Sunday, 13 May 2018

Daniel DeLeon - What Means This Strike? - Part 2 of 3

DeLeon puts forward an argument straight from Ricardo. He writes, 

“You have seen that the wages you live on and the profits the capitalist riots in are the two parts into which is divided the wealth that you produce. The workingman wants a larger and larger share. So does the capitalist. A thing cannot be divided into two shares so as to increase the share of each. 

If the workingman produces, say, $4 worth of wealth a day, and the capitalist keeps 2, there are only 2 left for the workingman. If the capitalist keeps 3, there is only 1 left for the workingman. If the capitalist keeps 3 1/2, there is only 1/2 left for the workingman. Inversely, if the workingman pushes up his share from 1/2 to 1, there are only 3 left to the capitalist. If the workingman secures 2, the capitalist will be reduced to 2. If the workingman push still onward and keep 3, the capitalist will have to put up with 1. 

And if the workingman makes up his mind to enjoy all that he produces, and keep all the 4, the capitalist will have to go to work.” 

According to DeLeon, in his argument above, profits cannot rise unless wages fall, and vice versa. As Marx points out, in relation to Ricardo, and his followers, like John Stuart Mill, this is wrong, in the first place, because it confuses surplus value with profit, and the rate of surplus value with the rate of profit. And, of course, this argument is nonsense as Marx demonstrated. There are several ways in which both wages and profits can increase simultaneously. Moreover, even in terms of wages and surplus value there are several ways in which both can rise simultaneously. The idea that they cannot comes directly from Ricardo, who ignored the potential for the creation of absolute surplus value, and thereby constrained his analysis within the context of a fixed working day

Marx deals with these arguments from their original Ricardian source in Theories of Surplus Value, Chapter 15. Looking at a situation where wages rise, as a result of a rise in the value of labour-power due to higher food prices, Marx says, bluntly, 

“Both could occur if, as a result of the corn, etc., becoming dearer, the minimum wage had increased from 10 to 12 hours. Even in this case, therefore, not only might the rate of surplus-value remain the same, but the amount and rate of surplus-value might grow.” (p 407) 


“If one takes a given magnitude and divides it into two parts, it is clear that one part can only increase in so far as the other decreases, and vice versa, But this is by no means the case with expanding (elastic) magnitudes. And the working-day represents such an elastic magnitude, as long as no normal working-day has been won. With such magnitudes, both parts can grow, either to an equal or unequal extent. An increase in one is not brought about by a decrease in the other and vice versa. This is moreover the only case in which wages and surplus-value, in terms of exchange-value, can both increase and possibly even in equal proportions. That they can increase in terms of use-value is self-evident; this can increase even if, for example, the value of labour decreases.” (p 408) 

So, firstly, wages can rise and profits also rise if the length of the working day is increased. The worker produces more new value as a result of working longer. Some of this new value can go to the worker as wages, and some to the capitalist as more profit. In other words, if the rate of surplus value is 20%, in a 12 hour day, the surplus value is 2 hours and wages 10 hours. If it rises to 15 hours, wages rise to 12 hours, and surplus value rises to 3 hours. In so far as workers get paid overtime rates, for any overtime worked, over the normal working day, the rate of surplus value might fall, and yet the mass of surplus value still rise. Of course, it can all go to profit, and that is the normal reason why capitalists have tried to extend the working day, week, year, life. But the actual division between wages and profit is determined by a distributional struggle between labour and capital over the proceeds, as Marx points out. 

“I think I have shown that their struggles for the standard of wages are incidents inseparable from the whole wages system, that in 99 cases out of 100 their efforts at raising wages are only efforts at maintaining the given value of labour, and that the necessity of debating their price with the capitalist is inherent to their condition of having to sell themselves as commodities.” 

(Value, Price and Profit) 

The workers have to engage in such economistic, distributional struggles, or they would never prepare themselves for the actual class struggle, but these distributional struggles are not themselves class struggles, any more than the continual debates, and interaction of demand and supply to determine the market price for any other commodity represents class struggle. In fact, by accepting the terms of reference within which it takes place, as being merely over the price of a commodity – labour-power – the workers already adopt the bourgeois standpoint, and accept the idea that capital is somehow natural and eternal, as is labour as wage labour. But, on that basis, the argument of the bourgeois economists such as Ricardo that the regulator of the economy is capital, must hold. The very basis of the social-democratic concept of the shared interest of capital and labour, but of the interest of capital always having to predominate, is thereby established. The inevitable logic of that framework is, as Ricardo set it out, that the interests of labour are best served, when the economy is growing, and the economy grows when capital accumulates, and capital accumulates fastest when profits are high, and profits are higher when wages are lower. So long as the framework is set within the context of a continuation of capitalism, capital must always be the regulator; it dictates the pace of accumulation, it dictates whether labour will be employed, and to what extent. And, by controlling and dictating the demand for labour-power, it thereby determines the level of wages, because, 

“As to the limits of the value of labour, its actual settlement always depends upon supply and demand, I mean the demand for labour on the part of capital, and the supply of labour by the working men.” 


If capital is over-accumulated, so that a point is reached where wages rise so that, no additional surplus value is produced, capital will stop adding labour, but perhaps not before a crisis of overproduction erupts, and will begin to introduce labour-saving technologies, that reduce its demand for labour, and create a relative surplus population, that then causes wages to fall, and profits to rise. 

“Take, for example, the rise in England of agricultural wages from 1849 to 1859. What was its consequence? The farmers could not, as our friend Weston would have advised them, raise the value of wheat, nor even its market prices. They had, on the contrary, to submit to their fall. But during these eleven years they introduced machinery of all sorts, adopted more scientific methods, converted part of arable land into pasture, increased the size of farms, and with this the scale of production, and by these and other processes diminishing the demand for labour by increasing its productive power, made the agricultural population again relatively redundant. This is the general method in which a reaction, quicker or slower, of capital against a rise of wages takes place in old, settled countries. Ricardo has justly remarked that machinery is in constant competition with labour, and can often be only introduced when the price of labour has reached a certain height, but the appliance of machinery is but one of the many methods for increasing the productive powers of labour. The very same development which makes common labour relatively redundant simplifies, on the other hand, skilled labour, and thus depreciates it.” 


Marx calls increases in surplus value brought about by lengthening the working day, "absolute surplus value". But, as Marx also describes, this distributional struggle over who gets what share of the new value created by labour is itself not simply some kind of subjective battle of wills between greedy capitalists, and militant workers. It is necessarily constrained within objectively determined limits, and, without that perspective, the whole scientific basis of Marx's analysis of value, and surplus value disappears. 

The objective limits are set by the fact that a minimum number of hours – necessary labour – in the working day are required to produce the value of the commodities required to reproduce the labour-power itself. This minimum is dependent upon the general level of development of social productivity within the particular society at that time.  This development itself is a function of capital accumulation, and of the ability of society to set aside some surplus labour-time to develop science and technology, as well as the drive of a section of society to engage in such development.

Secondly, the same effect can be achieved by increasing the intensity of labour during the same length of working day. Increased intensity should not be confused with increased productivity, the latter being the basis of relative surplus value. Marx gives examples of how textile capitalists used to speed up the machines. In car factories it was achieved by speeding up the assembly line. The worker produces more value during the working day, and again this can be divided between surplus value and wages. This is increased intensity of labour. Increased productivity arises, because a better machine is introduced, which enables a given amount of labour to produce more, even at the same intensity. 

Absolute surplus value becomes a secondary factor for capital, as machine industry and technology progresses, because, increasingly, as it becomes possible to produce the necessaries required for the reproduction of labour-power in a smaller and smaller time, so, even with a constant working-day, necessary labour shrinks and surplus labour increases. But, even with a smaller proportion of the working-day accounted for by necessary labour, the amount and range of use values that the workers are able to obtain as wages increases, so that their living standards rise, at the same time that profits rise at an even faster pace. 

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