The Rate Of Surplus Value
1) The Degree of Exploitation of Labour Power
Surplus
Value presents itself as a surplus of the value of the product over
the value of its components. These components divided into two.
Firstly, 'c' being what has become the means of production, secondly
'v', being what has become variable capital, labour-power. Marx says
“what has become” because the whole circuit of Capital is here M
- C – (MP-LP) – C1 - M1. The Capital
advanced is a sum of money M, which becomes MP and LP.
NB. The
error of the TSSI in insisting on calculating Profit on the basis of
M1 – M/M rather than on the reproduction costs of MP and
LP is that this fails to take into account that this change in Value
also involves a change in the Exchange Value of Money. As Marx set out in
Chapter 3, Money is a commodity, and the Money Form – 100 yds linen
= £2, can also be turned around so that £2 = 100 yds of linen. If
the labour-time required to produce 100 yds of linen doubles, whereas
the labour-time required to produce the money commodity remains the
same, then £2 = 50 yds of linen. So, the Exchange Value of money
has halved. Therefore, if M at t1 = £100, but at t2,
because the value of linen has doubled, the Exchange Value of
money has halved, then £200 at t2 is, in constant money
terms, really worth only £100. The apparent gain is non-existent.
It is a money illusion.
If a capital
of £500 is advanced, it may be divided into £410 ( c) and £90 (v).
It may generate a surplus value of £90 (s). We now have £500 (M)
- £500 ( C) - (£410 MP + £90 LP) £590 (C1). The
difference between the £500 Capital advanced, and the £590, the
commodity is now worth, is the £90 Surplus Value. In calculating
'c', Marx only includes that which is actually transferred to the
commodity. So, suppose the machinery employed is worth £1,054, but
the wear and tear amounts to just £54, then 'c' is only £54, not
£1054. He quotes Malthus,
““If
we reckon the value of the fixed capital employed as a part of the
advances, we must reckon the remaining value of such capital at the
end of the year as a part of the annual returns.” (Malthus, “Princ.
of Pol. Econ.” 2nd. ed., Lond., 1836, p. 269.)” (Note 1, p 205)
Actually, I
believe Malthus' formulation is wrong, because the end of year value would
include depreciation, which represents a Capital Loss rather than a
transfer of value to the product. As stated earlier, depreciation
occurs whether production takes place or not. Indeed, for the
reasons Marx describes, depreciation will be more where production
does not take place, where equipment, therefore, rusts and material
deteriorates. It makes no sense to say that more value is
transferred to the product the less it is used in the productive
process!
The new
value created is not c+v+s, as at first appears, because the 'c' has
only transferred exisiting value to the product. The new value
created is only v+s i.e. £90 (v) and £90 (s). If it were possible
for a capitalist to simply employ a worker without the need for any
constant capital, the surplus value would still exist, being the
difference between the new value created by the worker, here £180,
and the £90 the capitalist pays the worker, that being the value of
their labour-power. By contrast, the capitalist might employ £1
million of constant capital, and yet the surplus value created would
still only be £90, again the difference between the new value
created by the worker, and their wages. The £1 million would only
have transferred its value to the new commodity.
If the
worker only produces new value equal to the value of their
Labour-power, their wage, then no surplus value is created, and
capital cannot expand itself.
It is only
'v' which varies. So, v+s is no different than v+v1. If
the Value of Labour-power rises, 's' declines, and vice versa. The
relation is obscured because looking at the value of the commodity we
see not v=s, but c+v+s. However, Marx says, consistent with the
usual mathematical rule, in dealing with constant and variable
quantities, it is necessary to set the constant magnitude = 0, so as
to see the real effects of changes in the variable magnitude.
There
appears a further contradiction, as Marx points out. The £90 laid
out for variable capital is not itself variable. It is a fixed
amount, £90. So too is the Value of the Labour-power it has
purchased. (subject to the provisos set out previously in relation to
real values based on current reproduction costs as opposed to nominal
money values). What is variable is the amount of new value this
Labour Power creates, and consequently the amount of Surplus Value
generated (being the difference between this constant value of
Labour-power, and the new value created.
“If,
therefore, such expressions as “£90 variable capital,” or “so
much self-expanding value,” appear contradictory, this is only
because they bring to the surface a contradiction immanent in
capitalist production.” (p 206)
As Marx
says, the relation of the Surplus Value to the whole of the capital
(The Rate of Profit) is very important, but its consideration is left
to Volume III. For now, its important to examine the process of
production of surplus value itself.
“The
circumstance, however, that retorts and other vessels, are necessary
to a chemical process, does not compel the chemist to notice them in
the result of his analysis. If we look at the means of production, in
their relation to the creation of value, and to the variation in the
quantity of value, apart from anything else, they appear simply as
the material in which labour-power, the value-creator, incorporates
itself.” (p 207)
Looking at
just the new value created then, we have £180. Deducting the £90
paid out as 'v', this leaves £90 's', which constitutes the total
amount, the absolute quantity of Surplus Value. But, this absolute
quantity can also be expressed as a relative quantity. That is
relative to the other component of new value 'v'. So, s/v gives this
relative value of 's'. Marx calls this relative value, this ratio of
s to v, “The Rate of Surplus Value”. It is also called the “Rate
of Exploitation”, which can cause some confusion because the word
“exploitation” has connotations of the necessity of driving
workers ever harder. As Marx demonstrates, Capital is in fact,
capable of raising s/v, whilst also lightening the physical burden,
and even duration of work, and indeed of increasing workers real
living standards. The real exploitation is the amount that workers
hand over gratis in 's', even whilst these improvements in workers
conditions take place.
Marx points
out that once the source of Surplus Value is understood, and once the
rate of surplus value is understood, it is a simple matter to
understand the source of profit, and rate of profit. But, it is
impossible to work backwards, to begin with the rate of profit, and
get to an understanding of surplus value.
As a
consequence of the division of labour, the worker does not produce
their own means of subsistence. This is different to the slave, who
worked for the slave owner for so many hours a day, a proportion of
which went to produce their own food and so on, and is different to
the peasant, who worked half the week on their own land, to produce
their own requirements, and half the week on the Lord of the Manor's
land for free. The wage worker instead works so many hours producing
a commodity, say linen, whose value is equal to the value fo the
commodities required for the reproduction of their Labour-power i.e.
equal to the value of labour-power, equals the wage. This portion of
the day, week, or year is necessary labour. Necessary because its
needed to reproduce their labour-power. This is true whether its a
slave, peasant or wage worker. The work done over and above this is
surplus labour. The surplus labour done by the slave or peasant
produces a surplus product. The surplus labour done by the wage
worker, however, produces a surplus exchange value, or surplus value
for short, an amount of exchange value more than is required to cover
their wages/value of labour-power/labour-time required to produce
their means of subsistence.
In other
words, during this period of necessary labour, the worker produces a
quantity of linen. Its exchange value is 15p. The capitalist, in
selling it recovers the wages he has paid to the worker for producing
it. The worker with the 15p they have been paid, is then able to buy
enough food, shelter, clothing etc. to reproduce a day's
Labour-power.
If we assume
our worker is just a supplier of simple, abstract labour-power, the
number of hours they have to work to produce enough value to cover
the cost of reproducing their labour-power will depend upon the
cost/value of the necessaries they need to consume.
But, as we
have seen the worker does not just work for this amount of necessary
labour-time, but for several hours more per day. During these
additional hours he continues not only producing additional use
values, commodities, but more importantly, for the capitalist,
continues producing additional exchange values in those commodities
i.e. surplus value. This is additional value over and above what
what he has been paid in wages and is, therefore, additional value
for which the capitalist has paid out no equivalent. They have
received something for nothing. Marx calls this period “surplus
labour-time”, and the labour expended “surplus labour”.
“It is
every bit as important, for a correct understanding of surplus-value,
to conceive it as a mere congelation of surplus labour-time, as
nothing but materialised surplus-labour, as it is, for a proper
comprehension of value, to conceive it as a mere congelation of so
many hours of labour, as nothing but materialised labour. The
essential difference between the various economic forms of society,
between, for instance, a society based on slave-labour, and one based
on wage-labour, lies only in the mode in which this surplus-labour is
in each case extracted from the actual producer, the labourer.” (p
209)
Because the
value of variable capital is the same as the value of the labour
power it buys and the latter is determined by the value of the
commodities the worker needs to reproduce their labour-power, which
in turn determines how much of the day is required for “necessary
labour”, s/v is the same proportion as the ratio of surplus
labour-time to necessary labour-time. They are the same thing
expressed in different ways, the first expressed in Value terms, the
second in terms of time.
Marx writes,
“Although
the rate of surplus-value is an exact expression for the degree of
exploitation of labour-power, it is, in no sense, an expression for
the absolute amount of exploitation. For example, if the necessary
labour 5 hours and the surplus-labour = 5 hours, the degree of
exploitation is 100%. The amount of exploitation is here measured by
5 hours. If, on the other hand, the necessary labour = 6 hours and
the surplus-labour = 6 hours, the degree of exploitation remains, as
before, 100%, while the actual amount of exploitation has increased
20%, namely from five hours to six.” (Note 2, p 209)
The method
of calculating the Rate of Surplus Value is then straightforward. If
we take the value of the output and deduct from it the value of the
constant capital ( c) used in its production i.e. we set c = 0, we
will then have the mount of new value created. If we know the value
of (v) then deducting this from the amount of ew value will also give
us (s), or if we know (s) deducting it from the total new value will
give us (v). We can then calculate s/v.
Marx then
provides a number of actual examples of such calculations. There is
no point me repeating them, because its easier to simply view them at
Chapter 9.
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