This is the sixth set of notes for a reading group on Marx’s Capital, and includes a Volume I refresher for further reading of Volume II. There are links to earlier posts and texts that may be useful.
Marx does seem taken with a kind of scientism by proposing laws of surplus value as rate and mass. In that characterization, capital gets personified and is about power and control, as well as the introduction of technology. Marx’s social ontology provides a means for studying the larger process of valorization and commodity production. In trying to submit Smith and Ricardo’s political economy to critique, the methodological synthesis opens a new terrain for study.
That classical tradition of political economy in which David Ricardo holds such a pivotal position, insofar as it resembles mainstream economics by virtue of its seeking to model the economy mathematically, is a tradition which seeks to model the behaviour of the Ricardian machine. And the core question that arises in that tradition is this: since the commodities that an individual worker is implicated in producing are not the commodities that they consume, how is it meaningful to compare them quantitatively, so as to say that a surplus is produced? In what sense is a pallet of bricks or a sack of grain quantitatively greater than what went into producing it i.e. raw materials, plus a certain amount of depreciation of tools and machinery, plus a shopping basket of diverse wage goods? How can you count the surplus when you are counting different things?
Was it the Ricardian machine that Marx analysed in Capital? The answer is both yes and no. The subject matter of his argument is indeed the Ricardian machine. On an interpretative level, subject to some inconclusive and mutually inconsistent asides about where the machine’s precise boundaries lie, there can be no doubt about that. Indeed (and this is something which is not so widely understood as perhaps it should be), in many contexts it is the Ricardian machine that Marx is referring to when he uses the very word “Capital”. But to leave it at that would be to fail to do justice to the scope of Marx’s analysis. This is because of the profound insight Marx offers about the fungible substance – i.e. value – which all the diverse components of the machine quantifiably embody, such that one can meaningfully say that more is produced than consumed. His insight (which more than makes up for any mathematical modelling infelicities in his analysis) is that, under the specific historical conditions of the capitalist mode of production, that fungible substance is a social substance, embodied specifically through our market relations. You cannot analyse the Ricardian machine, so Marx demonstrates, without analysing the way value and capitalist society constitute each other.
And this is not to make a broad but vague claim that the Ricardian machine is embedded in a wider set of social relations, and laws in the juridical sense (although of course it is); Marx demonstrates that the social relations in question in fact drive the behaviour of the Ricardian machine with the ineluctable force of physical laws. The Ricardian machine is the chaotic monster that it is precisely because its lifeblood, value, cycles between ineluctable laws of a social, and a physical, and a social kind again, as the matter in which it is embodied cycles between market exchange, and the physical metabolic process of production, and back to market exchange again.
Value cycles between ineluctable laws of a social, and a physical, and a social kind again, as the matter in which it is embodied cycles between market exchange, and the physical metabolic process of production, and back to market exchange again.
Volume I, Chapter 10 Section 2: The Voracious Appetite for Surplus Labor
Outline of Marx's Discussion
- 1. "Capital did not invent surplus labor."
Class society with the monopolization of MP has long produced surplus labor. (generic)
2. Where use-value predominates
—surplus labor is limited by set of wants
—no boundless thirst from production itself
3. Where exchange-value (capitalist market) dominates
—there is just that boundless thirst, the aim is not use-value and therefore not limited by wants
—this comes with capitalist world market and production for export, e.g., in the United States slavery transformed from paternalism to the using up of slaves' lives to maximize exchange-value and profit.
4. Corvee labor
—in Danubian Principalities, Reglement Organique (1831)
—a "positive" expression of thirst for surplus labor. It is positive, because explicitly defined and expanded
—here "surplus labor in an independent and immediately perceptible form," i.e., work on seignoral estate.
5.Factory Acts in England (1850)
—negative expression of thirst, negative because the Acts set limits to surplus labor
—limits set through state, forced by working class struggle & exhaustion of LP
—capital responds with "nibbling and cribbling" at working day in a way that shows the nature of surplus value is no secret to anyone.
6. Full-timers, half-timers: people defined as personified labor time.
The rate of surplus value = s/v = (for example): (6 hours)/(6 hours),
or 100% or (3 shillings)/(3 shillings), or 100%
mass of surplus value = Sm = Vt(s/v),
where Vt = (v = value of average labor power)(# workers)
= total variable capital
= total hrs necessary to reproduce LP
Implication of First Law:
A decline in one factor can be compensated by an increase in another in order to maintain the mass of surplus value.
- e.g., if Vt declines, a rise in s/v can maintain Sm at the original level. Therefore, the level of exploitation is, to some degree, independent of the supply of workers.
- e.g., a decline in s/v can be compensated by an increase in the number of workers.
(At the level of society, the growth of population sets a limit to such an increase.)
But, the absolute limit of the average working day (< 24 hrs) sets an absolute limit to the degree to which the decline in the number of workers can be compensated by a rise in s/v through an extension of the working day.
e.g., if Vt = 1500 for 500 workers, s/v = 100% for a working day of 12 hours, then Sm = 1500.
if the number of workers drops to 100 and Vt = 300, and the length of the working day is raised to its physical limit, say of 18 hours, the 100 workers will only be able to produce a Sm of 600.
The mass of surplus value varies directly with the investment in variable capital, i.e.,
ΔSm/ΔVt > 0
this is not affected by differences or changes in c/v
—either between different branches of industry
—or in the same branch
But, this law contradicts immediate experience which is that different industries tend to generate the same rate of profit even though their organic composition of capital may be quite different .
Observations on the Definitions of Classes:
- Independent workers: own/control their means of production
e.g., small farmers concerned primarily with their own subsistence
- Capitalist who-also-works: hybrid, e.g., a “small master”, such as those in the guilds
- Capitalist qua capitalist: “capital personified”
- —fully devoted to the “control of the labor of others”
—requires an increase in the number of workers controlled
—this was opposed by the guilds
—in order for this to happen some minimum amount of capital had to be available to the would-be capitalist
- —if minimum too large then capitalists might acquire either 1) state subsidies or 2) a monopoly in the market for their goods.
—thus Hegel’s quantitative change (increasing number of employees) which becomes qualitative (conversion of the small master into a capitalist)
- Capital develops within production until it acquired command over labor
- This command is coercive:
- —forces people to work more than necessary for their needs
—more coercive than all earlier systems of directly compulsory labor — unbounded.
- At first this coercion is exercised with no change in technology.
- —become the means for the absorption of the LP of others
—come to consume the workers instead of visa versa
- But the relation between workers and their means of production is soon inverted and the MP
- Even if the "boundaries of the working day" cannot be extended [say by workers' struggles to set legal limits on the length of the working day] and are given as A - C, (where A is the beginning of work and C is quitting time - and this day is broken into two parts: A --- B [necessary labor] and B ---- C [surplus labor]) it is still possible for the capitalists to increase their share of value (and thus their surplus value), by reducing necessary labor, i.e., reducing the workers' share of A-------B (V) to A---B' (V'). With the working day fixed, this would increase the capitalist share from B ---- C to B -------C'.
This could be achieved by:
a. Pushing down the wage to the equivalent of A-B' —but, if we assume the wage must = value of labor power (V) and that the workers wages support them just at the level of subsistence, then a fall in wages below this level would mean a collapse in the ability of the workers to reproduce themselves, which would eventually undercut A - C. Marx notes that this often happens but must be assumed away in the analysis of self-sustaining accumulation.
b. Pushing down the value of the means of subsistence
Increases in Productivity - Relative Surplus Value
Competition acts to circulate productivity raising technological change:
Productivity and the Working Day
Marx is careful to note that although rising productivity makes it possible for the amount of work by all workers to be reduced - because what they need can now be produced with less work - this "is by no means what is aimed at in capitalist production" (p.438).
Instead, the only reduction in work is experienced by those workers displaced by machinery and unable to find other work (and thus to earn their bread).
David Ricardo worked to fix the issues he felt were most concerning with Adam Smith’s Labour Theory of Value. Both men worked with the assumption that land, labour, and capital were the three basic factors of production. However, Smith narrowed in on labour as the determinant of value. Ricardo believes that with production having 3 main factors it is impossible for only one of them to determine value on its own. Ricardo illustrates his point by adapting Smith's deer beaver analogy to show that even when labour is the only factor of production the hardship and tools of the labour will drive a wedge in the relative value of the good. Due to his criticisms of the Labour Theory of Value George Stigler called his theory a "93% labor theory of value".
There were no landlords charging rent for using their land and no undertakers paying wages to workers, or tax inspectors taking a share of their income. Smith argued that two hunters would exchange items (beavers for deer) in the ratio by which it would cost each labourer in labour time to hunt the other animal they wanted to exchange for what they had caught earlier. If it took twice as long to catch a beaver than it did to catch a deer, he suggested that the beaver would exchange for two deer.
As society advanced from sole hunters to shepherds, then farmers, and finally commerce, the number of factors required for production would increase from one to many, and each owner of the constituent factors would require a share in the revenue received from selling the joint product. From this time on, labour was no longer the sole source of production and the labour time theory of exchange value would no longer be relevant. This much is clear from reading Wealth Of Nations closely, as I explain in my forthcoming book on Adam Smith for Palgrave’s Great Thinkers in Economics series (2008).
...At one time, not long ago, the whole world was limited to hunting as its mode of subsistence (as John Locke put it: ‘all the world was America’, alluding to the hunting tribes of North America, then being reported in detail by travellers and explorers).
Ricardo identifies two sorts of capital: ‘capital that is to support labour’ (fixed capital), and ‘capital invested in tools, machinery, and buildings’ (circulating capital); respectively, instruments of labour and variable capital. The distinction is made on the basis not of the valorisation process but – as in the case of Smith – on that of circulation. Two misconceptions arise:
1 ‘The differences in the degree durability of the fixed capital, and the variations in the composition of capital in terms of constant and variable, are taken as equivalent.’1This standpoint is that of ‘phenomena in their finished form’, as opposed to that of the ‘inner mechanism of capitalist production’. The former, however, as far as valorisation is concerned, only relates to how a given quantity of value is transferred to the product; the latter determines variations in the production of surplus-value. In terms of the circulation process, the former is concerned solely with the period of the renewal of capital.
2 As Marx notes, in the distribution of the social surplus-value between capitals, the effect on the equalisation of the general rate of profit and the transformation of values into process or production32 of differences in the time for which capital is advanced (i.e. variations in the lifespans of fixed capitals) and in organic compositions of capital are similar. In Ricardo’s categories, with instruments of labour on the one side and variable capital on the other, objects of labour disappear from the picture. They cannot appear as fixed capital, since their manner of circulation coincides with the capital laid out on labour-power; but neither can they appear as circulation capital, because of Smith’s legacy in conflating fixed/circulating capital and constant/variable capital.
What is happening here is the fetishism peculiar to bourgeois economics, which transforms the social, economic character that things are stamped with in the process of social production into a natural character arising from the material nature of things. [...] [M]eans [instruments] of labour are fixed capital only where the production process is [...] a capitalist production process and the means of production [...] possess [...] the social character of capital, secondly, they are fixed capital only if they transfer their value to the product in a particular way. If this is not the case, they remain means of labour without being fixed capital. [...] What is at issue here is not a set of definitions under which things are to be subsumed. It is rather definite functions that are expressed in specific categories.5 1The confusion sowed in the Smithian conception has had the following consequences. The distinction between fixed and circulating capital is confused with that between productive capital and commodity capital.2 All circulating capital is equated with capital laid out on wages.3 The distinction between variable capital is completely reduced to the distinction between circulating and fixed capital, thus losing all sight of the real distinction.
Imagine two lines of business, thus:
Let us assume:
• same working day
• application of equal capitals
• same division between constant and variable capital• same division between fixed and circulating capital
• same division between social and necessary labour
• both products produced to order and paid for on delivery
Then: at the end of the week, when the yarn is delivered, the spinner receives her outlay of circulating capital and the wear and tear of the fixed capital contained in the value of the yarn;1 the turnover is complete, and the cycle can begin again anew. The locomotive manufacturer, on the other hand, must lay out fresh capital every day for three months. All else being equal, the latter needs 12 times as much circulating capital available than the former. That the capital advanced each week is equal is irrelevant to this circumstance. If the locomotive takes 100 days to build, for the workers each day forms a part of a discontinuous quantity; but for the product, the 100 days form a continuous quantity, a working day of 1,000 working hours, a single act of production. This act is the working period: the number of inter-related working days required to complete a finished product. Why does this matter? In the case of products requiring a more continuous production process, more additional outlay on circulating capital is required, since the period during which this capital is unable to exist in a form capable of circulation – in a finished commodity – is longer. This is not the case with regard to fixed capital, since the part of its value which remains fixed in production is independent of the length of the working period (excepting cases in which this latter is longer than the fixed capital’s use-value lifetime).2
Hence, first, even if, in our examples, equal capitals, divided equally into fixed and circulating capital, are invested, the reflux of these capitals is different. Second, although the same amount of productive capital is applied in the two processes over the longer working period, the amount of capital invested, because of the first observation, is greater in the case of the longer working period than in that of the shorter. Conclusion:
- T]he length of time in which specific portions of the capital are advanced – [...] the time during which capital is advanced – differs according to the length of the labour process, and so too does the amount of capital that has to be advanced, even though the capital applied daily or weekly is the same.3 (p.310)
Large-scale production thus requires more developed capitalist production: more advanced concentration of capital,4 and greater development of the credit system.5
in the last post the path from the Platonic Cave Allegory was drawn through Hegel providing a classical foundation for the dialectic that Marx develops into a dialectical materialism from historical materialism.
The Hegelian Evolution of Consciousness
The Platonic notion of the ascent of the soul through levels of being is the model for the Hegelian concept of the progress of consciousness. While Plato conceives of the soul as rising through a timeless series of levels of being, Hegel conceives of consciousness rising through a historical series of levels. For Hegel, the Platonic ascent of the soul becomes a historical evolution of the consciousness of humanity as a whole. This is the Myth of the Cave: the whole human races is being led out of the Cave. In Figure 3, Plato's Divided Line is in RED, Hegel's in BLUE.
The phenomenologist is the one who guides consciousness on its ascent out of the cave into the daylight, the one who compels consciousness to make the ascent.
Life is more explicitly rational than mere physical matter because it is more explicitly self-determining. Life itself becomes more explicitly rational and self-determining when it becomes conscious and self-conscious—that is, life that can imagine, use language, think and exercise freedom. Such self-conscious life Hegel calls “spirit” (Geist). Reason, or the Idea, comes to be fully self-determining and rational, therefore, when it takes the form of self-conscious spirit. This occurs, in Hegel’s view, with the emergence of human existence. Human beings, for Hegel, are thus not just accidents of nature; they are reason itself—the reason inherent in nature—that has come to life and come to consciousness of itself. Beyond human beings (or other finite rational beings that might exist on other planets), there is no self-conscious reason in Hegel’s universe.
In his philosophy of objective spirit Hegel analyses the institutional structures that are required if spirit—that is, humanity—is to be properly free and self-determining. These include the institutions of right, the family, civil society and the state. In the philosophy of absolute spirit Hegel then analyses the different ways in which spirit articulates its ultimate, “absolute” understanding of itself. The highest, most developed and most adequate understanding of spirit is attained by philosophy (the bare bones of whose understanding of the world have just been sketched). Philosophy provides an explicitly rational, conceptual understanding of the nature of reason or the Idea. It explains precisely why reason must take the form of space, time, matter, life and self-conscious spirit.
The New Dialectics is different from the old Marxian dialectics (or Diamat), which was concerned primarily with the influence of Hegel on Marx’s theory of history, and the eventual triumph of socialism. The New Dialectics, by contrast, is concerned mainly with the influence of Hegel’s logic on Marx’s theory in Capital of capitalism, as a given historically specific society; hence it is also called ‘systematic dialectics’ (as opposed to ‘historical dialectics’). Different authors have different interpretations of Hegel’s logic and systematic dialectics, but they all agree that Hegel’s logic is important for understanding Marx’s theory in Capital.
What does it mean to “think beyond capitalist subjects and objects in the constitution of such discourses in a more complex, concrete, and historically specific approach to human identity.”
In German, the general meaning of "Verwertung" is the productive use of a resource, and more specifically the use or application of something (an object, process or activity) so that it makes money, or generates value, with the connotation that the thing validates itself and proves its worth when it results in earnings, a yield. Thus, something is "valorised" if it has yielded its value (which could be use-value or exchange-value). Similarly, Marx's specific concept refers both to the process whereby a capital value is conferred or bestowed on something, and to the increase in the value of a capital asset, within the sphere of production.
The capitalist production process, Marx argues, is both a labour process creating use-values and a value-creation process through which additional new value is created. However, value creation as such is not what the capitalist aims at. The capitalist wants his capital to increase. This means that the worker must create more value for the capitalist than he receives as wage from the capitalist. The worker must create not only new value but surplus value. A value creation process which goes beyond the point at which the worker has just created the equivalent of the value of his own labour power, and begins to increase the value of capital, is a valorisation process, not just a value creation process.
Valorisation thus specifically describes the increase in the value of capital assets through the application of living, value-forming labour in production. The "problem" of valorisation is: how can labour be applied in production so that capital value grows? How can assets be invested productively, so that they gain value rather than lose it? In Theories of Surplus Value, chapter 3 section 6, Marx emphasizes his view that "Capital is productive of value only as a relation, in so far as it is a coercive force on wage-labour, compelling it to perform surplus-labour, or spurring on the productive power of labour to produce relative surplus-value."
In Capital Vol. 3 (Penguin ed., p. 136) Marx defines the rate of valorisation as S/C where "S" is the surplus value produced and "C" is the total capital invested to produce it. This is strictly a value ratio, a relationship between value proportions, not to be confused with the rate of profit on capital invested, since the amount of surplus value yielded by a capital investment, corresponding to a certain quantity of labour-time expended in production, typically diverges from that part of the surplus value which is realized as profit, since at any time products are likely to be traded above or below their value, rather than at prices which exactly reflect their value (Marx often assumes for the purpose of his analysis that the total mass of profit and the total surplus-value are the same magnitude, although in reality they can vary from each other, due to continual changes in labour productivity across time, imperfect pricing, and imperfect competition).
But a more radical interpretation of Marx says that as long as we are engaged in value production, then there will always be class control by those who own the means of production, whether in the form of private property or state control. That is a much more radical interpretation – and opens up a much more radical project: the end of value production and not just a fairer distribution of value. (p.44)
Just as commodities are, at the same time, use values and values, so the process of producing them must be a labor process, and at the same time, a process of creating value.
— Marx, Das Kapital
The term “value” is basically equivalent to capital, but it is capital at the highest level of abstraction. Even capital takes different forms, as we shall see later. It can be embodied in buildings, machinery, raw materials, purchased labor power and finished goods. In a way value refers to the flow of wealth creation through these different embodiments of capital. The absolutely key factor in that flow is TIME. The slower the flow of value between these different material embodiments of capital, the less competitive a given capital is, the less money it is making compared to other capitals. The faster the flow of value between these different elements of capital, the more competitive it is in relation to other capitals, and the more money it stands to make. (p.47)
In the process we are now considering it is of extreme importance that no more time be consumed … than is necessary under given social conditions. … The time that is socially necessary alone counts.
— Marx, Das Kapital
In Marxist theory, interpellation—the process by which we encounter a culture's or ideology's values and internalize them—is an important concept regarding the notion of ideology. It is associated in particular with the work of French philosopher Louis Althusser. According to Althusser, every society is made up of ideological state apparatuses (ISAs) and repressive state apparatuses (RSAs) which are instrumental to constant reproduction of the relations to the production of that given society. While ISAs belong to the private domain and refer to private institutions (family, church but also the media and politics), the RSA is one public institution (police/military) controlled by the government. Consequently, 'interpellation' describes the process by which ideology, embodied in major social and political institutions (ISAs and RSAs), constitutes the very nature of individual subjects' identities through the process of "hailing" them in social interactions.