Theories of Surplus Value, Part I, Chapter 4 - Part 50

A similar argument to that put forward by Ganilh has been used more recently. Its been argued, for example, that Britain has to encourage billionaires into London, because, by spending their money there, they then provide income for people working in hotels, restaurants and providing other services. But, as Marx demonstrates, this consumption of value is not at all the same as the creation of value. Unlike the servant or prostitute, in Marx's example, who at least create value by their labour, which is then exchanged against revenue, the billionaires create no new value. They merely consume the use values produced by others, and thereby destroy the value contained in those use values. That means they consume use values that could have been consumed by others who actually do produce value. Moreover, to the extent that the revenue they use to buy these use values is derived from dividends or bond interest, which itself is a deduction from the surplus value produced by workers in Britain, they consume use values produced by workers in Britain, using revenue that itself derives from an appropriation of the surplus value produced by workers in Britain! In other words, workers in Britain, may as well have simply handed these goods and services over to these billionaires free of charge!!

The Tories, of course, looking after the interests of their own class, want to provide these parasites with tax concessions so as to encourage them further in such practices. Worse still, in using their vast wealth to push up property prices, they also act to increase the cost of shelter, and so the value of labour-power. The ultimate consequence of that is to reduce surplus value, and to reduce the potential accumulation of productive-capital, and so acting to actively reduce rather than increase real wealth.

Marx also sets out what is wrong with this argument even in respect of the servant or prostitute, who do create value by their labour. But, in the process, he also explains why, even for the productive labourer, there is no relation between the value of labour-power and the value created by that labour-power. Unlike constant capital, the capital-value of variable capital is not transferred to the end product.

“But even assuming that the value (the costs of production) of a servant is twice as great as that of a productive labourer, it must be observed that the productivity of a labourer (like that of a machine) and his value are entirely different things, which are even in inverse proportion to each other. The value that a machine costs is always a minus in relation to its productivity.” (p 211)

This is so for several reasons. Firstly, surplus value itself directly depends upon the fact that there is no relation between the value of labour-power, and the value created by that labour-power. Surplus value is only possible because the latter is greater than the former, and the larger the difference between the two, the greater the mass of surplus value produced.

On the one hand, there is a limit, as Marx describes, to absolute surplus value, which is dependent upon the value of labour-power, which is why, he says, that even absolute surplus value is based upon relative surplus value. If workers can only physically work for 12 hours per day, but require the product of 12 hours labour just to reproduce their labour-power, then although they produce 12 hours of positive new value, during this time, all of that value is required simply to reproduce their labour-power, and so no surplus value is produced.

If, for example, there is a crop failure, so that the physical product of this 12 hours of labour is seriously reduced, this does not change the fact they have produced 12 hours of positive new value, by the expenditure of this labour. It simply means that this new value is contained in a much smaller number of use values, so that the value of each use value rises substantially. But, precisely because the labour-power requires as many of these use values to reproduce itself as it did previously, and precisely because there is no relation between the value of labour-power, and the value produced by that labour-power, the value of labour-power must rise substantially.

Suppose 12 hours of labour produces 120 units of wage goods. In order for this 12 hours of labour to be reproduced, the worker must consume 60 units of wage goods, and so a surplus of 60 units of wage goods, equal to 6 hours is produced. If, however, there is a crop failure, or some other sudden fall in social productivity the workers still work for 12 hours and thereby still creates 12 hours of positive new value as before. However, if this 12 hours of labour only produces 40 units of wage goods, the value of each unit will have risen from 0.10 hours of labour to 0.30 hours of labour.

Previously, the value of labour-power was equal to 6 hours of labour, which produced 6 hours of surplus value. But, the worker must still consume 60 units of wage goods to reproduce their labour-power, so the value of labour power rises to 18 hours of labour! The worker has created 12 hours of positive new value, as before, but now to reproduce this labour-power requires 18 hours of labour. Instead of the worker producing a surplus value of 6 hours, they now produce a loss of 6 hours. In order for the capitalist to reproduce their capital on the same scale, they would have to add 6 hours of value, of additional capital, to provide the wage goods required to reproduce the labour-power consumed.

Consequently, the existence of surplus value depends on the productivity of labour. Secondly, therefore, assuming that productivity is at such a minimum required level, the fact that the value of labour-power is equal to say 4 hours labour has no bearing on the fact that this same labour-power may work for 6,8,10,12 or so hours in the day, and thereby produce corresponding amounts of new value.

Thirdly, if productivity rises, so that only 3 hours of labour are required for the reproduction of labour-power, this has no bearing upon the fact that this labour may continue to work for 6,8,10,12 or so hours per day, and continue thereby to produce the corresponding amounts of new value.

Finally, the value of labour-power has no direct relation to the value of the product of that labour, which is itself determined post facto in the market, as Marx describes. A particular concrete labour may be highly skilled, and its value be high, because of the cost of educating and training that labour. This same level of skill may itself cause the product of this labour to be high, because the labour constitutes complex labour. But, there is no necessity for that to be the case.  Skilled labour-power may have a higher value, because it requires more labour-time for its reproduction, but that does not necessarily mean that the labour is complex rather than simple labour.  The determination of complex labour, Marx says is only determinable post facto, in the market, by what consumers are prepared to pay for the product of that labour (separate from what they pay for the constant capital etc. that comprises the final product).  It may require less labour-time to produce the labour-power of a footballer than a nurse, yet that has no bearing upon what consumers are prepared to pay for the product of 1 hour's footballing labour as opposed to 1 hour's nursing labour.

Marx describes, for example, the situation with professional and commercial workers. Their labour is skilled and complex, so that the value of its product is greater than that of simple labour. But, Marx goes on, the extension of public education, so that members of the working class could take on such jobs, reduced the value of this type of labour-power, even below that of unskilled workers.

“His wage, therefore, is not necessarily proportionate to the mass of profit which he helps the capitalist to realise. What he costs the capitalist and what he brings in for him, are two different things... The commercial worker, in the strict sense of the term, 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)

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