STUDYING DAS KAPITAL: Part 5 (of 8)
Summarizing, mostly defending and, at times, critiquing Volume 1
Part 5 consists of chapters 16, 17 and 18. Its title is “Production of Absolute and Relative Surplus Value”. If you prefer to download a PDF with all eight parts of my study notes combined into a single document, click the button below to do that.
Chapter 16: Absolute and Relative Surplus Value
Marx breaks with his focus on manufacturing to stress that a service sector worker - a teacher working in a private school - is as much a producer of surplus value as any other worker: “capital in a teaching factory, instead of in a sausage factory, does not alter the relation”.
Absolute vs relative surplus value are defined again. Increase surplus value by lengthening the work day beyond the time required to produce the value of the workers’ wages and it is “absolute”. Increase it through productivity improvements (or greater work intensity) that shorten the time required for the worker to produce his value in wages and it is “relative”.
Capitalism aims to enlarge both relative and absolute surplus value. The pursuit of one drives the other. Lengthening the work day has limits, so there will eventually be very increased focus on intensity and productivity. But as productivity and intensity increase so will the desire to make the workday as long as possible. Hence capitalism will tend to conquer non-capitalist or inefficient forms of capitalist production.
Any form of elite rule, not only capitalism, depends on workers producing much more than they need during a workday: “no surplus labour, and therefore no capitalists, no slave-owners, no feudal lords, in one word, no class of large proprietors.”
He says capitalism develops sooner in a place where nature is not “too lavish” in supplying free goods, but says this does not explain why workers submit to producing for others. That isn’t natural: “compulsion is necessary” says Marx.
ASIDE: Part 8 of the book is devoted to this last idea.
David Ricardo and his “vulgarizers”, Marx says, saw labor productivity as central to the magnitude of surplus value but didn’t dare enquire more closely at what created surplus value: forcing workers to stay on the job longer than required to produce what workers buy. Marx scoffs at John Stuart Mill who he describes as an especially odious vulgarizer. To Marx’s dismay, Mill said exchange (buying and selling) wasn’t necessary for profits to exist; said that profits are due to subsistence goods lasting longer than it takes to make them; and neglected to account for constant capital in calculations of profit. Marx also says that Mill saw capitalism everywhere when it “as yet exists only exceptionally on our earth” (showing that Marx considered most of the world in his day as existing in a semi-feudal, not really capitalist, state).
Chapter 17: Changes of Magnitude in the Price of Labour-Power and in Surplus Value
He makes some simplifying assumptions regarding the diversity of labour power among workers and how wages fluctuate. Some labour power costs more to develop (depending on the strength, skill and knowledge required of workers); and there is “natural diversity” in the labour power of women and children compared to adult men. Marx says he will ignore these considerations. He also assumes cheating is negligible - that all commodities including labour are sold at market value; and that labour power may only briefly rise above its normal market value but never sink below it. He goes on to discuss three cases and devotes a section of this chapter to each.
Section 1: Length of the Working day and Intensity of Labour Constant. Productiveness of Labour Variable
The new exchange value created by workers on the job is constant. Increased productivity means that new exchange value is spread over more articles. Referring back to chapter 8, he means that more of the old exchange value (contained in the means of production) is transferred and preserved by the worker who becomes more productive.
He says that as productivity rises, surplus value rises and the value of labour-power falls. Note that he is not asserting that workers are always worse off in absolute terms. His argument is that they lose in relative terms when a greater portion of the day produces surplus value. He stresses that the price of labour power falls when increased productivity makes the costs of the workers’ consumption basket go down. He reminds people that he is theorizing and that he is not ignoring what “the pressure of capital on the one side, and the resistance of the labourer on the other, throws into the scale”.
He reminds us that surplus value is a broad term that can take the form of profit, rent or interest. He often takes David Ricardo (respectfully) to task in this section for aspects of his economic analysis - for failing like other economists to identify the importance of surplus value independently of the forms it can take.
Section 2: Working day Constant. Productiveness of Labour Constant. Intensity of Labour Variable
A workday of above-average intensity, even though it produces more products in the same amount of time, does not decrease their new exchange value per item the way an increase in productivity does. Increased productivity means less labour for more items. Increased intensity means more labour for more items. He says the capitalist may be willing to pay more for this extra-intense labor but says it does not reflect the true exchange value of labour-power because of “increased wear and tear” on the worker. The implied analogy is that If you estimate a good price for a machine, but ignore maintenance costs, you will likely pay an inflated price.
He argues that increased productivity for luxury items (i.e. items not purchased by workers) would not cause a fall in the exchange value of labor power. However, increased productivity for essential goods does because it lowers the cost of supplying and maintaining workers.
Section 3: Productiveness and Intensity of Labour Constant. Length of the Working day Variable
Increased wear and tear on workers results from an increase in the length of the workday. That can increase the exchange value of labour-power - but the capitalist still gets more surplus value in spite of that increase. But if the workday is shortened the exchange value of labour-power does not fall, he says. Remember that he has always stressed that the value of labour power is regulated by the exchange value of the workers’ consumption basket. He reminds us that in reality the conditions of constant productivity and intensity do not hold: capitalists try even harder to increase both in response to a shorter work day.
ASIDE: Given Marx ‘s assumptions (constant productivity and intensity) I see no reason why the exchange value of labour-power could not fall back down to its normal level after rising due to a huge but temporary lengthening of the workday.
Section 4: Simultaneous Variations in the Duration, Productiveness, and Intensity of Labour
He considers various possibilities, one of which is the exchange value of labour-power increasing due to sudden increase in food costs due to loss of soil fertility. His most important conclusion is the following, and it is a rare time in the book where he envisions capitalism having been defeated:
Only by suppressing the capitalist form of production could the length of the working day be reduced to the necessary labour time. But, even in that case, the latter would extend its limits. On the one hand, because the notion of "means of subsistence" would considerably expand, and the labourer would lay claim to an altogether different standard of life. On the other hand, because a part of what is now surplus labour, would then count as necessary labour; I mean the labour of forming a fund for reserve and accumulation.
Consumer and producer surplus (as modern economists may put it) would merge under socialism. Workers would have to decide to consider the benefits of consumption as opposed to forgoing current consumption for investment to secure future consumption.
Chapter 18: Various Formula for the rate of Surplus value
He explains these formulas
The numerators and denominators of the first two ratios above have units of money while in the third they have units of time. By “Value of labour-power” he means a value paid by labour power during a workday, not an hourly rate.
He also provides these ratios:
And he clarifies that “by ‘Value of the Product’ is meant only the value newly created [my emphasis] in a working day, the constant part of the value of the product being excluded.”
A great passage follows that is ultimately built on his distinction between a use-value and an exchange value that he made at the very beginning of the book. Though he refers to “labour” below, he often refers to “labour-power” which evokes that distinction :
Capital, therefore, is not only, as Adam Smith says, the command over labor. It is essentially the command over unpaid labor. All surplus value, whatever particular form (profit, interest, or rent), it may subsequently crystallize into, is in substance the materialization of unpaid labor. The secret of the self-expansion of capital resolves itself into having the disposal of a definite quantity of other people's unpaid labor.