“And so, the bourgeoisie and its economists maintain that the interest of the capitalist and of the labourer is the same. And in fact, so they are! The worker perishes if capital does not keep him busy. Capital perishes if it does not exploit labour-power, which, in order to exploit, it must buy. The more quickly the capital destined for production – the productive capital – increases, the more prosperous industry is, the more the bourgeoisie enriches itself, the better business gets, so many more workers does the capitalist need, so much the dearer does the worker sell himself. The fastest possible growth of productive capital is, therefore, the indispensable condition for a tolerable life to the labourer.”
For Marx, the solution to workers' and thereby society's problems lies not in the reformists calls for higher taxes, which inhibit rapid capital accumulation, but a more rapid accumulation of capital, and the removal of impediments to it, and the socialisation of that capital, which opens the door for a different distribution of revenues.
“Any distribution whatever of the means of consumption is only a consequence of the distribution of the conditions of production themselves. The latter distribution, however, is a feature of the mode of production itself. The capitalist mode of production, for example, rests on the fact that the material conditions of production are in the hands of nonworkers in the form of property in capital and land, while the masses are only owners of the personal condition of production, of labour power. If the elements of production are so distributed, then the present-day distribution of the means of consumption results automatically. If the material conditions of production are the co-operative property of the workers themselves, then there likewise results a distribution of the means of consumption different from the present one. Vulgar socialism (and from it in turn a section of the democrats) has taken over from the bourgeois economists the consideration and treatment of distribution as independent of the mode of production and hence the presentation of socialism as turning principally on distribution. After the real relation has long been made clear, why retrogress again?”
(Critique of the Gotha Programme, Part I)
If we look at taxes, in this economic sense that Marx describes, then its clear that a lot of what is classified as tax collected by the state is no such thing. For example, a large proportion of the “tax” collected by the state goes to pay the wages of workers who produce a variety of commodities and services, as well as to cover the cost of the means of production used by those workers. In this category comes all of that expenditure on wages for teachers, doctors, nurses, social workers, etc. and on the hospitals, schools care homes and so on.
The tax equivalent of these expenditures is, in reality, not a tax at all, but merely a price charged for the provision of these commodities and services. Economically, nothing would be changed here if instead of paying a portion of their wages as “tax” they retained it in their wages, and used it to buy education, health and social care. What workers are doing is to buy these commodities and services collectively from the capitalist state, with each worker effectively paying an insurance premium to cover an uncertain degree to which they may need to consume these commodities and services.
If, as they did in the 19th century, and as Marx and Engels had recommended they continued to do, workers made provision for their own health and social care, and other social insurance, via their trades unions and Friendly Societies, then it would be clear that the weekly subscriptions they made from their wages to these organisations were in no sense a tax, but a necessary part of their wage, a fundamental requirement for the reproduction of labour-power, and thereby a constituent of society's variable capital, and not its surplus value. The physical equivalent of it – the means of consumption for the healthcare workers etc., and the materials and wear and tear of the fixed capital of hospitals, schools etc. - is a part of the society's necessary product, produced by workers, during the year, not the surplus product.
8. Prohibition
of all interference by employers in the administration of workers'
friendly societies, provident societies, etc., which are returned
to the exclusive control of the workers;
9. Responsibility
of the bosses in the matter of accidents, guaranteed by a
security paid by the employer into the workers' funds, and in
proportion to the number of workers employed and the danger that
the industry presents;
Programme
of the French Workers Party
|
Here I want to draw attention to the following: These
points demand that the following should be taken over by the
state: (1) the
bar,
(2) medical services, (3) pharmaceutics,
dentistry, midwifery, nursing,
etc., etc., and later the demand is advanced that workers’
insurance become a state concern. Can all this be entrusted to Mr.
von Caprivi? And is it compatible with the rejection of all state
socialism, as stated above?
Engels, Critique of the Erfurt
Programme
|
That workers purchase these commodities collectively, via such social insurance, whether it be their own social insurance, through their trades unions and Friendly Societies, co-operatives etc., or via a National Insurance scheme imposed by the capitalist state, changes nothing, in terms of the economic categories involved. The only reason for doing this via such an insurance scheme is the same as the reason for any other type of insurance, i.e. as a means of dealing with uncertainty, so that each individual pools their risk, and thereby minimises the overall provision required to cover such risks.
If risk is removed, either because consumption itself is predictable and certain, for each individual, or because the cost of the commodities involved becomes de minimus, the need for insurance disappears. For example, firms know how much their fixed capital will lose in value from wear and tear, and this is recovered in the value of the commodities they produce, rather than via insurance. However, they do not know how much the value of their fixed capital may lose as a result of depreciation or accidental damage. They try to minimise capital losses from depreciation by maximising the use of fixed capital, so as to write down its value as quickly as possible, and, for expensive equipment, they take out insurance to cover the risk of accidents, breakdown, theft etc. But, they will not take out insurance on those elements of their capital whose cheapness does not warrant it, and whose replacement can be absorbed as simply a minor part of the faux frais of production.
It used to be the case, until about forty years ago, that workers would rent TV's, rather than buy them. The reason was that they were prone to break down, and rentals were repaired or replaced as part of the agreement, whereas TV's that had been bought had to be repaired at the buyer's expense. Rental was a form of insurance against such uncertain expense, but when TV's became much more reliable, and the real cost of TV's fell to a fraction of its original level, buying rather than renting became the rational, more cost-effective option.
Social insurance covers other aspects of state activity which is funded by “taxes”, which economically speaking are not taxes at all but merely insurance premiums that covers the provision of a range of commodities and services required for the reproduction of labour-power, and which thereby comprises a portion of society's variable capital, rather than its surplus value.
The value of labour-power is determined by the cost of reproducing labour-power. The value of labour-power is calculated over the average lifetime of workers at the given time. That necessarily includes the time before workers begin to work, and the time after their working life has ceased. The shorter the working-life, therefore, the more this raises the value of labour-power. It can be seen why capital seeks to extend the working life for as long as possible so as to reduce the value of labour-power, and increase surplus value. This is not just why capital seeks to push back the age of retirement, but it is also why developed capitalist states introduced welfare states, providing healthcare so as to extend the useful working life of the source of their surplus value.
If the average worker lives for 80 years, and has 15 years before they start work, and 15 years of retirement, that leaves a working life of 50 years. The worker must be paid enough during this 50 years to cover the 80 years of their average lifetime. Suppose this lifetime cost is £1 million. For each year of their working life, this amounts to wages then of £20,000. If there are 50 working weeks in a year, this is £400 per week, and if there are 40 hours in a working week, £10 per hour.
In order to ensure the reproduction of labour-power, therefore, the average worker would need to be paid wages of £10 per hour to cover the value of their labour-power. But, of course, the worker would require this £1 million over their 50 years, whether they actually worked for each of those years or not, just as the same applies whether they work 40 hours per week or not. If workers are not fully employed, therefore, the value of labour-power rises, and to ensure its reproduction wages would have to rise for the hours worked. Again, this is one reason that capital does not like to see the working week reduced, or the number of holidays increased, because this raises the value of labour-power, and means wages must rise accordingly.
The value of labour-power, as set out in Capital I, is based upon the cost of reproducing it over its lifetime. That includes those periods when it cannot work – childhood, old age, the periods of day outside the normal working day – as well as those periods when it can. It must, therefore, comprise an average figure for when workers cannot work due to ill-health or temporary unemployment. Its for these periods that some form of social insurance is required by the worker, whether this is provided individually by the worker via savings, or via private insurance, or provided collectively via workers friendly societies, or other forms of co-operative provision, or else is provided via national insurance schemes run by the state.
In each case, this insurance is a cost of reproducing labour-power that must, therefore, form a part of wages, in just the same way that insurance taken out by businesses forms a legitimate cost of production that has to be recovered.
But, for the permanently unemployed, the paupers, criminals and so on, this cost of their subsistence, however provided, does not form any part of reproducing labour-power. It is simply a cost born out of surplus value, just as the unproductive consumption of the rentier capitalists, landlords and so on represents a deduction from society's surplus product, which otherwise could have gone to accumulation and the expansion of wealth. As Marx puts it,
“A pauper, like a capitalist (rentier), lives on the revenue of the country. He does not enter into the production costs of the product, and consequently Monsieur Ganilh would call him a representative of exchangeable value. Ditto, for a criminal who is fed in prison. A large part of the “unproductive labourers”, holders of State sinecures, etc., are simply respectable paupers.”
(Theories of Surplus Value, Chapter 4)
Firms, when they have to bear directly this cost of the reproduction of labour-power treat it in exactly the same way as with a social insurance provision. For example, they know how many paid holidays their workers are entitled to, and include this “Holiday Pay” in their wage bill. Similarly, where the firm provides paid sick leave, they estimate the average number of day's sickness each employee will take, and make provision for this in their budgets, again as part of the wage bill.
That the state undertakes this role of providing sick pay, or unemployment benefit, and covers its cost by making general deductions via the tax and national insurance system, does not change the underlying basis of these payments as part of the cost of reproducing labour-power, and so that such payments comprise part of society's variable capital, not surplus value.
Workers provide for the possibility of losing wages as a result of themselves having to withdraw their labour during a strike, or being locked out, by paying a portion of their wages into strike funds. No one considers these subscriptions to be a tax, or a deduction from surplus value, but rather a necessary component of wages in a wages system, which necessitates the regular bargaining over the price of labour-power, as with the bargaining over the price of any other commodity bought and sold in the market.
In the same way, were workers to make similar contributions into their own funds to cover other periods when they cannot sell their labour-power, due to unemployment, ill-health, etc. this too would comprise a necessary cost of the reproduction of labour-power, and there would be many obvious advantages of them doing so, rather than paying into an insurance scheme run by the capitalist state for that purpose.
The only such payments made by the capitalist state that are a deduction from surplus value rather than being a component of society's variable capital are the payments to the permanently unemployed or unemployable. As Marx sets out in the quote above in this respect these payments to the paupers, criminals and so on economically fall into the same category as the payments to the rentiers, landlords and so on.
In short, in economic terms, the only receipts taken in by the state that constitute tax are those required for the functioning of the state apparatus itself. Such tax is a deduction from surplus value. Any other receipts are simply a price paid for commodities and services provided by the state capital.
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