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If, thus far, Marx seemed like something of an angry accountant, meticulously adding up all the ways in which capitalism extracts value from workers, in Chapter 10, “The Working Day,” he succumbs almost entirely to his romantic, metaphorical and highly moral side. This was one of the most readable and enjoyable chapters of Capital so far.
We start with the assertion that that the value of labour power is based on the amount of labour-time necessary to produce it. How much does a worker need to live? $30 for room and board and a six pack of beer at the end of the day? Well, then, that is the minimum value of his labour power. Of course, the value of labour power is socially constructed. If we consider a telephone, or even the Internet, to be among the minimum requirements of survival for a normal worker – then his labour time must be sufficiently remunerated to procure those things.
In the working day, then, a given amount of time will be taken up by the worker creating the value of his own labour – earning his own keep, one could say. Everything above that is surplus labour, which is dedicated, of course, to creating surplus value… i.e. creating profit for The Man!
The central question at this juncture is how long should the working day extend beyond those hours required for generating the worker’s livelihood? If the worker can earn his keep in six hours, should then his working day be extended to 10 hours, 12 hours, or 15 hours so he can engage in surplus labour?
Marx employs a fitting metaphor to describe the capitalist’s disposition toward such questions:
Capital is dead labour which, vampire-like, lives only by sucking living labour, and lives the more, the more labour it sucks. (p342)
Ergo, the simple answer is that the capitalist would like the working day to be as long as possible. If your life source is “living labour” – in the same way that Dracula’s life source was blood – surely you’d depend on devouring as much of it as possible?
But the worker, selling his labour like any other commodity on the market, demands the full value of his sweat and toil, and knows that to consent to an 18-hour working day, ad infinitum, is to sign up for a premature death, which has the result of cheapening the one and only thing he has for sale. If a “normal worker” has 30 years of productive life, but the capitalist uses up that productive life in 10 years by over-working him, then this is a rotten deal for the worker.
David Harvey’s enlightening series of lectures again summarizes things nicely here. The NYU prof evokes these duelling “rights” – the right of the worker to extract maximum value for the labour that he is selling versus the right of the capitalist to extract maximum value out of the labour that he is buying. This is, in part, the essence of class struggle. Marx depicts this as an historical battle:
There is here therefore an antinomy, of right against right, both equally bearing the seal of the law of exchange. Between equal rights, force decides. Hence, in the history of capitalist production, the establishment of a norm for the working day presents itself as a struggle over the limits of that day, a struggle between collective capital, i.e. the class of capitalists, and collective labour, i.e. the working class. (p344)
And yet, still in historical mode, Marx reminds us that “capital did not invent surplus labour” (p344). Indeed, the ruling class had been claiming a good part of lowly workers’ labour time for centuries – even millennia. And let’s not forget the outright theft of labour power from workers that occurred under slavery. Rulers were exploiting workers before capitalism was even a glimmer in Adam Smith’s eye.
What differentiates the extraction of surplus labour under capitalism is that it’s potentially limitless, because the proceeds of surplus labour go toward the accumulation of money. (And money, is itself, open to nearly infinite accumulation.) Back when serfs were merely toiling for a day or two a week on the lord’s land, that toil was tied to creating use-values, and unlike money, use-values reach limits. How much corn, after all, could the lord ever eat or give to his family or trade? Only so much. But as is apparent every day in our globalized world, company profits know no bounds. Exxon routinely makes profits in the tens of billions of dollars. I don’t know if it’s even possible to contemplate exactly what the heck that kind of money can buy.
One thing is for sure – it can buy a whole lot of social power, which is, of course, as Marx points out frequently, one of money’s main advantages!
Another historical differentiation worth noting is that under capitalism, unlike in previous epochs, the capitalists’ ultimate goal is the extraction of surplus-value, which is not exactly the same as surplus labour. Unlike a lord surveying his serfs and figuring how many productive hours he can get out of them, a factory owner surveys his workers and his ultimate aim is figuring out how to get surplus-value out of them. Surplus labour is simply a means to that end.
Chapter 10 proceeds to relate many historical events in the pitched battle over the working day between factory owners and workers. These are clear, well-documented and factual accounts, drawn in many cases straight from the reports of factory inspectors in the employ of the British government, who were charged with investigating conditions of the labouring classes. What stands out, time and time again, is the ingenuity of the capitalist class for the “petty pilfering of minutes” or the “nibbling and cribbling at meal times.” So if the capitalist can get away with insisting on a worker taking his lunch while still working, he will do it. If the capitalist can argue that an hour mealtime occur before and/or after a 10-hour work day, rather than actually grant a break during the working day, he will do that too.
What also stands out in this historical account is the vital and ongoing role played by child labour. Whenever anyone points to a supposed Golden Era of capitalism, when markets were supposedly properly regulated and benefits trickled more equitably to all, that person had better try to explain why it was, in order for so much wealth to be generated by capitalism, that children as young as nine and ten had to be press-ganged into ten or twelve-hour work days in front of dangerous, noisy machines. There is ample evidence to suggest that many industries would have hardly flourished the way they did without child labour.
Bertrand Russell wrote that:
The industrial revolution caused unspeakable misery both in England and in America. … In the Lancashire cotton mills … children worked from 12 to 16 hours a day; they often began working at the age of six or seven. Children had to be beaten to keep them from falling asleep while at work; in spite of this, many failed to keep awake and were mutilated or killed. Parents had to submit to the infliction of these atrocities upon their children, because they themselves were in a desperate plight. Craftsmen had been thrown out of work by the machines; rural labourers were compelled to migrate to the towns by the Enclosure Acts, which used Parliament to make landowners richer by making peasants destitute; trade unions were illegal until 1824; the government employed agents provocateurs to try to get revolutionary sentiments out of wage-earners, who were then deported or hanged. Such was the first effect of machinery in England.
Happily, with the exception of the abomination of slavery – which actually provided the ruling class with an incentive to work people to death, safe in the knowledge that there was always a fresh crop of human victims to take the place of the slaves that had died – the working day has, for various reasons, found at least some sort of limits… usually. Those limits have in many cases been stipulated out of mere self-interest on behalf of the capitalists. It can be counterproductive to drive all your workers to work themselves to death. Also, the prospect of sun-starved and sleep-deprived children (and maybe also their parents) knowing nothing much of life except the sweat and grinding roar of the factory floor – well, that offends some people’s notions of a civilized society.
Governments, also, have stepped in to curb the excessive appetite of capital for labour because workers are generally on the frontlines of any warring that needs to be done. A famished, exhausted, half-dead labour force is generally easy prey on the battlefield. The Germans owed their victory over the French in 1870, in large part, to a better-rested, better-fed army.
Which leads nicely to this Salon article from just this year, which speculates thusly: if the American elite, in particular, no longer really needs the working class for, well, working (since most labour is outsourced to Asia), nor do they much need the working class for fighting (since the military is increasingly privatized and waged by foreign mercenaries) – well, why would the American elite have any need of ordinary Americans at all? Have capitalists in America achieved the ultimate victory: rendering their domestic working class obsolete?
Of course, the author exaggerates for satirical effect, but if current trends continue, it pays to speculate whether — at least in the west — the struggle over the working day will ultimately be concluded in a rather strange fashion: there will be no working day at all. Indeed, this is the plight already of far too many Americans. Or perhaps we’ll just continue to suffer the effects of excess population (Marx’s term) in proportion to the jobs available… Maybe we’ll return to the disgusting spectacle — immortalized in the film On the Waterfront — in which the capitalists throw tokens into a hungry horde of workers, each token being redeemable for a day’s labour, and workers will actually fight each other for the privilege of a day of backbreaking, exploitative employment.
Hey, it could happen! Under capitalism, be prepared to countenance any indignity against the the human soul.
So many great reading materials have been shared through Facebook and other online venues and even in person over the last year or two – a big shout-out to Andrew, Matt, Cyrus, especially – and I’ll bashfully admit to having found a few gems myself, I thought I’d try and find some of the ones I enjoyed the most and assemble them together here in this spiffy new section of my site, the Reading Room!
Here’s what I added today (and much more to come soon):
The Disappearing Intellectual in the Age of Economic Darwinism, Henry Giroux. Truthout. July 12, 2010. Universities now mostly turn out compliant, indoctrinated workers to do the bidding of our neo-liberal overlords. What’s wrong with this picture?
Are the American People Obsolete? Michael Lind, Salon. July 27, 1010. The corporate elite in America are outsourcing jobs and even military responsibilities, leading this writer to ask the obvious question – are Americans obsolete? And should they all just emigrate in search of opportunities overseas?
The Quiet Coup, Simon Johnson. The Atlantic Magazine. May 2009. I cannot recommend this one highly enough. I see it cited all over the place and it’s not hard to see why. No less an authority than the former chief economist of the International Monetary Fund – no radical leftist organization here! – writes in detail about how the United States is now an oligarchy.
A Marxist explanation for the current capitalist economic crisis. An interview with Robert Brenner. January 22, 2009. (Originally published in Hankyroh, my link is to the English translation at the International Journal of Socialist Renewal).
The Un-usable Past, Walter Benn Michaels. Baffler Magazine. December 16, 2009. A critique of the last few decades of American literature, which the writer argues has produced novels that fit the neo-liberal paradigm perfectly. Society is just individuals and families – really? Jonathan Franzen et al have the blinders on. A provocative piece to be sure!
Newspapers and thinking the unthinkable, Clay Shirky. December 2009. Just a regular ol’ blog post, but one that online chatterers interested in the future of news circulate frequently. It’s not so much that Shirky knows what will happen to news; it’s that he argues pretty persuasively that we’re undergoing an enormous paradigm shift equivalent in scope to the invention of the printing press.
First Do No Harm: Life and Death in the ICU, Andrew Ellner. n+1. May 16, 2006. There is so, so much worthwhile reading in n+1, quite possibly the best magazine ever made, so why single out this one? Because it sheds light on a subject that really doesn’t get much attention, at least not among early-to-mid thirties types like me: what happens when you die? This harrowing tale from a doctor discusses how technology conspires to prolong life as long as possible, even if the “treatment” sometimes feels like torture. An unsettling read.
The Problem With Music, Steve Albini. early 1990s sometime. An alternate title could be, “How record industry moguls screw over the artist at every step of the process, milking millions out of them and sharing mere pennies.”
What You’ve Done to my World, Mark Grief. n+1. June 22, 2009. Explains, among other things, why my favourite band, Fugazi, is essentially one of the most important musical acts of all time!
If you’d like to be generous enough to share an article with me that belongs in my reading room, email me at firstname.lastname@example.org, or indeed, since you’re probably already my friend on Facebook, just keep the great links coming.
These two exciting chapters in the Capital saga are called “Constant Capital and Variable Capital,” and “The Rate of Surplus-Value.” Marx isn’t one to pussy-foot around with flowery, fancy titles. But I certainly have pussy-footed around with my Marxist blogging project. A couple of weekends ago I buggered off to the Adirondacks, and then the weekend after that I buggered off to various places in Ontario and western New York State, and I stopped writing about Marx for a while. I wish I could say my mind now feels refreshed but it doesn’t. It feels like a hankie that somebody just blew their fat, snot-filled nostrils into.
Nevertheless, I’m going to try and understand the essence of these chapters. As is becoming increasingly apparent with Capital, Marx’s terms, most of which appear to be unique to him, or indeed, pioneered by him, are among the most important things the reader must grapple with. Thank Heavens then for David Harvey, bearded brilliance incarnate, whose lectures have helped me get this far.
In this section of Capital, Marx has plunged us right into the noisy, grimy epicentre of capitalism – the production process. Here we encounter two inputs, if you will, that are required for commodity production – constant capital and variable capital. Constant capital is composed of those inputs that transfer their value to the commodity without undergoing a change in value.
That part of capital… which is turned into means of production, i.e. the raw material, the auxiliary materials and the instruments of labour, does not undergo any quantitative alteration of value in the process of production. For this reason, I call it the constant part of capital… (p317)
But Marx has taken a very long and circuitous path to get to this definition and so we have to back up a bit and take some of those steps with him, I suppose, as arduous as it is. Since constant capital includes things such as raw materials and instruments of labour, under discussion here are inert objects. Since they are inert, unlike in some magical fantasy world, they cannot conspire to produce, say, a broomstick. No sir. They need a helping hand. Where does that helping hand come from?
From labour, that’s where.
As Marx has noted in previous chapters, labour comes in its general form – that is to say, abstract labour – and by this he means labour that creates value, and labour also comes in a rather specific form, that is to say, concrete labour, which goes toward producing a specific use-value. So if I toil away for a day whittling myself an elaborate spear with which to go hunting for wild boar, I have been engaged in concrete labour, because I now have an object with a use-value at the end of it. But if I dedicate the same day to sweating my face off in a capitalist’s factory, I don’t have a use-value for myself at the end of it. Nope! In this scenario I’ve joined that amorphous mass of abstract labour that is creating value. And that value, of course, is going to largely end up benefiting… the Man!
But labour gets a further bifurcation in Marx’s analysis. Not only does labour come in abstract and concrete varieties, furthermore, in its actualization, it achieves two things. It both preserves and creates value. When labourers come across the instruments of production – I’m going to imagine a printing press – they find inert objects that without their assistance won’t do much of anything except sit there in a dark room, forlorn and feeling all left out of the excitement of capitalism. Not much of value happening here! Particularly annoying to the capitalist is the knowledge that, because the printing press is itself the result of past labour and past constant capital inputs, he most likely had to pay good money for it, and so if no one uses that damn printing press, its value is being squandered.
So when labourers use instruments of labour, or indeed, raw materials, and “auxiliary materials,” (whatever the hell those are) these helpful folks are preserving the value of heretofore inert objects. The printing press hums into life, the plates are prepared, the ink readied – lo and behold, it churns out one million copies of The Secret for all the gullible shitmunchers of the world. Success! A marketable commodity…
Thank you, labour!
As noted already above, according to Marx, with constant capital, the value of various inputs (instruments of labour, raw material, etc.) are transferred to a new commodity without increasing their value. This is a bit of a headscratcher of an assertion, but now that I’ve scratched my scalp with confusion for a few weeks over it, I think I kind of get it. Let’s consider a modest heap of flour. We want to make bread. So the flour is added to water and eggs and yeast and whatever the hell else goes into bread (I’m not a baker, alas) and hey presto, bread comes out at the end of it. Now is the flour worth more after the production of bread than before? Did it increase its own value? Marx says it jolly well did not, and any capitalist that says otherwise is a damn liar. Similarly, did the oven increase its value in the baking of bread? Again, Marx says no. Indeed. As has been stated in previous chapters, a big machine like an oven imparts a portion of its overall value to the finished commodity (the bread, in this case) every time it has been pressed into use. If our oven bakes one million loaves of bread in its life and thereupon expires and goes to rest for all eternity on a scrap heap, we could say that for each loaf of bread, the oven has transferred one millionth of its total value. But at no time did the oven increase its value.
The transfer of value from constant capital to the commodity is…. constant! There is no alchemy at work here.
Unlike with constant capital, variable capital does indeed increase its value in the production process. Variable capital is, in a word, labour. Only labourers can reproduce more than the sum of their own value. Unlike a raw material such as flour, which, once it has gone to make up a loaf of bread is finished, its raison d’être expended, labour keeps on ticking, like the Energizer Bunny. Labour produces enough value to preserve itself (which is to say that sufficient shelter, food, drink are generated for the labourer’s sustenance) but labour then also creates an additional value – a surplus value – that goes to benefit someone else. A capitalist!
Not even machines – the instruments of labour – can do this. Hmmm. But we are constantly told that technology is so glorious and productive, right? Surely revolutions in the means of production can produce enormous increases of value in and of themselves? Didn’t we contemplate, decades ago, that in the future, it would be machines doing the work while we liberated workers could go write books, fornicate for much of the day, and eat Twinkies?
In so far as I follow Marx, technological revolutions achieve one thing: they increase the productivity of labour, and hence the amount of value that labour can create in a given time. He uses his perennial favourite example of spinning.
Let us assume that some invention enables the spinner to spin as much cotton in 6 hours as he was previously able to spin in 36 hours. His labour is now six times as productive as it was before. The product of 6 hours’ labour has increased six-fold, from 6 lb to 36 lb. (p309)
It also follows, as Marx points out, that each pound of cotton in the production process contains only one sixth of the value of labour that it possessed before the technological advancement. But does this mean that labour is losing its value? Not at all. On the contrary.
Let’s say 6lb of cotton sells for six bucks, then, of course, it follows then that 36 lbs sells for 36 bucks. Now let’s assume a Dickensian sort of world in which it only takes six bucks for the labourer to sustain himself for one day. This is the value he must produce in order to reproduce his own labour.
What’s the story before and after the revolutionary new spinning machine thingamabob? The capitalist heretofore invested $6 in the labourer for a day of work. He recouped that in six hours, by which time, the labourer had produced 6lb of cotton, which sold for $6. So in this scenario, the labourer only started to produce a surplus value for the capitalist in the last six hours of the work day (I’m leaving out the costs of raw materials and instruments of labour here because Marx, for important reasons, doesn’t factor them in either). And so the capitalist is left with a surplus-value of just… yep a measly $6! But after the new spinning wheel thingy, the labourer is six times more productive, so he can produce 6 lb of cotton in one hour. Whoa, what do you know – the labourer has just reproduced his own value (and the wages paid to him) in just the first hour of the day, and so for the remaining 11 hours of the day, he can create surplus value!
It goes without saying that this oversimplification has set aside the fact that inventing and manufacturing and paying for a more efficient spinning wheel incurs costs that must be factored into the above calculations. Nevertheless, you don’t have to be particularly cynical to acknowledge that investments in technological advances are always intended to benefit the capitalist, as illustrated – otherwise, why the heck would capitalists make these investments, huh?
They do it all the time!
Are you exploited?
Moving along to Chapter 9, we encounter some formulas and numbers that are rather dizzying. The point of all this mathematical wizardry is to calculate something that your average University of Chicago Econ 101 student is unlikely to ever contemplate: the rate of exploitation of the labourer. Effectively, this is what the rate of surplus-value is all about.
So as far as mathematical equations go, this is rather an exciting one!
Marx says that the portion of the day that the labourer spends reproducing his own value (earning his room and board, so to speak) is necessary labour time. You can’t really escape from necessary labour time. Even if you were not in an office or a factory or what have you, a certain amount of toil would be necessary to your survival. Even cavemen had to exert themselves running after woolly mammoths.
In addition to the necessary-labour-time portion of the work day, of course, is the time dedicated to creating surplus value. Marx calls this part surplus labour time. It turns out that the rate of surplus value – a.k.a. the rate of exploitation – is simply a ratio of necessary labour time to surplus labour time. It can be expressed as surplus labour time over necessary labour time. If the labourer spends half his day working to reproduce his own value and the other half working to create surplus value, we have a fraction that is basically something like six hours over six hours. Which is 100%. So the rate of surplus value is 100%.
Marx takes pains to point out that the capital advanced in the form of raw materials and instruments of labour is to be totally ignored here. Such calculations only enter into the minds of those who are looking to calculate profit. So while the rate of surplus value might be 100%, the actual profit might well be something like 18% or 10% or what have you.
This is an important consideration, and one that Harvey lingers over as well. For the labourer, while he is gainfully employed, profit really doesn’t much matter. What does he care if he spends his whole day working his fingers to the bone to create a product that makes 1% profit or 20% profit? A worker can be exploited exorbitantly but the capitalist still doesn’t necessarily end up making a big profit; and opposite conditions can apply just as well – you can have a relatively cushy job and not be exploited all that much and the rate of profit can nevertheless be very high… We can see real life examples of this a-plenty; many low-profit products actually require an enormous amount of exploitation in order to exist at all. The meat industry is a prime example.
The meat industry
The Canadian Encycopedia’s excellent history of the meat processing industry in Canada notes this very fact:
Like other food and beverage sectors, the livestock processors have very low profit margins, usually between 1 and 2 percent of sales. From the first industrial plants of the late nineteenth century, their profitability has always depended on high throughput, large-scale production, and salvaging the full value of animal by-products to attain the sales volume required to earn an acceptable rate of return.
A 2005 landmark report on working conditions in this industry – Blood, Sweat and Fear: Workers’ Rights in U.S. Meat and Poultry Plants – gives ample evidence of what kind of working conditions this leads to.
Nearly every worker interviewed for this report bore physical signs of a serious injury suffered from working in a meat or poultry plant. Their accounts of life in the factories graphically explain those injuries. Automated lines carrying dead animals and their parts for disassembly move too fast for worker safety. Repeating thousands of cutting motions during each work shift puts enormous traumatic stress on workers’ hands, wrists, arms, shoulders and backs. They often work in close quarters creating additional dangers for themselves and coworkers. They often receive little training and are not always given the safety equipment they need. They are often forced to work long overtime hours under pain of dismissal if they refuse.
Meat and poultry industry employers set up the workplaces and practices that create these dangers, but they treat the resulting mayhem as a normal, natural part of the production process, not as what it is-repeated violations of international human rights standards.
Forgive me if this seems like a very long digression from Marx, but I think that it pays to contemplate this scenario for a while through a Marxist perspective. I am no expert on the meat industry, but I did live in Alberta not so long ago – and indeed, I worked in politics during the mad cow crisis – and at that time, meat packers were the folk heroes of the land, if you listened to Conservative politicians, that is. They were heroes who’d been devastated by the awful scourge of BSE (mad cow) and Albertans were told they had to rally around and support them by bailing out their industry with tax money and by eating all the damn beef they could. Of course, this was an easy line to sell in Alberta, where the cowboy culture has mythologized cattle ranchers and made them pop icons. And of course, real ranchers – many of them only small scale capitalists – did genuinely suffer because of the mad cow crisis. But the issue got very murky indeed when meat processors (not at all the same as ranchers), including companies such as Cargill and Lakeside (among the most nefarious companies on the planet) asked for the same taxpayer support and sympathy as the iconic cowboy hero. Upon further inspection, it turned out that these companies weren’t exactly heroes. Some, like Lakeside, were exploiting the hell out of Sudanese, Ethiopian, and Somali labourers in their Brooks packing plant.
According to yet another landmark report, Meatpacking, Refugees and the Transformation of Brooks, Alberta, “Meat processing workers in Alberta have the highest probability of a disabling injury or disease among all manufacturing employees in the province, with a rate more than double manufacturing’s.”
Meat is a capital-intensive business. You’ve got to set aside many acres of land to raise animals, not to mention many thousands more acres to grow feed for those animals, and you’ve got to ship them to plants, slaughter them, clean them, butcher them – all of which requires extensive and costly machinery – and at the end of the day, most North Americans still think a hamburger should be priced at under ten bucks – even under five bucks. So the battle for surplus value must be waged on two fronts. First, if profits are going to be low, you’re going to have to sell as much of this product as possible. This is why burger commercials are one of the most prevalent sights on television. Secondly, to make up for the high constant capital costs that go into meat processing, something in the production process will have to be squeezed for as much value as possible.
Labour is what ends up being squeezed. For the sake of 1 to 2 percent profit for the capitalist.
Exhausted, I wonder if I’ve obscured the point of these chapters entirely. Well, if nothing else, I think the point of all this is that the profit-motive merits a serious head scratch. Profit is itself an obscure and elusive notion – and it is, in fact, the capitalists who do most of the obscuring. Marx (and Harvey) implore us to not get bogged down by the capitalists’ arguments about profitability when it comes to considering the rate of exploitation. So Lakeside Packers probably only makes 1 or 2 percent profit out of their meat processing plants? So what? Cry me a river, that’s what Marx would say. We don’t feel sorry for you. Why should we feel sorry for an abstraction like a low profit margin? What matters is the wellbeing of all the workers in the plants and the lives they’re trying to build through their labour. Because it is such an excruciating and difficult job for them to create surplus value, their lives are more hellish than those of almost any workers in Canada. This industry probably shouldn’t exist at all – not in this form. People become obese and sluggish through the consumption of vastly excessive quantities of meat, their hearts get choked up, and they die prematurely. And another Somali loses a hand, or worse. Not to mention that animals suffer enormously throughout almost every stage of the production process.
Marx exposes the red herring of profit in the argument that prevailed in his day – that is, the ludicrous argument, disseminated by the scholar Nassau W. Senior. This guy visited some English factories, got sold a faulty line of reasoning by factory owners, and came away with the idea that factory workers were only producing profit in the last hour of their working day – that is to say, the twelfth hour.
How the hell did the capitalists figure that? Well, as it turned out, the factory owners had argued that because of all the capital costs they’d invested in (machines, wages, transport, and doubtlessly also the grim factory buildings themselves) workers only started generating profit after they had paid back all of those initial investments. According to the factory owners, this only started to happen in the last hour of the day. They used this argument in their fight against any reduction in the length of the working day.
Of course, it was a totally spurious argument. The fact is, for the entirety of their workday, the labourers were transferring the value of all those constant capital investments to commodities that would be sold. Why should they have to work to recoup the cost of a bearing, a rivet, a lump of coal? Those values ended up in the finished goods which customers were prepared to pay for.
The factory owners were full of shit! It turned out that you could indeed reduce the working day from twelve hours. It could even be eight hours. And some people nowadays wonder if it should jolly well be reduced some more.
Exploitation and profit, therefore, are not directly correlated. Nevertheless, wherever there is a capitalist mode of production, there is a rate of exploitation, and Marx says it can be measured. And these calculations are likely to be a lot simpler than the capitalists let on, which is why you can’t really trust them with the math. The incentive to obscure the math is all on their side.
At the end of day, labourers just have to ask themselves, how much did I work for myself today versus how long did I work for the capitalist? At H&M, a T-shirt retails for $10. It is made in Bangladesh. How much does the average garment worker earn in Bangladesh? 25 cents an hour. If she works for ten hours a day, she’s earned $2.50.
Even if a Bangladeshi were to manufacture only one lousy stinkin’ T-shirt in an entire day, the rate of exploitation would still be exorbitant; given that she manufactures a great deal more than that per day, the rate is surely off the charts.
Now that’s Marxist math. And it’s truth-telling math, not the obscurantist math of crypto-fascist, neo-liberal economists.
This was not an easy chapter for the little hamsters that power the cogs in my brain. Poor things were winded by the end of it… Entitled, “The Labour Process and the Valorization Process,” Marx’s journey here takes him inside the locus of production – which could be the factory, the office, the farm, the coalmine.
It was the “valorization” part of this chapter that I found the most difficult to understand. But thankfully, Marx eases his audience into this part, starting out instead with the labour process.
Dedicated readers of Capital will recall that in the previous chapter, Marx identified labour-power as a very unique commodity – it is the only commodity with the power to create surplus-value. And as we all know, surplus-value is essential to capitalism. Capitalists need to take their money and turn it into even more money. That is what they live for! That, and fat stogies pressed between their appetitive lips.
In his series of lectures, David Harvey lingers a while over Marx’s assertion that while most things in a capitalist economy are a product of the dominant social order, labour transcends the social order. Labour is obviously the cornerstone of capitalism but it’s also the cornerstone of all previous forms of social organization. There is something a little zen-like in Marx’s thought here. As he notes:
Labour is, first of all, a process between man and nature, a process by which man, through his own actions, mediates, regulates and controls the metabolism between himself and nature. He confronts the materials of nature as a force of nature… Through this movement he acts upon external nature and changes it, and in this way he simultaneously changes his own nature. (p283)
Zen-like indeed. Labour is our means of interacting with Nature in order to procure the means of our survival. Each of us is a “force of nature” – and so we are an integral part of the forces that we attempt to manipulate – and in our labour, we change not only Nature but also ourselves. Although Marx has been accused of largely ignoring the environment, there seems to be a glimpse here of what an ecological reading of Marx might expand upon – a glimpse at a worldview that does not at all presume a separation between humanity and the environment, but rather, a symbiotic relationship between the two.
As a labourer, man is like other species that procure their means for their survival through Nature – eg. a spider with its web, a bee with its hive – with a critical difference. Only we humans conceptualize the fruits of our labour before the labour begins. Before I break an egg, I have an omelette in mind. I am not blindly fumbling around with no clue where I’m headed – well, not usually.
The labour process, then, is composed of three elements, says Marx: 1) purposeful activity… the work itself 2) the object upon which the work is performed, i.e. clay, which is turned into a pot, and 3) the instruments of that work, i.e. the pottery wheel.
David Harvey emphasizes here the point that work is NOT play. I would elaborate in my own way to say that given this is so, no matter what kind of emancipation is ever achieved in the workplace, work will always be, well, work. It could be a lot more meaningful given a different social order, but Harvey’s evocation of the cliché that most work is “10% inspiration and 90% perspiration” is indeed one with which I am in total agreement. Speaking strictly personally here, even the kind of work I apply myself to strictly voluntarily, writing, with no clock, no boss, no whip of coercion, is nevertheless very seldom fun. I don’t find it to be play; I do consider it work. Nevertheless, it’s always been about the most fulfilling thing I’ve ever applied myself to.
Marx continues to flesh out the labour process in more detail, discussing the raw materials and the instruments of labour that clearly are part and parcel of creating a commodity. These things have been with us for an awfully long time. As he notes, briefly wearing his anthropologist’s hat, “we find stone implements and weapons in the oldest caves” (p285). So it would follow that raw materials and the use of tools are not manifestations of a capitalist mode of production, per se.
It is not what is made but how, and by what instruments of labour, that distinguishes different economic epochs. Instruments of labour not only supply a standard of the degree of development which human labour has attained, but they also indicate the social relations within which men work (p286).
It appears here that we must be very mindful of a particular process, then, because the labour process pre-dates capitalism in myriad different forms. It’s only because of how these elements are uniquely organized under capitalism that we can call a certain form of production a genuinely capitalist mode of production.
The next few pages are very, very dense indeed. They’re like a thicket of brambles that you need a scythe to get through. Or you can use the clever noggin of David Harvey to get you through! The general gist here is a discussion of use-values, and how use-values show up in the labour process in a number of ways. Raw materials are use-values, instruments of labour are use-values, products of labour are use-values. In applying use-values in the labour process, let’s say burning coal to fuel a factory furnace, some use-values are extinguished and new ones are born. If the coal is all used up in a furnace that generates sufficient heat to create steel, what we have now is a new use-value. The previous use-value of coal – to provide energy – has been spent in the production of a new use-value, the use-value of steel (as a building block of a skyscraper).
Readers who’ve followed the journey with Marx from Chapter 1 are forced to confront a new idea about use-values, then. Previously, use-values had been tied to the notion of individual consumption. I create a golf tee, which has a use-value to a golfer. Because I hate golf, I can trade my golf tee with the golfer for something he possesses that is of use to me – let’s say a golf shirt. Yes, I do hate golf, but I will, if I have to blend into a certain kind of society, wear a golf shirt. Hence it has a use-value for me. We’ve exchanged use-values in a mutually advantageous way. Three cheers for commodity exchange!
But now Marx supplements this conception of use-value with a new one. We have not only use-value in individual consumption, but also use-value in the production process. What complicates an analysis of the production process is the requirement to take into account not only the visible production of new use-values but also the reliance in that new production on the products of past labour – that is to say, on the previous production of use-values. This analysis is difficult, because as we’ve seen with the example of coal, previously-produced use-values are often extinguished when used in a new production process.
Marx calls the consumption of previously produced use-values productive consumption.
…the product of individual consumption is the consumer himself; the result of productive consumption is a product distinct from the consumer. (p290)
Indeed. I like jam. When I eat it, I am consuming in a way that merely sustains me. That’s greedy individual consumption for you. But as a labourer, I would consume jam in an entirely different way; I would consume it in a way that would produce a Jammy Dodger – that tasty biscuit so beloved of the English. In so doing, I am creating a consumer product separate from myself. And bringing cheer to millions of children who can now further rot their rotten English teeth.
The labour process in a capitalist mode of production thus corrals these productive forces in a way that has two very necessary pre-conditions:
1) “The worker works under the control of the capitalist to whom his labour belongs” (p291)
2) “The product is the property of the capitalist and not that of the worker” (p292)
So you can’t flip the bird at your foreman and tell him to suck eggs and walk off the site. No sir! And you can’t take with you that wheelbarrow of cement you just mixed. Your work belongs to the foreman’s boss, the developer, and the product of your work belongs to him too.
This, remember, is freedom. This is freedom as capitalists would have it.
The Valorization Process
So now we get to the bit that really hurt my head. In this section, we return to the same vexing question that plagued us in Chapter 5, essentially, how is surplus-value (a.k.a. profit) generated? Marx had started answering this question by saying that it is labour-power that creates surplus value. But how exactly does labour-power achieve that?
Marx looks at it from the perspective of the capitalist, who buys labour-power. Very logically, he asserts that the capitalist has two aims in the start of the production process: 1) “he wants to create a use-value which has exchange value, i.e. an article destined to be sold” (p293) and 2) “he wants to produce a commodity greater in value than the sum of the values of the commodities used to produce it” (p293). Achieving #1 ensures that the capitalist actually has something people want to buy; achieving #2 ensures he makes a profit on that sale.
Briefly Marx digresses to tell us that just as the commodity is a unity, formed of use-value and value, so too is the production process a unity, which is composed of the labour process and the process of creating value.
This seemingly important point made, he then provides a very lengthy analysis of a production process involving yarn and spinning and spindles and whatnot. Perhaps the antiquated terminology is what makes this section such tough going. What the heck is a spindle? Do I really have to go consult a dictionary? Maybe there are people who still have first-hand experience of spindles, but I’ll wager that most of them live in Vietnam, Cambodia, or China.
Back to the unbridled joy of reading this section of Marx. Now correct me if I’m wrong, but what Marx seems to be doing between pages 293 and 297 is explaining all the inputs that go into a particular production process, including labour power. Very painstakingly, everything that goes into the production process must be counted, including such things as the wear and tear of that hapless spindle. Why? Because the use-values of such things as spindles are slowly used up as they manufacture finished goods. So if a spindle lasts about 10 years – not a bad innings for a spindle, eh what? – then we must consider how many thingamabobs that spindle has helped manufacture in that time – let’s say hipster T-shirts from H&M for the sake of argument – and then we must calculate how much of the spindle’s use-value is extinguished in each T-shirt. Maybe a spindle expends one millionth of its life span on making me a fancy-ass T-shirt that I can lark about in to impress my friends. Whatever the calculation – and believe me, I goddam hate calculating things so I don’t plan on doing any further calculations – the essential rule is that every single use-value that goes into the production process is expended in whole or in part. If it’s a spindle, eventually, it’s going to have to be replaced when it no longer works. And the capitalist, of course, in order to own the means of production, must purchase all of these necessary use-values (which we could alternately call commodities, of course, since every one of the things under discussion here is a commodity, including labour-power itself).
Phew, now we’ve gotten this far. But now it’s going to get even trickier.
The capitalist now adds up everything that he has had to invest in the production process and then calculates the value of the result of that production process, in terms of the finished goods he now possesses that he can sell. Something very fishy is up. “Our capitalist stares in astonishment,” Marx declares dramatically (p297). “The value of the product is equal to the value of the capital advanced.”
What does that mean? It means that if the product happens to be, say, 100 H&M T-shirts, which is the result of the labour of one hard-working worker over the course of, say, six hours, selling those H&M T-shirts is not going to make the capitalist any profit whatsoever. He paid the required rate for everything involved in the production process, including to the labourer, but the value of what he’s created is exactly equivalent to what he invested.
As in Chapter 5, Marx does not countenance the idea of treachery and overcharging or underpaying or what-have-you. This is, if you will, a version of capitalism that is as pure as the driven snow.
So what’s the big fuss about?
What has happened is that the capital advanced “has not been valorized” (p297). The capitalist remains vexed over this shambolic state of affairs, all the way from the bottom of page 297 to page 301. And then, suddenly, he starts to laugh. Why? Because the solution has been so self-evident all along! Doh!
The answer – the mystery of how to valorize capital – lies of course in the hands of the labourer. If the capitalist invests whatever is necessary for each element of the production process – for the spindle and the spinning machine and what-have-you – the labourer is, of course, included in these calculations. And as has been previously determined, the amount of labour time that is socially necessary to produce labour-power is the equivalent of whatever it takes to sustain the labourer – i.e. the amount invested in food, shelter, etc. for the labourer to be able to renew his or her energies every day.
But now the canny capitalist sees that while he has given the labourer sufficient funds to produce six hours worth of labour-power, which is also equivalent to what the labourer requires to live, the labourer is still standing there, fully able to KEEP WORKING! He’s taken a licking but he’ll keep on ticking!
“So get back to work for another six hours, prole!” the capitalist hereby yells triumphantly. And therein is the secret of valorization, and by extension, the creation of surplus-value. A worker will work X number of hours for his own sustenance, the trick is to then get him or her to work for an additional X number of hours for the sake of creating value. All without paying him too much more, of course – if a dime.
Now the labourer can make an additional 100 H&M T-shirts, and the capitalist can whistle all the way to the Swiss bank with the profits.
Tax Freedom Day (a purposeful digression)
A little light went off in my head about Marx’s calculations above when I considered the concept of Tax Freedom Day, a popular notion espoused by numerous right-wing demagogues. The basic idea of “tax freedom” is that you add up all the taxes that an individual must pay, let’s say it’s $10,000 in a year, you then figure out how many months it would take to pay these taxes with a given income – let’s say you earn $40,000 a year – and you arrive at the conclusion that because your tax load is one quarter of your salary, it’s going to take a quarter of the year to pay your taxes. January, February, March. Only as of April are you “free.”
Tax Freedom Day is generally based on a similar calculation to the one above except that it’s for an entire country. And every year, tax-hating right-wing ideologues – who in addition to many other flaws also happen to be crashing bores (imagine writing basically the same story every year all your life) – these dunderheads then come out and declare, say, May 1 as Tax Freedom Day. Why? Because after this day, the average American/Canadian/Brit will have stopped working for the government(s) and will have started working for himself. Hallelujah!
Of course, there are a gazillion errors with this conception of taxes. University of Toronto professor, Joseph Heath, has ripped it apart, and a brief summary of his thinking can be found in this brief Wikipedia profile here.
I’m more interested here in how Tax Freedom Day actually helps illuminate something very different. By very similar logic, we could add up all the hours we spend working for our own sustenance versus working on generating surplus value for some rich capitalist. What are the chances that for the average hapless labourer toiling away to make H&M T-shirts that Capitalist-Free Day arrives much later in the year than Tax Freedom Day? In other words, how much longer does the average worker have to toil away making profits for a capitalist versus creating a living for himself?
One thing is for sure. Freedom is a very slippery word indeed and capitalists don’t deserve any enduring claim to it.
There is a great post at Truthout from Henry Giroux which talks at length about the incorporation of the intellectual into the prevailing market capitalist order. The Academy, which Giroux asserts should “speak truth to power,” is increasingly subsumed by power itself. The result, which is not difficult to see, is intellectuals doing little more than helping prepare students to take their place in the job market, or indeed, developing theories or products that themselves are incorporated into the current economic order — schools of management are ideal examples of factories of this kind of commodifiable thought… marketable thought.
When it comes to the role of students in the Academy, Giroux expands on his ideas in this interview.
They [students] often come to the university with no language for defining themselves or citizenship itself outside of the demands of a consumerist society, making it all the more difficult for them to challenge the university as an adjunct of corporate values and interests. This means that those of us teaching in the humanities not only inhabit classrooms with dwindling resources, but increasingly face students who do not value knowledge that does not immediately translate into a job opportunity or seems at odds with simple translations offered by an utterly commodified popular culture.
This is what is most unsettling about the current era that we live in. After the largest failure of global capital in 70 years, not to mention the largest ecological catastrophe in United States history in the form of Big Oil’s assault on the Gulf of Mexico, very few of us are asking, “How could things be different?” Not only do we fail to ask what could be different, we come to school as if programmed to accept the status quo as inevitable, and our role within it seems inevitable too. As Giroux notes in his article about the disappearing intellectual, according to the current discourse, “the economic order is either sanctioned by God or exists simply as an extension of nature.”
When I read this, I had just reached the chapter in Capital where Marx explicitly says that relations between workers and capitalists are not a product of nature. But as Giroux is saying, that’s not what you’d think by looking at popular culture or even the academy. Neo-liberalism has been so triumphant that capitalism now seems as inevitable as the passing of the seasons. The logic has been internalized by rich and poor alike. In a certain respect, one can see why it’s so effective. At essence, the message is a very, very simple one. “Allow individuals maximum freedom to pursue their own self-interest, and prosperity and happiness will follow.” This appeals to people’s sense of inherent worth. They’ll say “I’m canny and enterprising… I could be rich and happy… if I could just get ahead.” Then the bigoted among them, which might include many in the Tea Party, would add, “I could be rich and happy, just if government could get out of my way… or if those lazy blacks weren’t stealing all my money for their social programs… or if those Mexicans weren’t taking all the jobs” etc.
Politics then gets reduced to the dynamic of individual on one side and all the freedom-menacing forces on the other. Meanwhile, we overlook how we historically developed into the system we live in today. And the system, as it’s currently constructed, does not actually permit a whole lot of freedom, unless we’re talking about the amazing freedom of being able to consume a nearly infinite number of consumer products. Our lack of freedom is not down to some statist, socialist plot. It’s because capitalists own and control the game.
You can almost palpably feel the shackles. It isn’t that we cannot protest or voice dissent. It isn’t that we can’t write books or blogs that question the system. It’s that we cannot see dissent leading to meaningful change. The existing order has only intensified in its power. Without a critical mass of dissenters, individuals start to question the merit of their own actions. We might cohere for a while in a small group, but to be dedicated to round-the-clock dissent is very difficult, because there is no space where the rules of capitalism don’t apply; you can’t throw yourself into uncompromising rebellion because you’re going to end up unemployed, broke, on the streets, or worse, in jail. And in the West, there are no squats or communes or alternate forms of living that pose a genuine threat to the state — with the possible exception of Indian reserves — so alternate means of living these days are essentially a retreat and a form of escapism, rather than a means of starting the transition to another social and economic order.
Nevertheless, as Giroux and others have noted, there is still a lot of work ahead in the realm of theory, and so there is no reason to give up. At the moment, I am not convinced that there actually is a viable alternative to capitalism; not one that takes into account the exact conditions we find ourselves in here and now. Efforts are being made to conceptualize an alternate form of economics, to define value differently, and many are embarking on ways of understanding how we return to a peaceable form of agriculture — including my own cousin and his wife. Others are occupied with figuring out more equitable forms of social relations — hence feminism and post-colonial discourse — and exploding the narrow confines of mass culture-imposed identity. At some point, hopefully, many of these efforts will come together in a unifying vision that offers to the public en masse a path out of our current quagmire.
If this is indeed the task ahead, the importance of what Giroux is talking about is accentuated only more. At the moment, the Academy appears to be one of the major places where an expansive theory capable of transforming the prevailing destructive ethos could have its productive birth.
It is precisely over the creation of alternative democratic public spheres that such a struggle against neoliberal, economic Darwinism can and should be waged by academics, intellectuals, artists, and other cultural workers. Higher education, labor unions, the alternative media and progressive social movements offer important sites for academics and other intellectuals to form alliances, reach out to a broader public and align with larger social movements. Critical intellectuals must do whatever they can to nurture formative critical cultures and social movements that can dream beyond the “mad-agency that is power in a new form, death-in-life.” At the same time, they must challenge all aspects of the neoliberal disciplinary apparatus – from its institutions of power to its pedagogical modes of rationality – in order to make its politics, pedagogy and hidden registers of power visible. Only then will the struggle for the renewal of peace and justice become possible.
So it’s hardly a time for the intellectual to disappear. On the contrary. It’s time for the intellectual to roll up the sleeves of his wrinkly shirt, beat his fist upon the dusty chalkboard, and roar to his students, “Let’s build the new socio-economic order!”
Henry Giroux is the Global TV Network Chair in English and Cultural Studies at McMaster University, Hamilton, Canada. (The title seems a little ironic; I’m sure I’m not the only one to have noticed.)
In Chapter 5, Karl Marx left his readers in a state of considerable suspense. Where on earth does profit come from if commodities are bought at their value and sold at their value? So far it remained a mystery. Marx had concluded that profit did not come from ripping people off or from lying about commodity values (although we know that such things certainly can and do happen in the real world. Remember the famous Bre-X scandal – i.e. the gold mine that turned out not to exist?!)
No beating about the bush, Marx comes galloping out of the gates in Chapter 6 of Capital and tells us that profit comes to the capitalist by using his money to purchase the one commodity that is a use-value as well as a value. That is to say, he must find a commodity that has a utility but also embodies socially necessary labour time (which is the source of all value, as Marx has explained in previous chapters); and he must be able to extract value out of this commodity in the consuming of it.
What commodity possesses these properties? Labour-power, that’s what!
I had a rather hard time twisting my head around Marx’s reasoning here, but I suppose in thinking concretely about consumption and value, it makes sense that he arrives at labour as a unique commodity. As hard as I try, I can’t think of anything else that you consume – i.e. get a use out of – that directly leads to increasing its value. If I eat a cupcake, the crumbs that spill from my greedy, salivating maw are worth less than the original. If I buy a car and drive it for ten years, generally speaking, its value goes down continuously from the moment it leaves the sales lot. And so on and so on. Granted, there are certain artifacts that appear as commodities – paintings, for example – that gain value with use over time. I wonder how to explain that in Marxist terms?
Anyway, for the sake of being agreeable, let’s agree that labour is a pretty unique commodity, because it is almost indisputable that by putting labour to use, added value is going to be realized (unless the labourer is a bumbling buffoon and sticks his arm in the wrong part of the machine and splatters the factory floor with blood, breaks the machine, and thus stops production for the whole day… or if he pulls a whole stack of boxes onto himself, like the unhappy labourer in this photo I just swiped from Google Images).
Now, two conditions must be met in order that a money-owner (a.k.a. a current or aspiring capitalist) can find labour-power available to buy as a commodity on the market. 1) The labourer must be free to sell his/her labour. He/she can’t be an indentured serf. Or a slave. 2) The labourer must be free of all other commodities to sell besides his/her own labour. Or to put it the other way around, labour-power must be the only thing the labourer possesses that he/she can sell.
These are the terms of freedom under capitalism. Tantalizing, innit?
Interestingly, this analysis splits into two groups almost everyone in society: owners of money versus owners of labour-power. Marx takes pains to tell us that, contrary to generally received wisdom, this division is not the natural order of things, rather “It is clearly the result of a past historical development, the product of many economic revolutions, of the extinction of a whole series of older formations of social production” (p273).
There follows on the next page an argument that seems almost like a tautology. Marx inquires into how much labour-time is required to produce labour-power. Hmmmm what? This sort of sounds like “How much do I have to work in order to work?” But Marx here is applying his system very, well, systematically. Labour-power like any commodity has a certain value. And so it follows that, like all other commodities, value is the socially necessary labour time that goes into its production. So, again, how much labour-time is required to produce labour-power? Answer:
…the labour time necessary for the production of labour-power is the value of the means of subsistence necessary for the maintenance of its owner (p274).
In other words, if you’re going to expend a certain amount of muscle and brain power in producing something, you need that amount of energy to be replenished. This is labour-time, which must be equal to the necessary requirements of survival –“themselves products of history, and depend therefore to a great extent on the level of civilization attained by a country…” (p275). In case this is sounding abstruse, we’re talking food and shelter here!
In his edifying lectures on Capital, David Harvey dwells at length on this point, examining the basket of goods that is commonly used in North America to measure the minimum requirements of subsistence, X dollars for shelter, food, education, etc. And we can see that measures of minimum subsistence levels are socially constructed. Should the market basket include a cell phone or Internet? Are these now part of the standard requirements of survival… or of social participation?
A lot to mull over.
Marx also points out that the means of subsistence must not only be sufficient to sustain the worker but also his family – i.e. children, since capitalism cannot have the current generation of workers simply expire with no young blood to replace it. Their kiddies must be press-ganged into service too!
Moreover, there are various costs that go into forming a worker – the acquisition of skills and suchlike. Marx outlines some of these. I prefer to breeze through this section. Marx will make some other perfunctory observations in passing. For example, payment for labour-power pretty much always occurs after the labour-power has been expended. Hey, I’ve noticed that too! When you think of it, this is another rather unique property of labour-power as a commodity. Most other commodities – beef steaks, lucky bamboo, cat litter – need to be purchased prior to their use. But not labour-power, which is advanced by labourers to the capitalist as if on credit.
Aren’t labourers generous?
To conclude this chapter, Marx has one of his ironic phases. He’s a bit of a smart-ass sometimes!
The sphere of circulation or commodity exchange… is in fact a very Eden of the innate rights of man. It is the exclusive realm of Freedom, Equality, Property, and Bentham. (p280)
The freedom is down to the fact that capitalists and labourers are free to buy and sell to each other. Equality because they exchange equivalents, that is to say, commodities of equivalent value. (I admit that this part puzzled me, since in earlier chapters, Marx called money the most powerful commodity, but perhaps here he is just making the more straight-forward point that the amount of money exchanged is equivalent to the labour-power that is sold…) Property, of course, because both sides are exchanging what belongs to them. And Bentham, well, because the famous utilitarian, Jeremy Bentham, would look fondly at exchange between capitalist and labourer, seeing both sides acting in their own self-interest, which, as we know, is how we build a perfect society!
But having said all these seemingly nice things about capitalism – can we tell he doesn’t mean it? – Marx then ends with a firecracker of a closing line, oh yes. Here he compares the demeanour of the capitalist in relation to the labourer:
The one smirks self-importantly and is intent on business; the other is timid and holds back, like someone who has brought his own hide to market and now has nothing else to expect but – a tanning. (p280)
Zing! Turns out not everything is as hunky-dory in the capitalist utopia as we thought.
Worshippers at the Church of Neo-Liberalism cling to the belief that if you simply let free markets do their job, we will live in the best of all possible worlds. These ideologues say, “Keep government out of business! Respect property rights. Let free trade rule, let capitalists do what they want, and everything will be hunky dory!” (Until they need a bank bail-out, that is, and then they will gladly accept government interference, provided it comes in the form of billion-dollar no-strings-attached gifts!)
Of course, in the real world, free markets are more of a concept than a reality. Commodity production and commodity exchange are rendered dizzyingly complex by all sorts of political and regulatory considerations. Would the ecological catastrophe known as the Alberta tar sands even exist if the Canadian and Alberta governments hadn’t been prepared to massively subsidize their development with royalty holidays? Would the North American auto industry have boomed the way it did without Eisenhower’s massive investment in the Interstate highway system and the concurrent suppression of alternate means of transportation?
Then sometimes, along comes a bizarre and sickening story like this one to remind you just how twisted and criminal the real world of capitalism really is sometimes: British company Octel bribed Iraqi officials with millions of pounds to keep buying a toxic fuel additive that is linked to brain damage in children.
Is bribery part of the rugged free market ideology so beloved of Milton Friedman and Friedrich Hayek and company? Probably not.
The real point of this rather long digression to start Chapter 5 of Capital is this: many apologists for capitalism will say, “Well, our system is failing because it’s not working the way it’s supposed to.” Then they might mumble about Adam Smith and the way markets should work. Aside from the obvious question – how exactly are we supposed to remove the usual human foibles and frailties from a market system – this line of argument opens itself up to another attack. As David Harvey points out in his lectures, Karl Marx doesn’t critique capitalism based on the notion that capitalism has been implemented improperly or because its adherents are a bunch of unscrupulous bastards. Marx’s critique of capitalism is based on the notion of the system operating exactly as it should: free exchange occurring exactly as Adam Smith would want. In other words, even if capitalism were to function perfectly, Marx still believes it would enrich only a few while impoverishing many more. Most damningly, he believes perfectly functioning capitalism results in routine failures and eventually its own destruction.
Now on with the show!
Marx starts out Chapter 5 with the observation that the exchange of commodities as use-values is the exchange of equivalents. If I trade you a hamburger for a hotdog, we are basically exchanging food commodities that we both agree have approximately the same worth. Indeed, we enter into such contracts exactly because we believe the trade to be an equal one.
So the question arises, given that capitalism is all about making a profit, where does the profit come from? Or to use the Marxian term, where does the surplus-value come from? The capitalist is like a magician who pulls the rabbit of surplus-value out of his hat. Where does the rabbit come from?
Marx cautions us to not confuse use-value (i.e. the actual utility we get out of a commodity – eating it, drinking it, sitting on it and taking a poopsie) with exchange-value (what it can be traded for on the market). It becomes quite clear that when it comes to exchange-value, in order to make a surplus-value (profit), the commodity owner must be able to exchange his commodity for more money than he invested in it.
Again, where does this surplus-value come from? Marx starts by answering this question in the negative. He explains what surplus-value is NOT:
The formation of surplus-value… can consequently be explained neither by assuming that commodities are sold above their value, or by assuming that they are bought at less than their value. (p263)
In other words, surplus-value is not created by some form of uneven trade – such as my paying you only $100 for your Dodge Aries, which is actually worth $1000! (Of course, such trades can indeed happen, but as per the introductory note, Marx deals with a sort of pure, conceptual form of capitalism, and in this pure, conceptual world, profit is not inherently based on outright treachery.)
Marx proceeds to explain, quite straight-forwardly, how outright treachery does not actually create increase value in exchange. He uses the following example: let’s suppose I have some wine that is worth $40, but I trade it for $50 worth of corn. I now have $50 worth of corn but my trading partner only has $40 worth of wine. Ha ha, sucker!
But as Marx inquires very sensibly, what is the total value of both commodities before and after the trade? All that has happened is that the $40 of wine and the$50 of corn have changed hands. The grand total value, $90, is identical before and after the trade. So no surplus-value has been created.
That’s not capitalism, that’s just a rotten deal for one particular corn trader!
Marx concludes here that circulation – the exchange of commodities – itself creates no value.
After this, Marx makes a bit of an aside about usury, in which the famous formula that’s been under discussion for the last few chapters – M-C-M (Money is exchanged for a Commodity which is then exchanged for an increased amount of Money – i.e. a profit) is subtly simplified to M-M. In other words you lend money and ask for that money back with interest, and skip the commodity purchase altogether. Marx finds that this particular form of increasing value is, in essence, pre-capitalist. He sort of compares it to fraud – and says that an entire “capitalist class of a given country cannot..defraud itself” (p266).
In other words, not everyone can be in the usury racket! A capitalist system cannot thrive this way. (It would have been nice had this advice been heeded prior to the recent financial bubble burst which crippled economies worldwide.)
Marx ends Chapter 5 with a bit of a cliffhanger. Having heretofore raised the question, “Where does profit come from?” he then exhausts all possible answers, and right on the last page, raises the question again and still does not answer it!
The money-owner, who is as yet only a capitalist in larval form, must buy his commodities at their value, and sell them at their value, and yet at the end of the process withdraw more value from circulation than he threw into it at the beginning…. These are the conditions of the problem. (p269)
How on earth will this problem be resolved by the canny capitalist?
Stay tuned for Chapter 6 to find out!
Heading into Chapter 4 of Capital, one realizes that this is going to be a marathon, not a sprint. Are there really another 800 pages to go? Yes, there are. 840, to be exact, if we include the very serious-looking appendices. Time to fix one’s Marxist courage to the sticking place. Tally ho! Thank goodness David Harvey is such an inspiring guide.
In case the previous 50-page colossus of a chapter hadn’t convinced us, Marx reminds us in the opening of Chapter 4 that the ultimate product of capitalism is money. As an aside, let us note that it’s not happiness, peace and goodwill on earth, or eternal youth, or any other sort of malarkey. No sir.
But capitalism doesn’t begin and end with money as money per se. Money must be transformed into capital. And how exactly does this transformation occur? Here, Marx briefly returns to his earlier formulae – two of which do NOT describe capitalistic exchanges, one of which DOES — can you tell which one?
C-C: Commodity-Commodity exchange (a barter system) – two items of equal value are traded, i.e. my bicycle for your turnip
C-M-C: Commodity-Money-Commodity exchange (exchanging commodities of equivalent value using money rather than straight-out trading)
M-C-M: Money-Commodity-Money exchange. In this form of exchange, the owner of money transforms his money into a commodity; this commodity he later hopes to sell for a profit
Yes, it is indeed the last one that makes the Gucci-little-piggies squeal with pleasure! M-C-M is the formula for how money acts as capital.
Marx here notes that unlike with C-C and C-M-C, the capitalist exchange system M-C-M is no longer about the exchange of equivalents.
It’s not about me trading my home-brew beer for your home-brew wine and us both enjoying the equal value of getting rip-roaring drunk. M-C-M is about starting out with $100, and rather than trading for its equivalent, trying to find a trade that will increase the value of that $100. As Marx notes, if we simply wanted to hoard our $100 in order to show off to everyone what a big fancy-pants moneybags we are, well then, we could be a miser. And by being a miser, we would avoid the risk of commodity circulation altogether.
But are capitalists a bunch of risk-averse, nappy-wetting, nervous Nellies? No they are not!
And so capitalists take the risk of exposing their money to the vicissitudes of the system of commodity exchange. When $100 becomes $110, what has been achieved is not a qualitative change – it’s still money at the end of the exchange – it’s a quantitative change. Marx calls the increment of value that is added to the original sum of money the surplus value. It is critical, of course, in realizing the surplus value that the original sum of money remains intact. In other words, you need to return your original investment plus make a profit.
So let’s imagine that a cunning capitalist has successfully transformed $100 into $110. What then? Well, if he then blows his whole load and exchanges his $110 for a sumptuous meal of, say, dead duck and fine wine, the $110 is no longer capital. Nor is it capital if – like the miser – he hoards it. In such a state, it is “petrified”and it “could remain in that position until the Last Judgement without a single farthing accruing to it” (p252).
So as is becoming evident, money has got to keep moving in order to be capital. It can’t stop, it can’t go on holiday, it can’t take a Time Out. Indeed, as Marx points out, unlike exchanging money for commodities, in which a final goal is in mind – the satisfaction of a need or want – “the circulation of money as capital is an end in itself…”(p253)
It is thus limitless. If you’re going to turn $100 into $110, why not then turn $110 into $120? Why not for that matter, keep going until you’re at $100,110 or indeed $2.4 millon or $937 billion or $19,378 supercalifragilisticazillion? After all, this money, as has been noted previously, provides social power. Do I have the same social power as billionaire Bill Gates? As if! That’s like comparing a flea to a white shark.
On page 255, Marx indulges again in some of his delightful figurative speech when he notes capital’s ability to shapeshift – transforming itself continuously – so that capital can be both money and commodities (commodities of any kind under the sun). Capital is boundlessly creative of value, endlessly adaptable to being and becoming whatever it needs to be in order to increase its magnitude. Rather enigmatically, Marx says, “By virtue of being value, it has acquired the occult ability to add value to itself. It brings forth living offspring, or at least lays golden eggs.” (p 255)
David Harvey here cautions the reader to not take Marx literally. Of course, capital does not actually have occult powers. Nevertheless, you would think that capital does indeed have some kind of ominous and supernatural force, given how citizens and especially their governments both fear and revere it. We talk about watching our money “grow” as if it were a beanstalk. When capital is moving through large markets, such as the Stock Exchange – Lord, it’s as if it has become Zeus himself, with powers to “punish” even Western European governments.
More language to provoke angry cries of “blasphemy!” among the dogmatically-inclined lie in wait at Chapter 4’s end, as Marx notes how in a capitalist system, value, in its manifestation as original value and surplus-value, is rather like a certain Mr. Bigshot in Christianity:
It [capital] differentiates itself as original value from itself as surplus-value, just as God the Father differentiates himself as God the Son, although both are of the same age and form, in fact one single person; for only by the surplus value of £10 does the original £100 originally advanced become capital, and as soon as this has happened, as soon as the son has been created, and through the son, the father, their difference vanishes again, and both become one, £110.
Value therefore now becomes value in process… (p256)
I like how Marx usurps the language of faith to critique a system that in a spectacularly short amount of time historically has assumed the same power as organized religion. With its omnipotence and mysterious ways, with its “invisible hand” and its stern – even wrathful – behavior, but also with its boundless capacity to guide the obedient on their way to the Promised Land, capital does indeed emerge as the new deity.
Praise be to Capital; thy Kingdom has come, thy will is done!
As the now-deceased rapper Notorious BIG once said, “Mo money, mo problems.” Karl Marx would agree. In Chapter 3 of Capital, “Money, or the Circulation of Commodities,” we learn that once a barter system is superseded by a system of exchange based on money, society is in the grip of an ungovernable force that is prone to crises.
Money presents a whole host of problems, many of which are elucidated in this chapter.
What is money?
As with my readings of chapters 1 and 2, I am referring extensively to David Harvey’s lectures on Capital available in streaming video. Harvey starts his discussion of Chapter 3 with a basic question. What is money? By the time this question was answered, I had understood why it is better to have $1 million in hard cash as opposed to, say, $1 million in the form of commodities: be they soya beans, Batman comics, or Russian prostitutes.
What’s so special about the filthy lucre?
As Marx explains, money (which he equates with gold for the purpose of his discussion) has two purposes. 1) it is the measure of the value of commodities. 2) it is the means of circulation of commodities.
In the former, money expresses the value of a commodity as a price. The couch that I purchased on rue Saint Hubert last spring was on sale for the price of $260. (Was it actually worth $260 given that it subsequently broke?) Of course, prices like $260 don’t affix themselves to couches by chance. Marx observes that “The guardian of the commodities must… lend them his tongue, or hang a ticket on them, in order to communicate their prices to the outside world” (189).
Determining whether the guardian or owner of a commodity has chosen a price that expresses value appropriately is the job of the market. Alas, I am just one person, and so I cannot dictate that my couch should actually have been priced at under ten bucks. However, in a market made up of many people, the prices of commodities are obviously going to find socially acceptable levels – usually…
Marx clarifies that pricing is a “purely ideal act” – i.e. it occurs strictly in the mind. And so the money attached to a price is “imaginary.” It does not become real until the commodity is actually exchanged for money. Everything preceding that is hypothetical.
So while I could go on e-Bay and ask for $1 million for lint harvested from my navel, the $1 million will remain imaginary until an actual purchase is made. Convincing people to exchange money for a commodity is not always easy.
Sales and purchases on the market are rendered possible by money’s circulation function. To realize a sale of the sumptuous, shapely lint from my navel, there must be money circulating so that one very lucky individual can pony up the $1 million and buy it. As David Harvey puts it, money is the “lubricant” of the system.
How much lubricant – money – does the system need? Argh – here we get into mathematical territory (never my favourite place to be). But never fear – it turns out that the amount of money required in a system of commodity circulation can be expressed as quite a simple formula:
MONEY MASS = SUM TOTAL OF COMMODITY PRICES x VELOCITY + RESERVE FUND
Whoa! What the #*^*@ is velocity? And why the heck do we need a reserve fund? My head was spinning with these questions. Marx doesn’t make life easy. Fortunately, Professor Harvey flies in like a superhero to save dunderheads like me from a lifetime of ignorance.
It turns out the first part of the formula is straight forward. Let’s take a simple country like Canada. How much money should be in Canada’s system of commodity circulation? For a start, it should be sufficient to cover the sum total of prices of all the commodities for sale in Canada. Temporality is an important factor here. Obviously, the number and prices of commodities are not always the same and not all commodities are sold at the same time. Sometimes Canada experiences a dip in the total price of its commodities (in a recession, for example). In which case, less money is required. But temporality assumes a different dimension when we consider velocity.
Velocity describes the speed at which commodities are being exchanged. Let’s imagine a very simple system of exchange: it’s between Banchi and me and my neighbour James. Let’s say it’s a somewhat frenetic velocity of exchange. I sell Banchi a can of Friskies for $1. After this transaction, I have $1 and Banchi has a can of yummy food. Then she sells me a dead moth. I now give her the $1 back in exchange for the moth. Banchi then goes downstairs and buys a cigarette from James. Now James has the $1 and Banchi has a cigarette. James then decides he would really like my dead moth in order to press it and hang on his wall. So he comes by to give me $1 for it.
Pretty amazing to contemplate that only $1 dollar was sufficient to cover the exchange of a can of Friskies, a dead moth, and a cigarette. Everyone managed to part with a commodity that they didn’t need/want and obtain a commodity that they did need/want. If, by contrast, there were a slow velocity of exchange in my local market; say I bought a dead moth for $1 from Banchi, hung it on the wall and then decided to stop exchanging for the day, a problem might well emerge. If Banchi or James hoped to buy any further commodities, more money would need to enter the system, because I’m sitting on the only available $1. So the general rule with velocity appears to be that the higher it is, the less actual money is required. This is why credit cards are encouraged. They speed up exchange, while sparing us the need to have large volumes of real money to cover all the purchases made on any given day.
In the formula, everything pretty much now makes sense except the RESERVE FUND. What the heck is that? It would appear that a reserve fund is something that is in the control of the State. Let’s say Canada, for the sake of argument. It’s a pile of money that is outside of the usual system of exchange that enables the government to somewhat regulate the economy. If there is a banner commodity production year – literally oodles of iPods and TVs and yachts and beef steaks crowding the market – why then, the Canadian government will release money from its reserve fund so that people can buy all these wonderful commodities. The government wants commodities to find buyers, see? That’s how wealth is generated! Similarly, at those times when there is too much money on the market and not enough commodities to spend it on, the government can withdraw money from circulation and return it to the reserve fund.
But I have jumped ahead. Money measures value by virtue of taking a form in which all other commodities can be measured – i.e. a couch = $260. It turned out that gold (and also silver) proved to be the easiest forms for money to take, because these metals could be divided by weight in order to express a value. Hence, literally one pound of silver became one pound, the unit of currency for the United Kingdom. However, as Marx points out, the origins of these names — pound, dollar, franc — quickly lost relevance. Nevertheless, it is still important to Marx that dollars and pounds etc. stay related to the metals that they represent. So that even when money changes form and we’re no longer trading literal pieces of gold in ounces and pounds, but rather, tokens or symbols that represent the same, gold or silver are still agreed to be the underlying supports of the currency’s value. Hence, we can start using paper money, just so long as we agree that $1 is redeemable for a certain unit of gold, which is held by the government in a vault somewhere.
Complicating things further is the fact that long after Marx wrote this, the world mostly abandoned the custom of storing gold as a support to its paper money. Since 1973, the direct relation between our money and precious metals has been broken.
Another important point is made by Marx about money versus price. “…The possibility that the price may diverge from the magnitude of value is inherent in the price form itself” he writes (p196). To stretch the same point further, he notes on the next page, “[the price] may harbour a qualitative contradiction, with the result that price ceases altogether to express value…”
These are crucial points. Price is not always indicative of value is the bottom line. I might slap a price of $1 million on a turd, but whether the turd is really going to have a $1 million real value is up to debate. If I polished the turd would it help? Still debatable. I expected Marx to say here, “Aha, this contradiction in capitalism is part of what’s so rotten about the system!” But in fact, he says the opposite. He says it is not a “defect” that there is an incongruity between price and value; indeed, “it makes this form the adequate one for a mode of production whose laws can only assert themselves as blindly operating averages between constant irregularities” (p196).
From C-C to C-M-C to M-C-M
With a better handle on money as a measure of value, Marx goes on to flesh out money as a means of circulation. Harvey helps draw a chronology here that is enormously useful. He backtracks right to the original system, discussed in Chapter 1, of commodity-commodity (C-C) exchange. This is essentially a barter system, whereby I trade something I don’t need for something I do need (a cat for a bicycle, for example).
Once money enters the equation, a more sophisticated pattern of exchange is possible: Commodity-Money-Commodity (C-M-C). This was illustrated with my whole dead moth, cigarettes, Friskies example. Now here we have to pause. Marx breaks down the C-M-C scenario into its constituent parts, arguing that they are not exactly the same. C-M means that a commodity is exchanged for money. M-C means that money is exchanged for a commodity. The former is a sale, the latter is a purchase.
Marx takes issue with previous political economists who had asserted that because every purchase is a sale and every sale is a purchase it therefore follows that the system of exchange maintains an equilibrium. He is disagreeing here with Say’s Law. According to Marx, the system does not always have equilibrium, because C-M and M-C are very different forms of exchange. The power is all on the side of the M-C exchange. Why? Because money is the universal equivalent; it can be exchanged for anything and everything. Hence there are all sorts of reasons why C-M might not be followed naturally by M-C. The supposed equilibrium can easily be thrown off by sellers simply hoarding their money and thus taking money out of general circulation.
This is where Marx finds the makings of a monetary crisis. And he was far from alone in worrying about general crises of capitalism. Malthus and, much later, Keynes, also were perplexed by the system’s propensity to fail.
The final step in the evolution of the system of circulation is the acknowledgment of a further form of exchange called M-C-M. That is to say, Money-Commodity-Money. In this system, money is not simply what is exchanged for a commodity. Money is instead focussed on the acquisition of more money. Money is directed toward a commodity for the purpose of converting that commodity to a return of additional money. Hence, I take $5 to the Kahnawake reserve and buy a pack of cigarettes; I return to a Montreal school yard where they’ll easily retail for $10.
I’ve just made a big old profit! And enabled an illegal smoker. Score!
The commodification of everything
Harvey talks about how money enables private individuals to appropriate social power, which is one of the chief reasons why the lust for money in a capitalist economy is limitless. This is why commodification is also limitless. To anyone who argues that certain things are sacred and beyond commodification, David Harvey points out that the Catholic Church, by selling indulgences, already commodified Heaven. Back in the medieval age, you literally could buy your way into God’s kingdom.
And so it goes. You can commodify human organs, the sex act, and ideas…
For the purpose of social power, then, money is best as money. Harvey asks why would you even want to transform all your money into use-values? He cites Imelda Marcos and her giant shoe collection. Is a collection of 3,000 shoes a good way of ensuring social power? Not really. What use-value is one person supposed to get out of 3,000 shoes? You’d be hard pressed to wear each pair at least once over the course of a lifetime.
And so the commodification of everything proceeds apace because capitalists realize that money is power and more money is more power. Meanwhile, us Marxists sit on the sidelines and grumble that mo money is mo problems. Can’t we all just get along? As it turns out, we can’t.
We are under siege from big money-grubbing thugs
The capitalists’ tireless and limitless accumulation of money — and when Marx says limitless, he means it, he means infinite — puts their social class into a collision with others who don’t share their privileges or worldview. It puts them into conflict with other humans, as well as with animals and with the environment itself. So while BP attempted to extract as much oil worldwide as possible, it also attempted to minimize its expenditures on safety measures. Within the logic of capitalism, BP played by the rules exactly as they are spelled out. Capital accumulation is BP’s business — not protecting coastline, birds, or fishermen. As Chris Hedges argues here, BP and similar companies are headed by sociopaths who, unless caught, are quite content to maim, kill, and destroy everything that stands in their way of getting another dollar.
Literary theorist Terry Eagleton has written in The Guardian that football – i.e. the sport currently galvanizing the attention of billions of the world’s population – should be abolished. That’s right. Abolished! Because this is Eagleton, it’s an entertaining read, but one that I disagree with. In fact, I think he might have scored an own goal.
If every rightwing thinktank came up with a scheme to distract the populace from political injustice and compensate them for lives of hard labour, the solution in each case would be the same: football. No finer way of resolving the problems of capitalism has been dreamed up…
This reminds me of arguments Noam Chomsky made many moons ago in Manufacturing Consent. But OK, football is topical right now, so let’s give Eagleton our attention!
Modern societies deny men and women the experience of solidarity, which football provides to the point of collective delirium… Like a jazz band or drama company, football blends dazzling individual talent with selfless teamwork, thus solving a problem over which sociologists have long agonised. Co-operation and competition are cunningly balanced.
I agree with all of this. Surely few societies have fragmented their populations into such atomized and lonely units as those in western capitalism. However, the latter evocation of football’s blend of individuality and teamwork obscures the object of Eagleton’s ire. Is it the sport we watch on TV or the game that large numbers of people actually play that he hates? Or both? Without making a distinction between the two, Eagleton goes on to pay homage to one of Marx’s most famous phrases: “…football these days is the opium of the people, not to speak of their crack cocaine.”
To which a rather witty commentator responded at the end of the article:
Well back in the good old days it wasn’t the opiate of the people, you had to be really committed. Watching twenty-two blokes booting a casey over the gasworks in the pouring rain for ninety minutes had nothing to do with entertainment and was a more a kind of existentialist trial of the will.
Eagleton’s final point, made with the gusto of somebody who has never shied away from controversy, is this: “Nobody serious about political change can shirk the fact that the game has to be abolished.”
Perhaps here we can see an example of how leftists earn their reputation of being rather dour killjoys who want everyone to dress in hemp sackcloth and eat alfafa sprouts. The world after the longed-for revolt against capitalism would NOT INCLUDE football? Jeepers, it looks like our cause just shed a couple of billion possible recruits. It would be nice if sometimes the Left made the post-Capitalist world seem nicer and more exciting than the one we currently live in. If socialists of Eagleton’s ilk are coming to take away our football, what else are they going to abolish? Beer? Fart jokes?
While I agree that spectator sports have a terrible knack of distracting everyone from other more meaningful forms of mass social expression, let’s just think of all the things that football has to contribute to someone with a more socialist frame of mind.
As Eagleton notes, you play the sport as an individual and as part of a collective. The balance between the two is just the kind of thing I’d like to see in a socialist utopia! And everyone more or less can find their place in football, which makes it very inclusive. Most of us won’t make the World Cup or England’s Premiership, but even kicking around a ball with a handful of other leaden-footed no-hopers is enormously edifying. Name any other occupation in a capitalist economy that offers such fulfillment to losers. Moreover, football can instill such passion into its adherents that they’re prepared to keep toiling away – sweating, kicking, swearing, falling down, getting hurt, getting back up again – even in the face of failure! Football gives ownership of its wealth to every member of the roster; all enjoy the spoils of victory and all suffer the ignominy of defeat. Moreover, the enterprise is inherently healthy for mind and body! Which cannot be said about sitting in front of a computer all day.
In short, when I lose myself in playing football, I truly enjoy a rare glimpse into what true dedication to a collective cause is all about. If more of life were like playing football, I’d be happier!