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ABC of Marxism
The application of the materialist conception of history to the problems of the class struggle under capitalism demands a knowledge of scientific economics. While Marxist political theories are based on the concept of the state, scientific economics is based on the labor theory of value. First we will analyse the relations between labor, wage-labor, labor-power, value and the transformation of living labor into crystalized labor.
Under chattel slavery, the slave’s labor appeared to be unpaid labor. Under capitalism, the worker’s labor appears to be paid labor. Both these appearances are false. The slave got the minimum necessities of life as “pay”, while the wage-slave under capitalism gives the boss the greater portion of his product as unpaid labor. Historically this difference represents a change in the form of slavery. With the development of feudalism slavery was transformed into serfdom. This form in turn was changed into wage-labor with the spread of the capitalist mode of production. The slave himself was a commodity bought and sold by slave-owners. The wage-worker is not a commodity but his labor-power is. Deprived of the ownership of the means of production the worker is forced to auction off hours of his life in order to survive. Apologists for capitalism deny labor-power is a commodity though they concede that the slave was a commodity.
Simply defined, a commodity is a useful thing produced for sale on the market. It is the basic unit of all capitalist production. Labor power appeared as a commodity with the advent of the capitalist mode of production. The wage-worker sells his labor-power for a definite period of time: by the hour, day or week; not for all time. That is why the wage-worker is called a free man. He is “free” to sell his labor power on the market as a commodity, or starve. He has no other commodity to sell.
When we examine the method of capitalist production, one thing strikes us immediately: goods are produced not for use but for sale. To be saleable all good must have use-value, must supply some human want. But not all use-values are commodities, do not embody labor. The manufacturer or farmer does not produce goods because they are useful alone, but because he can sell them. In capitalist society food is not grown to eat, nor is clothing made to be worn, nor are houses made to be lived in. No matter how great the need for it, the good will not be produced by a capitalist unless it can be sold. Capitalist production is commodity production – for the market.
Labor closely resembles and is often confused with labor power. Labor power is owned by the worker and is his until it is sold and used in the production process. It is potential labor. It is the commodity sold by the laborer. The capitalist buys labor power as a commodity, takes it to his factory and puts it to productive use. Here potential labor is converted into dynamic or realized labor. Dynamic labor and the commodities it produces become the private property of the capitalist by virtue of his monopoly of the means of production. As soon as labor power enters the productive process it is consumed in the form of labor and ceases to be a commodity. Labor is as different from labor power as the machine is from the work it performs.
Commodities exchange for one another on the market by virtue of some common quality or character than can be measured. As use-values, commodities, being different, cannot enter into quantity relations. As exchange values, however, commodities, being the same, can enter into quantity relationships. If we ignore their natural qualities (use-values) there remains only one common quality or likeness: they are all products of (abstract) human labor, a social, not a natural quality. How is the exchange value of a commodity measured? By the number of hours of labor socially necessary to reproduce it. Value must not be confused with price. The latter fluctuates according to supply and demand. But the level around which it ebbs and flows can be determined only by the amount of labor embodied in them. It would seem that:
“the lazier or clumsier the man, the more valuable is his commodity. This, however, would be a sad mistake. You will recall I used the word ‘social’ labor, and many points are involved in this qualification ... we mean the quantity of labor necessary for its production in a given social average intensity, and average skill of labor employed.” (Marx – Value, Price and Profit, p. 61)
Labor power, however, is also a commodity, since the worker sells it on the labor market. The value of labor power “is determined by the value of the necessaries required to produce, develop, maintain and perpetuate the laboring class.” (Same, p. 75) In other words, the amount of labor it takes to produce the labor power. Wages are the price of labor power. Behind wages is concealed a relationship of exploitation.
Marx discovered that labor power is different from all other commodities in one fundamental respect. He found that a worker, in consuming commodities which takes, let us say, four hours of socially necessary labor to produce, stores up enough energy to work much more than four hours. In other words, labor has the ability to produce surplus value. By means of his monopoly of the means of production, and because the worker must sell him his labor power, the capitalist takes advantage of the ability of the worker to produce surplus value. He takes from the worker 8 or 10 hours and in return gives the worker the four hours pay which the worker needs to restore his energies.
Surplus value is the unpaid portion of the value of the commodity produced by the worker. It is the source of profit. The degree of exploitation is the ratio between paid and unpaid labor. It is not dependent on the amount of wages. Colonial workers whose wages are low are not exploited to the degree that the highly developed industrial workers are, although the latter receive a far higher wage. The worker receives in wages the full value of his labor power. The capitalist realizes surplus value by selling commodities at their value.
“Let us now consider society as a whole. We are not interested in any individual capitalist or any individual worker. We are concerned with how the whole gigantic machine called the capitalist system is arranged. The capitalist system employs a vast number of workers. Capital pays them wages, the value of their labor power. This money enables them to renew their labor power, to be again expended in the service of capitalism. The working class not only pays for itself by its own labor, but creates also the income of the upper class – surplus value. Through innumerable channels this surplus value flows into the coffers of the ruling classes: the capitalist himself receives his share – profit; a part goes to the landlord – rent; a part goes to the capitalist state in the form of taxes; a part to the merchants, shopkeepers, clergymen, etc. On this surplus value live all the parasites who are created by the capitalist system.”
The exploitation of labor is the source of the irreconcilable conflict between the classes. It is the driving force behind the working class for the abolition of capitalism and the wage system.
Marx first demonstrated that labor power, like all other commodities, has use value and exchange value; that is, it has the quality of being concrete and abstract. “This is the pivotal point on which a clear comprehension of political economy turns.” The two-fold nature of labor does not signify two different kinds of labor, but two qualities of one and the same labor.
Craft or skill generates a distinction between simple and complex labor. In computing the value of a commodity complex labor must be reduced to simple labor of which it is composed. It is now clear that value originates not in nature but in society. It is not a relation between things but between men.
Money is the standard of price and the measure of value. In this sense it serves as a medium of circulation. Gold and silver by nature are not money. They are used for money because the physical properties of these metals enable them to function best as money. This is possible because gold and silver coins are themselves commodities embodying crystalized labor. Money does not express value directly, but indirectly, as price. “Price is the money name of value realized in a commodity.” It is a monetary expression of value. Paper money facilitates circulation and functions as part of capitalist bookkeeping. It can replace gold as medium of circulation but cannot be a standard of value. Gold and not paper is the equivalent of socially necessary labor time embodied in commodities.
All commodities are reducible to crystalized labor time. Capital is a special form of commodity which multiplies itself by causing labor to create surplus values. It exists in various forms: as money; as machines, buildings, land, etc.; and as accumulations of goods, raw materials, etc. It is a social relationship, by which the capitalist uses labor for the creation of new surplus values.
“It is the lordship of past stored-up, realized labor over actual, living labor that transforms the stored-up labor into capital.” (Marx – Wage-Labor and Capital, p. 31)
“Capital does not consist in the fact that stored-up labor is used by living labor as a means for further production. It consists in the fact that living labor serves as the means whereby stored-up labor may maintain and multiply its own exchange-value.” (Same)
The mere development of commodities and money does not suffice for the advent of capital. Capital was born only when the development has proceeded to the point where the owner of commodities and money meets in the market and purchases the “free” laborer’s labor power. The appearance of capital in history marks a new economic epoch.
Not all the surplus value that the capitalist expropriates is used up by the capitalist for his immediate needs. Most of it is used over again in further production. He adds it to his capital. He extends his undertakings. He installs more productive machines thereby displacing workers and creating an “industrial reserve army.” He builds greater plants. This new industrial machinery, this increased capital, set in motion by labor, receives still greater quantities of surplus value. Thus capital rolls on like a snowball, with every turn gathering larger masses of surplus values.
As is now apparent, capitalism is not a well-ordered society. Resting on exploitation, it is split into classes. No real organized production and distribution of the necessities of life is possible. Plans like those of the Technocrats, Sinclair’s Epic Plan, or the social schemes of the New Dealers, designed to organize production and distribution under capitalism, are utopian. As long as goods are produced for profit and not for use, anarchy in production must prevail. As long as the working class is exploited, real social planning that would benefit society as a whole is impossible.
1. Two “technology” engineers, L.P. Alfred and J.E. Hannum, advocate measurement of production by “kilo-man-hours” or kmh’s as a basis for capitalist planning. In the final analysis this is the recognition by ominent capitalist engineers of the labor theory of value.
Value, Price and Profit – Marx
Wage-Labor and Capital – Marx
Socialism, Utopian and Scientific – Engels; Part III
Capital – Marx; Vol. 1, pp. 1–32
The People’s Marx – J. Borchardt
The Marxian Economic Handbook – Emmet
A Short Course in Economic Science – Bogdonoff
Critique of Political Economy – Marx
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Last updated: 7 August 2019