Friday, 14 July 2017

Theories of Surplus Value, Part I, Chapter 6 - Part 5

[3. On the Circulation of Money between Capitalist and Labourer]

[(a) The Absurdity of Speaking of Wages as an Advance by the Capitalist to the Labourer. Bourgeois Conception of Profit as Reward for Risk]

Marx examines here a number of explanations for the existence of profit arising from the relation of the capitalist to the worker, such as that the profit arises because the capitalist removes the need and risk for the worker to sell the portion of the product which belongs to them. The concept here is the same as that discussed above, which is that a portion of the product is owed to the worker – just as a portion is owed to the landlord for rent, a portion to the money-lender as interest, and to the state as taxes.

The worker advances their labour-power to the capitalist, by engaging in the production process for say a week, before they are paid. Its then argued that the capitalist advances wages to the worker, because although this has resulted in the creation of a product, it has yet to be sold. The capitalist gives money wages to the worker, at the end of the week, before they have sold the product and obtained its money value, which means the worker can consume as soon as they receive these money wages.

In fact, there are many activities where the worker produces a commodity that is sold within a matter of minutes, hours or days after its production, and so long before the capitalist has had to hand over money wages to the worker, e.g. the labour of a worker in a fast food restaurant.

But, even besides this, Marx set out, in Capital II, in discussing the turnover of capital, after the first turnover period, workers are paid their wages not out of the capital advanced by the capitalist, but from the proceeds of the sale of their own product.

“The money here has the form of means of payment. The capitalist has always appropriated to himself the commodity “labour” before he pays for it. The fact however that he only buys it in order to make a profit out of the resale of its product is no reason for his making this profit. It is a motive. And it would mean nothing but: he makes a profit by buying wage-labour because he wants to make a profit out of selling it again.” (p 314)

As for the argument that the profit is justified because the capitalist saves the worker the trouble of selling that portion of the product which belongs to them, if this were applied, it would upset the whole basis of the relation between wage labour and capital, and economic justification of surplus value. The actual relation between wage labour and capital is that the capitalist buys labour-power. What they pay for that labour-power, as a commodity, is its value. They set this labour-power to work with means of production, also bought by the capitalist, and so at the end of this process, a product exists, which also thereby belongs to the capitalist.

If the value of the product is greater than the total value advanced by the capitalist, and this is the purpose of their activity, then this surplus value also belongs to the capitalist. So, to begin saying that a portion of this product belongs to the workers who produced it would upset this whole arrangement.

“The profit that the capitalist makes, the surplus-value which he realises, springs precisely from the fact that the labourer has sold to him not labour realised in a commodity, but his labour-power itself as a commodity. If he had confronted the capitalist in the first form, as a possessor of commodities, the capitalist would not have been able to make any profit, to realise any surplus-value, since according to the law of value exchange is between equivalents, an equal quantity of labour for an equal quantity of labour. The capitalist’s surplus arises precisely from the fact that he buys from the labourer not a commodity but his labour-power itself, and this has less value than the product of this labour-power, or, what is the same thing, realises itself in more materialised labour than is realised in itself.” (p 315)

The argument that workers owned a portion of the product they produced, had some material foundation when workers were employed via the "Putting Out System", and when they were still basically independent handicraft producers working under one roof in a factory.  But, the reality already was that they wore wage-workers.  As Marx describes in relation to the Scottish pebble collectors, who sold pebbles to stone-cutters, they were nominally independent commodity-owners, but the reality was that there were so many pebble collectors relative to stone cutters that the latter were able to buy the pebbles from the former at prices that only reflected the value of their labour-power, not the value produced by their labour.  The latter, thereby appropriated the difference as surplus value.

The same phenomenon occurs today with all of the nominally independent commodity owners of the so called gig economy.  In reality most are in a worse position than the average wage worker.

The concept of workers being commodity owners who sold their part of the end product to the capitalist for wages was developed by James Mill, who as a disciple of Ricardo, sought to wrestle with all of the contradictions within the Ricardian system and theory of value, against the criticism of it from Malthus, Chalmers, Cazenove, Bailey and others.  The contradictions flowed partly from Ricardo's failure to identify the source of surplus value, in the way Adam Smith had done, and the failure of both Smith and Ricardo to distinguish between labour-power, as a commodity, and labour the value creating substance, and measure of value.  Marx deals Mill at more length in Theories of Surplus Value Part 3, Chapter XX, where he analyses this disintegration of the Ricardian School.

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