Ambiguities of Surplus Value

1. In his critical inquiries into the accumulation of capital, Marx awards "pride of place" to the extraction of relative surplus value; surplus-value which is extracted by reducing that portion of the overall working period devoted to the laborers producing a value equivalent to their own wages.  He writes in Capital, Volume 1, Chapter 16:

The production of absolute surplus-value turns exclusively upon the length of the working-day; the production of relative surplus-value, revolutionises out and out the technical processes of labour, and the composition of society. It therefore presupposes a specific mode, the capitalist mode of production, a mode which, along with its methods, means, and conditions, arises and develops itself spontaneously on the foundation afforded by the formal subjection of labour to capital. In the course of this development, the formal subjection is replaced by the real subjection of labour to capital.

To be sure, Marx understands that each "type" of surplus value, absolute and relative, does not exist without the other.  Two paragraphs later, Marx is writing:

If, on the one hand, the mere formal subjection of labour to capital suffices for the production of absolute surplus-value, if, e.g., it is sufficient that handicraftsmen who previously worked on their own account, or as apprentices of a master, should become wage labourers under the direct control of a capitalist; so, on the other hand, we have seen, how the methods of producing relative surplus-value, are, at the same time, methods of producing absolute surplus-value. Nay, more, the excessive prolongation of the working-day turned out to be the peculiar product of Modern Industry. Generally speaking, the specifically capitalist mode of production ceases to be a mere means of producing relative surplus-value, so soon as that mode has conquered an entire branch of production; and still more so, so soon as it has conquered all the important branches. It then becomes the general, socially predominant form of production. As a special method of producing relative surplus-value, it remains effective only, first, in so far as it seizes upon industries that previously were only formally subject to capital, that is, so far as it is propagandist; secondly, in so far as the industries that have been taken over by it, continue to be revolutionised by changes in the methods of production

But Marx is not about to diminish the critical importance, uniqueness of relative surplus value to advancing capitalism; to capital accumulation:

From one standpoint, any distinction between absolute and relative surplus-value appears illusory. Relative surplus-value is absolute, since it compels the absolute prolongation of the working-day beyond the labour-time necessary to the existence of the labourer himself. Absolute surplus-value is relative, since it makes necessary such a development of the productiveness of labour, as will allow of the necessary labour-time being confined to a portion of the working-day. But if we keep in mind the behaviour of surplus-value, this appearance of identity vanishes. Once the capitalist mode of production is established and become general, the difference between absolute and relative surplus-value makes itself felt, whenever there is a question of raising the rate of surplus-value. Assuming that labour power is paid for at its value, we are confronted by this alternative: given the productiveness of labour and its normal intensity, the rate of surplus-value can be raised only by the actual prolongation of the working-day; on the other hand, given the length of the working-day, that rise can be effected only by a change in the relative magnitudes of the components of the working-day, viz., necessary labour and surplus-labour; a change which, if the wages are not to fall below the value of labour power, presupposes a change either in the productiveness or in the intensity of the labour.

Relative surplus-value is inexorably linked with the rate of surplus-value; the productiveness of labor; and will be linked by Marx with the productiveness of capital and the intensity of labor.  Relative surplus-value will be the motor for and the object of the accumulation of capital, for the application of accumulated capital to the production process, for the exchange between objectified labor and living labor.
 

2.  Marx's original exposition on the origin and source of relative surplus-value in Capital restricts the source and the impact of  relative surplus-value on the accumulation of capital to  the devaluation of labor power.  In Chapter 12 of Capital, Volume 1, Marx identifies the expansion of relative surplus-value with the reduction in value of the necessities of life, the means of subsistence, which form the value equivalent to the wage.  The reduction in the time necessary for the reproduction of these necessities reduces the time necessary for the reproduction of the laborers.  Less time is required to reproduce the reduced value, but the labor is still compensated at its full, but now diminished,  value.  Everybody might still go home hungry, but not hungrier.   Marx writes:

Granted this, it follows that the labour-time necessary for the production of labour power [the surplus producing capacity of labor; in capitalism forced to present itself as a commodity, a value for exchange-- sa], or for the reproduction of its value, cannot be lessened by a fall in the labourer's wages below the value of his labour power, but only by a fall in this value itself.  Given the length of the working-day, the prolongation of the surplus value must of necessity originate in the curtailment of the necessary labor-time; the latter cannot arise from the former. In the example we have taken, it is necessary that the value of labour power should actually fall by one-tenth, i.e. from ten hours to nine, and in order that the surplus labour may consequently be prolonged from two hours to three.

And this can only be accomplished...:

Such a fall in the value of labour implies, however, that the same necessaries of life which were formerly produced in ten hours, can now be produced in nine hours.  But this is impossible without an increase in the productiveness of labour...By increase in the productiveness of labor, we mean generally and alteration in the labour-process, of such kind as to shorten the labour-time socially necessary for the production of a commodity, and to endow a given quantity of labour with the power of producing a greater quantity of use values.....

In order to effect a fall in the value of labour power, the increase in the productiveness of labour must seize upon those branches of industry whose products determine the value of labour power, and consequently either belong to the class of customary means of subsistence, or are capable of supplying the place of those means.  But the value of a commodity is determined not only by the quantity of labour which the labourer directly bestows upon that commodity, but also by the labour contained in the means of production...Hence a fall in the value of labour power is also brought about by an increase in the productiveness of labour, and by a corresponding cheapening of the commodities in those industries which supply the instruments of labour and the raw material that form the material elements of the constant capital required for producing the necessaries of life. 

Emphasizing the unique origins of relative surplus-value, Marx continues:

But an increase in the productiveness of labour in those branches of industry which supply neither the necessaries of life, nor the means of production for such necessaries, leaves the value of labour power undisturbed.

And if the value of the labour power is undisturbed, then the portion of the working day necessary to reproduce that value is likewise undisturbed by increases in productivity in these sectors.

Now clearly, history has provided examples of exactly those circumstance where the increase in productiveness of labor in sectors making up the "necessaries of life"-- thereby reducing the value of labor-power-- causes a fall in wages, in the cost of the reproduction of the labour power.  One such example is the US "long deflation" period, from about 1868-1896.  Improvements in agricultural productivity, manufacturing productivity, and more than equally as important, transportation productivity, caused the long-term decline in the prices of  everything from wheat to coal. At the end of that period, nominal wages had declined some 12 percent.  Real wages however increased 42 percent.  The overall decline in the consumer price index in this period measured 40 percent.

None of this implies that the period was free of strife; of periodic recessions of great and greater severity; of labor struggles in the face of attempts to forcibly reduce wages; of the bourgeoisie's attempt to offset the oscillations in profitability by attacking labor.   All of those struggles occurred precisely as a result of the increasing productivity of labor, the "transition" to the "real domination" of capital, expressed in the increasing time of relative surplus-labor.


As for the "non-necessaries," Marx provides an explanation that rests on the productivity of labor creating a variance of the non-necessary commodities' individual values, or time of reproduction, and its social value, the socially necessary time for its reproduction.   

Reducing not the necessary labor to the reproduction of the wage, of the labor power, but rather  labor necessary to the production of the commodity reduces the unit value of the commodities, and increases the mass of commodities.  The capitalist then arbitrages this variance, that "spread" in unit values, transferring thereby aggrandized surplus-value from the other producers, claiming a portion of the total social surplus-value corresponding to the size of his/her capital, and its relative efficiency through the mechanism of price, through distribution. 

Marx's identification of  the "single source" for relative surplus-value, to the production of necessities and the decline in the value of labor power creates certain ambiguities.  First and foremost, at the end of the period of the long deflation, the real value of the wage is greater than at the start of the period.  The value of necessities that the wage can command has increased.  The nominal wage declined by 12 percent; the real wage had increased.  The CPI, as a proxy for the "necessary labor" had declined by 40 percent.

Secondly,  the "arbitrage" mechanism created by the enhanced productivity of labor is "universal" to capital; it is the mechanism for enhancing the rate of surplus-value in all sectors and departments of capitalist production.  This same distributive price arbitrage is the mechanism for aggrandizing greater rates of surplus-value in the capitalist production of those "necessaries" to the reproduction of labor-power.

When capitalism revolutionizes the conditions of agricultural production, it does so through enhancing the productivity of labor, which is then manifested in the arbitrage of the "spread" between the individual value, the individual cost of reproduction of the necessary commodities, and the social value, the socially necessary time for the reproduction of the necessary commodities.  There is no other way, given market relations, given in fact, private ownership of the necessary commodities for this to occur.   If the productivity of labor in the production of wheat doubles, the value of the labour power engaged in that production does not immediately decline.  The relative surplus-value does not directly reflect a increase proportional to the decline in the value necessary to reproducing the laborers.  The capitalist appropriating the results of the heightened productivity brings the expanded value to market at a lower price, and claims a larger portion of the total surplus-value in the market.

The devaluation of the labor power is expressed only through this pricing mechanism, and only over time as, in fact, the "spread" disappears, as the entire society is revolutionized by the improved means of production; as in fact the reduction of  labor-time necessary for the reproduction of all commodities is transmuted into the reduction of the necessary labor-time for the production of the value equivalent to the wage.

The identification of relative surplus value as originating in the production time for the "necessaries" of subsistence glosses over the mutability of the category of "necessaries" itself.  Semiconductors were not a "necessary of life," a component of the means of reproducing the value of the necessary labor-time,  upon discovery, or through the initial stages of refinement.  Applying semiconductors in integrated systems controlling design, production, communication, and transport has occurred over decades. And today the utilization of semiconductors in consumer products certainly have become part of the package of necessities.

Similarly, the application of GPS, in combination with semiconductor based digital control technologies, to the production of agricultural commodities, precisely providing for the application of seed, nutrients, and water, reducing the time, and value of these components in the valorization process is a new process that reduced the proportion of the value of the labor power engaged in production, but will aggrandize greater surplus-value through the market arbitrage mechanism until the process has become socially dominant.

3. The application of technology to the production process in capitalism is the application of accumulated capital to the valorization process.  In all sectors and departments of capitalist production what is critical is the reduction in the labor necessary for the expansion of value; the "disproportional" reduction of the value  of the labor power necessary for accelerating the expanded reproduction of the value of the applied capital.

The ambiguities in the presentation of relative surplus-value have allowed some to conclude that, counter to Marx's own discussions,  the application of accumulated capital cannot alter the rate of surplus-value, the rate of exploitation of labor; that in fact there are no different rates of surplus-value  in various industries; that the relative "productivity of labor" is immaterial to the expansion of value; that all of capitalism's enhancement of the rate of surplus-value, if not attributable to a decline in the value at which the labor power is compensated, amounts to nothing but a redistribution of/from surplus-value extracted from "super-exploited" sectors, that is areas and sectors where the wage is less than the value of the labor power, and is not sufficient to the reproduction of the laborers.  Each of these "conclusions" is fundamentally at odds with Marx's own exploration of surplus-value, with the application of the law value, and with the real mechanisms of capitalist accumulation in the past, in the moment, and in its miserable future.

Marx,  considering the increased production of surplus-value that arises from the curtailment of the necessary labor-time in sectors that do not make up the "necessaries" determining the value of the labor power writes in Chapter 12:

The exceptionally productive labour operates as intensified labour; it creates in equal periods of time greater values than the average social labour of the same kind (see Ch 1. Sect.1)...Hence the capitalist who applies the improved method of production, appropriates to surplus-labour a greater portion of the working-day, than the other capitalists in the same trade.  He does individually what the whole body of capitalists engaged in producing relative surplus-value, do collectively.  On the other hand, however, this extra surplus-value vanishes so soon as the new method production has become general and has consequently caused the difference between the individual value of the cheapened commodity and its social value to vanish. The law of the determination of value by labour-time, a law which brings under its sway the individual capitalist who applies the new method of production, by compelling him to sell his goods under their social value, this same law, acting as a coercive law of competition, forces his competitors to adopt the new method.  The general rate of surplus-value is therefore affected by the whole process only when the increase in the productiveness of labour has seized upon those branches of production that are connected with, and has cheapened those commodities that form part of the necessary means of subsistence, and are therefore elements of the value of labour power.

Ambiguities resolved, right?  Yes and no.  Maybe and maybe not.  On the one hand...while on the other hand...

For one thing, Marx here refers to the intensity of labor as a determining condition, without quantifying that quality.  He does not provide us with any method for measuring that quality.  We do not know therefore its impact on the actual valorization process.

To be sure, Marx has it exactly right-- the improved productivity of labor does operate "as if" it were intensified labor-- "creating in equal time greater values than the average social labor."  However, if "intensified labor" can create something so unusual, so much an oxymoron-- "greater values in equal time"-- we need to know exactly how labor is so intensified, and if  relative surplus-value is simply an expression of intensified labor.

If intensified labor is labor that produces greater values in equal time than the social average, then intensified labor is labor that produces the value equivalent to its own wage in less time. All abstract labor is measured by one thing, and one thing only--time: "Time is everything, man is nothing; he is, at the most, time's carcass," wrote Marx in The Poverty of Philosophy and he wasn't kidding. 

So how is labor intensified, given that intensified labor creates greater values than the average in equal time?  Clearly, lengthening the working period, by reducing "breaks," or eliminating a meal period,  is not the mechanism for this as that would violate the "equal time" condition.   The labor process can be accelerated.  But the pace of the labor process under capitalist relations is determined by the accumulated capital applied and reapplied to production; the pace is determined by the machine.  The machine can be sped up, and the laborers will have to follow.  In the production process, the increased pace means that greater quantities of raw materials, intermediate products, and replacement parts for the machinery will be required.  The proportion of labor time embodied in any one or all of the products, declines.  The mass of commodities increases.

In the valorization process, the proportion of constant capital embodied in any unit of time increases, but this is a mere transfer of already existing value.  It's a pass-through.  The proportion of  variable capital, the living labor expressed in the wage in any unit of time, and for each unit of production decreases.  At the end of the working period, we have the relatively reduced value and hours of living labor required for both production and valorization.  We have labor power reproducing values equivalent to its own in less time.  We have a condition indistinguishable from that of the enhanced productivity of labor.  We have a condition indistinguishable from that enhancing the appropriation of relative surplus-value.

The commodity production can also be intensified, accelerated, by the rationalization of the process, by the elimination of intermediate steps, by the substitution of machinery that can function at speeds, and levels of precision exceeding the human laborer.  

In the end, we are always left with a condition indistinguishable in production and realization from that of relative surplus-value. 

4. In the long and the short-run, the existence and increments of relative surplus-value materialize in the expanded capital values introduced into production. The reduction in the value of labor power, the necessary labor, is transformed socially into the reduction in the labor necessary for the totality of reproduction.  It is from that point of totality, pardon the oxymoron, that the "unwinding" of capital accumulation begins, when the increased rate of surplus value cannot overcome the decreased rate of living labor, and the rate of profit trips, stumbles, and falls. 

S.Artesian
March 27, 2016

School's Out

First, you need to understand what "real estate" is all about.  It's all about finding, targeting, and fleecing the "bigger fool."   That requires pretense, and pretending. Deception.  Advertising. That requires enforcing, imposing, that pretense as a contract.  That requires lawyers, and goons. Enforce the contract on the bigger fool, protect the "builder" from the pretense of equity inserted in the contract to deceive the bigger fool.

The "builder," "developer," is the sum total of pretense, deception, advertising, enforcement, law, and thuggery.  The entrepreneur's entrepreneur. 

Keep that in mind.

There's a "school of thought" that claims that Trump's campaign is fueled by the  "populist rage" of the "white working class"  at the "neo-liberal" establishment,  with the neo-liberal establishment personified by the likes of Reagan, Bush 1, Clinton, Bush 2,   Obama, and...the prospects of Clinton 2. 

The problem with that "school" is that "neo-liberalism"  is exactly the application of the "builder's,"  the "developer's" business model to the capitalist economy as a whole. 


"Neo-liberalism" does not exist separate and apart from it origins, its pretense as something other than the attack on racial equality, and than the attack on the few steps taken towards racial equality--the equal treatment of black and brown labor-- forced upon the bourgeoisie by the struggles after WW2.

The ideology of  "neo-liberalism"--  "free markets," "reduced regulation,"  "free trade," --  is a string of codes, of coded messages, designed to allow the implicit racism, the attack on black labor, to become public discourse and a public policy.

And...and with the election of an African-American president, Trump embodies the real moment of "neo-liberalism:"  there is no longer any need for codes.  Racism, the fundamental imperative for waging the struggle against the working class is, once again, the explicit currency of politics.

The bourgeoisie have been trading in this discourse, this code, forever, more or less. The Republicans have embraced it with particular fervor since 1964.  That the "neo-liberals" among them are now "horrified" by Trump; by his attacks on "free trade;" on their military adventures;  on sources of cheap labor;  shows that indeed Trump knows the real estate better than they do.  He has found his bigger fools.


That Trump is now more than less dispensing with the codes and explicitly appealing to racists doesn't mean we can "speak" to those  "populists" and give them an "alternative" way to "channel that rage." If there ever was a "liberal" response to a class struggle that's it. Our appeal needs to be to the migrant workers, to the most exploited sector of the working class, and it has to begin with proposing the dismantling of the Immigration and Customs Enforcement raids and attacks on workers.

S.Artesian
March 20, 2016

Digital Divide

From The Wall Street Journal, Saturday/Sunday, March 12-12, 2016

Instacart Slashes Grocery Couriers' Pay

 Instacart Inc is cutting the fees it pays couriers who shuttle groceries in several cities...

 Instacart informed drivers in recent weeks in some cities, including the San Francisco  and Los Angeles metro areas, about new rates that in some cases will require workers to nearly triple their deliveries to make the same pay, according to emails reviewed by The Wall Street Journal.

Contract drivers in the company's hometown of San Francisco who collect prepacked bags from grocery stores will earn $1.50 a drop-off, a cut of 63% from the previous guarantee of $4.  Instacart is also slashing by 50% to 25 cents the commission it pays for each item in an order drivers collect when shopping in stores....

In its emails to drivers, Instacart said driver could still earn "$18 or even $20 or more per hour" based on its expectation of tips.

Other startups with apps that summon contractors...are scrambling to maintain their business models.

Many of these companies, such as Instacart, rely on a contracted labor force that pays for its own gas, insurance and other fees, helping to keep costs down.  But competitive pressure from well-heeled companies such as Uber Technologies Inc. and Amazon.com Inc. is forcing start-ups to rein in costs....

[Instacart], which operates in 17 U.S. markets, makes money from delivery fees as well as charging more than retail prices for items at some stores and pocketing the difference through commissions paid by the grocer.  

This model, along with the promise of simplifying delivery through smartphone apps, attracted big-name venture-capital investors...

But Instacart has signaled its business of delivering fresh groceries in as little as one hour needs revamping.

 In December, Instacart raised the delivery free for customers to $5.99 form $3.99 and increased its annual fee for unlimited deliveries to $149 from $99. 

Instacart told workers the latest rate changes came after evaluating "order volume, efficiency, and delivery costs," and promised more deliveries and improved routes.

But the immediate effect is many Instacart drivers will earn less for the same deliveries...

A 40-item delivery today pays $25, excluding tips, but would drop to $17.50 in the new structure, based on a Journal calculation

Yes, almost all the elements of the modern, digital economy are there.  The talk about models, and apps, and "contractors" and venture capital and fees and.....tips.  Yeah, tips, shifting the cost for reproducing the labor-power of the laborer away from the actual compensation and onto.......charity.  So very modern.  So very egalitarian.  For an extra-dollar, the deliverer will tap dance, too.

What's missing?  Damn, the article left out "entrepreneurs" and "entrepreneurship."  The article forgot to mention the great things entrepreneurship brings to your doorstep along with your organic, vegan, whole grain quinoa, flax, chia, goji, extra dark fair trade chocolate chip cupcakes.  Like the working poor.  Like super-exploitation where the wage, wait-- don't call it a wage, call it a commission-- is essential to maintaining the marginalization of the-- don't call them workers, call them associates.

Bet you never knew that LA and San Francisco and Seattle where part of the so-called Global South, did you.   Now you do.

Nothing says primitive accumulation like the digital economy....which gets us to our forthcoming topic... ambiguities of surplus value.

S. Artesian
March 16, 2016

 

Dispersed Camps, Concentrated Camps

1.  So...capitalism gives us a universe of camps. It's a system for the reproduction of camps, of camp inmates, camp followers, camp administrators. Of course as capital centralizes, converges, condenses all the manifestations of its thuggery around the unifying thuggery at its core namely driving the cost of labor, the wage, below its value, capitalism will concentrate those camps as it concentrates everything on its sole historic mission,  which is not preserving value from destruction, but rather preserving value through destruction.

Accumulation is the accumulation of camps, an accumulation of the dispossessed, the fleeing, the marginalized, those whose very existence is supposed to make them invisible, unheard, lost. 

From Guantanamo, to gated communities; from squats occupied by those without cash attempting to avoid detection to penthouses occupied and purchased by those with cash for cash likewise to avoid detection, it's a camp world.  Calais, Canary Wharf, Battery Park City, The City of London, Idomeni, none can exist without the other; each exists because of the other.

2. Meanwhile...in the United States, a golf-cart fascist, the bastard offspring from the non-marriage of Elmer Gantry and Silvio Berlusconi, as incubated in Sarah Palin's uterus, is just a ventricular fibrillation or two away from every landlord's dream, picking up the White House as part of the package of foreclosed properties in a distress sale.

3. Meanwhile...in China, president Xi Jinping is engaged in a struggle to preserve "party capitalism," that is to say the organized aggrandizement, against the prospects of oligarch capitalism, the disorganized plunder inherent in China's integration into world markets.  And how will the party/state camp protect its assets from the depredations of the laissez-faire camp?  By expelling two million workers from state-owned coal and steel enterprises in the next four years,  thereby resolving also the so-called "labor shortage" of migrant workers in the Guangdong, and thereby relieving the pressure for wage increases, thereby reducing the flight of capital to other cheaper camps, like Vietnam.  A win-win-win-win for party capitalism, president Xi assures everyone with a keyboard.

As big a number as two million is, it's but a veritable drop in the bucket of overproduction. Estimates are that almost one-third of China's workforce in the cement, glass, shipbuilding sectors face elimination.

Special enterprise zones, plus foreign direct investment, plus state owned enterprises, plus off-balance sheet local government structured investment vehicles equals....more camps.

4. Meanwhile...As it is on the sea, so shall  be it on the land.  Capsized dry-bulk carriers lay up at anchorage, container ships "slow steam" to reduce overcapacity,  and very large crude carriers (VLCC) are deployed as floating oil storage facilities as land based holding areas are at peak capacity.  Now, in the United States, about 1/3 of the tank cars used to transport shale oil are being used to warehouse the oil.  The cost for leasing a 700 barrel capacity tank car per month is $1500-$1700 month, so if the warehousing period lasts for six months, the barrel price has to increase by about 50 percent to make this exercise in market-timing fruitful.  Who says the bourgeoisie are good at numbers?

Meanwhile, annual deliveries of new tank cars to transport rather than warehouse the oil have more than tripled, from less than 10,000 in 2011, to more than 35,000 in 2015.  Just in time, right?

Meanwhile of course, the oil boom camps in North Dakota are emptying out; commercial breath in the Permian Basin is shallow, wheezy, and weakening.

The employer of next resort in the frail shale oil patch?  Welcome to Camp Meth. 

5. Meanwhile...in the European Union, the French, having failed to destroy the refugees inhabiting the camp at Calais, have decided that the refugees now have a political use-- as a threat against the UK should it opt out of the EU camp.  Should that "Brexit" occur, France will deny Britain the right of "containment"-- maintaining a quarantine of refugees on the French side of the English Channel.

In 1917, the German military command sent Lenin & Co. in a sealed train to Russia to force it to withdraw from the war.  A century later,  the French Minister of the Economy threatens allowing thousands of refugees to enter Britain via Eurofreight train in order to prevent the UK from withdrawing from the European Union.

Meanwhile and at the same time, the same minister of the economy has promised to make a place and a home for the refugees from the City of London-- bankers, asset liquidators, hedge fund managers-- at Palais Brongniart should they desire to maintain their EU connections and set up camp at 14 Place des Reflets.  Welcome back, finance campers.    Répète après moi.

Donnez-moi votre riche fatigué
Votre super-riches
Aspirant à dépenser librement
Envoie-les moi
Ces braves financiers
Leveraged au maximum

S.Artesian
March 5, 2016