Monday 10 October 2016

Capital III, Chapter 48 - Part 13

It is not land, which creates the value represented by differential rent. The differential rent is a function of the relative fertility of different soils, but it is not that relative fertility, which determines the value of products, arising from these different soils. That depends upon the labour-time required for their production. That labour-time may be greater or smaller for any given level of output, depending upon the soil fertility. But, also the rent, as a function of these product values, depends not just upon the individual values of products, produced on different soils, but on their general market value, which is determined as a result of competition between the capitals employed on these different soils, as well as upon the average rate of profit, which has nothing to do with the land or its relative fertility.

The concept of labour being the source of wages is no more rational than of land being the source of rent.

“In so far as labour is value-creating, and is manifested in the value of commodities, it has nothing to do with the distribution of this value among various categories.” (p 823)

In other words, labour creates new value, as a consequence of its expenditure, but this tells us nothing about how much of this new value should be distributed as wages, profit, interest or rent. These are determined by quite different factors. The amount that must be distributed as wages depends upon the value of labour-power, i.e. upon how much value must be set aside to buy the necessary wage goods required to reproduce that labour-power. That itself may fluctuate, as a consequence of competition, and the relation of supply and demand for labour-power, at any time, depending upon the needs of capital. But, even assuming that we take wages as an average, equal to the value of labour-power, this leaves the remaining portion of the new value, created by labour, the surplus value, to be divided as profits, interest and rent, according to the laws previously described.

Moreover, as set out earlier, although concrete forms of labour are the source of value, they are not the essence of value, they are not its substance. In just the same way that a candle, a torch or the sun are sources of light, none of these sources are the substance of light, which is comprised of the photons emanating from these sources. In the same way, the concrete labour of a tailor, a mechanic or a brain surgeon is the source of value, but none of them are the substance of value, which is comprised of abstract labour.

“In so far as it has the specifically social character of wage-labour, it is not value-creating. It has already been shown in general that wages of labour, or price of labour, is but an irrational expression for the value, or price of labour-power; and the specific social conditions, under which this labour-power is sold, have nothing to do with labour as a general agent in production.” (p 823)

The labour that determines the value of labour-power – that is that determines the value of the commodities required to reproduce labour-power – which is paid as wages, the price of that labour-power, is exactly the same abstract labour that determines the value of all other commodities.

“Labour is also materialised in that value component of a commodity which as wages forms the price of labour-power; it creates this portion just as much as the other portions of the product; but it is materialised in this portion no more and no differently than in the portions forming rent or profit. And, in general, when we establish labour as value-creating, we do not consider it in its concrete form as a condition of production, but in its social delimitation which differs from that of wage-labour.” (p 823)

In other words, its not wage-labour per se that creates value. It is the act of performing free labour, as part of any labour process, in any mode of production, and so abstracted from any historically determined form of that labour, which creates value. The labour of the individual member of a primitive commune, just as much as the labour of a peasant in an Indian village commune, or an independent English yeoman, or the citizen of a future communist society, are all equally value creating, no more nor less than the labour of the wage labourer under capitalism.

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