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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.