Labour is the Only Thing
There are a lot of inputs into the creation of a product, but they can be broken down into two categories:
- constant – the materials and tools of production; the value of these is the same at the beginning and end of the process.
- variable – or labour, which is the catalyst for creating value in the process and tied tightly to time.
The usual framework for capitalism is to throw these two together to give a profit ratio, but pulling them apart leads to some uncomfortable insights.
Circulation of capital (money) presupposes that someone is going to get more than they started out with (otherwise, why would they do it?) which presupposes a difference between the equivalence of exchange and surplus value. This needs to be bridged by something. The buying and selling of labour power allows capitalists to produce a commodity with surplus value to that being put into the process.
Labour is the key to this.
The Labour Process and the Valorization Process
The Labour Process
The buying and selling of labour introduces the class relationship between labour and capital. “The general character of the labour process is not changed by the fact that the worker works for the capitalist instead of for himself” (page 291). In both cases, it is an act to change nature.
Labour is, first of all, a process between man and nature, a process by which man, through his own actions, mediates, regulates and controls the metabolism between himself and nature … he acts on external nature and changes it, and in this way, he simultaneously changes his own nature.
Capital: Critique of Political Economy v. 1 (Classics S.), page 283
All animals work to change nature, build nests, etc. But man is the only animal who has a definite end, a model in their mind before they start. “At the end of every labour process, a result emerges which had already been conceived by the worker at the beginning, hence existed ideally” (page 284).
So people can embark on great projects, but work is not play, people must “subordinate their will to it” (page 284) and it will take discipline. So far this is a natural enough process.
Technology and infrastructure are particularly important; as we move through stages of development, the tools are what distinguish times (iron age, bronze age, etc). these tools are used to create something, and “the process is extinguished in the product” (page 287), in very real terms, labour is objectified, it has been used to create an object.
Because labour is used to create some commodities which are then used as part of other commodities, labour can already be embedded in something. “Whenever products enter as a means of production into new labour processes, they lose their character of being products and function only as objective factors contributing to living labour”, (page 289).
Labour is hidden by design, “it is by their imperfections that the means of production in any process bring to our attention their character of being the products of some past labour. A knife which fails to cut…” (page 289).
When a capitalist sets out in the market, they require three things
- purposeful activity (the work itself)
- the object on which the work is performed
- the instruments of that work
The Valorisation Process
The objective of the capitalist is simple, “to produce a commodity greater in value than the sum of the values of the commodities used to produce it” (page 293). It’s all about value, so determining value is essential.
But when you do the basic accounting, something doesn’t add up for the capitalist. If they pay a worker £x and they get back £x for the work, there is no surplus value created. However, “the fact that half a day’s labour is necessary to keep the worker alive for 24 hours does not in any way prevent him from working the whole day” (page 300).
The use-value of labour-power, in other words, labour belongs as little to its seller as the use value of oil after it has been sold belongs to the dealer whole sold it. The owner of the money has paid the value of a day’s labour-power; therefore he has the use of it for a day … that the value which its use during one day creates … double what the capitalist pays is for that use; this circumstance is good luck for the capitalist, but by no means an injustice towards the seller.
Capital: Critique of Political Economy v. 1 (Classics S.), page 301.
This all happens because you get the value of the labourer for a period of time. After a period of time, they have worked the equivalent of their value, anything beyond that creates surplus value.
The difference called out between the processes of labour versus capitalism, the process of production is basically the same in both of these, but the latter is a development and focussed on profit.
- labour and creating value = production of commodities
- labour and valorization = capitalism
Constant Capital and Variable Capital
Constant capital is that amount which pre-exists in the inputs. It gets transferred to the end product by the production process with no change. This makes sense with the physical (eg the cotton that ends up in a shirt). For those things consumed in the production process (energy, machinery that wears out) a portion of this value is also transferred (depreciation).
This transfer is only possible through the worker, who is engaged in “productive consumption”. Because this is a process, if it stops (eg the workers strike and the machines stop working), there is no value added. This is the power of the worker because the relationship works both ways, the capitalist employs the worker, (so the worker needs them), but the worker preserves the value for the capitalist (without the worker, there would be no value transfer).
This repositioning gives the worker some power.
In addition to this, the worker adds value – variable capital. As they add value, the amount of value they have added is equivalent to the amount of their own labour costs (from then on, the labourer adds surplus value). Marx has a great term for the amount of the day necessary for the worker to create the amount of value equivalent to their own labour costs: “necessary labour time”
Necessary for the worker, because independent of the particular social form of his labour, necessary for the capital and the capitalist world, because the continued existence of the worker is the basis of that world
Capital: Critique of Political Economy v. 1 (Classics S.), page 325
So the cost of a product is a combination of the raw material (the inputs), the auxiliary material (consumables and machinery etc) and the instruments of labour (people).
That part of capital, therefore, which is turned into a means of production i.e. the raw material, the auxiliary material and the instruments of labour, does not undergo any quantative alteration of value in the process of production. For this reason, I call it the constant part of capital.
On the other hand, that part of capital which is turned into labour-power does undergo an alteration of value in ht eprocess of production. It both reproduces the equivalent of its own value and produces an excess, a surplus-value … I therefore call it the variable part of capital.
Capital: Critique of Political Economy v. 1 (Classics S.), page 317
So constant capital can never be a source of value. Under this definition, machines can never be a source of value. If production is automated, the ratio of constant and variable capital can change, but a change like this can “not in the least degree affect the essential difference between the two” (page 319).
The Rate of Surplus Value
Given all of the above, it’s important to work out the amount of value added by the labourer to see if wages are fair or if there is exploitation.
Marx’s formula for this is simple:
Capital (C) = constant capital (c) + variable capital (v)
But for Marx, the interesting thing is determining the surplus value element, because this allows calculations of the rate of exploitation, so the formula expands to:
Capital (C) = (constant capital (c) + variable capital (v)) + surplus value (s)
While it’s easy enough to break this into a formula, actually determining surplus value is incredibly difficult. In theory, the surplus value is the amount a worker would be better off if working for themselves, but there are a lot of other variables in this (security of employment being one).
One of the questions he grapples with is the calculation of exploitation. For the capitalist, the preferred calculation would be the same as the profit margin, which is always lower. The labourer can be very exploited and the capitalist still have a low rate of profit. But Mark looks at the amount of socially necessary labour time the worker is giving to the capitalist without remuneration.
- Surplus value / capital (= profit margin)
- Surplus value / variable capital (= rate of exploitation)
The reason for breaking up the constant capital is that the value in this has already been produced. If you include it in the calculation, then you are calculating the amount of time taken to reproduce value (i.e. this is the value of things that if nothing was done to them, would sell for the same value). The worker (the variable capital) is the only thing that can add value, so any calculation of their value and wages should be done on the variable side alone.
The element of variable time, then, is crucial for the capitalist – control of the worker’s time
Summing Up – Labour is the Only Thing
Looking back at my margin notes, the big thing for me was the proper understanding of the simple formula.
Capital (C) = (constant capital (c) + variable capital (v)) + surplus value (s)
And as with most of what I’ve read in Marx, this understanding didn’t come until the end of the chapter. I found myself working hard to understand where this was headed, but the end of the section tied everything together.
In the normal world, profit is always “s/C” in the terms above, and that thinking pervades everything. But breaking it out into constant and variable capital, and recognising the thought experiment that the constant capital does not change in value, though it is processed so changes in form, puts the role of the worker hugely more central.
Hence the value of the means of production re-appears in the value of the product, but it is not strictly speaking reproduced in that value. What is produced is a new use-value in which the old exchange value re-appears.
Capital: Critique of Political Economy v. 1 (Classics S.), pages 315-316
Going back to the Commodity – Commodity exchange, this is what happened. The capitalist, though, is after adding value and this is why the labour element is so important. Firstly enough labour to cover the cost of the hire of labour, secondly, enough to make a profit.
And with the amount of constant capital being great, that level of exploitation has to also be large to move the profit dial.