Marx makes the transition from the sphere of circulation to the sphere of production by deducing that the origin of surplus-value lies within the realization of the use-value of labor-power. In the process, he examines briefly both its exchange-value and its use-value. By focusing on the specific use-value of labor-power as source of surplus-value, he highlights its central value to capital. In later chapters, he returns again and again to the quantitative determination of surplus-value but he begins here, and continues in Chapter 7 focused on the qualitative aspect of the use-value of labor-power. At this point, his concern with the exchange-value of labor-power is only to show that capitalists can extract surplus-value even in the presence of equal exchange. Now let us follow Marx from circulation to production.
He reasons as follows:
1. The increase in the value associated with the formula of capital M – C – M' cannot take place within the exchange M – C because the value of C is merely the transformed value of M.
2. Nor can the increase originate in the second act of sale C - M for this too is only a change in form.
3. The increase "must therefore take place in the commodity which is bought in the first act of circulation," i.e., in the C acquired through M - C.
4. But, it cannot occur within the exchange-value of C if we assume equal exchange.
5. Therefore, "the change can originate only in the actual use-value of the commodity."
6. The question is, is there a commodity whose use-value "possesses the peculiar property of being a source of value"? Whose consumption involves the creation of value?
7. The answer: yes, and the commodity labor-power, or the capacity and willingness to work.
"The aggregate of those mental and physical capabilities existing in the physical form, the living personality, of a human being, capabilities which he sets in motion whenever he produces a use-value of any kind."(1)
Although this definition is gendered and a-historical, i.e., abstracted from the specific conditions of capitalism, the whole context—the analysis of capitalism in a book titled Capital—makes it quite clear he is analyzing a set of social relationships within that framework. Although this definition lacks any specificity about "mental and physical capabilities," the one I have emphasized, without which all the others are moot, is the willingess of people to work for capitalists. Whether obtained by coercions of the types analyzed in the section on primitive accumulation or by more sophisticated modes of education and propaganda that normalize waged and salaried labor, willingness—begrudged or enthusiastic—is a trait capital must engender to get people to actually work once they have been hired in the labor market.
Marx begins his analysis of the labor market with the demand for labor-power, the M that its holder wishes to convert into capital by purchasing workers' labor-power (one part of C) and putting them to work generating surplus-value, to complete M – C – M'. How the would-be capitalist comes by enough money to hire workers (and to be able to purchase the necessary means of production) is skipped over in this chapter, although we have seen his historical analysis of this in Part VIII, Chapter 29 on the rise of agrarian capitalists and in Chpater 31 on the rise of industrial capitalists.
He then specifies two conditions that must be fulfilled for there to be a supply of labor-power available for purchase:
1. Workers must be free proprietors of their own labor-power and be able to sell it as a commodity—but only for a limited time. This differentiates workers who sell their labor-power from both slaves and from peons, who are effectively enslaved by endless debt.(2) Here Marx quotes Hegel from the Philosophy of Right and follows his discussion of alienation, independent wills, contract, etc.
2. The workers cannot produce commodities independently of capital, because capital has expropriated the means of production. That expropriation has included the means of producing one's own subsistence, so that all goods and services necessary for survival must be purchased as commodities.
These are exactly the conditions for the creation of a working class, whose historical origins Marx traces in Part VIII . He explains not detailing this history (he does mention it) by saying, "We confine ourselves to the fact theoretically, as [the capitalist] does practically."(3)
He then goes on to discuss first the value, and then the use-value of labor-power within capitalism.
The value of labor-power, he writes, "is determined . . . by the labor-time [socially] necessary for the production and consequently, also the reproduction of this specific article. [my emphasis]." (4) But what does this mean to "produce" labor-power and how, if at all, is its "reproduction" different from its production? Assuming an already constituted capitalism, the production of labor-power evokes at least two elements, both of which he mentions. First is the procreation of children: "The production of labor-power must include the means necessary for the worker's replacements, i.e., his children." (5) Second is the training of children willing and able to work for capital. For most working-class children of Marx's time, training was on-the-job, sometimes as apprentices or in penal labor in the workhouses.(6) In more recent times, mass public education has provided the disciplining and psychological conditioning required for most, although juvenile detention facilities still incarcertate the recalcitrant and "rehabilitation" is usually defined by a return to work.
The broader category of the reproduction of labor-power also includes day-to-day reproduction, from feeding and clothing to whatever patching-up—both physical and psychological—is required for the "maintenance" of workers' ability and willingness to return to work. Moreover, given technological change and the ever-increasing precariousness of jobs, procreation has become an industry and training and retraining have become common not only among the young but among adult workers. Such changes illustrate why Marx notes that what is required for the production and reproduction of labor-power has "a historical and moral element." Requirements have changed over time with the evolution of class relationships. The reproduction of labor-power clearly includes the production of labor-power as a subset of all those activities involved.(7)
While all the work involved in the reproduction of labor-power has an impact on its value, Marx defines that value as “the value of the means of sub¬sistence necessary for the maintenance of [the] owner of labor-power.”(8) In other words, in the little circuit, LP – M – C(MS), the value of labor-power, LP, and hence the amount of money, M, that capital must pay workers is determined by the value of the use-values, C(MS), required for their production and reproduction.(9)
Left out of this definition is all the essential work involved in reproducing labor-power not involved in the production of consumer goods, e.g., housework and schoolwork. The work of the waged agricultural laborer who produces food necessary for the reproduction of labor-power is included in this definition, but the work of the unwaged housewife who prepares the food and sets it on the table for consumption and then washes the cooking pots and serving dishes is not included. The work of salaried writers, editors, proofreaders, typesetters and bookbinders who create textbooks is included, but the unwaged work of the student who spends hours studying those textbooks is not included. Were the housewife hired as cook or waitress in a restaurant, or the student a salaried employee being trained on the job for a new position, their labor would be included.
Both Marx and the classical political economists, such as Adam Smith, were well aware of the existence and necessity of such work. But they saw it as outside of what they felt was capital’s new way of organizing work, i.e., profitable commodity production. Smith, for example, juxtaposed putting people to work producing commodities to paying people to provide personal services. The latter, he argued, had to be paid out of some external source of revenue, e.g., land rents for the owners of large estates, such as the one portrayed in the TV series Downton Abbey, or wages or salaries for less well-off individuals. Workers hired by capitalists, however, generate the revenues necessary for their rehiring by producing commodities sold at prices that cover the costs of production plus a profit. Such workers, Smith called "productive," whereas personal servants he dubbed "unproductive." Marx retained this nomenclature with the addition of awarding the title "productive" only to those commodity-producing workers whose products embodied surplus-value.(10)
Not only are housework and schoolwork ignored in this definition, but so too is their impact on the value workers must receive for the purchase of consumer goods and services. For example, the more unwaged domestic food production, via gardening or subsistence farming, the fewer food commodities workers need to purchase and therefore the lower the value of labor-power and the lower the wage, M, required to buy C(MS). Or, the more schoolwork that can be imposed on children, or adults in retraining, the fewer waged teachers are required and lower the amount of revenue diverted to schools and training programs. Inversely, the less housework performed by unwaged housewives—due to escape or rebellion—the greater the wage must be to purchase services that were once performed at much lower cost.(11) Similarly, the less schoolwork children are willing to do on their own, the greater the expense of forcing them to work, via more teacher oversight, police in schools and court enforcement of laws against truancy.
Unlike Marx, we can trace such connections by extending the
little circuit LP – M – C(MS) to a full-fledged Differential training requirements for different jobs explain,
in part, the wage and salary hierarchy. The greater the complexity of skills
required, the greater the expenditure required to produce labor-power. While
some expenditure on training occurs directly on the shop floor or in offices by
employers or other workers, much more derives from wages and salaries that make
it possible for parents to pay for their children’s schooling. Data showing that
families tend to rear children to similar skill levels tend to confirm this, e.g.,
university-educated parents tend to have jobs with salaries high enough to send
their children to universities.
When not all members of the family are earning a wage or
salary—as was common in Marx's time—those who are employed must earn a
"family wage" that can pay for the production and reproduction of all
members of the family. In other words, the wage must purchase enough means of
subsistence to reproduce the unwaged as well as the waged. It was the prevalence of
wages too low to meet this need that drove workers to fight to have their wages
complemented by direct payments by the state-as-collective-capitalist, e.g., programs of
unemployment insurance, aid to dependent children, etc.
We should note that the famous "moral and historical element"
determining the level of wages remains very much unspecified at this point.
Saying this is determined by "the level of civilization" is not saying much.
Later on Marx will make clear that the major determinant is the balance of power
between the classes—that the exchange-value of labor-power is determined
by working class power vis-é-vis capital, which changes historically, and
morally as the working-class is able to impose its "morality" of less exploitation
on capital.
Toward the end of this discussion there is a curious passage
in which Marx writes about a “minimum limit” of the value of labor-power.
“The limit is formed by the value of the physically indispensable means of
subsistence.” Yet he then goes on to say that “if the price of labor-power falls
to this minimum, it falls below its value” because the labor-power functions at
less than normal quality. Less than normal quality work, i.e., lower levels of
productivity, we can suppose, would be the consequence of underpaid workers being
either malnourished and sick, or disgruntled, angry and resisting work more than
usual. So, there would seem to be no such thing as a “minimum limit” after all.
Instead, what we have, as integral to the wage and salary hierarchy, are parallel
hierarchies in healthiness, illness and willingness to work, where those who are
paid more can afford better medical care, those who are paid less cannot and those
who are paid the least are frequently malnourished, sick and angry.
(13)
What the issue of “minimum limit” evokes is our (workers’)
judgement of the adequacy of the use-values we receive, in terms of health, both
physical and psychological. Can we buy enough commodities—food, clothing,
housing, toys and services—and enough of the right sort, to be healthy,
able and willing to work? Do we have enough time and energy, to "consume" them,
i.e., put them to use in our efforts to live lives worth living. So, we try to
figure out which commodities we need, what their prices are, and what our wages
or salaries can buy. For the most part, we do these things in the order of Marx's
little circuit LP – M – C(MS), i.e., we look for and try to
find a job that will earn us a wage or salary, LP – M, and then
spend our money on what we need M – C(MS). But longer term, we often
reason in the opposite order: first deciding how we want to live, figuring out
what commodities are necessary for that kind of life and then we either look for
a job that will bring in enough money so that we can afford to live that way, or
if we cannot find one, we take a less remunerative job and then fight for higher
wages or for a better-paying position.
Whatever kind of job we obtain, there is no guarantee that what
our wage or salary can purchase today will be the same tomorrow. If we are lucky,
increases in the productivity of the production of consumer goods will reduce
their per unit values and prices so our money income will purchase more goods and
services.(14) If we are unlucky, their per unit
values and prices will rise so that we can only obtain fewer goods and services.
Such might be the result of anything that requires more socially necessary labor
in the production of either existing goods or new ones required for reproduction.
Such changes are easier to see in changes in supply and demand beyond the control
of workers. Capital may transfer value to itself by artificially restricting the
supply of some goods, e.g., oil or coffee, or stimulate demand (through advertising)
to drive up prices, undercut real wages and the value of labor-power. Or, as we
saw in Chapter 3, it has often intentionally triggered
a general inflation of prices by expanding the supply of fiat money, to transfer
value from those on fixed wages to the owners of commodities whose values haven't
changed but whose prices have. In each case our income buys fewer or lower quality
consumer goods. Another way in which the value of labor-power can be lowered is
through the kind of cheating Marx describes in his footnote on the adulteration
of bread. When workers spend their wages, they expect to get a commodity of a
usual, recognized quality. If the quality is reduced by adulteration—incorporating
ingredients of lesser value because requiring less labor—and the baking company
sells their bread at a price above its now lower value, buyers are cheated and
receive less use-value than otherwise.(15)
The use-value of labor-power, Marx writes, "consists in the
subsequent exercise of that power [of the aggregate mental and physical
capabilities. . . of a human being]." The exercise that preoccupies him here
produces commodities, which capitalists sell with the aim of making a profit.
He is not concerned, for the moment, with the exercise of those capabilities in
the production of labor-power itself, e.g., housework and schoolwork, although
they are exercised daily in its reproduction. Nor does he examine how those
capabilities are sometimes exercised completely outside the circuits of capital,
for autonomous purposes of workers, e.g., discovering alternatives to capitalist
ways of doing things.
Now, the use-value of labor-power that most vitally concerns
capitalists is its "peculiar property of being a source of value, whose actual
consumption is therefore an objectification of labor, hence creation of value."
As we will see in the next chapter, by "objectification of labor" he means the
way workers' abilities, directed by the will of their employers, become embodied
in their products, the objects and services they produce.
(16) In other words, if labor-power is the
capacity to work, then the use-value of labor-power includes not only its exercise,
the work of creating commodities embodying surplus-value, but also the use-value
of that surplus-value, which can then be used to impose more work. Not just any
exercise of human capabilities, but imposed labor, and—through re-investable
surplus-value—ever more labor to boot.
The "ever more labor to boot" is essential. "The process of
the consumption of labor-power" must be not only "the production process of
commodities" but also the genesis of "surplus-value"—required for investment
and the expansion of the system. Work is value only when it produces surplus-value,
when it contributes to the expansion of value. Work which does not, may serve the
function of social control when it occurs, but if it does not result in sufficient
surplus-value, then the imposition of that kind of work will cease.
(17) I discuss this further in the next chapter.
We now pass as Marx says fully into "the hidden abode of production
where . . . the secret of profit making must at last be laid bare". To do so, we
must leave the fetishistic realms:
And enter into the realm of COERCION—where, as we will
see, the capitalist rules as a despot, and the workers slave as cogs in the machine
—at least in as much as the capitalist can make them do so!
1. Explain the reasoning through which Marx concludes that the origin
of surplus-value must lie within the C of M – C – M'.
2. Explain the difference between labor and labor-power. Why does Marx
insist on this point?
3. What are the conditions which must be met for there to be a market
for labor-power? What does this have to do with primitive accumulation?
4. In what double sense are workers free within capitalism?
5. Distinguish between the exchange-value and use-value of labor-power?
Discuss the interests of the capitalists and the workers in these two sides.
In what ways are they focal points of struggle?
6. Discuss the upper and lower limits of the value of labor-power. What
factors determine where it will in fact be found between these two bounds?'
7. What is the relationship, if any, between work performed in consumption
of the means of subsistence and the value of labor-power? Is this commodity
producing work? What is the difference between this work and work
done in factories or on farms?
8. What is there in Marx's discussion of the determination of the value
of labor-power which might give us some insight into the structure of the
wage hierarchy?
9. Should we include transfer payments such as social security, unemployment
benefits of federal aid to students in the value of labor-power?
10. When and where do workers give the capitalist credit? Do you
know of situations in which there has been a crisis associated with such
credit?
11. What is there about rural workers, or peasants, which often makes
it possible for the capitalist to pay them wages which are well below
subsistence for city workers?
12. What do you think constitutes "subsistence wages" today, where you live?
13. Discuss the relationship between the representation
LP - M - C(MS) . . . P. . . LP* and Critical Theory. What is . . . P . . .
here? What is LP*? As . . . P . . . grows what would you expect to
happen to LP*?
14. Evaluate the relative advantages and disadvantages of the two
representations
LP – M – C(MS) and LP – M – C(MS) . . . P . . . LP*.
Does it make sense to you to assert that one represents the working class point
of view and the other the capitalist's? Why, or why not?
2 The examples of peonage given by Marx are in
Mexico and Romania. As noted in my commentary on Chapter 29
, after the Civil War in the United States, a great many ex-slaves found
themselves trapped in sharecropping and exactly the kind of debt peonage Marx
describes in this chapter, despite the clause in the Thirteenth Amendment barring
involuntary servitude as well as out-and-out slavery.
3 Capital, Vol. I, p. 273.
4 Ibid., p. 274.
5 Ibid., p. 275.
6 See John Locke, "On the Poor Law and Working
Schools" (1697), in H. R. Fox Bourne, The Life of John Locke, vol. II
(1876), London: Henry S. King & Co., 1876, pp. 377-391. There were a few exceptions,
such as the schools that the textile manufacturer and reformer Robert Owens
(1771–1858) created for his own workers' children under ten years of age,
to discipline and train them for future work.
7 This use of terms is consistent with the way
Marx uses the term reproduction in Part VII, Chapters
23-25 where he analyzes the reproduction of the class relationship as a whole under
the rubrics of “simple reproduction” and “expanded reproduction” or “accumulation.”
8 Capital, Vol. I, p. 274.
9 While “pay” is often interpreted narrowly in
terms of the direct payment of wages and salaries, the value that capital must
consecrate to the reproduction of labor-power should be grasped to include all
value diverted from otherwise investible revenue to support the process. In
Marx’s time there were few employers like Robert Owens who created schools for
working-class children. But after the Civil War and into the early 20th Century,
capitalists became deeply involved in creating private schools, and lobbying for
the creation of public-school systems, especially in the largely agrarian
southern states, to create a whole new generation of workers—from low-paid
manual workers to salaried professionals—better prepared for work in modern
industry. In the case of public schools, capitalists sought, from the beginning,
to shift the burden of payment onto working-class taxpayers, undermining the value
of their wages and salaries. Some capitalists have also profited directly from
1) the building of public schools and their purchase of textbooks and other
equipment, 2) the building of for-profit operations, e.g., charter schools,
technical training schools and youth detention centers.
10 Marx's critique of the limits to Smith's
analysis can be found in Volume I of the three volumes of Theories of Surplus
Value, MECW, Vol. 31, pp. 7-31. This analysis by Marx of the
distinction between the "productive" labor of waged workers employed by capitalists
and the "unproductive" character of other kinds of labor produced a long and
strange legacy. Not only have debates raged among Marxist theorists about what
labor is and is not "productive," but they have resulted in such bizarre phenomena
as the refusal of the Soviet state to include "services" in its Material Product
System accounting because "service" labor was judged to be unproductive.
11 Obviously, unwaged housewives have to be
supported out of their husband's wage or salary, but such support generally costs
far less than that required to hire someone to perform the same work.
12 I first worked out this circuit while
researching some issues in public health. See the Appendix to
“Malaria, the Politics of Public Health and the International Crisis”, Review
of Radical Political Economics, vol. 9, issue 1, April 1977, pp. 96–100.
13 Dynamically, the degree of resentment and
anger fluctuates with changes in income. Losing a good job with access to decent
medical care or gaining some increase in income and health but still at much
lower levels than others, can both be sources of discontent. In his time, Marx
noted that job loss and wage reductions associated with economic crises often
spurred worker uprisings. The latter case was noted by economists and political
scientists studying “development” in the Global South. They saw how positive
changes, e.g., higher income or access to education, often provoked the demand
for even faster improvement and discontent when it was not forthcoming
14 As you will find in
Chapter 15, when the value of consumer goods fall, capital has sometimes
sought to arrogate to itself all of the gains of increasing productivity. There
is, however, no guarantee of success in such endeavor, so the distribution of
the fruits of productivity gains has always been decided by the balance of power
between workers and capital.
15 You will find a longer discussion of this
phenomenon in my commentary on Chapter 10 where Marx
returns to adulteration.
16 The kinds of products that he cites are almost
always physical objects. As will become dear later, he also recognizes that some
commodities are not "objects" in the usual sense, but services that exist only
in the kinds of work being done.
17 In the microeconomic analysis of the firm,
such termination as the result of insufficient surplus-value/profit, is called
the "shut-down point." Indeed, most commodities have a "life cycle;" they are
produced, find a profitable market for a while, but eventually demand dwindles,
profits decline, and their production is terminated. The intentional shortening
of that life cycle—in favor of more profitable substitutes—is called
"planned obsolescence."
18 Jeremy Bentham (1748–1832), a social
reformer who influenced Robert Owens, also embraced the idea that humans are always
motivated by egotistical self-interest, even when they help others.
LP – M – C(MS) . . . Pc . . . LP*
The Use-Value of Labor-Power
of FREEDOM—free contracts
of EQUALITY—equal exchange
of PROPERTY—each sells his own
and of BENTHAM—each owner looks only to his own advantage.
(18)
Concepts For Review
labor
labor-power
value of labor-power
LP – M – C(MS)
family wage
"moral and historical element"
means of subsistence
use-value of labor-power
LP – M – C(MS) . . . P. . . LP*
labor of reproduction
productive and unproductive labor
Questions For Review
Footnotes
1 Ibid., p. 270.