VIII – Production of Surplus Value
If the commodities required to produce a workers' labour-power for a day, themselves require six hours of labour to produce, then this is the value of a day's labour-power. If gold is the money-commodity, then, if six hours labour produces a quantity of gold called 3 shillings (£0.15) this is the price, the money equivalent of the value of a day's labour-power. If the worker works for 6 hours, they will also have produced £0.15 of new value, embodied in other commodities. When these commodities are sold, their value is enough to purchase the commodities (wage goods) required to reproduce the worker. This is true whether the worker is an independent labourer, or a wage-worker.
But, of course, the worker is not limited to working just this six hours of necessary labour, or producing only the £0.15 of new value. They might work for, say, 12 hours in the day, and so produce £0.30 of new value. In that case, they produce £0.15 of surplus value, over and above what is required to reproduce their labour-power. Again, this is true whether they are an independent labourer or a wage worker. The important distinction, however, is who has ownership of this surplus value.
The independent labourer can choose, whether and how much surplus labour they perform, and owns the resulting surplus value/product themselves. The wage-worker does not. A condition of being allowed to work is that they provide to the capitalist a quantity of such surplus labour, for free. The end product, the commodity in which this surplus value is contained, is, itself, entirely the property of the capitalist. That is the contract they form with the worker. The capitalist provides the means of production, and buys a day's labour-power from the worker, in exchange for wages, and the capitalist owns the end product. The only point of negotiation is, then, over what constitutes a normal working-day, i.e. how much surplus labour the worker will provide.
In terms, purely, of value and setting aside, for now, questions of demand and supply for labour-power, these limits and requirements can be objectively assessed. For example, the value of labour-power has been determined, as for other commodities, as the labour-time required for its production. As Marx has noted, this varies for different types of labour-power, for example, for a brain surgeon rather than a carpenter. But, in addition, as Marx notes, this also changes, over time, because what is required as a minimum, to reproduce a modern worker is different to what was required a century ago. To live and function, in a modern capitalist society, the worker requires a higher level of education, which entails also, a longer active lifespan, and so better health and living conditions. Indeed, as Marx sets out, in The Grundrisse, capitalism itself, also, requires, the workers to form a demand for all these additional goods and services it produces, which constitutes its Civilising Mission.
As productivity rises, capital and revenue is freed from certain spheres of production, and is employed in other, new spheres. So, on the one hand, the value of labour-power rises, because this range of goods and services required for its reproduction, its cultural component, increases, but, at the same time, that rise in productivity reduces the value of all wage goods, and so reduces the value of labour-power, reduces the amount of labour-time required to produce even this larger range and quantity of wage goods.
The important point, as Marx notes in The Critique of the Gotha Programme, in attacking the Lassalleans' Iron Law of Wages, was never that workers living standards had to be kept to an absolute minimum. The rise in social productivity means that real wages/living standards inevitably rise. What is required, however, is that relative wages, the proportion of wages/necessary labour, falls relative to surplus labour/value.
As Marx says, in Theories of Surplus Value, all surplus value is, therefore, ultimately relative surplus value, because the length of working-day is, itself, physically limited. Even if a worker could work for 24 hours a day, they require time to eat and sleep and so on. But, if it takes the whole of this 24 hours to reproduce their labour-power, no surplus value could be produced. Its only when productivity is such that it takes less than 24 hours to reproduce their labour-power that surplus value would be possible. That is why its only at that point that slavery becomes possible.
However, there is a wide range of possible variations between the necessary minimum required to reproduce labour-power, and the theoretical physical maximum working day. At all of these points, surplus value continues to be produced. Negotiation between labour and capital, based on their respective strength, at the given time, determines the length of the actual working-day. But, further factors also influence it. For example, beyond a certain length or intensity of the working-day the worker uses proportionally more labour-power, just as a machine suffers additional wear and tear if is is used for prolonged periods, or at faster speeds. The worker, then, requires higher wages, to compensate. Beyond a certain point, this additional compensation is greater than the new value created (especially as the worker becomes tired, and their performance deteriorates) leading to a reduction, rather than increase in surplus value. These are objective factors that determine the length of the normal working-day.
Having objectively determined the length of the necessary working-day, and of the normal working-day, the difference between the two is, then, the amount of surplus labour/value. It is, then, also, objectively determined, and no longer something arbitrary or unexplained. It still means that there is room for negotiation between capital and labour over the size of this surplus, but that, too, then, becomes a function of the supply of and demand for labour-power, which itself is not arbitrary, but objectively determined. As Marx sets out, in Wage-Labour and Capital, the conditions are best for workers when capital is expanding rapidly, because that brings an increase in the demand for labour, strengthening the social position, and bargaining power of the workers, and vice versa.
When the workers are in a weak position, because the supply of labour-power exceeds the demand, capital is in a position not only to reduce wages, thereby raising relative surplus value, but also to increase the length and/or intensity of the working-day, thereby, increasing absolute surplus value. That, in itself, weakens labour further. If workers work an average 12 hour day rather than 10 hours, 20% fewer workers are required, and so the demand for labour is reduced further. That is why overwork always goes hand in hand with unemployment, and vice versa.
But, once workers are already working the maximum working-day, it cannot be increased further. Absent a significant rise in productivity, to reduce the amount of necessary labour, and so raise relative surplus value, the ability to produce more surplus value begins to hit limits. As Marx says in Capital III, Chapter 15,
“Given the necessary means of production, i.e. , a sufficient accumulation of capital, the creation of surplus-value is only limited by the labouring population if the rate of surplus-value, i.e. , the intensity of exploitation, is given; and no other limit but the intensity of exploitation if the labouring population is given.”
Although technological development takes place constantly, raising productivity, it is only at certain points in the long wave cycle, that big, society-wide, technological revolutions take place – Innovation Cycles – and that is produced, precisely, at points where the demand for labour exceeds the supply, not where supply still exists in excess.
So, absent such a technological revolution, and with the individual working-day already at its maximum, the only way to produce more surplus value is to employ more labour, i.e. to increase the social working-day. At first, that means soaking up some of the existing unemployment, but also means mobilising other reserves – more women workers, children, immigrants, and in places, peasants, independent producers and the petty-bourgeoisie, whose inefficiency and under-employment becomes apparent as economic activity rises.
This means that capital accumulation becomes extensive rather than intensive. As Marx describes, in Theories of Surplus Value, this strengthens the hand of labour. It can start to demand better overtime rates of pay, which, itself also reduces the rate, though not the mass, of surplus value. As the demand for labour rises further, workers can demand higher hourly rates, and competition between firms, also, brings that about. Finally, as real wages rise, workers demand shorter hours, longer holidays, and so on, and this, then, reduces the supply of labour, strengthening workers further.
“By advancing three shillings, the capitalist will, therefore, realize a value of six shillings, because, advancing a value in which six hours of labour are crystallized, he will receive in return a value in which twelve hours of labour are crystallized. By repeating this same process daily, the capitalist will daily advance three shillings and daily pocket six shillings, one half of which will go to pay wages anew, and the other half of which will form surplus value, for which the capitalist pays no equivalent. It is this sort of exchange between capital and labour upon which capitalistic production, or the wages system, is founded, and which must constantly result in reproducing the working man as a working man, and the capitalist as a capitalist.” (p 61)
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