Theories of Surplus Value, Part I, Addenda - Part 21

[(C) Two Essentially Different Phases in the Exchange Between Capital and Labour]

There are two interdependent phases, in the exchange between capital and labour. In the first phase, there is the straightforward exchange of commodities, which takes place according to the laws of commodity exchange on the basis of equal values.

“From a conceptual or legal standpoint the sale of labour-power takes place in this first process, although the labour is paid for only after it has been performed—at the end of the day, of the week, etc.” (p 397) 

A commodity, labour-power, is exchanged by the worker, for an equal amount of value in money. But, what the worker sells is not some commodity already materialised in a product, but their power to perform labour, and thereby to create value.

“The wage—the value of the labour-power—appears, as explained earlier as the direct purchase price, the price of labour.” (p 397)

But, the only reason that the capitalist buys the commodity is that the labour they thereby obtain represents a greater value than the value they have advanced in the form of money to buy it. But, this appropriation of the additional value arises not as a consequence of this exchange, but only as a consequence of the subsequent consumption of the commodity bought.

In other words, when I buy £1 of food, I exchange £1 in value, in the form of money, and receive £1 in value, in the form of food. This exchange of values is an independent act from my subsequent consumption of the food. The two acts are of course interdependent, because I only buy the food because I intend to consume it, and I can only consume it, because I have bought it.

The same thing arises here. The capitalist only buys labour-power because they intend to consume it in the production process, and can only consume it, because they have bought it – even though they pay for it after it has been consumed. I buy food because I need to eat; the capitalist buys labour-power because they need to produce surplus value. But, the two acts exchange and consumption are separate.

What is different, however, is that when I consume the £1 of food; its use value disappears, whilst its value has been transferred to me. But, that is not the case with labour-power. The very act of its consumption, in the labour process results not only in the creation of new value able to replace the value of the labour-power, consumed, but an additional surplus value too. Where when I consume food I consume and thereby destroy the original use value, incorporating that use value into my body, and transferring its value to me, the use value of labour-power is not transferred to its product, and nor is its value.

That was part of the mistake of Adam Smith, who saw the value of commodities, in some versions of his theory of value, being resolved in the value of the labour-power. But, the value of labour-power used in the production of a commodity is not transferred to the value of the commodity in the way that the value of constant capital is transferred.

Labour-power is consumed in the production process, and in that process, the use value and value of labour-power is consumed, and disappears. But, alongside this process of consuming labour-power, is the very act of creating new value. Labour-power, with a value of £100 is consumed, in the production process. It is destroyed and disappears in that process. But, in that process labour is expended and creates new value to the amount of £120. This new value created in the production process is thereby enabled to reproduce the £100 of value of the labour-power consumed, and to produce a surplus value of £20, but this value of £120 is in no sense contingent upon the original £100 value of the labour-power. That £100 value is not transferred, in any way, to the commodity produced in this process. It would be all the same if labour-power with a value of £120 were employed in the production process, and yet, as a result of a fall in productivity, the value produced by this labour-power, created only £100 of new value. In that case, instead of creating a surplus value of £20, it would produce a loss of £20.

“In this process, therefore, labour is directly materialised, is transformed directly into capital, after it has been formally incorporated in capital through the first transaction. And indeed more labour is here transformed into capital than the capital which had earlier been expended on the purchase of labour-power. In this process a part of unpaid labour is appropriated, and only thereby does the money transform itself into capital.” (p 398)

The basic reality here is that a given value of materialised labour, embodied in the means of production and means of subsistence (c + v) is now materialised in commodities representing a greater sum of value (c + v + s).

It is this process which results in the productive labour, i.e. labour which is directly exchanged with capital, creating surplus value, and which thereby creates capital.

“This statement covers: (1) the relation of money and labour-power to each other as commodities, purchase and sale as between the owner of money and the owner of labour-power; (2) the direct subsumption of labour under capital; (3) the real transformation of labour into capital in the production process, or what is the same thing, the creation of surplus-value for capital. Two kinds of exchange take place between labour and capital. The first expresses merely the purchase of labour-power and therefore in reality of labour and therefore of its product; the second, the direct transformation of living labour into capital, in other words the materialisation of living labour as the realisation of capital.” (p 399)

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