Masks and Mirrors
Capitalists and labour are stuck in a cycle of production: production of growth for the capitalist and production of surplus value for the labourer.
As often happens when people are stuck in something they don’t like, and a mirror is held up to it they seek to mask the nature of that reality.
So growth is unequivocally good because it’s a structural necessity that the system has to grow. Productivity is good, so a productive person is good.
For all his faults, Marx is unremitting in questioning underlying assumptions. In a world of fake news, this is more important than ever.
Individual and Collective Labour
In the beginning of religion, there was the Word, in the beginning of labour, there was the individual labourer, or rather the craftsman. As capitalism is introduced, the relationship of the worker to the product begin to diverge. It happens in a rational, scientific, way, but as the elements of production are brought together into the factory, they fall apart.
Just as head and hand belong together in the system of nature, so in the labour process mental and physical labour are united. Later on they become separate … the product is transformed from the direct product of the individual producer into a social product.
Capital, page 643.
This social product is one the worker has less overall involvement in producing, they become a cog in the production.
In order to work productively, it is no longer necessary for the individual himself to put his hand to the object; it is sufficient for him to be an organ of the collective labourer and perform any one of its subordinate functions.
Capital, page 643-4.
As the examination of labour and capital extends, it is necessary to move from the individual labourer to collective labour. But there are problems in defining collective labour; is it just the people inside the factory, or does it extend. No matter what you define, there’s a potential issue.
In a similar way to the extension of collective labour above, it could be argued that domestic labour is important because it’s unpaid labour which lowers the cost of production. On the one hand, it’s not adding direct surplus value, but on the other, it’s an extended contributor to it.
The Flexibility of Capital
There are a number of ways that capital can achieve its ends. By modifying duration, intensity and productivity, capital can be very flexible.
“Capital, therefore, is not only the command over labour as Adam Smith thought. It is essentially the command over unpaid labour” (page 672).
Price versus Value
There’s a quantitative difference between price and value. Price fluctuation allows fluctuations in supply and demand, while value is much closer to the equilibrium.
Marx does not believe that demand and supply is a crucial explanation of anything other than the oscillations of the market. Over time, there is a “natural price”, an equilibrium which is the value of labour.
Prices and price movements mask fundamental relations. once things have a price they can be broken up in various ways (payment by hour, day, week, month, piece). All of these systems hide the extraction of surplus value.
The only thing that interests a capitalist “is the difference between the price of labour-power and the value which its function creates (page 682). the result of that masking is “he never comes to see that if such a thing as the value of labour really existed, and he really paid that value, no capital could exist and his money would never be turned into capital” (page 682).
Even worse, these things allow for a complete abuse whereby”a capitalist can now wring from the worker a certain quantity of surplus labour, without allowing him the labour time necessary for his own subsistence” (page 686). Dressed up as flexibility for the worker in zero hours contracts and benefits for the consumer in the “gig economy” that’s been touted for the “Uberization” of the digital age.
Or it could be seen as another example of an extension of capitalism into worlds it never used to be able to access.
The Process of Accumulation of Capital
As the first step in the analysis, he makes some overt assumptions, that demand and supply are at an equilibrium, that all surplus capital goes to the capitalist (there are no landlords, financiers, taxes, etc. involved) and that there are no exports.
We come back to process, in order to exist, capital must continually reproduce itself. This is true for the capitalist, who invests, as it is for the worker, as what “flows back to the worker in the shape of wages is a portion of the product he continuously reproduces” (page 712).
Extend this out from the individual worker to the class of workers and we get
The capitalist class is constantly giving to the working class drafts, in the form of money, on a portion of the product produced by the latter and appropriated by the former. The workers give these drafts just as constantly to the capitalist, and thereby withdraw from the later their allotted share of their own product. The transaction is veiled by the commodity form of the product and the money-form of the commodity.
Capital, page 713
So again, the worker is providing something for free, and providing capitalism with a living. John Locke had a theory about rights to wealth, that it belonged to the one who “mixed the labour with the land”. In other words, who did the work.
Applying that idea to capitalism, we can add up the surplus product, and when it reaches the value of the original investment, it could be argued that the capitalist had consumed their wealth and didn’t have a right to it anymore.
When the capitalist “has consumed the amount of their original capital, the value of his present capital represents nothing but the amount of surplus-value appropriated by him without payment” (page 715). Of course, that’s not going to happen.
The worker has produced capital. It’s the unpaid labour that forms capital. “In short, the capitalist produces the worker as a wage-labourer. this incessant reproduction, this perpetuation of the worker, is the absolutely necessary condition for capitalist production” (page 716).
And they are both stuck in the cycle.
The capitalist process of production, therefore, seen as a total, connected process, i.e. a process of reproduction, produces not only commodities, not only surplus value, but it also produces and reproduces the capital-relation itself; on the one hand the capitalist, on the other the wage-labourer.
Capital, page 724.
The Transformation of Surplus Value into Capital
But the capitalist does not consume all of the surplus value. Some is destined for reinvestment, or accumulation. With accumulation, the use of more capital, comes the requirement of more resources, both product (inputs that the workers can work on) and labour, to transform the products into something value added.
The result is “the ownership of past unpaid labour is the sole condition for the appropriation of living unpaid labour on a constantly increasing scale. The more the capitalist accumulates, the more he is able to accumulate” (page 729).
So we would seem to have the capitalist getting more than their share. But the transaction where the labour “freely disposes of” their labour is one in the marketplace where capitalist and labourer meet as equivalents. The problem is that workers receive payment “for the exchange value of his labour-power and by so-doing alienate its use value. The fact that this particular commodity, labour-power, possesses the peculiar use value of supplying labour, and therefore of creating value, cannot affect the general law of commodity production” (page 730).
The constant sale and purchase of labour-power is the form; the content is the constant appropriation by the capitalist, without equivalent, of a portion of the labour of others which has already been objectified, and his repeated exchange of this labour for the living labour of others.
Capital, page 730
The exchange has happened, but no one has been “defrauded” in the exchange, because “the law of exchange requires equality only between the exchange-values of the commodities given in exchange for one-another…it presupposes a difference between their use-values, and has nothing to do with their consumption” (page 731).
And, of course, it’s in the consumption that the additional value is generated.
The Political Economist’s Erroneous Conception of Reproduction on an Increasing Scale
Marx then turns to the question of how the system expands. It does not expand from
- capitalist consumption
Instead, it means more labour power and more means of production are needed. this obviously causes complications as the “more means of production” have themselves to be produced.
The Division of Surplus Labour into Capital and Revenue. The Abstinence Theory
The surplus value realised by the capitalist is divided into two components, the amount consumed and the amount reinvested. the part he voluntarily does not consume is what makes him a capitalist. But being a capitalist is not always a great thing.
But being a capitalist is not always a great thing.
Execpt as capital personified, the capitalist has no historical value…Only as capital personified is the capitalist respectable. [but consider] the effect of a social mechanism in which he is merely a cog. Moreover, the development of capitalist production makes it neessary to constantly increase the amount of capital laid out in a given industrial undetaking and competition subordinates every individual capitalist to the immanent laws of capitalist production, as external and coercive laws. It compels him to keep extending his capital so as to preserve it, and he can only extend it by means of progressive accumulation.
Capital, page 739
So the capitalist is embedded in a system and no matter whether they are good or bad or greedy or giving, they have to reinvest and play by the rules, otherwise they will no longer be a capitalist.
So the system has to grow.
So no or low growth is a crisis.
Why, because it’s a structural necessity, no matter what the consequences are.
So growth is good.
The So-Called Labour Fund
All of these things show that “capital is not a fixed magnitude, but a part of social wealth that is elastic and constantly fluctuates with the division of surplus value into revenue and additional capital” (page 759). To give more examples, reinvestment is not the only way of improving productivity, other examples include paying workers less; teaching them to manage money or food so they can live on less; exploiting nature; improvements in science and technology.
This flexibility and fluidity is the critical element as it is almost impossible to stop. there are so many variables and adjustments that can be made.
Final Thoughts: The Origins of Values
Throughout this section, we are introduced to a system which has seemingly no exit. A worker must work and a capitalist must accumulate. If a worker does not work, they have no money to live. If a capitalist does not accumulate and grow, they will no longer be a capitalist.
So both are stuck in a system.
And they make the best of that system. part of this is justifications of how people live with the situation. For example, the capitalist makes a virtue of abstinence, they don’t consume all their profit, the reason they reinvest is for the good of the overall society”.
Another example of things which are “good” perhaps not being “good” in themselves is productivity. Calling someone “unproductive” is pejorative but under capitalism, productivity is defined in relation to the amount of surplus value that is being produced. “To be a productive worker is therefore not a piece of luck, but a misfortune” (page 644).
Dressed up as flexibility for the worker in zero hours contracts and benefits for the consumer in the “gig economy” that’s been touted for the “Uberization” of the digital age.
Final thought, marketing has a role to play in this as well. Nat Eliason recently wrote a blog Could that Be Explained by Marketing, giving examples of how other things were reframed, including the 10,000 steps myth, multivitamins and breakfast. He recommends asking the question “is this obviously true on its own? Or might it be something I believe because it’s in the financial interest of someone to make me believe it?”
One of the interesting things about this course on Marx is questioning underlying assumptions. In a world of fake news, this is more important than ever.