Analysis of Wealth. II. Surplus Value. (1916)

From the July 1916 issue of the Socialist Standard

Link to Part 1.

In a former article under this heading the writer tried to show that the substance of value, the common property of all commodities as such, is social labour, measured by the time taken in its expenditure. He tried to show further that money serves as a measure of values, a standard of prices, and a medium of circulation, only because it is itself a commodity, that is to say, it embodies social labour in the same manner as do the articles for which it is exchanged. He tried to show still further that the production of commodities, i.e., articles for exchange, and the use of money are features of a certain stage of development in the means and methods of production and in the control thereof, and are destined to disappear with future progress.

We have now to consider money a little further in the form of capital in the process of accumulation, or in other words, the phenomenon of “money making money.” For money in itself is not necessarily capital. Only when it is used for the purpose of adding to itself does it become so. When the independent producer (peasant or handicraftsman) brought his goods to market he received for them a certain sum of money which sooner or later he expended on articles of a different sort, largely for his own personal use and partly, of course, to buy fresh raw material, etc. To him the money entering transiently into his possession was not capital. Nor were the goods he sold, for he received in exchange goods of equal value. No interest, no profit, accrued to him in the transaction.

Otherwise is it with the modern capitalist with a sum of money, which is constantly expanding in volume. He buys commodities not for consumption by himself, but in order that in some form or other he may re-sell these commodities and realise a profit on the transaction. Apart from this profit his activities as a capitalist would be meaningless.

The independent producer bought commodities mainly in order to realise their use-value in his own person. The capitalist buys them only to throw them back into circulation and receive in return an increase in exchange-value. The simplest definition of capital, then, is money thrown into circulation only to be received back again with an increase to itself, which increase becomes part of the capital which is again advanced to return with a fresh increase.

This increase or profit Marx calls surplus-value. The problem of its origin is the central one in economic science, and its solution holds the key to an understanding of all the workings of capitalism.

The quest for profit is the mainspring of the present social order. Let us take the mainspring out of the case and examine it.

In the first place, it is obvious that money must go into circulation in order to increase itself. If it simply lay in a safe it would remain the same in quantity. Thus is the modern capitalist cuter than the old-fashioned miser. Being a “true Christian” he refrains from the stupid, worthless process of hugging his money to himself, and lets it go believing implicitly in the words of his Lord : “Whosoever would save his life the same shall lose it, but whosoever loseth his life for my sake [“profits’] the same shall find it.” But bearing in mind that on the average prices are determined by values, and these latter by the socially necessary labour embodied in commodities, it is also clear that the circulation of money cannot in itself give rise to profit. On the average the capitalist buys commodities at their values and sells them again at their values. He exchanges equivalents, and unless some increase of value takes place between the two acts of buying and selling he can realise no profit. Various orthodox theories have tried to see the origin of surplus value in the process of exchange. The investigation of these theories, however, shows them to be based either upon the confusion of use-value with exchange-value or upon the illusion that prices (and implicitly values) are determined by the arbitrary will of the owner of commodities or by mere chance.

In dealing with capital the scientific economist is concerned not with an accumulation of use-values, but of exchange-value in the form of money ; which accumulation, moreover, is not made by one or a few capitalists at the expense of the rest, but by the capitalist class as a whole. The origin of surplus-value is, therefore, to be found in production, or in other words, in the productive consumption of the commodities originally purchased.

All commodities which are consumed in order to re-appear as new commodities may be said to be productively consumed. For instance, leather purchased by a boot manufacturer is consumed in the factory to reappear as boots. The boots, moreover, contain more value than the leather, since they embody additional labour. This additional value, however, is by no means necessarily surplus-value. Imagine, for instance, an independent boot-maker purchasing his own tools and raw materials and selling his own product. The value of the raw materials, etc., is transmitted to the finished product, which, in addition, contains the value added by the bootmaker’s labour. The boots are sold for more money than was paid for the leather and the tools, but no surplus-value has been realised ; money does not in this instance make money. The raw materials, etc., do not transmit more value than they themselves contain ; all the increase is due to the boot-maker’s labour. The difference between the original outlay and the price he gets for his commodity is simply equal to the value he has added. The effect is the same as if he had made no outlay but produced a new and distinct commodity and sold it. His money has not expanded itself ; he has simply added to it. In short, it is not capital. Men do not become capitalists and wealthy in the modern sense by themselves adding value to natural objects. Rather, the increase of their wealth is obviously independent of their efforts and totally out of proportion to any they might make.

Nevertheless, seeing that all value is but the embodiment of labour, surplus-value, being a particular form of value, can only be derived from labouring in some fashion. Therefore in order to obtain surplus-value the capitalist must find in the market not merely ordinary commodities (which are in capable of producing for him more value than they themselves possess) but some commodity which actually produces value, i.e., labours. This commodity he finds in the energies of the modern wage-labourer. It matters little to the capitalist what other commodities he deals in. Food or clothing, luxuries or necessities, all alike embody labour, therefore it is the labouring commodity which he essentially requires in order to obtain profit.

When the capitalist purchases other commodities he buys congealed labour : labour which is past, dead, inactive. From them alone he can expect no increase of value. In buying labour-power, however, he secures the potential source of all further value. So far as he is concerned the special function of labour-power is to produce value and, above all, surplus-value. With the usefulness of labour-power, in any other sense he is not concerned, any more than he is concerned with the utility of the goods he sells. Capital being but a sum of exchange-values, its sole passion is for its own growth by the production of more exchange-value, which means the continual consumption of labour-power. It remains to show how by this consumption surplus-value is actually produced.

Labour-power, like every other commodity, possess an exchange-value, which is realised in a price, termed wages. The amount of this exchange-value is determined by the labour-time spent in its production. The average wages of any section of the working class depends upon the cost of its customary necessities of life, including such special education as may be necessary in the branch of industry in which it is employed. It is obvious that wages cannot be long depressed below this standard without impairing the productive efficiency of the labourers’ energies. On the other hand, if they rise far above this standard the surplus-value is encroached upon. For surplus-value is nothing more than the difference between the wages of the labourers and the sum total value of their product. Were the labourers in the habit of producing no more wealth than would keep them, in working condition surplus-value would be impossible. The labour market, like the market for other commodities, is liable to fluctuations, but experience shows that these cancel one another, and that the general level of wages is such as will maintain the workers in their daily tasks.

But though the price of labour-power is limited in this way, the limit of surplus-value is simply the productivity of labour-power. Anyone purchasing a conmodity acquires the use of it, and the capitalist only buys labour-power in order that he may use it up, i.e., set it to produce the greatest possible amount of exchange-value in the form of commodities. Here we may take examples from Marx (“Capital,” Vol. I. p. 106).

Marx first supposes a capitalist advancing a sum of 15s. which is split up as follows : 10s, is the price of 10 lbs. of cotton ; 2s. represents the value of wear and tear of machinery, etc.; 3s. is paid for the hire of labour-power. We have thus a sum of 12s. as constant capital, i.e., value which passes unchanged into the form of the finished product, yarn. This is assumed to be the product of two days labour of twelve hours each, i.e., two hours labour is embodied in a sum of 1s., or a commodity of that value. Supposing now that in six hours the 10 lbs of cotton are converted into 10 lbs of yarn, The yarn contains thirty hours labour ; twenty-four being spent in producing raw material, etc., and six in converting it into finished product. Its value,, therefore, is 15s., i.e., 1s.for every two hours labour.

Here no surplus-value is created, for 15s. was the sum originally advanced. By only working six hours the labourer has done no more than produce an equivalent of his wages, 3s., and the capitalist makes no profit.

Marx now gives a second case. In this the capitalist advances 27s. Twenty lbs. of cotton are bought for 20s., and 4s. is allowed for wear and tear. The labourer is paid his wages of 3s., but instead of working only six hours is made to work twelve, having exactly twice the amount of raw material to convert into yarn. This time the yarn represents 60 hours labour, 48 being contained in raw material and twelve being added in the process of spinning. If 30 hours labour are represented by 15s., then 60 hours are embodied in 30s.

The capital advanced was 27s., so that the capitalist makes a profit of 3s. when selling the goods in the market at their value.

These simple examples illustrate the whole character of capitalist production. Carried on as it may be with all due regard to legal forms, it yet consists of a process of robbery disguised by the exchange of equal values.

The capitalist certainly gives the labourer his “due,” i.e., the value of his energies, or in other words, the cost of production of his commodity labour-power, but if the labourer simply replaced this value the capitalist would gain nothing. For him the transaction is meaningless unless the worker produces far more than that, unless, in fact, his whole life-time becomes but a process of producing value.

In further articles the writer hopes to outline how capital in its lust for self-expansion pushes the exhaustion of labour-power to its limits. For the present it is as well to remember the cause of the subjection of labour-power to capital.

The worker sells himself (in the form of his energies) as a commodity. Why ? His obvious motive is to obtain his price, wages. These as we see, however, only represent sufficient to keep him in existence. It follows, then, that he lacks the means of subsistence and must purchase them, which still further implies that he does not possess the wherewithal to produce them. This is another point to be dealt with later.

Eric Boden

[To be continued.]

The Prize-Fighter's Evidence. (1916)

From the July 1916 issue of the Socialist Standard

The statement always made by the Socialist that the capitalist system is responsible for  the horrors of modern society still awaits the bold economist to explode it. The basis of society, the private ownership of the means of life, breeds the most hideous manifestations. The capitalist class, who own and control the means of wealth production and distribution, force the working class in order to live to operate those instruments for the profit of the former class. The wealth filched from the producers is sold upon the open market, and the workers, because they only receive a portion thereof as wages in return for their labour-power, cannot buy back the whole of their product. The result is the inevitable congestion of the market, with the consequent stagnation and crisis.

The capitalist class — national and international—being in possession of the wealth stolen from the workers, compete with each other for the control of the world’s markets. This capitalist class, split into warring factions, are continually embroiled in trouble over the disposal of the wealth on the markets, but they present a solid front to the workers whenever the latter get out of hand in the endeavour to better their conditions of life. We have just witnessed in Ireland an example, where, as a result of an incorrect conception of their position in society, thousands of working men and women flocked into the Sinn Fein movement, only to be butchered by their oppressors in control of the armed forces of the Skate.

It is true that the Irish workers have a fearful struggle to live, like the rest of their class the world over. But an anti-social movement like theirs, with “Ireland for Irishmen” for its slogan, was doomed to failure from the start. We, the working men and women who form the Socialist Party of Great Britain, sympathise with our fellow workers in Ireland in their struggle against the hideously squalid conditions that prevail among them, but must record our hostility to any movement that is not based upon the class struggle.

The blood-thirsty gang known as the international capitalist class know full well the horrible conditions that are rampant among the wealth producers, but while they pretend to condole with them, they do not intend to ease by a fraction the exploitation to which they subject them. Just at the moment when the various European governments are proclaiming that the war is being waged in the interests of their workers, it is well not to forget the awful conditions that are the lot of the toiling masses. Whether in London, Paris, Berlin, or Rome, in spite of the plausible tales of the reptile Press, millions of working men, women, and children are without even the bare necessaries of life. Writing on the Irish revolt one of the retired prize-fighters of the master class, while giving HIS opinion why the workers were led to the shambles, incidentally showed the state of things that prevail in one of OUR possessions.

The glorious British Empire! Such conditions as the above prevail wherever you care to travel in the much-vaunted, world wide dominions. Nor are these conditions confined to the British Empire, but they prevail wherever the private ownership in the means of life obtains.

Until the working class understand the class struggle, and recognise that the capitalist system and its parasitic class are alone responsible for the whole of the horrors we now witness, the common anomalies always prevalent, i.e., abject poverty and misery on one hand and riotous luxury and affluence on the other; international trade wars for markets and sea routes with their attendant bloodshed, will run concurrently with the cruel and ceaseless slaughter of the workers from the prolongation of the worst of all wars—the Class War.

The only hope lies in the deluded, toiling masses of wealth producers mustering under the crimson banner of Socialism, determined to gain control of the machinery of government, including the armed forces, to use it as the agent of emancipation, and to usher in the system of society based upon the common ownership of the means of life; the social system wherein the interests of the human family shall form a harmonious whole. 

C. F. Carter

Old-Age Pensions: A Typical Reform. (1916)

From the July 1916 issue of the Socialist Standard

At the time that the OLD AGE pension measure was passed by Parliament it was pointed out in this journal that its chief purpose was to save the rates. It wax to encourage old people to starve outside the workhouse rather than go in and be kept at treble the cost by the ratepayers. Evidence of this fact has been repeatedly given, and to-day, owing to the enormous increase in the cost of living, the old-age pensioners are dying off like flies. Such paragraphs as the following speak eloquently of this :

"'LIFE ON 1s. 6d. A WEEK.”

  "'If they can live on Is. 6d. a week each and don't get starved, a good many of us eat too much,' said the coroner at the inquest on a Bethnal-green woman aged 70. She and her aged husband had lived on the latter's a old-age pension of 5s., out of which 2s. was paid in rent. Occasionally the man earned an odd 6d. The doctor said that death was not accelerated by want."

                                                     "Daily Chronicle," June 16.

After all, if people who have reached the age when the stomach has lost its elasticity will gorge themselves on 1s. 6d. a week they must expect to pay the penalty.

The same paper pointed out a short while back that, owing to the rising cost of food, old-age pensioners were being forced to apply for admission to public institutions, "Thus defeating the object of the Act."

The sentence I have italicised is significant; it is a fact not often admitted.

Another instance (from the "Daily Telegraph" of June 12th) throws a little further light on this capitalist reform. The comments of Dr. Waldo are worth thinking over.

OLD-AGE PENSION PROBLEM.

  At Southwark, Dr. F. J. Waldo held an inquest on the body of Edward Heath, aged 85, who died in St. George's Infirmary. The evidence showed that the deceased was for some time in Christchurch Institution, S.E., and during that time his old-age pension of 5s. a week was in abeyance. Quite recently he left the institution, and on May 29 he visited the Customs and Excise officer at the Hop Exchange with a view to having his pension renewed.
  Questioned by the Coroner, Mr. James Murray, the Customs officer, said the deceased should have gone to the Post Office, got a form, and either brought it to witness or posted it.
  Coroner: Would you then have given him 5s?
  Witness: Oh, no; the form would have been sent to the Pensions Committee, and probably a week or more would have elapsed before the deceased got his 5s.
  Coroner: That looks like red-tape. This poor chap might bare starved before his paper came back. If the deceased had no money to supplement the pension would you have given him the 5s?
  Witness: Certainly I would.
  Coroner: Surely that is wrong. A man cannot live on 5s a week! It has often struck me that the law wants altering. It is not the fault of the pensions officers, but I have had numbers of instances of poor people dying in a horribly neglected condition while trying to subsist on 5a a week. But for the pension they would probably have been in some public institution, where they would have been properly cleansed and cared for. In this case the deceased was encouraged to leave the institution and try and live on the 5s.
   Dr. Thomas Massie said be believed that a very large majority of old-age pensioners did not go on the Poor Law at all.
  The jury returned a verdict of accidental death, and added a rider to the effect that an old-age pension of 5s a week was not sufficient unless there was something to supplement it.
   Coroner: In that case the pension is not an unmixed blessing.

In other words, when the ruling class grant us, with great flourish of trumpets and braying of asses, an epoch-making reform, it is all spoof. It is their way of putting something into their OWN pockets. It is the hard-headed British working man who is the mug—every time.

F. C. Watts

Scrag-Ends. (1916)

From the July 1916 issue of the Socialist Standard

Lloyd George says that England can take every man off the land if required for fighting and get all agricultural work done by women. Lord Selborne says so many men have been already taken that the whole industry is endangered. Great minds think alike, we are often told—here, small minds differ.

The Christians are still busy praying about the war, not for peace, of course, but for more blood to be shed and that right quickly. So hurry up, my gallant youths, kill your enemies quickly, so that we can have all the dirty mess cleared up by Christmas Eve, and assemble once again in the old church to warble that sweet little ditty, “ Peace on earth and mercy mild."

In spite of the pleadings of the War Savings Committee we remain an extravagant people; last month several more reckless Old-Age Pensioners squandered their weekly dollar and starved themselves into “glory."

Mr. Asquith has been telling his constituents that it is only the knowledge that he enjoys their complete confidence which enables him to carry the stupendous burden of the Premiership. Well spoken, Herbert! You may beat David after all in the Swankers' championship.

“There are mills in which men are made to work 7 days a week for 12 hours a day, and in the 365 weary days of the year cannot make enough to pay their bills.”

The above is an extract from one of President Wilson's speeches and has reference to conditions in the U.S.A., but it could be stated with truth about all countries where capitalism exists, whether they are Free Trade or Protectionist countries: capitalism being the universal cause of working-class misery, the only remedy for that misery is the universal abolition of capitalism hence the S.P.G.B.

SKEWER.

Editorial: Capitalism's Crowning Crime. (1916)

Editorial from the July 1916 issue of the Socialist Standard

Our Masters’ Bloody Orgy

Nearly two years have passed since the European war of extermination began, and the tale of slaughter continues on an ever-ascending scale. No nation—as a nation—can hope to gain by this war; no class—not even the capitalist class, as a whole—can hope to reap pecuniary or other benefit in the end from this sanguinary conflict.

It is quite true that our patriotic masters are at present in very many cases reaping enormous profits; it is also true that the necessities, and even the sufferings, of the people provide these vampires with their chief opportunities ; yet it is the capitalist class that must pay for this war in the long run. The workers cannot. Their wages represent barely their average cost of subsistence; and though this may, as at present, be disregarded for a time, it brings in its train a degradation of labour-power and a loss of efficiency that means still greater loss to the master class. The capitalists cannot recoup themselves by continuing to substitute chaff for oats in the feeding of their beasts of burden.

The smaller capitalists, it is true, are likely to suffer most, if not all, of the loss. The big fish are feeding upon the smaller ones. The financiers and the larger industrial capitalists (they are all one, nowadays) will continue to reap a golden harvest. Small wonder, then, that the magnates are in favour of the ruthless prosecution of the war to, at least, the last Frenchman, and the last rouble. Small wonder that any peace talk is stigmatised by their literary prostitutes as a "dastardly intrigue" or a "dangerous manoeuvre," while what they call a "premature" (!) peace is condemned as "an incalculable disaster to civilization."

Mr. Henderson follows the lead. The war has meant promotion to him. His unflinching resolve to maintain his position to the very last is unmistakable. At Northampton on June 24th he reflected his own sacrifices for the Allied cause when he solemnly warned his hearers against "peace talk" by "enemies abroad who boast that the Allied Powers are conquered, and a few mistaken people at home who have done little or nothing to prevent the Allies being defeated."

Truly, the millions of men physically wrecked, mutilated, or done to death in this useless war for dirty trade weigh as nothing in the balance for these bloodthirsty servants of capital. For them the incalculable sufferings of many millions of men, widows, orphans, and dependents is a mere "regrettable necessity," an occasion for insulting and utterly inadequate charity, an opportunity for little homilies on "our" duty to "our" country. All that really matters is the security of the property and the profit of the national capitalists! Soldiers, workers, and silently suffering dependents are mere pawns in the game, in which the control of the world-markets is the stake. Even so, the state of the ''game'' is stalemate rather than checkmate; and rumour has it that peace negotiations have been entered upon, but cheated of fruition owing to discord among the Allies. Whatever truth there may be in these repeated rumours it is impossible to say, but it is equally impossible to entirely disbelieve them. The only sure thing is that meanwhile, the conflict grows in intensity, and the human sacrifice to capitalist greed more awful.

This war is, indeed, merely a phase of the great class war. It is a crowning example of the ruthless sacrifice of the propertyless of the world to the interests of those who own the world. The thieves of Europe have fallen out, and their slaves must fight as well as toil. And this fact must never be overlooked, that the wine press of capitalism crushes out the life blood of the workers to till with profit or power the bins of the possessors of the earth in peace as well as in war.

Yet even as we realise how grave and how intense is the suffering inflicted on the working class during the long drawn-out years of "peace," the mind recoils with greater horror before the vividness and intensity of the present all-engulfing murder madness of Europe. How long is this crowning crime of capitalism to remain superadded upon the fundamental and age-long industrial exploitation of the many ? How long will the workers stand it? It is not as though there were no way out. It is not as though conditions barred every avenue of hope to the workers. The capitalists are clearly parasites. Hireling workers, the slaves and victims of this hellish system, actually run the world for these parasites. Yet, chiefly through ignorance, the workers of Europe allow themselves to be pitted against each other in a war of extermination for the supposed interests of their masters. Is not the untold suffering, now and to come, of men, women and children of more importance than the interests of those waxing fat. on the profits of war stock, munition industries, or the people's food ? Are the people to be for ever sacrificed to the Moloch of capital? Surely it is time the workers used their brains in their own interests. The callous brutality, the greed and hypocrisy of the ruling class of all nations could hardly ever be clearer than it is to-day. The workers have only to discard the blinkers of patriotism to see this plainly.

National war is the inevitable corollary of capitalism. It can only be made impossible by Socialism. On every ground, indeed, Socialism is the real and living hope of the toiling millions. It alone can harmonise material interests, and make the good of the whole the immediate interest of each. Bitter experience and soberer thoughts are making increasing numbers of men and women realise that it is commercial rivalry, caused only by the capitalist system, that is the actual and fundamental cause of war. They are beginning to see that it is in reality immaterial to a wage-worker whether his employers or rulers be German or French, British or Russian. The real enemy of wage workers is not any foreign nation, but the employing or capitalist class of every country. And it is this enemy class that, in pursuit of what it thought was its interests, is still, after nearly two years of carnage, urging the working class to even madder efforts in the extermination of each other. This exploiting class has secured the concentration of all the scientific genius and energy of the world in the brutal and savage work of destruction and human slaughter. Not content with the long-continued and ruthless robbery of defenceless proletarians in what it calls peace, it now causes their wholesale annihilation in a vain effort to extend or safeguard its spheres of exploitation, and plunges them into an ever more insane intensity of conflict, until, seemingly losing almost every vestige of control over the bloody carnage its greed has evoked, it threatens to drag the last remnants of civilization ' down below the lowest depths of savagery.