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In chapter 7 Marx describes two processes linked together by circulation and within production: the labor process and the valorization process.
I. The Labor Process: Marx defines the simple elements of the labor process as being “(1) purposeful activity, that is work itself, (2) the object on which that work is performed, and (3) the instruments of that work.” Work transforms elements of nature into something which serves a need by means of the worker’s own natural powers, typically aided by some sort of tool, the instrument of that work. Tool use is almost entirely exclusive to the labor of workers but it is not the only thing which sets it apart from the labor of animals. Though spiders weave webs and bees build hives they don’t direct their work with an intelligence which first envisions the product of their work before they begin to undertake it. This intelligent planning is truly exclusive to workers. The object of the work is always some element of nature which can range from that with which nature readily furnishes humanity to that which has already been modified by human labor. The instruments of labor are defined as the thing or set of things that assist in directing the worker’s labor power into the object being produced. Marx makes an interesting note that the method of production, including the kinds of instruments of labor employed in production, is what distinguishes different economic epochs, indicating both the level of sophistication that has been achieved by the society's mode of production as well as the social relations within which work takes place.
The use value of the product of a labor process can be directed toward individual consumption as a means of subsistence, or it can be redirected back into another labor process as an object of labor or an instrument of labor. The latter is referred to as productive because the value of what is consumed is transferred to the new use value. The former, being a means of subsistence for the laborer, produces labor power as it enables the worker to continue his or her work.
The labor process is common to all epochs of humanity, and so the process which was just laid out does not reveal the conditions under which the labor occurs. Under capitalism, productive consumption is often done under the employ of a capitalist. In such a scenario, the capitalist owns the instruments of labor as well as the objects of labor, and contracts with the worker (the owner of the labor power) to own, for a designated period of time, his or her labour power. The product of the labour process becomes the property of the capitalist, who owns all the constitutive parts of the product, rather than the laborer, who has merely sold his or her labor power to the capitalist.
II. The Valorization Process: The valorization process is the process by which capital adds value to itself. Fundamentally, for there to have been a fair exchange of commodities, ‘equal’ must be exchanged for ‘equal.’ Marx explains that the value of the commodities that are put into the labor process remain in the product that is produced. But in order for the capitalist to accomplish valorization through the labor process, the final product would have to bear a greater value than the sum of its parts, and one of these parts must therefore be capable of creating this extra value. He finds this ability in labor.Where the value of a commodity is equal to the value needed to produce that commodity, the value of labour power can be reduced to only however much labor power is needed to maintain workers and their ability to reproduce themselves and their families. This amount of labor power is less than the amount of labor power which workers are able to expend over the course of the day. By paying the worker not by how much he or she can produce but instead by how much is needed to maintain the worker, the capitalist can pocket the difference.
In other words, the exchange value of what a worker is able to produce in just half a day may be equal to the amount of money required by the worker to reproduce themself, and this amount determines the rate of the worker's wages. However, in order for the capitalist to valorize his capital, the capitalist must make the worker work beyond this point. The excess amount of value that the worker produces is surplus value.
By using his money to purchase commodities in the form of living labor and dead labor, and putting them together through the labor process to form a new product, the capitalist transforms money into capital, i.e., "value which can perform its own valorization process."
The labor process can be divided into objective factors and subjective factors. The objective factors of the labor process are the means of production, these being the raw material, auxiliary material, and the instruments of production, which have their values carried over into the product of the labor process. The subjective factors are the hands hired to carry these values over to the product by virtue of their work. The work done by these hired hands not only carries over the value of the objective factors, but also creates surplus value which is carried as well by the finished product of the labor. This finished product, then, has three constituent parts: the value of the objective factors (also called constant capital), the value of the subjective factors (also called variable capital), and the surplus value.
The capital in any enterprise is advanced to cover both the constant capital and the variable capital. In return for this advance the capitalist is returned what had been advanced as well as the surplus value that results from the labor process valorizing his or her capital. In terms of the valorization process the objective factors and subjective factors of the labor process are seen instead as constant capital and variable capital.
The capitalist is guaranteed at least the value of the capital they have advanced in the labor process because of labor power’s ability to preserve the value of the means of production and transfer it into the new product. While the old forms of the use values of the means of production disappear in the labor process, they are converted into new forms of use-values in the new product. At the same time, labor creates and adds new value to the product of labor.
In the labor process, while the raw materials lose the independent forms with which they entered the process, instruments of labor do not. As long as these instruments keep their original shape more or less, they are able to continue being part of the labor process indefinitely. Only a fraction of its value is transferred into the new product through the labor process— if the instrument can work for 6 days, then it transfers 1/6 of its value into the products it produces in one day. After this period, the instrument becomes unusable and therefore without use-value. Here Marx notes that only instruments of production which have value, i.e. are the product of human labor, can transfer value into the new product. Therefore, means of production supplied by nature that have never been the object of human labor, like land, wind, and water, do help to create use-value in the labor process, but do not transfer any value to the new product. The total amount of value the instrument of labor can transfer in the labor process is determined by its value it possessed independently before entering into the labor process. If a piece of machinery costs $150, it can only transfer a total of $150 of value into the products it helps produce over the course of its life.
From the point of view of the labor process, we can distinguish what are known in the context of the valorization process as constant versus variable capital, instead as objective and subjective factors, means of production and labor-power.
I. The Degree of Exploitation of Labor Power: In this section, Marx is laying out what David Harvey calls a system of accounting by which workers can determine their rate of exploitation. This section lays out a logical proof which says that the rate of exploitation equals the rate of surplus value. He does this first by reminding the reader that the value of a commodity coming out of the process of production can be represented as the sum of the capital advanced and the surplus value. Capital advanced, as discussed in chapter 8, can be divided into constant capital and variable capital. When calculating the rate of surplus value the constant capital component of the capital advanced is ignored as though it were equal to zero. Marx justifies this exclusion with the argument that the rate of surplus value relates to the valorization process and it is only the variable capital which is capable of self valorization.
The rate of surplus value is expressed as the ratio of surplus value to the variable capital. The variable capital is the price paid for the labor. As with all other commodities Marx asserts that the price of the labor-power is equal to the amount of labor required to reproduce the commodity. In light of this, one part of the worker’s day is given to reproducing the value which the capitalist has advanced in the form of the worker’s wages. Labor spent beyond this point creates a value in surplus of what has been advanced.
From here we can see that the working day is divided into two parts. The part of the working day during which the worker produces enough value to replace his own means of subsistence is called by Marx necessary labor time, and the work that takes place during this time Marx calls necessary labor. During the second part of the labor process, the worker continues to produce, but does not create value for him or herself. Instead, he creates surplus value, which the capitalist pockets for him or herself. Marx calls this part of the working day surplus labor time and the labor that takes place during this period surplus labor. Since variable capital is equivalent to labor-power purchased by capital, and the value of this labor-power determines the necessary part of the working day; and since the surplus value is determined by the surplus part of the working day therefore the quotient of surplus value divided by variable capital is equal to the quotient of surplus labor divided by necessary labor. (s/v = surplus labor / necessary labor) The first part of formula expresses objectified labor, while the second expresses living labor. This, the rate of surplus value, is also the rate of exploitation of labor power by capital, of the worker by the capitalist.
II. Representation of the Value of the Product by Corresponding Proportional Parts of the Product: Here, Marx explains that the total value of the products produced in the labor process can be divided up into different parts that represent c, v, and s: one part of the product represents the labor spent on the means of production (constant capital), another part represents the necessary labor spent during the process of production (variable capital), and another part represents the surplus labor expended during the labor process (surplus value).
III. Senior’s Last Hour: In senior’s last hour, Marx narrates a story that elucidates a criticism he is making of bourgeois political economy. It was common for many capitalists to claim that all of their profit was created in the last hour of production, and they argued that for this reason, the reduction of the labor day would completely eliminate profit. Marx explains that this is ridiculous, because with the reduction of the labor day, all the capital advanced would also decrease in proportion. Marx reiterates how the worker’s ability to reproduce or replace the value of the constant capital is a gift to the capitalist, and not worthless time that the laborer spends, as the “last hour thesis” would imply. “It is because his labor converts the cotton and the spindles into yarn that the values of the cotton and spindles go over to the yarn of their own accord. this is the result of the quality of his labor, not its quantity.” Surplus value is not just a portion of a working day, but also a portion of each commodity sold, so long as the cost of the inputs (tools, labor, raw materials) is less than the value of the commodity, and it is so long as the workers contribute more value than the price of their labor power (varible capital advanced).
IV. The Surplus Product: The product representing the surplus value is called the surplus product. The rate of surplus value is determined by its relation to the variable capital rather than the sum total of the capital thrown into the labor process. In the same way, the the relative amount of the surplus product is determined by its ratio to the part of it that represents necessary labor, rather than the remaining part of the total product.
The production of surplus value is the entire purpose of capitalist production. Therefore, the size of a given quantity of wealth should be measured by the relative magnitude of the surplus product rather than by the absolute quantity of wealth produced.The working day is made up of parts of the day when the worker does necessary labor (replacing the value of her labor power) and the part of the day when the worker does surplus labor (produces surplus value). Marx turns to the working day in the following chapter.
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In chapter 11, Marx relates three variables whose relationship to one another determine the rate and mass of surplus value given different configurations of capital. These three variables are: variable capital advanced, the amount of surplus value produced, and the rate of surplus value. Marx gives three laws with these three variables that explain their relationships to one another.
Variable capital advanced refers to the sum total expended on employing. Marx assumes that each worker works at an average rate of efficiency and that they are paid the value of average labor-power. With these assumptions in mind, Marx excludes from his analysis those situations where surplus value produced does not increase in proportion to the number of workers being exploited, thought these cases do exist. The amount of surplus value produced is the amount of value returned to the capitalist beyond that which he put into the production process in advance. The rate of surplus value refers to the surplus value over the amount of variable capital advanced.
Law #1: Since the amount of surplus value created by a single worker is determined by the rate of surplus value, the amount of surplus value produced is equal to the amount of the variable capital advanced times the rate of surplus value. In other words, the amount surplus value is determined by the product of the number of labor powers simultaneously exploited by a capitalist and the degree of exploitation of each individual labor power.
Law #2: The capitalist runs into a limit in the ability to compensate for a decrease in the number of workers employed— the working day can only be lengthened to a certain extent, and this limit cannot be overcome. “The total value a worker can produce in a day will always be less than the value of 24 hours of objectified labor.” The working day cannot go beyond 24 hours. For this reason, there is a limit to the extent to which an increase in the degree of exploitation (lengthening of the working day) can compensate for a decrease in the number of workers exploited.
From here arises a contradiction: while capital is always looking to decrease the number of workers employed so as to limit the amount of capital they spend on variable capital, there is a limit they will reach before decreasing the number of workers will begin to decrease the amount of surplus labor they can collect, no matter how much they exploit their workers. Inversely, if a capitalist employs a greater number of workers, but not enough to compensate for a decrease in the rate of exploitation, the mass of surplus value can also fall.
Law #3: With a given rate of surplus value and a given value of labor power, the mass of surplus value produced varies directly as the amount of the variable capital advanced — assuming everything else is given, the more the variable capital advanced, the greater the surplus value.
Marx introduces the concept of the social working day, which is the labor set into motion by capital society-wide in a day. If there are a million workers who work a ten-hour day, the social working day is 10 million hours. The amount of surplus value produced in a social working day can be increased by either increasing the population of workers exploited, or by lengthening the working day.
There is a requisite amount of money that must be concentrated in one person's hand before it becomes capital-- before that person can become a capitalist. The minimum amount of variable capital needed is equal to the cost of a single labor power. From this worker, the capitalist extracts the value necessary to reproduce the laborer, plus a surplus. The capitalist must reproduce himself with the surplus value extracted, so he needs to employ at least as many workers as needed to do so. But, he actually needs more than this, because the point of being a capitalist is not to simply reproduce oneself, but to extract a surplus on top of that. The more laborers he employs, the more surplus he extracts.
Some capitalists could be half-worker, half capitalist— a “small master,” only employing a few workers and still needing to contribute his own labor to the functioning of his business. But at a certain stage of capitalist production, capitalists need to devote their entire working day to being a capitalist, controlling the labor of others and selling the products of labor.
The threshold of value that must be collected for an individual possessor of money to be able to become a capitalist changes according to the development of capitalist production, and it is different in different spheres of production (it takes less capital to start a bakery than it does to start a tech company).
Finally, Marx offers a summary of what he has described so far in this book: the capitalist, capital personified, takes command over labor, and makes sure that the worker labors for him regularly and properly. Capital also coerces the working class to do more work than would be necessary to reproduce himself. Unlike other modes of production, the capitalist can accrue more and more social power through extracting ever greater amounts of surplus value and amassing it in the money commodity.
Under the simple labor processes, it is the worker that uses the means of production simply as a means to perform some productive activity. Under capitalism, in contrast, the means of production become simply a means for absorbing the labor of the worker; the production process is simply a process of valorization. “As soon as a certain sum of money is transformed into a means of production, ie. into the objective factors of the production process, the means of production themselves are transformed into a title, both by right and by might, to the labor and surplus labor of others.” And this distortion wherein dead labor rules over living labor, wherein value rules over the force which creates value, is reflected in the consciousness of the capitalist as well, which Marx demonstrates through an anecdote to finish off the chapter.
These summaries were co-written with BA.
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