Olúfẹ́mi O. Táíwò
Why Everything Costs Money Part 6
[Capital Volume I, Chapters 8-9, pgs. 306-339 of Penguin Press]
Marx for folks who aren’t trying to read 900 damn pages, by someone who has nothing better to do.
Part 6 of an ongoing series of posts going through Capital Volume 1. See a full introduction to this series here, get caught up with part 1 here, and access free electronic copies of Capital Volume 1 here or here. Continue to Part 7.
Chapter 8: Constant Capital and Variable Capital
Value exists in use values, in physical objects (which are commodities under capitalism). Specific kinds of labor are required to shape things into specific use-values, and those objects remain use values so long as the retain the physical characteristics that make them what they are. A machete will dull over time, machines rust and break down, and these changes deteriorate the use value of those objects, and thus the value they can add to production processes as tools or materials (means of production).
The part of capital which is used as means of production in a production process (“auxiliary material” and tools) doesn’t undergo quantitative alteration of value in the production process - presumably, other than the negative effects of depreciation previously mentioned. This part of capital is constant capital, since its value is held constant. Another part of capital does undergo a change in value, like capital that changes forms, often to play a role as means of production in a different production process. For example, cotton that gets produced into yarn, which then becomes a means of production in the production of fabric. This is variable capital because the value of the capital (you can read “capital” in this context as “means of production”) changes as labor is added to it and it changes form, from cotton to yarn to fabric. (308-319).
Chapter 9: The Rate of Surplus-Value
With the previous distinction in mind, we can get even more mathsy about how value works under capitalism. So, back to first principles: commodities get their value from the labor-time they objectify or materialize. That comes from two sources: the means of production, which themselves contain the labor time that produced them (we use a furnace to do the smithing that allows us to make a machete, but someone had to make the furnace!) and, of course, the labor time applied to the material and tools that help make the product. Since can use the term “capital” to talk about the means of production, that means that the distinction we just made between constant and variable capital will help us mathematically define the value of a commodity as it circulates in a capitalist economy:
C = (c+v)
C’ = (c+v)+ s
So big C = commodity. Small c = capital and small v = variable, and the sum of these together (c+v) represent what the means of production contribute to the value of the commodity by being consumed in the production process. And s is our trusty surplus value.
But we could define this a different way given what we discussed in part 5. When we stared long enough at surplus value we figured out that surplus value is a way of increasing the value of objects by putting labor into them – the steel becomes the more valuable object of a machete by the labor of smithing. The machete is at least as valuable as the original steel, since it still is steel – the steel it once was is literally objectified in the machete that it now is. That’s constant capital. But it’s more valuable cause it has taken a shape that turns it into a particular kind of use value that regular lumps of steel aren’t, it can do shit that not just any old steel can do. That’s the variable capital. The surplus value comes from the fact that it some of the value of the machete comes from the improvement in the steel and some of it comes from the bare fact that labor time was put into it, from the production process itself (remember, the fact that the production process is itself productive. This extra value, however, is also materialized in the object that is produced, but above and beyond what can be accounted for by just staring at the physical changes to the commodity. So we can think of surplus value as an additional source of value from variable capital. That gives us an alternative way of defining C’:
C’ = c + (v +Δv)
Where Δv = “change in v” = surplus value
Okay cool. What else?
Well the worker, during part of the day, creates the amount of value that corresponds to the value of their labor power. That value is the amount of labor-time needed to reproduce their labor power: that is, for them to survive to work another day (Marx uses the term “means of subsistence” for this). But they work the whole day. We could continue from the example in part 5: say the worker produces that amount of value in the first 6 hours of a 12 hour work day. The value created in the last 6 hours is surplus value which is created for the capitalist and not for the worker, who owns both the means of production and the objects produced with them. Again, that’s surplus value. (324-325)
But we can stare at surplus value a little longer. The worker and the capitalist are in a contractual political relationship, trading hours for dollars according to the laws of a society structured around capitalist production. Since they are both bound by the law that structures their contract, that is a kind of political “equality”, equality under the law. But their negotiating positions over that contract are far from equal. Capitalists already have their means of subsistence, which is a precondition for being able to wait for goods to be produced and sold to make their money. So, as a class, they are entering into negotiations over the wage contract to protect their profit. Workers do not have their means of subsistence, which is a precondition for being alive. They enter into the negotiations over wages to survive.
“But it was one on one tho! Equal number of players! Fair's fair.”
Surplus value could help us measure the relative power between the sides of the negotiating table. Call the amount of labor needed to reproduce a worker’s labor power “necessary labor”. This number will be equal to the variable capital without the surplus value, since it represents the non-extra labor time put into the production of a commodity. Then:
Rate of surplus value = surplus labor / necessary labor
Rate of surplus value = s / v =Δv/v
This is not to be confused with a rate of profit (327): it’s the ratio of the part of the working day which is socially necessary for the worker and the part of the working day which is not.
Gotta say, two things in this chapter really grind my gears. Why does Marx take the rate of surplus value to be the measure of exploitation? Or, maybe to put it more fairly, why isn’t he clearer about the way that this relates to the background assumptions of the chapter? Leave them aside for a second and just try to take the claim that the rate of surplus value is the rate of exploitation at face value: presumably the less of the day that the worker works for herself, the more of it she is working for the capitalist, and exploitation is the only thing that could explain why. But what if she is herself consuming the surplus value – that is, what if she is compensated at a level that cuts her into the sweet deal of surplus value?
What blocks this in Marx’s case is the assumption that labor will be compensated at its exchange value, i.e. at cost of reproduction, which is to say that wages will be driven as low as they possibly can go, so low that if they went any lower workers wouldn’t be able to survive and reproduce their labor power. Given Marx’s historical time period, that simplifying assumption wasn’t so different from the actual world. But wages in the First World of a significant portion of workers are likely much higher than that amount, given the political concessions that the activism of the working class has won from capitalists in the intervening generations. But that possibility should have been predictable to Marx – this was an intermediate goal of the very political work he himself was doing in the time period where Capital was written, supporting pro-labor political formations like the International Workingmen’s Association (otherwise known as the “First International) and the global abolitionist movement against slavery (which also relates directly to the surplus value discussion, which Marx discusses briefly on page 325). Why define the rate of capitalist exploitation with the exchange value of labor, which measures how much it will theoretically be compensated by the capitalist, instead of with some equation related directly to wages, which measure how much work is actually compensated by the capitalist?
One interpretive possibility, contra my earlier commentary in part 2, is that Marx isn’t generalizing from the First World quite as heavily as I might have earlier been thinking – after all if we were generalizing from wage levels in majority of the European political periphery, the Third World (Global South if you prefer), and the underclass of the shadow economy in the First World (think, for example: undocumented immigrants and day laborers in the US) I would be hard pressed to yell too loudly about this issue.
Continue to Part 7.