Wednesday, 15 October 2014

The Law Of The Tendency For The Rate of Profit To Fall - Part 50

Transformation Of the Nature of Labour (2)

In Part 49, it was pointed out that the process which Marx describes in the Grundrisse as the Civilising Mission of Capital, is one in which the nature of labour itself is transformed, both by the nature of the labour process, in which an ever expanding range of different use values requires the development of an ever expanding range of concrete labour, and by the ever expanding consumption of that same ever expanding range of use values, including those use values such as education, training, culture and so on, which results in the worker as a “social human being”, and the “production of the same in a form as rich as possible in needs, because rich in qualities and relations -- production of this being as the most total and universal possible social product, for, in order to take gratification in a many-sided way, he must be capable of many pleasures [genussfähig], hence cultured to a high degree”. It is impossible to see this labour as anything other than qualitatively different than its historical equivalents, and the use value of its product as anything other than superior.

This is important for its effect on the rate of profit for several reasons. Firstly, the process which results in a higher level of social productivity, as a result of technological development, is seen as reducing relatively the quantity of variable capital employed. If the quantity of variable capital employed falls, then unless the rate of surplus value rises, the quantity of surplus value produced must also fall relatively. Moreover, as Marx indicated previously, there are limits to the extent to which any rise in relative surplus value can offset this effect, for any given concrete labour. But, the point here is that if this technological change, occurring over a period of time, also brings about a change in the nature of the concrete labour employed, then this limitation no longer exists. In fact, the opposite can become the case.

As Marx sets out, in deciding on whether it is profitable to replace living labour with a machine, the question resolves itself into whether the machine costs less than what is paid in wages. But, this is a different question entirely than whether the value of the product of the labour itself is high or low. A machine might be introduced which replaces 3 workers, for example, requiring the labour only of 1 worker. Suppose, the machine costs £10,000 per year, whereas the wages of the 3 workers it replaces amounted to £30,000 a year. It meets the requirement then of costing less than the labour-power it replaces. However, suppose the worker now required, to operate this machine is more skilled, and technologically and culturally developed. This is reflected in the fact that where the value of the labour-power of each of the previous workers amounted to £10,000, it is £15,000 for this new worker. The machine still represents a £5,000 saving over the previous wage bill.

However, if the rate of surplus value remains constant at 100%, then previously the £30,000 of variable capital would have produced £30,000 of surplus value, whilst the £15,000 of variable capital would now produce only £15,000 of surplus value. But, the fact is that this new labour is qualitatively different from the labour of the former 3 workers. It is complex labour. If the value of the product of this labour is equal to say 4 times that of the former workers, then where those former workers produced £60,000 of new value, this new labour would create £80,000 of new value. Even allowing for the higher wages paid to this labour, therefore, the surplus value would rise from £30,000 to £65,000!

The limitation that Marx set out, that 25 workers, producing 2 hours of surplus value each, is greater than the surplus value, of 2 workers working 24 hours a day, without pay, is then removed, because this is only true if we consider the working-day only as a quantity of concrete labour time, rather than abstract labour-time. Its quite possible for 2 workers to produce 200 or more hours of new value per day, if their labour is complex rather than simple, and so, even if these workers are relatively highly paid, these small number of workers may produce more surplus value, per day, than a large number of simple labours. In the above example, all of the workers may work for the same 10 hour day, and yet, in terms of an abstract labour day, the original 3 workers provide 30 hours of abstract labour, 15 hours of which constitutes surplus labour, whereas the single worker provides 40 hours of abstract labour, per day, 32.5 of which constitute surplus labour.

Marx himself noted this phenomenon, as was seen earlier, in relation to commercial workers.

“The commercial worker...belongs to the better-paid class of wage-workers — to those whose labour is classed as skilled and stands above average labour. Yet the wage tends to fall, even in relation to average labour, with the advance of the capitalist mode of production. This is due partly to the division of labour in the office, implying a one-sided development of the labour capacity, the cost of which does not fall entirely on the capitalist, since the labourer's skill develops by itself through the exercise of his function, and all the more rapidly as division of labour makes it more one-sided. Secondly, because the necessary training, knowledge of commercial practices, languages, etc., is more and more rapidly, easily, universally and cheaply reproduced with the progress of science and public education the more the capitalist mode of production directs teaching methods, etc., towards practical purposes. The universality of public education enables capitalists to recruit such labourers from classes that formerly had no access to such trades and were accustomed to a lower standard of living. Moreover, this increases supply, and hence competition. With few exceptions, the labour-power of these people is therefore devaluated with the progress of capitalist production. Their wage falls, while their labour capacity increases.”

Capital III, Chapter 17

In other words, this very process of capitalist development both increases the value of the product of this labour, whilst at the same time reducing the value of the labour-power itself. This is precisely the process described earlier. The very nature of capitalist production creates a requirement for this more complex labour. As complex labour, the value of the product of this labour is many times that of simple labour. The surplus value that can be extracted from this complex labour is then also many times that produced by simple labour, or here the surplus value that this complex labour realises is that much greater. Yet, even if the value of this labour-power is not depreciated as much as Marx describes here, this very fact that it is cheapened, combined with the fact that it produces this much greater quantity of new value, means that the mass of surplus value produced by this smaller number of workers can still rise substantially above that produced by a large number of workers that provide only simple labour.

But, there are other reasons that this transformation of the nature of labour is important in relation to the rate of profit, as I will describe next.

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