has merit but, still, we cannot overlook differential rates of productivity. According to Hickel:

‘Southern workers are probably at least as productive since these days many of them work in foreign-owned factories (think of Apple’s iPad factories with highly efficient technology and rigid Taylorist rules, designed to extract as much as possible from every movement).’

Clearly, this is just cherry-picking. The vast majority of Southern workers don’t work in foreign-owned factories. Some do and, doubtless, productivity in these cases matches Western levels. But you have to look at the situation across the country as a whole to get a more realistic picture.

Even in an emerging industrial powerhouse like India, the formal sector accounts for only 10 percent of the workforce, the rest working in the informal sector. Globally ‘a staggering 2 billion workers are in informal employment, accounting for three in five (61 per cent) of the world’s workforce’ (ILO, World Employment Social Outlook: Trends 2019).

These are overwhelmingly concentrated in the Global South. Given the paucity of formal sector jobs and the lack of unemployment benefits, workers here often have little option but to eke out a living in the low-paid informal sector. This is characterised by rampant ‘underemployment’ and relatively inefficient small-scale ‘involutionary’ forms of activity.

There is some truth in Hickel’s claim that ‘wages are not somehow naturally low in the south – they have been made low by design. Wages are an effect of power’. But his explanation is incomplete. The bargaining power of those workers is, in turn, undermined by the depressing effect on wages caused by mass unemployment and, even more, underemployment, which is much more pronounced in the South.

The much larger ‘industrial reserve army’ also helps to explain the persistence of generally more labour-intensive forms of production there and, by extension, the significantly lower per capita productivity. According to the ILO there is a strong correlation between output per worker and international variations in wage rates (bit.ly/2OhfIK2).

Indeed, Marx himself maintained that ‘The more productive one country is relative to another in the world market, the higher will be its wages as compared with the other’ (Theories of Surplus Value, Ch. 8). Key to this is raising the ‘organic composition of capital’ via mechanisation thereby bringing about a fall in the rate of profit.

Ironically, Cope himself contends that ‘the capitalist system has been able to maintain itself in recent decades’ only because, among other things, ‘industrialisation of large parts of the Third World have ensured the entry of millions of (super-)exploited workers into the global workforce. This has undoubtedly raised the rate of profit by reducing the rate of growth of the organic composition of capital’ (ibid p.201). So he is effectively conceding that production there is more labour-intensive and we can assume this means less productive in per capita terms.

There is a further point to consider. As we saw earlier, part of Cope’s argument rests on the claim that most Northern workers are ‘unproductive’ in the sense that they do not produce, but are financed out of, surplus value. But what of the Global South? While some workers in the small formal sector could be classed as unproductive – for example state employees – in the much larger informal sector the predominant form of labour – 70 percent in sub-Saharan Africa – is ‘self-employment and unpaid family work’. Strictly speaking, this does not constitute productive labour either since it does not involve what Marx called the ‘exchange of capital for labour’ which is a precondition for such labour being considered ‘productive’.

However, to reiterate – being ‘unproductive’ does not mean not being exploited. ‘Being exploited’ does not depend on you being directly involved in producing surplus value but rather on your functional contribution to a wider system of surplus extraction.

Furthermore, even if 80 percent of the world’s productive labour is ‘performed in the Third World by workers earning less than 10% of the wages of First World workers’, as Cope claims, one should bear in mind that at least 80 percent of the world’s population lives in the Third World anyway.

As for workers there earning less than 10 percent of the wages of First World workers we need to relate this to international differences in price levels. In this regard, the position of Third Worldists comes across as muddled.

On the one hand, we find Cope suggesting that workers in the Global North benefit from the ultra-cheap prices for goods produced by super-exploited workers in the Global South; on the other we are told by him that ‘as soon as these goods enter into imperialist-country markets, their prices are multiplied several fold, sometimes by as much as 1,000%’(p. 159). This is because the capitalists there can ‘afford’ to pay their workers higher wages to buy these goods which presumably means they are making a profit by employing them.

Who benefits from lower import prices?

Wages, being the price of labour power, will tend to adjust to changes in the prices of other commodities. Cheapening the price of imports into the North by intensifying the exploitation of Southern workers will not materially benefit workers in the North. Actually, if anything, it has induced capitalists to outsource production to the South and close down factories in the North at the expense of northern workers.

Like water finding its own level wages will ultimately tend to gravitate towards the value of labour power. Marx’s observations on the early nineteenth-century struggle to repeal the Corn Laws which restricted food imports to boost domestic prices are pertinent here:

‘The English workers have very well understood the significance of the struggle between the landlords and the industrial capitalists. They know very well that the price of bread was to be reduced in order to reduce wages, and that industrial profit would rise by as much as rent fell’ (bit.ly/2LvHt0p).

While it is undeniable that there are marked differences in wage rates between the North and South there are some suggestions that the gap may be closing. A report in the Economist noted that while wage growth in the advanced countries has been slight or stagnant: ‘The crucial change that has taken place over the past decade or so is that wages in low-cost countries have soared’ (19 January 2013). Ironically this has encouraged a limited ‘reshoring’ of manufacturing back to the US where wage stagnation has made US manufacturing slightly more competitive.

Of course, we are still quite a long way off from the ‘equalisation of international wage rates’ but current developments seem to be tending in that direction. In Asia, for example, wages have been growing annually nearly ten times faster than in the world’s richest nations (Nikkei Asian Review, 28 November 2018).

Moreover, if you apply ‘purchasing power parity’ exchange rates to reflect the varying costs of buying an identical basket of goods in different countries, the gap between rich and poor countries narrows considerably. Cope himself notes that ‘according to calculations based on data compiled by the Union Bank of Switzerland, OECD wages have an average 3.4 times more purchasing power than non-OECD wages’ (p.163).

This is far less than the cited ratio of 1:11. This difference can be adequately explained in terms of factors already discussed such as differential productivity rates. But compared to the difference in purchasing power between capitalists and workers everywhere in the world, it is pretty negligible.

It is this fundamental class division that the proponents of Third Worldist ‘anti-imperialism’ wilfully obscure in their pointless pursuit of a reactionary nationalist agenda in an age of global capitalism.

Robin Cox

Producing and Paying: A Grim Fairy Tale. (1922)

From the September 1922 issue of the Socialist Standard

When discussing with the average member of the working class, or at meetings that bring forward their opinions, as soon as the Socialist attempts to show the futility of concern with this or that expenditure of the master class, he is invariably asked, “But don’t we pay for everything?” and this to the questioner appears an obvious truth.

Indignation is often aroused and shown when it is pointed out that the working class cannot have any part in the paying or contributing towards the colossal expense of running the capitalist system of society. True, some may feel the injustice of a system which on all sides presents itself as a glaring contrast between stupendous wealth and sheer stark naked poverty. True, others may dimly perceive that the existence of this wealth is due to the efforts of the working class. That at the docks, on the railways, in the mine or the office, the activities of the master class are unknown—from the highest to the lowest, skilled or unskilled, all are workers.

If, however, those who think thus, do not carry their observations and enquiries farther, such knowledge remains superficial, and will lead to wrong conclusions. They must go deeper and seek to understand what portion of the wealth that is produced accrues to the working class. They will then know that they CANNOT PAY either directly or indirectly towards the upkeep of the very system that exploits them; though it is quite desirable from the master class point of view to foster the belief that they can and do.

When we speak of the working class, we mean the class that works as the name implies. This presupposes a non-working class. The former are without any property in the means of life, and have only their bodily activities to sell in order to live. The latter own the earth and all upon it (machinery, mines, raw material, railways, etc.).

Wealth used to exploit labour power for profit is capital and its owners are capitalists. Capital is therefore merely wealth used for a particular purpose and is itself the product of wage labour.

Now the working class have only three methods of existing, either begging, stealing or working. Obviously the first two methods cannot become general, and to a small section, begging, unless upon a large scale (such as the Salvation Army and various charitable organisations) is a rather poor occupation; while to steal, after everything worth stealing has been stolen, with politically controlled force to maintain its ownership, is also a foolish proceeding.

There is, therefore, only that enervating pastime left to the workers, to work—for somebody else. And what does work give when obtainable? Wages. And what are they? Marx and Engels wrote in 1848 :

  “The average price of wage labour is the minimum wage, i.e., the sum of the necessaries of life, absolutely needful to keep the worker in life as a worker. Thus what the wage earner appropriates by his labour is just as much as is necessary to assure him a bare existence” (Communist Manifesto.)

But the worker is paid in money, and it is this fact that disguises from him the exploiting nature of the transaction, the buying of his labour power. What the master really buys is the full use of that energy, but when it is expended in the production of wealth, the worker produces much more in value than the value of his own necessaries of life expressed in price as wages. Six hundred years ago a man could produce in twelve weeks labour sufficient to sustain himself and family for a whole year (Thorold Rogers.)

How much greater must be his productivity to-day with the aid of steam, electricity, machinery, and every labour saving device science has placed at his disposal. What the worker produces over and above the value of what he receives as wages the Socialist calls “SURPLUS VALUE.” And it is from this source, whether it takes the form of Rent, Interest, or Profit that the masters MUST PAY.

The worker is robbed of the major portion of the wealth he alone produces and is left relatively poorer year by year as that wealth increases. All improvements in the means and methods of wealth production must benefit the comparatively few owners of those means, for to them belong the results. While the workers remain labour power sellers they cannot command more than the price resulting from that sale (wages).

If the master class can persuade the workers to continue in the belief that the latter have a part in the paying of national or local expenditure, they can help to disguise the exploiting nature of their system. The worker cannot pay out of what he NEVER RECEIVES, though at times he argues that he pays indirectly by consuming such things as tobacco, beer, etc.

Even here again it is a question of wages. Whatever the sum total of the prices of the necessaries required to reproduce the worker (including some sort of entertainment and small luxuries) must be given to him first in his wage, otherwise his labour power deteriorates. When prices rose during the war, bonuses had to be given to cover the increased cost of living; when they fell to any extent bonuses disappeared, or in other words, wages came down. The sliding scale is another example of the adjustment of wages to the cost of living.

Capitalist agents often tell the workers that it is the employed that must support the unemployed. Their object is twofold, to delude the workers, and endeavour to keep as low as possible their masters expenditure. At times they give the game away by stating that it pays better to receive “Guardians relief” than work for wages, and that’s saying something.

How little the reduction of such expenditure concerns the workers was evidenced recently at Poplar, when certain Labour members of the Council went to prison, avowedly in the interests of the workers, but we find the truth in strange places, thus ! “We have in our possession a return showing that the ‘large ratepayers’ actually saved in rates £300,000, as a result of the ‘Poplar Labour Borough Council.’ One firm in Millwall saved over £3,000, and another in Bow £1,222.” (Ed., “East London Pioneer,” April, 1922). Certainly good for the “large” ratepayers.

No, fellow workers, if the paying were yours the masters would trouble little about the expense much less spend large sums in propaganda upon matters which didn’t concern them. What concerns you is how long you intend to be the victims of profits and production for sale. Understand your importance in society and your historic mission as real men and women and then organise for Socialism. Social ownership of the means of producing wealth for use and not profit. That will destroy the power of the few to dominate the lives of the masses. The working “class” will then be abolished because all but the child and the feeble will take part in the useful necessary work of society and all will enjoy the benefits such social life will give.

W. E. MacHaffie