The reason for this regulation by the Welfare State is in fact made clear by Marx. He writes of the conditions applying in his day when the amount of education provided to workers was minimal, and healthcare represented nothing but the faux frais of production, required for the repair of labour-power. If for some reason, social productivity fell, so that the new value created in the year by labour fell, this would mean that the amount of revenue fell. The consequence is that less will be available as wages and profits for workers and capitalists to spend.
“If in such conditions capitalist and workman wanted to consume the same amount of value in material things as they did before, they would have to buy less of the services of the doctor, schoolmaster, etc. And if they were compelled to continue the same outlay for both these services, then they would have to restrict their consumption of other things It is therefore clear that the labour of the doctor and the schoolmaster does not directly create the fund out of which they are paid, although their labours enter into the production costs of the fund which creates all values whatsoever—namely, the production costs of labour-power.” (p 167-8)
There are a number of points that need to be drawn out of this. Firstly, in Capital III, Marx had described the way that capital was concerned that labour-power should be reproduced in the most efficient manner. That was not just a matter of trying to reduce the value of wage goods, via such measures as the repeal of the Corn Laws, to reduce the price of food. It was also a concern for temperance, to ensure that workers did not use up their wages in the consumption of alcohol, which not only did nothing to reproduce labour-power, but actively damaged it.
The introduction of the capitalist welfare state addressed this problem, referred to above, in several ways. Firstly, by forcibly deducting a price for the provision of education, healthcare and other commodities required for the reproduction of labour-power, out of wages, via the tax and national insurance system, capital ensured that the decision over this allocation of workers wages was taken out of their hands. Workers now had no choice but to allocate the proportion of the wage fund that capital required of them, so as to reproduce their labour-power to the necessary standard of education, training and fitness that was optimal for capital accumulation.
Secondly, even if workers' wages fell, this same amount of revenue would continue to be allocated to health and education, to ensure that labour-power of the required standard was produced, and this was so even more, because it was the capitalist state which now had a monopoly over the provision of these commodities to workers. This provided a powerful ideological tool, also, for capital. Not only did the capitalist state thereby obtain a direct transmission belt for bourgeois ideas through the educational system, into the heads of workers, from birth, but the idea of this welfare state as something that was class neutral, or even “socialist” was fundamental to the socialising of the working-class into the acceptance of their subordinated role within the modern bourgeois social democratic state.
Similarly, by vesting this monopoly power in the hands of the capitalist state, for the provision of these commodities, it meant that it could regulate their provision for the optimisation of capital accumulation. At times, when capital required innovation, greater scope for academic freedom can be allowed, to encourage the development of the new ideas it can harness. At other times, when what is required are simply more drones, the emphasis switches to the mass production of automatons, whose educational experience is focussed on vocational training and so on. At times, when labour-power is in general excess supply, spending on the provision of education and health can simply be cut back, whilst the existing supply is used up.
The other thing to be taken from Marx’s quote is that here the doctor or teacher merely provides their labour-power directly in exchange for revenue from the worker or capitalist, no different to the way the cook supplies their labour-power embodied in the mutton chops. The education and healthcare are as much required for the reproduction of labour-power as are the mutton chops, but the labour-power bought in each case is unproductive. It is exchanged not against capital but revenue. The buyer of this labour-power does not do so for the purpose of producing a commodity and extraction of surplus value, but only for the purpose of obtaining a use value, for their own consumption.
But, this need not be the case. Just as the cook may be employed as a productive labourer, in a restaurant, and produce surplus value, so too a teacher may be employed by a school, and a doctor by a hospital. The teacher employed by a school exchanges their labour-power with the variable capital of the school. The school, in selling a commodity – education – thereby recovers the fund required to reproduce its constant and variable capital, as well as making a surplus value over and above it.
The same is true in relation to a doctor who exchanges their labour-power with the variable capital of a hospital. The surplus value arises in each case, as with the production of surplus-value in every case, because the value of the labour-power sold by the cook, teacher or doctor is less than the value created by the expenditure of their labour-power. The fact that the cook, or teacher or doctor is employed by the capitalist state, to produce these commodities, and that their labour-power exchanges with the variable capital of that state does not change anything. The fact remains that they are paid wages of X, equal to the value of their labour-power, and they create new value equal to X + n, determined by the labour they perform.
Nor does it change anything that the payment for these commodities is made out of an insurance scheme to which workers contribute collectively, rather than by individual workers' payments. Nor does it change anything that the state may or may not realise the surplus value itself produced by these workers. If a cook, employed by the state, produces food for workers, and the meals are sold to workers at a price that does not realise the produced surplus value, then workers have obtained food below its value, and there is a consequent reduction in the value of labour-power. As a result, surplus value for all capitals employing those workers rises. The loss of surplus value for the state capital is then a direct gain of surplus value for all other capitals. This process occurs all the time, for all capitals, not just state capital, as surplus value is redistributed via the formation of prices of production.