Where do profits come from? How can wage-labour reasonably be described as wage-slavery? If a worker makes a free contract, as an individual equal before the law, with an employer, isn’t that a fair day’s wage for a fair day’s work?
Shouldn’t the word “exploitation” be reserved for exceptional cases where workers are exceptionally at a disadvantage in the wage-bargain, rather being used (as Marxists use it) for all wage-labour?
The Grundrisse offers a faster-burning and more vivid first draft of the answers to these questions which Marx develops in Capital.
In Capital, Marx is laconic and deliberately “flat” about why it is labour that sustains capital.
In order to be able to extract value from the consumption of a commodity, our friend, Moneybags, must be so lucky as to find, within the sphere of circulation, in the market, a commodity, whose use-value possesses the peculiar property of being a source of value, whose actual consumption, therefore, is itself an embodiment of labour, and, consequently, a creation of value. The possessor of money does find on the market such a special commodity in capacity for labour or labour-power. [Chapter 6].
It just so happens that way, and that’s that.
In Capital, when Marx introduces the concept of surplus value (the common underpinning, in his theory, of capitalist revenue of all sorts), he starts by imagining that wages are equal to the amount of value added by a worker in a day. Impossible: there would be nothing for capital to feed on! A seemingly pedantic distinction resolves the conundrum. The value of labour-power (which underpins wages) is determined by the labour-time embodied in working-class subsistence, not by the labour done by the worker after the capitalist has bought the labour-power.
The owner of the money has paid the value of a day’s labour-power; his, therefore, is the use of it for a day; a day’s labour belongs to him. The circumstance, that on the one hand the daily sustenance of labour-power costs only half a day’s labour, while on the other hand the very same labour-power can work during a whole day, that consequently the value which its use during one day creates, is double what he pays for that use, this circumstance is, without doubt, a piece of good luck for the buyer, but by no means an injury to the seller. [Chapter 7]
“By no means an injury to the seller!” Only over hundreds of pages, in Capital, does Marx build up the picture which shows that the market criterion, “by no means an injury to the seller”, is only a half, or quarter, or one-tenth truth. In Capital, Marx does not use the words “exploit” or “exploitation” until chapter 11. Even there, those words are mostly used in a fairly neutral way.
In Capital Marx chose a deliberately toned-down, give-your-opponents-their-strongest-argument approach. Compare the Grundrisse.
The exchange between capital and labour... splits into two processes which are not only formally but also qualitatively different, and even contradictory:
(1) The worker sells his commodity... for a specific sum of money... (2) The capitalist obtains labour itself.. the productive force... which thereby becomes... a force belonging to capital itself...
Instead of aiming their amazement in this direction — and considering the worker to owe a debt to capital for the fact that he is alive at all, and can repeat certain life processes every day as soon as he has eaten and slept enough — these whitewashing sycophants of bourgeois economics should rather have fixed their attention on the fact that, after constantly repeated labour, he always has only his living, direct labour itself to exchange...
The worker cannot become rich in this exchange, since, in exchange for his labour capacity as a fixed, available magnitude, he surrenders its creative power, like Esau his birthright for a mess of pottage. Rather, he necessarily impoverishes himself... because the creative power of his labour establishes itself as the power of capital, as an alien power confronting him. He divests himself of labour as the force productive of wealth; capital appropriates it, as such...
The productivity of his labour, his labour in general, in so far as it is not a capacity but a motion, real labour, comes to confront the worker as an alien power; capital, inversely, realizes itself through the appropriation of alien labour.
The worker emerges not only not richer, but emerges rather poorer from the process than he entered. For not only has he produced the conditions of necessary labour as conditions belonging to capital; but also the value-creating possibility, the realisation which lies as a possibility within him, now likewise exists as surplus value, surplus product, in a word as capital, as master over living labour capacity, as value endowed with its own might and will, confronting him in his abstract, objectless, purely subjective poverty. He has produced not only the alien wealth and his own poverty, but also the relation of this wealth as independent, self-sufficient wealth, relative to himself as the poverty which this wealth consumes, and from which wealth thereby draws new vital spirits into itself, and realizes itself anew.
After production, [labour capacity] has become poorer by the life forces expended, but otherwise begins the drudgery anew...
In the earlier parts of the Grundrisse, Marx follows other economists in calling what the capitalists buy from the workers “labour”. In the very course of writing the Grundrisse, he realised that was wrong. The worker sells not labour but labour-power, or the capacity to labour.
The best-known explanation of this distinction between labour and labour-power is Engels’ introduction to a later edition of Wage Labour and Capital. Engels’ introduction is deliberately “flat”, in the same way that Marx’s exposition in the early chapter of Capital is. In the Grundrisse, we see the distinction dawning on Marx; and it is not merely a distinction, it is a conflict.
Living labour itself appears as alien vis-a-vis living labour capacity, whose labour it is, whose own life’s expression it is, for it has been surrendered to capital... Labour capacity relates to its labour as an alien... Just as the worker relates to the product of his labour as an alien thing, so does he relate to... his own labour as an expression of his life, which, although it belongs to him, is alien to him and coerced from him... Capital is the existence of social labour.
The distinction between labour-power and labour is not just a logical distinction, but a social process of separation, a question of social power. Marx was to explain further in Theories Of Surplus Value:
Instead of labour, Ricardo should have discussed labour-power. But had he done so, capital would also have been revealed as the material conditions of labour, confronting the labourer as power that had acquired an independent existence, and capital would at once have been revealed as a definite social relationship.
The explanations in the Grundrisse are all the more powerful because here — in contrast to some of his earlier writings, and more sharply than in any other of his later writings — Marx stresses that “the workers themselves... will not permit [wages] to be reduced to the absolute minimum; on the contrary, they achieve a certain quantitative participation in the general growth of wealth”.
That they do so is politically important: it is what makes wage-workers within capitalism able to get “a share of civilization which distinguishes [them] from the slave” — such as “participation in the higher, even cultural satisfactions, the agitation for his own interests, newspaper subscriptions, attending lectures, educating his children, developing his taste etc”.
The formal equality which the wage-worker achieves in capitalist society is important, too: it “essentially modifies his relation by comparison to that of workers in other social modes of production”.
The evil is one not to be remedied by higher wages, or more complete formal equality.
Thus Marx’s comment, some years later, on a clause in the German socialists’ Gotha Programme which said that the problem with wage-labour was an “iron law” keeping wages too low:
It is as if, among slaves who have at last got behind the secret of slavery and broken out in rebellion, a slave still in thrall to obsolete notions were to inscribe on the program of the rebellion: Slavery must be abolished because the feeding of slaves in the system of slavery cannot exceed a certain low maximum!
Of course slaves generally did not get enough food. Of course slave revolts were good even if limited to demanding bigger food rations. Of course it is inherent in the system of capitalist wage-labour that wages are squeezed down. Of course it is important that workers struggle to get even a little bit more. But Marx developed his theory so as to encourage workers to rebel against wage-labour as a whole, not just against low wages, just as, in their time, slaves had eventually rebelled against slavery as such, and not just against small food rations.
The same thought is expressed in the Grundrisse:
The recognition of the products as [labour-power’s] own, and the judgement that its separation from the conditions of its realisation is improper — forcibly imposed — is an enormous advance in awareness, itself the product of the mode of production resting on capital, as much the knell to its doom as, with the slave’s awareness that he cannot be the property of another, with his consciousness of himself as a person... slavery... ceases to be able to prevail as the basis of production.
Comments
Labour Power v Horse Power in Value Creation
I am working on a review of Theories of Value both Subjective and Objective (i.e. Classical/Marxist). Two questions that arise are "Why is only human labour-time the measure of exchange-value?", and "Why is only human labour-power productive of surplus-value as opposed to say the work done by a horse?" The conventional Marxist answer to the first question is that only humans participate in free exchange of commodities. Does this mean that if other sentient beings existed and exchanged with us their labour-power would have to be taken into account? But what about slaves they take no more part in free exchange than does a horse! To the second question the answer is normally given that the worker is able to continue producing value over and above the value of their wages i.e. the time required to produce their means of subsistence, but again what about the slave? A horse can continue say driving a turbine and thereby producing an output that has a value all day long, presumably then producing a value far in excess of what has been used for its production. If this is not to count then why should the output of the slave be any different?
I beleive that Marx in the Grundrisse provides the basis for answering these questions, but as far as I am aware they have not been thoroughly dealt with. I would be grateful of any thoughts that Marxist economists might have. The basic questions I have so far considered are:
1) Why is Labour time the measure of Value only the time worked by the human, rather than the time worked by say a horse, or following that a machine?
2) What is the function in answering this of the part played in exchange? That is a free human takes part in exchange i.e. it is a SOCIAL relationship. A horse does not it acts merely as a means of production as does a machine. The horse is simply employed and receives means of subsistence.
3) But what then of the slave? The slave does not take part in exchange, but in effect plays no different role than the horse being merely provided with means of subsistence! Does this mean that slave labour does not count in determining exchange value, that it can like the horse or machine only transfer its own production cost (value in labour time) to the commodity?
4) If so then what about surplus value? Does a slave not produce surplus value for the slave-owner? In a slave mode of production this can be overcome because what the slave produces is a surplus product not a surplus value. However, what about the slave in a commodity based economy? Did the slaves in the US South not produce surplus value in the cotton??
5) The slave like the worker is able to work longer during the day than is required to produce their own means of subsistence. Whether the surplus produced over this minimum is described as a surplus product or a surplus value surely depends on the mode of production within which it is produced. But by the same token a horse is able to work longer during the day – during which time it is producing an output (say energy by turning a turbine) whose value may be greater than the value of the horse’s subsistence. So surely this is a surplus product too. But can’t the same be said for a machine? It has a cost of production and costs for maintenance, but it too can continue producing – indeed more so than a human – values that exceed this cost! The question here though is how is this value of output determined???
6) The horse and the machine are set in motion by human labour. They are an adjunct of that labour. A dangerous argument surely. The worker is set in motion by the entrepreneur on that basis value added is added by the entrepreneur whose productivity is increased by the use of labour-power. On that basis the entrepreneur is put in the place of the worker, and the worker in the place of the machine!!!
7) What would be the situation if there were more than one sentient species? Suppose Neanderthals or aliens walked, worked and traded amongst us. Would human labour power STILL only be the source of new value, and human labour-time the only measure of exchange-value??? How does the widely different ability of such species affect the determination of Value if the labour of all is counted, via the averaging out of all labour-time? What about the rise of sentient machines?
Arthur Bough
Starter
As a starter perhaps for a discussion on this below is a brief discussion I produced a couple of years ago on this question. However, I don't feel it deals with all of the questions raised above in relation, particularly to slave labour.
Why Human Labour Creates Exchange Value and Animal Labour Does Not
Why is human activity value creating labour whilst the activity of say a horse not? Why is human ploughing a field productive of value, whereas a horse ploughing a field is not? Animal labour is productive of value. Cows naturally produce manure in the fields in which they pasture. The manure acts as a fertiliser for the grass, and in doing so it is clearly valuable. But what animals do by such self-activity is produce not exchange-values, but use-values. For economic study what we are interested in is what gives these use values an exchange value. That is the key to the question. It is only humans that engage in conscious exchange. A horse exchanges his activity with its owner in return for food and shelter, but that exchange is not undertaken consciously by the horse on the basis of I will only perform this work if you give me x amount of food and shelter.
Take a situation of a horse in one field and a man in another. The horse is not self-aware. It acts to satisfy basic needs e.g. eating. When it eats grass it does so to meet its need for food. For the horse the grass is value, but it is use-value not exchange value i.e. the horse derives utility, usefulness from the food just as a man does, but the horse does not consider the food something it can exchange. The horse does not think, “If I pull this apple from this tree I can exchange it for a bundle of hay, that I would prefer to have, with someone who prefers the apple.” In short the horse does not consider its actions in respect of the time they take and the benefits they confer. Even less does the horse consider how it can increase its productive capacity. If we go a step further and consider the actions of a machine then even less can its actions be considered equivalent to labour as creating exchange value because there is a complete absence of neurological activity.
Why is this important? Because at root the determination of exchange value by labour-time resolves itself as the individual considering the amount of time they have to give up in order to achieve a given end. If it takes 6 months labour to produce 1cwt. of potatoes, but 2cwt. of carrots and I choose to produce potatoes that reflects the fact I prefer potatoes. If someone wishes to get me to exchange my potatoes for carrots they would have to offer me at least 2cwt. of carrots i.e. equal to the carrots I could have produced for myself in the time it took me to produce the potatoes. At a period in time when the vast majority of production is at this kind of individual level i.e. peasant families producing to meet their own needs, then concern for exact exchange relations may not be important. I might decide if I have an accidental surplus to exchange it for something I want whatever the exchange rate. But this situation changes as soon as trade begins to develop, and merchants arise whose sole business is to know the true values of goods in order to make a profit. A merchant is the perfect person to arbitrage the labour of one individual against another, one village with another etc. If two villages produce cloth and flour but at different levels of efficiency a merchant can make a profit by trading off these variations. If A produces 1 cwt. of flour in 100 hours, and 100 yds. of linen in 120 hours, whilst B produces 1cwt. of flour in 120 hours, and 100 yds. of linen in 100 hours then a merchant can buy 1 cwt of flour from A and exchange it with B for cloth that would take it up to 120 hours to produce (the equivalent amount of time it would need to give up to produce the flour). If the merchant then takes the 120 yds of linen acquired from B he can then exchange it for 1.44 cwts. of flour with A (the equivalent of the 144 hours it would have taken them to produce 120 yds of linen. In short it is this calculation of how much time those doing the exchanging would have to have given up to produce what is acquired which is the basis of the exchange value they place on the goods exchanged. A horse or cow or donkey makes no such calculation and therefore its activity can never be a source of exchange-value, only of use-value.
Once more than two producers enter the equation then A is no longer constrained to exchange with B, and vice versa. Competition between the various parties thereby ensures that the actual rates of exchange between all parties are forced down to the average time required for production of each commodity, so that the comparative advantage situation above out of which the merchant is able to make a profit by arbitrage disappears.
Arthur Bough
Some Answers and Some Further Questions
Part of the answer is given above – that is the calculation of exchange values requires participation in the process of calculation, requires participation in exchange, therefore. See:above
This means that only free participants in exchange, and therefore in the process of calculation can assess exchange values, and therefore it is only their Labour time that can be a measure of value. If I capture a horse to use for powering a mill to grind wheat I only take into consideration the labour time needed to capture the horse, sustain the horse, not the time the horse actually spends grinding. The same is true if instead of a horse I capture a slave. Marx says in the Grundrisse:
“IN production based on slavery, as well as in patriarchal agriculture…..the slave does not come into consideration as engaged in exchange at all.” (419)
and “in the relations of slavery and serfdom….The slave stands in no relation whatsoever to the objective conditions of his labour; rather, labour itself, both in the form of the slave and in that of the serf, is classified as an inorganic condition of production along with other natural beings, such as cattle, as an accessory of the earth.” (p489)
So the condition set out by Marx for determining exchange value appears to be that the economic agents participating in exchange must base their calculation of how much of one commodity to exchange for another based upon THEIR OWN expenditure of labour. This is the basis of Value as opposed to Exchange Value. It is the generalisation of this calculation within the context of SOCIAL Labour which produces Exchange Value. That is the calculation becomes not how much labour would I have to expend to obtain this commodity, but how much would other similar owners of commodities, who participate in exchange freely, have to expend in order to produce this or that commodity. If a society is one which has generalised commodity exchange, yet retains labour in the form only or mostly of slave labour – which Marx explains would be contrary to the way capitalism functions - then the labour time of this slave labour cannot be treated any different than the labour of an animal or a machine i.e. it can only pass on its value, and not create new value, not produce surplus value. In that case we have the peculiar situation in which the Exchange Value of the product of the slave is determined under such conditions only by the labour-time of the slave owner in procuring and maintaining the slave, and only the labour-time of the slave owner (or other free participants in exchange such as slave supervisors) then counts as living labour, and therefore productive of surplus value.
The slave does not participate in this process according to Marx because they are neither free to make the necessary calculation of how much Labour Power to exchange for a given quantity of means of subsistence, and also – and in this case amounts effectively to the same thing – not the owner of a commodity which they bring to market to be measured against other commodities.
How then to deal with the question of valuing the product of slaves in the US South? Presumably, if all producers use slave labour then only the labour-time used in procuring and maintaining the slave can enter the Exchange Value of the product. No Surplus Value is created by the slave, only the labour-power of the slave owner and his free workers create new and Surplus Value. The consequence must be that the Exchange Value of the product, and the quantity of Surplus Value produced must be considerably reduced. This appears a valid conclusion, because according to Marx the slave is no different here to the animal or machine used in production, and we would expect the exchange values of products produced by machines to fall compared to those produced by free manual labour. But the Southern slave owners sold their cotton on a world market where the exchange Value is determined not by this slave labour, but by the labour of free workers. The same is true for the capitalist that employs a machine. The exchange Value of his product is determined not by his particular production, but production in general. If the machine means that the Value of his particular output is lower than the Exchange Value of his output then he obtains a competitive advantage is able to capture a larger market share or make a bigger profit. If the employment of a slave allows the same advantage then the slave owner benefits in the same way as the machine owner.
It is only the existence of this large liquid market where Exchange Values are determined by the labour-time of free workers that allows this calculation to be undertaken. Yet there seems logically something wrong here.
Marx would accept that in slave society the slave produces a surplus product. The slave consumes a certain quantity of the product of society, but through his labour produces a greater quantity of products. To consider the situation otherwise has to be to consider the slave merely as a tool, to put the social surplus down entirely to the slave owners use of the slave as a tool. But this social surplus is a surplus of USE Values, and the slave’s labour is certainly productive of USE Values just as is Nature itself. See Marx’s Critique of the Gotha Programme where he chastises Lassalle for the argument that only Labour creates Value. This surplus produced by the slave cannot be considered, however, a Surplus Value for the simple reason that in a slave society there is no general commodity exchange. If products are exchanged it is only of the surplus, and exchange is generally conducted not within society, but between societies. No real calculation of exchange Values takes place, and therefore no Surplus Value can be produced, because Surplus Value is specific to capitalist production.
Yet to some extent this appears a semantic difference. In both slave society and capitalist society – indeed in all civilised society – a social surplus is produced. In each type of society the means by which this social surplus is produced is different, and the differences create the specific dynamics of each type of society, the classes on which arise out of the different forms of property that develop etc. Capitalist society differs from all previous forms of society precisely because the social surplus takes the form of Surplus (Exchange)Value not Surplus USE Values, the ultimate expression of which is the accumulation of Capital as objectified Surplus Value. Yet as Marx outlines the source of the Social Surplus is effectively the same in each type of Society. Society produces more than it consumes output exceeds what has to be used to simply replenish what has been used up in production. But in all class society the real act of production is always at least in its vast majority the production undertaken by the exploited class. The social surplus arises because this class or classes produce more than they consume. In the case of the worker s/he is paid a wage (the exchange Value of their Labour-Power) which ensures his/her reproduction through the transformation of this exchange Value into Use-Values, but is less than the Exchange Value of the output (Use-Values) of their Labour, and hence produces a social surplus in the form of Surplus (Exchange) Value, whereas the slave similarly receives use values as means of subsistence to ensure their reproduction, and produces a greater volume of use-values as a consequence of their labour thereby creating a social surplus of Use-Values. In both instances one set of Use Values is negated in the act of production, and the process is completed via the negation of this negation in the resultant use values which form the beginning of the new cycle. The difference being that under capitalist production the process is mediated by Exchange Value, which inserts itself into what was previously a process of direct transformation.
It is, of course, entirely conceivable that a wage worker might receive in Use Value no greater share of society’s output than does a slave, indeed no greater absolute amount. At the beginning of the 19th century when the working class was created in Britain as a result of the driving off the land of the peasants through the general Enclosure Act of 1801 the condition of these workers was certainly much lower than had been the condition of workers, peasants and serfs in the previous 500 years, manifest in the halving of their life expectancy. Yet the development of production meant that 50 years later living standards for workers had almost recovered to previous levels – though they were now working twice as many hours per day, at far greater intensity, and in far worse conditions to achieve it. Subsequent increases in production, together with the organisation of workers have seen a further rise in living standards.
But two questions then arise. If the worker like the slave receives means of subsistence, and by their labour produces a greater output in what real sense can the one be described as unproductive (of surplus value), and yet the other productive of surplus value – apart from the terminological difference that one produces a surplus of use values, and the other a surplus of Exchange Values. Secondly, if the requirement for labour-time to count towards the calculation of Exchange Value is that those undertaking the calculation are owners of commodities free to exchange them in a liquid market then how does this really apply to wage workers. The definition of the working class as a slave class derives precisely from the fact that it can only sell its labour-power to a monopsonist buyer – the capitalist class – and under conditions, thereby in which it provides some of its commodity for free! If there were as many buyers of labour-power as there are sellers, or alternatively to say the same thing if each worker owned the means of production and bought their own Labour-Power then this monopoly power over Labour could not exist. In Capital Marx relates that even up to the last third of the 18th century - i.e. even after the Industrial revolution had begun – capitalists could not make substantial if any profits out of workers for the simple reason that their was such a shortage of Labour-Power due to the fact that the majority of people were still peasants, and even landless labourers were able to make a living from the Common Land.
Yet whereas according to Marx the Labour-time of the slave does not enter the calculation of Exchange Value it is precisely the labour-time of the wage-slave that is determinant of Exchange Values.
Arthur Bough
Moved
As this is getting longer than I expected I have moved further discussion to my blog here
In the next section I have discussed the necessity of wage labour for the full development of Exchange Value and Capitalism, and the implications of this for new class theories. Feel free to add comments there or here.
Arthur Bough
Why Capital Consumes Itself
In my blog here I set out why Capital in Department I does not produce Surplus Value, Why Capital consumes itself, and procudtion increasingly drives towards the Production of Use Values rather than Exchange Values, why the social surplus tends to drive towards a surplus of Use Value, not exchange value.
Arthur Bough