“In short, the production of these services can be in part subsumed under capital, just as a part of the labour which embodies itself in useful things is bought directly by revenue and is not subsumed under capitalist production.” (TOSV 1, p 167)
All commodities can be broken down into two types. There is labour-power itself, and there is every other commodity that is produced by labour-power. Labour-power is itself produced by labour-power, i.e. labour-power produces all of the commodities required for the reproduction of the worker. But, labour-power is produced in a more direct sense, by labour-power too. The labour-power of the teacher creates labour-power directly by acting immediately upon the worker, to provide them with a level of education, skill and training. The labour-power of the doctor not only brings new labour-power into the world, but sustains and extends existing labour-power by healing workers when they are sick. Given the growing importance of these factors as capital comes to rely on increasingly educated and skilled labour-power, its no surprise that capital does not leave their provision and consumption to chance, but places them under the direct regulation and supervision of the capitalist welfare state.
The reason for this regulation by the welfare state is, in fact, made clear by Marx. He writes of the conditions applying in his day, when the amount of education provided to workers was minimal, and healthcare represented nothing but the faux frais of production, required for the repair of labour-power. If for some reason, social productivity fell, so that the new value created in the year by labour fell, this would mean that the amount of revenue fell. The consequence is that less will be available as wages and profits for workers and capitalists to spend.
“If in such conditions capitalist and workman wanted to consume the same amount of value in material things as they did before, they would have to buy less of the services of the doctor, schoolmaster, etc. And if they were compelled to continue the same outlay for both these services, then they would have to restrict their consumption of other things It is therefore clear that the labour of the doctor and the schoolmaster does not directly create the fund out of which they are paid, although their labours enter into the production costs of the fund which creates all values whatsoever—namely, the production costs of labour-power.” (TOSV 1, p 167-8)
The doctor or teacher, here, merely provides their labour directly in exchange for revenue from the worker or capitalist, no different to the way the cook supplies their labour embodied in the mutton chops. The education and healthcare are as much required for the reproduction of labour-power as are the mutton chops, but the labour bought in each case is unproductive. It is exchanged not against capital but revenue. The buyer of this labour does not do so for the purpose of producing a commodity and extraction of surplus value, but only for the purpose of obtaining a use value, for their own consumption.
But, this need not be the case. Just as the cook may be employed as a productive labourer, in a restaurant, and produce surplus value, so too a teacher may be employed by a school, and a doctor by a hospital. The teacher employed by a school exchanges their labour-power with the variable capital of the school. The school, in selling a commodity – education – thereby recovers the fund required to reproduce its constant and variable capital, as well as making a surplus value over and above it.
As Marx puts it, in Capital I,
“If we may take an example from outside the sphere of production of material objects, a schoolmaster is a productive labourer when, in addition to belabouring the heads of his scholars, he works like a horse to enrich the school proprietor. That the latter has laid out his capital in a teaching factory, instead of in a sausage factory, does not alter the relation.”
(Capital I, Chapter 16)
The same is true in relation to a doctor who exchanges their labour-power with the variable capital of a hospital. The surplus value arises in each case, as with the production of surplus-value in every case, because the value of the labour-power sold by the cook, teacher or doctor is less than the value created by the expenditure of their labour. The fact that the cook, or teacher or doctor is employed by the capitalist state, to produce these commodities, and that their labour-power exchanges with the variable capital of that state does not change anything. The fact remains that they are paid wages of X, equal to the value of their labour-power, and they create new value equal to X + n, determined by the labour they perform.
As Marx puts it, in Capital I,
“If we may take an example from outside the sphere of production of material objects, a schoolmaster is a productive labourer when, in addition to belabouring the heads of his scholars, he works like a horse to enrich the school proprietor. That the latter has laid out his capital in a teaching factory, instead of in a sausage factory, does not alter the relation.”
(Capital I, Chapter 16)
The same is true in relation to a doctor who exchanges their labour-power with the variable capital of a hospital. The surplus value arises in each case, as with the production of surplus-value in every case, because the value of the labour-power sold by the cook, teacher or doctor is less than the value created by the expenditure of their labour. The fact that the cook, or teacher or doctor is employed by the capitalist state, to produce these commodities, and that their labour-power exchanges with the variable capital of that state does not change anything. The fact remains that they are paid wages of X, equal to the value of their labour-power, and they create new value equal to X + n, determined by the labour they perform.
Nor does it change anything that the payment for these commodities is made out of an insurance scheme to which workers contribute collectively, rather than by individual workers' payments. Nor does it change anything that the state may or may not realise the surplus value itself produced by these workers. If a cook, employed by the state, produces food for workers, and the meals are sold to workers at a price that does not realise the produced surplus value, then workers have obtained food below its value, and there is a consequent reduction in the value of labour-power. As a result, surplus value for all capitals employing those workers rises. The loss of surplus value for the state capital is then a direct gain of surplus value for all other capitals. Under capitalist production, surplus value is never appropriated by the capital that produces it, because competition brings about an average rate of profit, and a redistribution of surplus value, via prices of production.
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