William J. Blake: An American Looks at Karl Marx
The mass of surplus-value is always given in the rate. That is, if variable capital is known—say if it is $1,000—it is multiplied by the rate of surplus-value, and the result is the mass of quantity of surplus-value. If the daily value of the labor-power is $1, and the rate of surplus-value is 100 per cent, then the mass of the variable capital is at the rate of 1 to 1 with surplus-value, and is therefore $1 per worker and the surplus-value must be $1,000 for the thousand workers employed daily. So far, it is a redundant arithmetical expression. But since the mass of surplus-value is produced by many laborers, it is helpful to put it comprehensively:
The mass of surplus-value is equal to the variable capital advanced, multiplied by the rate of surplus-value, and determined by the compound ratio of labor-powers exploited simultaneously by the one capital and the degree of exploitation of each individual labor-power.
Since the ratio of variable capital to surplus-value is the factor for calculating mass of surplus-value, it follows that even with decreasing variable capital, the mass of surplus-value can increase if the working day is made longer. For example, a capitalist employs 100 workers at $20 a week each, or $2,000 variable capital is paid out each Saturday.
They work 4 hours a day for themselves and 6 hours for him. Then the rate of surplus-value is 6 to 4, or $1,500 to $1,000, and that $1,500 is the mass of surplus-value. But he presses them to work 12 hours a day. They still work 4 for themselves and 8 for him. The rate of surplus-value is 8 to 4, or $2,000 to $1,000, and so his surplus-value has risen by $500 although variable capital is unchanged.
But suppose that the workers win a strike. They work only 8 hours, 4 for themselves and 4 for him. The ratio is 4 to 4 or $1,000 surplus-value to $1,000 variable. In all three cases the variable capital has remained the same, but the mass of surplus-value has altered. To obtain the same mass of surplus labor on the 8-hour basis as on the 10, the capitalist must employ more men, that is, he must increase the variable capital, or pay out a greater total of wages. He certainly would rather increase the hours of labor than employ more men. It is a rate of surplus-value he seeks to augment instead of the variable capital he must use.
Since variable capital can even be diminished, if the rate of surplus-value is increased, and so the mass of surplus-value increased, it follows that the capitalist both seeks to reduce the number of workers by either increasing their time worked or, as we shall see in the next chapter, working them more intensively, in any given time.
But the increase in the rate of surplus-value has one limit: twenty-four hours a day. Since working time cannot be extended beyond a given point, variable capital can be replaced by increased labor-time only within these limits. As the laborer must use a portion of his labor-power to reproduce it, the range of surplus-value has both a lower and a higher limit.
So that no matter how much a capitalist seeks to increase the rate of surplus-value to compensate him for the shortage of variable capital, after a given point he can make no progress. For instance, a variable capital of $5,000 employs 100 workers for 10 hours. They work 6 hours for the employer. The surplus-value is 6 to 4, or $7,500. A variable capital of $2,000 employs, say, 40 workers for 14 hours even. The ratio of surplus-value is 10 to 4, or $5,000 to $2,000.
But it can never rise as high as the mass of surplus-value available to the capitalist with $5,000, exploit his workers as the smaller capitalist may. Since capital seeks to reduce its variable capital, and also tries to reduce the number of workers employed, and at the same time seeks to increase the mass of surplus-value, this time limit forces it to some other solution, as we shall see later, for its contradictory desires.
With a given rate of surplus-value and a given value of labor-time, the mass of surplus-value must increase or decrease in proportion to the variable capital advanced. If the rate is 100 per cent, and average labor produces 1,000 units of value, with twice the variable capital, it will produce 2,000 units, although no other factor is changed.
The capitalist divides his capital into two sections, (1) constant capital, the means of production, and (2) the purchase of living labor-power, the variable capital. This proportion of constant to variable capital varies in different industries and within the same industry; it varies with either technical changes or changes in the organization of production. But since constant capital creates no new value, it does not matter whether its proportion to variable is 2 to 1 or 10 to 1 or 100 to 1; it is with the variable capital used that the surplus-value is obtained, although it is true that with $100,000 one can buy more machinery (constant capital) to employ workers than with $10,000. The masses of value and surplus-value, despite this, vary directly as the amounts of the variable section of this capital, that is, the section which is transformed into living labor-power.
The Ratio of Constant to Variable Capital
But, everyone will object, this is against common sense. Why, look at the steel business which requires immense investments, and compare it with a small baker’s shop which has no real investment. The steel mill will have a million dollars in plant investment and spend only $100,000 in wages and the baker have $1,000 in investment and spend $2,000 in wages. If there were a greater surplus-value in industries with a large proportion of variable capital, who would sink his money into those that require a high proportion of constant capital? And they are right. This is the foundation of Marx’s theory of average rates of profit, but it must await the completion of surplus-value theory, for it is derived from it.
The Social Calculation of Surplus-Value
In the United States we have forty million workers and they average eight hours each; the total daily working time is 320 million hours. Within the limit of this number of hours, the mass of surplus-value can be raised only by increasing the number of workers. The growth of population is the mathematical limit to the production of surplus-value by the total social capital. If, on the other hand, the population is static, the mathematical limit is given by the greatest possible extension of the working day. But—and this is new—we shall soon see that these limits exist only for the absolute form of surplus-value we have dealt with up to the present.
Minimum Capital Required for Surplus-Value
For any sum of money to become capital it must at least be used to employ one labor-power, day in and day out, to produce surplus-value. A great deal of money in the hands of possessors is too small to perform even this minimum task. If the worker is to work eight hours for himself and four for the moneyed man, the little employer would have to employ more than one man to live on the difference they produce, for four hours in the case of one person is not enough surplus to sustain a boss. In that case, all he would seek to exploit two workers for would be merely his own living requirements.
But if he wants to live twice as well as a worker, he must employ four workers, and if he wants further to turn half their surplus-value into additional capital he must hire eight workers. That is, since each of his eight workers requires eight hours to live, that is sixty-four hours, and he lives twice as well as any of them, that is, on sixteen hours’ worth of means of subsistence, to use half the surplusvalue as capital he must use the produce of sixteen hours.
Anyone who cannot live better than his workers and turn part of their surplus into new capital is not really a large capitalist but is that hybrid called a small master or (in America) a “little businessman.” It seems, then, that a true capitalist must have the funds to employ a fair number of men. A little businessman usually works beside his men, as does a master barber, or is in close daily contact with them and replaces them at certain tasks, like a small retail storekeeper.
Special Functions of the Capitalist
But a real capitalist, at a certain stage, must devote himself to functioning only as capitalist, that is, as personified capital. He must look to the control of his workers and the appropriation of their labors, and to the sale of the products. The guilds tried to stop this in the Middle Ages, for they limited the number of workers that a master might have.
It is all a question of the quantity of capital, which at a given point changes the quality of the person with money from small master to capitalist. He then functions in a wholly different manner. But the minimum of money required to be a capitalist itself advances with changes in technique. Even in early times, some of these efforts required so much money that companies had to be formed, as no individual moneyed man had enough.
The central feature of capital is that the worker is not only hired by the employer but passes under his command as though he were in the army, for it is considered intolerable that a man should lose money by carelessness or inefficiency of his staff. And this military organization, autocratic, irresponsible, proved more efficient as an exploiter than slavery or apprenticeship. At first capital instinctively tried to obtain more money by lengthening the working day, since it took over the primitive modes of production, and time was the only differential that counted.
The Altered Position of Labor under Capitalism
The capitalist system changed the character of labor. Where once labor employed the means of production, now the means of production employed it. Instead of his consuming the means of production for his productive activity, he is consumed by them, as necessary to their life process, as preserving their existence as value, and as expanding it. A furnace that is idle is a loss to the capitalist. It requires the night-work of man. This complete inversion of the relation of dead and living labor, between value and the force that creates value, becomes an axiom of capitalists.
The Foundations of Relative Surplus-Value
We may seem to have wandered very far from the query as to constant and variable capital and the social total working day. But these historical reflections are necessary to usher in the study of relative surplus-value, which alone can indicate the means whereby surplus-value is really produced, the study of the rich details within the framework of the mere hours of labor. Marx considers the whole of the country as engaged in one gigantic working day because in such a totality all individual competition is eliminated, and it is seen that when only time is the limit, the variable capital alone being a source of value, it is necessary to predicate some other mode of action of variable capital in order that these limits could be circumvented.
To achieve this Marx then asks, How does capital to begin with, in its actual functioning, use labor to create a surplus-value? That is, not what is surplus-value, nor how is it computed by time, but what are the constituents of the labor-process itself within the time limits? For not only does labor have duration, it also has intensity. To lead to this, Marx points out that capital has the right to discipline labor as well as to purchase its time, and that it totally changes the character of labor by making the living worker the servant of the dead tool. This reversal of the role of dead and living labor is the precondition for analyzing labor in the capitalist system, and from now on, labor will be treated as a factor in making capital productive, and as nothing else.
The proportion of constant and variable capital (which Marx calls the organic composition of capital), and as we shall see later, of the almost equally significant idea of fixed and circulating capital, can be properly understood, and the seeming dilemmas answered, only when we understand the actual roles of constant and variable capital in action, as against merely understanding their relation to working hours. True, the production of any mass of surplus-value requires a given amount of constant capital to produce it and a given amount of constant capital to absorb it. But these proportions emerge only in actual production.1
1. Marxist popularizers now usually give the organic composition along with absolute surplus-value. This is a mistake. Marx’s system is a philosophical unity, and whenever he appears to be diverging from the interests of the student, it is to develop a close argument that will make the reply to his questions automatic, once the exposition is rounded. The teacher of Marxian political economy has to choose between answering ready objections as they come along or channeling them until they flow into the river of his philosophy.