Sunday, 29 January 2017

Theories of Surplus Value, Part I, Chapter 3 - Part 18

4. Smith’s Failure to Grasp the Specific Way in Which the Law of Value Operates in the Exchange between Capital and Wage-Labour

As Marx describes, in Capital III, the key to understanding social reproduction is, as the Physiocrats recognised, that it involves the reproduction of material balances. The total social product divides into means of production and means of consumption, and surplus product. In the terms Marx uses to analyse capitalism, that is constant capital, variable capital, and surplus value. In relation to the constant capital, as Marx sets out in Capital III, Chapter 49, it “must be replaced in kind by a new specimen of the same kind, if not in quantity and form, then at least in effectiveness.” But, the same is true in relation to the variable capital.

As Marx again describes, the basis of surplus value resides in the difference between the value of the commodity labour-power and the value of the commodity-product, produced by that labour-power. If we set to one side the value of the constant capital, which is merely reproduced within the value of the commodity-product, its value is equal to the new value created by labour. In order for social reproduction to occur, all of the commodities required for the reproduction of labour-power must be paid out as wages to workers for that purpose.

The proportion of the social commodity-product, required for that purpose will depend upon the value of those commodities, i.e. the amount of current social labour-time required for their production. What is left then constitutes the social surplus product and surplus value. If wages were paid in kind, this would be more obvious. The reality is that the capitalist buys labour-power with wages, and these wages are equal to the value of the labour-power. They comprise the required quantity of necessities to ensure the reproduction of the labour-power.

In other words, the worker exchanges one commodity – labour-power – for other commodities of equal value. But, this actual exchange is hidden, as a result of wages being paid in money.

“Wages or the equivalent with which the capitalist buys the temporary disposal of labour-power are not a commodity in its immediate form, but the commodity metamorphosed, money, the commodity in its independent form as exchange-value, as the direct materialisation of social labour, of labour-time in general. With this money the labourer naturally buys commodities at the same price as any other possessor of money He faces the seller of commodities as does every other possessor of money—as a buyer.” (p 86)

It is not capitalism which creates this surplus value. Capitalism merely gives it its particular historical form. A peasant producer works for a portion of the day engaged in necessary labour, simply to reproduce their own labour-power. They also spend a portion of the day engaged in surplus labour, over and above it, during which time they create a surplus product. If they live in a feudal regime, a portion of this surplus product will be appropriated as feudal rent, but another portion they may be able to retain, for their own accumulation. It is not feudalism here, which creates the surplus product, and surplus value, but simply the fact that the value of labour-power (the amount of labour-time required for its reproduction) is less than the value which that labour-power can create.

In all societies, labour-power exists as a use value, and as a use value, which is itself the product of labour – as opposed to being provided free by nature – it exists as a product with a value, determined by the labour-time required for its reproduction. In all societies, surplus value exists, as the difference between this value, and the value of the products created by that labour-power. As Marx sets out in Capital III, Chapter 47, the defining characteristic of every mode of production is the specific form by which this surplus value is pumped out of the labourers.

“The specific economic form, in which unpaid surplus-labour is pumped out of direct producers, determines the relationship of rulers and ruled, as it grows directly out of production itself and, in turn, reacts upon it as a determining element. Upon this, however, is founded the entire formation of the economic community which grows up out of the production relations themselves, thereby simultaneously its specific political form. It is always the direct relationship of the owners of the conditions of production to the direct producers — a relation always naturally corresponding to a definite stage in the development of the methods of labour and thereby its social productivity — which reveals the innermost secret, the hidden basis of the entire social structure and with it the political form of the relation of sovereignty and dependence, in short, the corresponding specific form of the state.”

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