Wednesday, 29 August 2012

Capital I, Chapter 7 - Part 2

2) The Production Of Surplus Value

The product of the consumption, by Labour, of the means of production i.e. of the labour process, is a Use Value. But, under Capitalism, the aim is not the production of Use Values, as it is under all previous modes of production. Where the petit-commodity producer produced a commodity, sold it for money and then bought some other commodity they desired (C-M-C), the capitalist only lays out money to buy commodities if they can be subsequently sold for an additional sum of money, M-C-M1. But, money cannot simply expand itself via exchange. Capitalists only produce Use Values because they are also Exchange Values, and because through the process of production, the capitalist can extract Surplus Value. To do that, he must produce a commodity whose Exchange Value is greater than the sums of the Exchange Value he has laid out for its production, or more precisely, than it would cost him to reproduce it.

The Value of a commodity is determined by the labour-time socially necessary for its production. That is true of the product now appropriated by the capitalist. If this is 10 lbs. of yarn, the labour-time required for its production can be calculated. Given that this is now a capitalist economy, and, therefore, a money economy, in which money represents the value of commodities we can use money amounts to represent this labour-time, and assume that the capitalist pays the full value of all he buys.
So, the yarn may comprise 10 lbs of cotton worth 10 shillings (50p); wear and tear of machinery 2 shillings (10p). That is a total of 12 s. (60p) in means of production. Put another way, as Marx describes it, if it takes 24 hrs or 2 days to produce the gold that is equivalent to 12 shillings, then the labour-time incorporated in the yarn so far = 2 days.

It doesn't matter that all of the cotton is used up, and can be seen in the yarn whereas only a portion of the spindle and other equipment is used up, and its material cannot be seen in the end product. Both contained Value, i.e. labour-time, and that value was transferred to the final product in proportion to how much of it was used up.

It is important to distinguish here this transfer of value from the means of production due to wear and tear, which increases in proportion to how much they are used, and depreciation which in contrast is a function of time and obsolescence. A machine used 24 hours a day will transfer value to the final product at twice the rate as one used 12 hours a day, and will likewise be used up twice as fast. Depreciation proceeds whether a machine is used or not. In fact, Marx sets out that depreciation occurs even more as a result of non-use than of use. Equipment left unused rots and rusts, material rots and deteriorates. Moral depreciation arises where a machine is made obsolete as a result of some new better machine being introduced, or as a result of a new method of producing an existing machine, so that its current value is reduced. The same is true in respect of other means of production. The value of machines and means of production is transferred to final production in production to their wear and tear i.e. in proportion to their participation in the production process.

But, depreciation occurs outside the production process, it proceeds whether production is occurring or not. As such it is not value transferred to the final product. Any changes in the Value of Means of production that occur outside the production process cannot be attributed to the Production process, and the process, therefore of valorisation. They constitute merely Capital Gains or Losses for the Capitalist not for Capital. Depreciation has the same effect as though, someone stole a part of the machine, or stole an amount of raw material. Or put another way, it is as if, someone picked the capitalists pocket, burgled his house, or as if he lost money at the gaming table. It has nothing to do with the formation of Value or Surplus Value, because it occurs outside the Labour Process outside the valorisation process. In fact, not only is it not a consequence of the labour process, it is as Marx sets out a consequence of a NON-LABOUR process, a consequence of not being consumed by Labour. Could it have been consumed immediately by Labour, there could have been no depreciation. This distinction between the production of Value and Surplus Value within the Labour Process, and the accrual of Capital Gains or Losses by Capitalists outside that process is one of the things that the TSSI does not grasp, and is important for later discussion.

All of the labour-time used in the production of these means of production may have occurred a long time ago. This does not matter, and it is measured according to current standards. As Marx says,

If a definite quantity of labour, say thirty days, is requisite to build a house, the total amount of labour incorporated in it is not altered by the fact that the work of the last day is done twenty-nine days later than that of the first. Therefore the labour contained in the raw material and the instruments of labour can be treated just as if it were labour expended in an earlier stage of the spinning process, before the labour of actual spinning commenced.” ( p 182-3)

In order that the cotton and spindle do become part of the value of the final product, both the cotton and spindle must come together and be needed in the production of some Use Value. In addition, no more of either than is socially necessary must be used to that end.

Though the capitalist have a hobby, and use a gold instead of a steel spindle, yet the only labour that counts for anything in the value of the yarn is that which would be required to produce a steel spindle, because no more is necessary under the given social conditions.” (p 183)

When we consider the living labour, and come to measure its value, things are different. We saw earlier that although as Use Value, as the source of Abstract Labour, and, therefore, Value, each concrete labour is different and specific, in being the essence of value, it is only the nature of Labour in the Abstract that is significant, and so in this sense, it only differs quantitatively.

It is solely by reason of this identity, that cotton planting, spindle making and spinning, are capable of forming the component parts differing only quantitatively from each other, of one whole, namely, the value of the yarn. Here, we have nothing more to do with the quality, the nature and the specific character of the labour, but merely with its quantity. And this simply requires to be calculated. We proceed upon the assumption that spinning is simple, unskilled labour, the average labour of a given state of society.” (p 184)

If its assumed that this labour works under the average conditions then it may be that 10 lbs of yarn will require 6 hours of living labour to produce.

Not only the labour, but also the raw material and the product now appear in quite a new light, very different from that in which we viewed them in the labour-process pure and simple. The raw material serves now merely as an absorbent of a definite quantity of labour. By this absorption it is in fact changed into yarn, because it is spun, because labour-power in the form of spinning is added to it; but the product, the yarn, is now nothing more than a measure of the labour absorbed by the cotton. If in one hour 1 2/3 lbs. of cotton can be spun into 1 2/3 lbs. of yarn, then 10 lbs. of yarn indicate the absorption of 6 hours’ labour. Definite quantities of product, these quantities being determined by experience, now represent nothing but definite quantities of labour, definite masses of crystallised labour-time. They are nothing more than the materialisation of so many hours or so many days of social labour.” (p 184-5)

Above, we assumed that 12 shillings = 24 hours labour-time. In that case, the 6 hours now expended is equal to 3 shillings (15p), bringing the total value of the yarn to 15 shillings (75p). But, we also assumed earlier that the value of a day's Labour Power was also equal to 3 shillings or 6 hours labour-time. In that case, the total value of the yarn is 75p and the amount laid out by the capitalist is also 75p. No Surplus Value has been created, and no new capital has been formed.

There is in reality nothing very strange in this result. The value of one pound of yarn being eighteenpence, if our capitalist buys 10 lbs. of yarn in the market, he must pay fifteen shillings for them. It is clear that, whether a man buys his house ready built, or gets it built for him, in neither case will the mode of acquisition increase the amount of money laid out on the house.” (p 186)

Marx then goes through all the traditional arguments put forward by the apologists of capital to explain profit, in order to dismiss them. The capitalist bemoans that he had risked his capital to make profit. “The road to hell is paved with good intentions.” He could have bought the commodity rather than produced it. But, if all capitalists did that who would produce them? He had been abstinent in order to acquire profit. But, in return for that abstinence he is “now in possession of good yarn instead of a bad conscience.” Had he not provided the worker with the means of producing and thereby done society a service? “Well, but has not the labourer rendered him the equivalent service of changing his cotton and spindle into yarn?” Have I not performed labour myself? The capitalist asks, in overlooking and superintendence? “His overlooker and his manager try to hide their smiles.”

But, then Marx says, having gone through all the arguments for the source of profit, the capitalist smiles.

He himself is a practical man; and though he does not always consider what he says outside his business, yet in his business he knows what he is about.” (p 187)

What the capitalist realises is that the value of the Labour Power he has bought, and the Value that the worker can create during the day he has bought that Labour Power, are two different things. The Value of the Labour Power was 15p = 6 hours labour-time or the amount required to produce that Labour-Power for a day. But, there is no reason that the capitalist should then limit himself to only demanding 6 hours work from the worker. He has bought a day's Labour Power, and is entitled to receive it, be that Day, 6 hours, 12 hours, or even 24 hours.

It is this capacity of Labour that the capitalist is interested in, its ability to create Value over and above the Value of Labour Power, not whether that Labour can produce boots rather than boats, or any other kind of commodity. All the capitalist is interested in is the capacity to produce Surplus Value.

NB. Its important to pick up a point here in reference to the comment Marx made earlier in reference to buying a Day's Labour Power being no different to hiring a horse for a day. His point was that having hired it the capitalist is entitled to use it for the day. However, as pointed out previously, there is a difference between hiring a horse for a day, and hiring a wage labourer for a day. The former does not produce Surplus Value, the latter does. The horse like a slave is merely an instrument of labour. It does not produce Surplus Value. A horse could be doing exactly the same work as a wage labourer, for example turning a mill stone grinding oats. If it grinds 10 bags of oats in a day, but only consumes 1, it has produced a Surplus Product = 9 bags, just the same as a wage worker might do. But, this is a Surplus Product not a Surplus Value. Yet, it is not the fact that it is a horse rather than a human that accounts for the fact that Surplus Value is not created. The same would be true if it had been a slave rather than a horse. The reason no Surplus Value is created is because in the case of the slave and the horse, neither appear in the market to buy the oats. The oats are bought by the owner of the horse or the slave, who will only pay for them what they cost him to produce i.e. the equivalent of 1 bag of oats. But, the wage worker does appear in the market to buy their own means of subsistence. They have to pay for them at the rate not of what it costs the capitalist to produce them, but at the rate determined by the amount of labour-time required for their production. That is why Marx sets out in the Grundrisse, that it is only when Wage Labour becomes widespread, and indeed only when wage workers form the bulk of consumers, that Exchange Value can take its fully developed form.

For a fuller discussion of this point see: Labour Power v Horse Power

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.” (p 188)

The capitalist provides the worker with sufficient means of production, therefore, to work for not 6 hours, but 12 hours. In this 12 hours, 20 lbs of cotton will be consumed.

There is now materialised in this 20 lbs. of yarn the labour of five days, of which four days are due to the cotton and the lost steel of the spindle, the remaining day having been absorbed by the cotton during the spinning process. Expressed in gold, the labour of five days is thirty shillings. This is therefore the price of the 20 lbs. of yarn, giving, as before, eighteenpence as the price of a pound. But the sum of the values of the commodities that entered into the process amounts to 27 shillings. The value of the yarn is 30 shillings. Therefore the value of the product is 1/9 greater than the value advanced for its production; 27 shillings have been transformed into 30 shillings; a surplus-value of 3 shillings has been created. The trick has at last succeeded; money has been converted into capital.” (p 188-9)

The capitalist has bought all of the commodities at their full value, including Labour-Power, and has only sold the final product at its Value, and yet a Surplus Value has been produced.

This metamorphosis, this conversion of money into capital, takes place both within the sphere of circulation and also outside it; within the circulation, because conditioned by the purchase of the labour-power in the market; outside the circulation, because what is done within it is only a stepping-stone to the production of surplus-value, a process which is entirely confined to the sphere of production.” (p 189)

Comparing the production of Value and Surplus Value, the latter is essentially the continuation of the labour process beyond the point where the cost of replacing the Labour Power has been met. In the Labour Process pure and simple the aim is the production of Use values, and means of production are employed to assist Labour to that end. In Capitalist Production, however, the aim is to produce Exchange Values and the utility of the means of production utilised is secondary to the fact that they are representations of Value, of labour-time, whose only measurement is quantity not quality.

Having said that, the necessity arising from competition, determines that the quantity of the means of production, and of labour-power must be of the average for production of that type.

If a self-acting mule is the implement in general use for spinning, it would be absurd to supply the spinner with a distaff and spinning wheel.” (p 190)

This is why, as I've pointed out elsewhere, Capital is not free to simply “Make The Workers Pay” for its crises, because that impacts the quantity and quality of the labour-power available, a consequence of the fact that capital is a social relation, with Capital and Wage Labour forming a contradictory unity.

The process of production, considered on the one hand as the unity of the labour-process and the process of creating value, is production of commodities; considered on the other hand as the unity of the labour-process and the process of producing surplus-value, it is the capitalist process of production, or capitalist production of commodities.” (p 191)

Marx concludes by demonstrating that the employment of skilled complex labour at higher wages does not change things. Complex Labour simply counts as a multiple of simple labour. So, if the worker worked for the same 12 hours, but was paid 6 shillings (30p), rather than 3 shillings, they would still create Surplus Value. If 1 hour of their complex labour = 2 hours of simple, abstract labour, then their 12 hours is equal to 24 hours. They would thereby have created 24 hours of new Value = 12 shillings. The capitalist has then paid out 6 shillings for the Labour Power, creating a Surplus Value of 6 shillings. Its as though they employed 2 workers and extracted Surplus Value from both.

Whatever difference in skill there may be between the labour of a spinner and that of a jeweller, the portion of his labour by which the jeweller merely replaces the value of his own labour-power, does not in any way differ in quality from the additional portion by which he creates surplus-value. In the making of jewellery, just as in spinning, the surplus-value results only from a quantitative excess of labour, from a lengthening-out of one and the same labour-process, in the one case, of the process of making jewels, in the other of the process of making yarn.” (p 192)

No comments: