Wednesday, 22 August 2012

Capital I Chapter 6 - Part 1

The Buying and Selling Of Labour Power

In this Chapter, Marx demonstrates historically and logically how the contradiction identified in the last Chapter is resolved. How is Surplus Value possible if all commodities exchange at their Values? How can Capital arise and accumulate?

Marx begins by once more emphasising this point that profit cannot be created in the realm of circulation neither in stage one of that process, where money buys commodities, nor in stage two where those commodities are once more sold.

The change of value that occurs in the case of money intended to be converted into capital, cannot take place in the money itself, since in its function of means of purchase and of payment, it does no more than realise the price of the commodity it buys or pays for; and, as hard cash, it is value petrified, never varying. Just as little can it originate in the second act of circulation, the re-sale of the commodity, which does no more than transform the article from its bodily form back again into its money-form.” (p 164)

He quotes Ricardo,

““In the form of money ... capital is productive of no profit.” {Ricardo: “Princ. of Pol. Econ.,” p. 267.}” (Note 1, P 164)

which contradicts the views of those such as the proponents of the TSSI who see in the movement from M-M1, resulting from Capital Gain, such a profit.

The solution to the dilemma, Marx demonstrates resides in the nature of Labour-Power, which he distinguishes from Labour. Labour-Power, the ability to work, is a commodity, indeed the only commodity possessed by workers, the only thing they have to sell. The Use Value of Labour-Power that the capitalist wants, the quality it possesses, like the quality of an apple to provide nutrition, is Labour. The reason the capitalist desires this Use Value, Labour, is precisely because, as Marx has demonstrated, in all the foregoing chapters, it is Labour which is the essence of Value.

...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.” (p 164)

Marx describes the conditions necessary for Labour-Power to be sold as a commodity. Firstly, the possessor of the Labour-Power must also be its owner, and able to freely sell it. A slave is the possessor of Labour-Power, it cannot be physically separated from his being, but he is not the owner of that Labour-Power. The slave owner, by definition of owning the slave also owns his Labour-Power, and the right to use it, lease it, or sell it alongside the slave, to whoever they choose. That right does not belong to the slave, and so their Labour-Power is not a commodity. Only the slave exists as a commodity to be bought and sold by the slave owner.

Because Capital is a social relation consisting of a contradictory unity of Capital and Wage Labour (Labour-Power sold as a commodity whose price is the wage), it is clear that, under slave owning societies, Capital does not exist, and nor does Surplus Value. In the Grundrisse, Marx explains clearly why slave labour does not produce Surplus Value. See my blog - Labour Power v Horse Power.
Marx writes 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)


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)

In other words slaves do not form a subjective factor in production but an objective factor like an animal or a machine, or other means of production. They form Constant rather than Variable Capital, to use the distinction that Marx derives later in his analysis.

Marx notes,

In encyclopaedias of classical antiquities we find such nonsense as this — that in the ancient world capital was fully developed, 'except that the free labourer and a system of credit was wanting.' Mommsen also, in his “History of Rome,” commits, in this respect, one blunder after another.” (note 1, p 165)

The same applies if the worker essentially turns themselves into a slave, by offering themselves for sale rather than their Labour-Power for a given period of time.

He must constantly look upon his labour-power as his own property, his own commodity, and this he can only do by placing it at the disposal of the buyer temporarily, for a definite period of time. By this means alone can he avoid renouncing his rights of ownership over it.” (p 165)

Marx notes that laws exist in various countries, therefore, which set maximum terms for labour contracts and regulations for their termination. But, by the same token the absence of such laws have often provided the basis for hidden slavery, for example in the form of peonage. He quotes Hegel from the “Philosophy of Right”.

““I may make over to another the use, for a limited time, of my particular bodily and mental aptitudes and capabilities; because in consequence of this restriction, they are impressed with a character of alienation with regard to me as a whole. But by the alienation of all my labour-time and the whole of my work, I should be converting the substance itself, in other words, my general activity and reality, my person, into the property of another.” {Hegel, “Philosophie des Rechts.” Berlin, 1840, p. 104, § 67.}”(Note 2, p 165)

The second condition required for Labour-Power to appear as a commodity for sale is that the owner of that Labour-Power is obliged to sell it rather than the commodities in which his labour is incorporated. In other words, the owner of Labour-Power, as a producer, must be separated from the means of production, which would otherwise enable them to produce and sell commodities on their own account; a situation that existed under peasant production.

Throughout Man's history, it has always been the case that he needed to consume both before and during the time he was producing. In an economy based on commodity production, it is also necessary to be able to consume before the commodities you produce have been sold, and provide the money to buy further commodities to consume. So, in addition to the Means of Production, the owner of Labour-Power must own the Means of Consumption, if they wish to avoid having to sell their own Labour-Power.

As a consequence of a variety of historical circumstances (which Marx details later in Capital in respect of Britain), a situation is arrived at whereby the owner of money does meet in the market place such owners of Labour-Power, who are free to sell their Labour-Power, and who now being freed of the ownership of the Means of Production and of Consumption, have no choice but to sell their Labour-Power as a commodity.

But, as Marx points out,

One thing, however, is clear — Nature does not produce on the one side owners of money or commodities, and on the other men possessing nothing but their own labour-power. This relation has no natural basis, neither is its social basis one that is common to all historical periods. It is clearly the result of a past historical development, the product of many economic revolutions, of the extinction of a whole series of older forms of social production.” (p 166)

Marx emphasises just what a sharp break capitalist production is with everything that has gone before. He summarises the historical development he has previously described.

Definite historical conditions are necessary that a product may become a commodity. It must not be produced as the immediate means of subsistence of the producer himself.” (p 166)

It is only with capitalist production that the majority of products can take on the form of commodities. As a result, prior to capitalist production most things are produced for their Use Value, and Exchange Value is undeveloped. Only when the Division of Labour separates Use Value and Exchange Value, which first appears as barter, do commodities begin to be produced on a larger scale. Yet, such development is still common to many different types of society.

Money only arises when the exchange of commodities has itself reached a more developed stage, and the preponderance of its use for its different functions of equivalent of commodities, or as means of circulation, or means of payment, as hoard or as universal money, point, according to the extent and relative preponderance of the one function or the other, to very different stages in the process of social production.” (p 167)

But, Marx points out that all these forms are compatible with a relatively primitive circulation of commodities.

Otherwise with capital. The historical conditions of its existence are by no means given with the mere circulation of money and commodities. It can spring into life, only when the owner of the means of production and subsistence meets in the market with the free labourer selling his labour-power. And this one historical condition comprises a world’s history. Capital, therefore, announces from its first appearance a new epoch in the process of social production.” (p 167)

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