Friday, 5 April 2019

Theories of Surplus Value, Part III, Chapter 20 - Part 105

As Marx points out, elsewhere, the actual relation between simple and complex labour cannot be determined a priori, nor is it simply reducible to the difference between skilled and unskilled labour, but is only established a posteriori, in the market, on the basis of how much consumers are prepared to value the product of labour A as opposed to labour B. For example, the same amount of concrete labour may go into a chair produced by Chippendale, and one produced by Bodgit and Son, and yet consumers will be prepared to pay more for the former than the latter. The same is true in terms of how much consumers might be prepared to pay for the product of one hour's tailoring labour, as opposed to one hour of labour by a top class footballer, actor singer etc. As commodities become increasingly produced by homogeneous machine labour, these differences may erode, on that basis, but they are expanded, as the differences instead take the form of the design labour used by firm A as opposed to firm B, or the ability to create the impression of superiority by the use of clever advertising and marketing. 

If the same rate of surplus value exists across all industries, and capitals, and if there is a complete absence of all monopolies and other frictions, then the question resolves itself ultimately into a question of the value of labour-power, because in those spheres where complex labour is employed, and higher rates of profit exist, capital will move to those spheres, increasing supply and reducing market prices. At the same time, the increased demand for that particular type of labour-power will push up wages, though if the value of this labour-power is not higher than that of other types of concrete labour, then assuming the same lack of frictions, workers from other industries would move in search of these higher wages, pushing them down once more. But, as Marx points out, in the real world, there is no basis for making these assumptions. Moreover, even where the question resolves itself into the value of labour-power, ultimately, this ultimate resolution might be only a distant prospect. 

For example, in Capital I, Marx describes the situation where one firm, in a particular industry, introduces a new machine that significantly increases the productivity of its workers. But, the firm's output is sold at market prices determined by the large number of its competitors. The firm then obtains surplus profits, and Marx explains this as being the consequence of the value of the product of the firm's workers being the equivalent of the product of complex labour. In other words, if the firm is twice as productive as its competitors, it is as though one hour of labour by its workers produces two hours of new value. Yet, this has nothing to do with the skill of these workers, or the value of their labour-power. They continue to be paid their original wages, and it is the difference between that and the additional new value they create, which is the source of the surplus profit. In other words, the rate of surplus value is higher in this firm than in all of the other firms. 

Now, if there is no friction, other firms, in the industry, in search of these surplus profits will also seek to introduce the new machine, so as to raise their productivity. Once they have done so, the market value of these commodities will fall, the surplus profit will be competed away, and the rate of surplus value will be once more equalised. But, it might take years for such a process to be completed, and during that time, other new machines will have been introduced, by some firms, so that, now, their productivity is higher than average. But, it may also be the case that frictions and other constraints exist. For example, larger firms enjoy economies of scale that smaller capitals can never obtain. Consequently, the rate of surplus value, in these larger capitals, may be higher than in the smaller, less productive firms, even where the wages in the larger firms are higher than in the smaller firms. The larger firms may be happy, as Engels shows, to pay these higher wages, because it has advantages for them in terms of maintaining continuous production, retaining a stable workforce, and so on, as well as continually pressurising their smaller competitors. But, in any case, the workers in the larger firms, are better able to organise in trades unions, and thereby to negotiate for a share of the surplus profits. 

This, then, does not represent a higher level of skill or higher value of labour-power, of the workers in the larger firms; it simply shows that they are able to obtain wages above the value of their labour-power, as a form of rent, deriving from the surplus profit. And, that, indeed, is what is seen across industries, particularly where workers in large firms are able to organise in trades unions, where those in small firms cannot. It was illustrated by Lenin, in his analysis of The Development of Capitalism in Russia. 

And, Marx makes the same point in relation to the international differences in wages. In countries like Britain, in the 19th century, where productivity was much higher than in other countries, it was as though the labour of British workers represented complex labour, compared to the simple labour of Austrian, Belgian and other workers, and the same was true in relation to the labour of European workers compared to the labour of workers in India, China and so on. The labour of the more productive workers acts like complex labour, so that even where wages are higher, the rate of surplus value, and rate of profit is also higher. This was the basis of the wealth of nations, and not as the Mercantilists believed the cheating of less developed economies via unequal exchange

As Marx sets out, wages in Britain were 50% higher than in other European countries, and yet Britain's production was more competitive, and its rate of profit was higher. This was the basis on which Fordism was developed, in the 20th century. It is also why capital exported from the main developed capitalist economies went to other developed economies and not to low-wage, less developed economies. And, in some spheres, it is simply not possible to compete away the surplus profits that derive from the value of particular types of concrete labour being highly complex. It is not possible to simply produce additional George Clooneys, Wayne Rooneys, or David Beckhams, simply by the application of additional capital. And, the same is true in relation to a whole series of other commodities that rely on highly complex labour, for example, that of a computer games producer, who develops a game that is in phenomenal demand, a clothes or other designer that produces a design that consumers are prepared to pay a premium to obtain, and so on. 

Again, in the case of footballers, and so on, those who seek to limit their earnings, consequently miss the point. The revenues of the football clubs, film and media companies are not high because the wages they pay are high, but vice versa. The revenues are high, because consumers are prepared to place a high premium on the complex labour those companies employ, in producing their particular commodities. That results in those companies making surplus profits, some of which is then appropriated as a form of rent, by the labour they employ, which cannot be easily increased in supply. If the wages of the footballers, film stars, singers etc. were restricted, the only consequence would be to inflate the profits of the firms that employ them, and so to line the pockets of the shareholders in those companies. 

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