William J. Blake: An American Looks at Karl Marx

18
The Functioning of Capitalist Production, or Relative Surplus-Value

The necessary working day which we have hitherto discussed has, for the purposes of discussion, been considered as a fixed expenditure of labor within that time. So many hours’ work are so many hours, and are all equal for all purposes of the argument. The division of the day between the number of hours used by the worker to reproduce his labor-power and that given gratis to the capitalist, has been the cause of our identifying absolute surplus-value, that is, the ratio of time given free, to that compensated.

In a sense, all surplus-value is absolute surplus, for unless the capitalist gets these hours for nothing, unless they cost him nothing, he can never make money. But let us suppose that the working day is rigorously limited to, say, eight hours. The capitalist seeks to increase surplus-value but since he cannot extend hours, what other possibilities are there for him?

We mean economic possibilities, not cheating. Only one exists, reducing the necessary labor-time. For example, if a worker requires four hours for himself, then if he can accomplish this same reproduction of his labor-power in three hours, the employer has the surplus use of five hours instead of four and does as well as if he had extended the working day to nine hours. The total working time is unchanged, but its constituent parts, necessary and surplus working time, have changed in their proportions to the advantage of the capitalist. He has raised the rate of surplus-value from 4 to 4 or 100 per cent to 5 to 3 or 166⅔ per cent, without increasing the working day.

Absolute and Relative Surplus-Value Distinguished

The surplus-value produced by prolongation of the working day is called absolute surplus-value. The surplus-value arising from curtailment of the necessary working time and alterations in the lengths of the two components of the working day is called relative surplus-value.

But relative surplus-value and absolute surplus-value can coincide in the same day. The original four hours were absolute; the last hour economized within the same working day is the unique cause of relative surplus-value. And this can be accomplished only by making labor more productive, that is, making it produce more in the same working time.

It may be said that the capitalist does not seek to obtain his advantage over the worker by either a longer day or a more intense use of the same day, but also by the reduction of wages, that is, by diminishing his variable capital. But this is outside the present question.

We must ask how, assuming that the capitalist pays full value, he obtains surplus-value. That, in fact, he seeks to depress the compensation of labor below its value may be true, but is irrelevant here. For, in order to understand the basis of capitalism, we must first find its laws of motion, and for this we begin by assuming value for value. If labor is cheated by selling its labor-power for less than value, then the capitalist is stealing a part of the necessary working time, so that this maneuver would still be subject to the economic referent of what is that necessary working time.

Reducing Time for Acquiring Means of Subsistence

How can a fall in the value of labor-power (for that is what the reduction of necessary labor-time is) be brought about? Such a fall in the value of labor-power means that the necessaries of life which were formerly produced in four hours can now be produced in three. Hence the increased productiveness of labor, in those industries that specially provide the workers means of subsistence, brings down the necessary labor-time all around. And this, in turn, is assisted by an increase in productiveness of instruments that aid in such industries or employments. For example, the cheapness of wheat was greatly aided by the machines called the “little combines.” The more efficient fabrication of these combines in turn helped to make them more widely used by the wheat farmers. The cumulative effect of the cheapening of wheat by the use of the combine and of the wider use of that combine, due to its increasing cheapness, helped to make bread cheaper and so reduce the necessary social time of all workers who are bread-consumers to the extent that their time is devoted to this provision of bread, and to the extent that a cheapening in wheat is reflected in the price of bread.

That is one way of reducing necessary labor-time. Since necessary time has been defined all along as that necessary to nourish and sustain the worker and his children, any cheapening of those essentials is a reduction of the hours required for the worker to sustain himself.

But let there be an increase of productivity in the manufacture, or rather the polishing and cutting of large diamonds, and the effect of that upon the working time of the laborer will be non-existent, for he never buys a large diamond. The same is true of M. Guerlain. Were he to lower the price of Shalimar perfume from 300 francs to 240 by more skillful compounding or organization, the mill girls of Alabama could not have their labor-time reduced thereby. It is only the ordinary means of subsistence, or their substitutes (like chicory for coffee), or the raw materials that enter the production of these means of subsistence, or the tools that shape them, that enter into the question. What the worker does not consume does not count in this calculation. Nor would the cheapening of one or two smaller items of subsistence have any effect. The number of articles that would be more available to the worker would have to be, on the average, enough to affect his cost of living.

It is not the intention of the cheapeners of goods, of course, to reduce the value of labor-power. But Marx is not concerned with consciousness, nor the movements of individuals or individual masses of capital, nor will he discuss the laws of competition until there are first revealed those immanent laws of capitalism which govern these persons and masses and particles, exactly as terrestrial gravitation governs all men, even if they think it is countered by their leaping in the air and flying kites. Marx takes up competition because it illumines one of the immanent laws of capitalism.

Contrast of Total and Individual Production

There are two values to any commodity, in practice, apart from those hitherto described. The social value of a commodity is that required on the average throughout society, at any given time, to reproduce that article. That is, if 1,000,000 madras shirts of a certain fineness are to be made, the total of this million can be reproduced for $1,000,000 and we can speak of the average social value of a shirt as $1. But this social average is a summary of the costs of thousands of producers, some above the average (the inefficient manufacturers), some at the average (most of them, naturally), and a few below the average (the progressive manufacturers).

Suppose that 12 of these shirts are produced in 12 hours, on the average. Let the value of the means of production in each shirt be 50 cents. 50 cents is the value added by labor. Now suppose capitalist can produce, say, 16 shirts in place of 12 in 12 hours. The means of production remains the same, 50 cents. But the value added by labor will be less by a fourth of the 50 cents due to it. Less labor-time is incorporated in each shirt. Since his total values are now 87½ cents, the capitalist can sell it at above its individual value, at 90 cents, and still beat all his competitors, though a seller for less than social value.

But to get rid of his products he must extend the market, for now the potential number of shirt-seeking clients has increased. It is for this reason that he lowers the price below the social value, instead of trying to sell more shirts at the social value. He has increased his surplus-value by 2½ cents more than the individual value, that is, he has still further augmented his surplus-value, although he sells for less than before.

This increased surplus-value, then, is not related to the cheapening of the articles of consumption of the workers. It is obtained by increased exploitation of the worker, by his greater productivity. In that way labor produces more value throughout the day, so that even if its cost of items of subsistence is unaltered, it can devote less time to obtaining them since the products to which it adds value now exchange for more of those necessary items for each hour worked. That is, if labor produces twenty-five per cent more in four hours than in three, and the necessaries of life remain unchanged, it need work but three hours to buy what it bought with four. The working day is unaltered, but the employer has gained more time, more surplus-value, for himself.

How Competition Tends to Equalize Costs

Every capitalist is under a compulsion to cheapen his commodities by increasing the productivity of labor. But his increased surplus-value is still due to his gaining more of the workers’ time gratis by reducing the time they require for themselves. And if every capitalist is to live he must bring down the social value of his products to that of the most efficient competitor. As soon as competition brings all producers into line, the individual advantage is lost and the extra surplus-value vanishes. The general rate of surplus-value, unlike the individual rate, is changed only when the increased productiveness of labor affects industries that provide the workers with means of sustenance, and then only when that change is social and is enduring.¹

NOTE: A summary of the difference of the two-shirt processes:

The number of shirts produced in 12 hours. (Surplus-value old process, 100 per cent.)

Since surplus-value is the rate of variable capital to total new value added and this is expressed in time, the old ratio of $2.50 variable to $5.00 new value added is 6 hours to 6 hours. Compare with Column II.

Here we have seen that although the value of shirts is brought down from $1.00 to 90 cents and though new value added is cut from 50 to 25 cents, surplus-value has risen from $2.50 to $5.00 and the capitalist has taken the use of 8 hours 40 minutes, not 6 hours, in the same working day. Hence the law:

The value of commodities is in inverse proportion to the productive power of labor and the value of labor-power is in inverse proportion to its own productive power.

The latter is true because the value of labor-power depends on the value of means of subsistence. Relative surplus-value, on the contrary, is directly proportional to the productive power of labor. It rises with the productive power of labor and falls with its decline. There follows from this the deduction that it is not the absolute value of commodities that interests the capitalist, but their surplus-value, realizable by a sale.

Indirect Cheapening of Labor-Power

The productiveness of labor, by cheapening commodities, cheapens the laborer himself by reducing the value of his labor-power since his living can be got in less time. This explains the riddle; why does the capitalist, whose one aim is to produce exchange-values, seek always to lower these values, to sell for less against competitors? It is commonly answered by saying he sells more. But if his disbursements increase in the same proportion, by selling each unit for less he would still realize less than before.

For example a manufacturer sells 1,000 units for $1,000, cost $900. He cuts prices 10 per cent, sells 2,000 for $1,800 and his costs have doubled, for his doubled production, and are now $1,800. He used to make money, now he makes nothing. The usual answer is meaningless, unless he can get his goods produced for less, that is, more in less time.

But once relative surplus-value is seen to increase with productiveness, and it increases only because the value of labor-power diminishes with its own productiveness, it is clear that the increased exploitation of labor is the cause of the “cheapness of commodities.” This is the advantage, says Marx, of efficient, larger-scale production, and not the mere phrase that it lessens costs. The question is, which costs and why?

Hence in capitalist production the economizing of labor by its intensified production does not mean that the working day will be lessened but simply that that portion of it that is given gratis to the capitalist is extended. In fact the increase of relative surplus-value by this intensified production so whets his appetite that he seeks to add still longer hours, for they are worth that much more to him. The incredible increase of productivity of labor, for example, from 1750 to 1850, which, in proportion, has never been rivaled, actually resulted in increasing hours until workers’ pressure forced legislation against the tendency.

Specific Modes of Increasing Relative Surplus-Value

Marx now proceeds to examine the specific techniques whereby the relative surplus-value is increased.

Capital exploits labor working co-operatively, that is, in teams.² The labor, by its very numbers employed, makes certain that it will be labor of an average social quality. The more the men employed the less their individual differences count. Two or three workers vary a great deal, but when twenty are together, the capitalist can argue that any twenty will produce pretty much the same in two hundred labor-hours a day. The capitalist is free from the chance that his production will be far below the social average due to human failings. A fixed minimum of efficiency is assumed, and soon enforced. The laws of production of value emerge socially, as described in the first part of this study, only when the capitalist system produces in this co-operative large fashion. No surplus-value in the capitalist sense is possible until value itself emerges in the shape of a social production of commodities, an immense continuing accumulation of objects, leading to innumerable acts of exchange.

Even before any mechanism of production were improved, the joint consumption of tools and raw materials and the use of one workshop in the place of many, led to the transference of less constant capital into the production of labor, and gave greater scope to the value added by labor. Thus the instruments of labor had a social character before labor itself was co-ordinated properly.

Unlike the purely historical sections on co-operation and manufacture, our interest here is centered on the use of co-operation for the realization of relative surplus-value. Co-operation cheapens commodities and lowers the value of labor-power. Secondly, higher productivity itself alters the rate of profit to the total constant and variable capital advanced.³ As Marx says, he should consider profits along with surplus-value, but his division of the subject is exactly like capitalism’s own divisions. Economy in the use of capital, for example, does not concern the worker; he is divided from the method by which his increase in productivity is consumed by the capitalist. Class divisions in life cause departmentalization in theory.

The sum total of forces of workers differs enormously when they co-operate from what they could all do individually, even in the same numbers, when they act together in an undivided operation like moving a load too great for any of them. This gain is independent of machinery, or the use of outside productive forces, and costs the capitalist nothing, for it cheapens labor, and thus increases relative surplus-value.

The same economic consequences result from the savings due to chains of persons passing on work (now glorified in the conveyor-belt system at Detroit but a very old principle except for its speed-up) for the distribution of tasks that can be performed simultaneously, utilization of scattered work, as in dam-building gangs, temporary groupings like harvesters, etc.

The specific productive power of labor, with no other mechanical aid, is the labor-economizer here. Since this method of reducing labor-time for a job costs capitalists not even the investment in plant, machinery, or raw materials, men like Taylor, Bedaux, and other distributors, combiners, and motion-integrators of work, are eagerly sought after. (The modern name for this phenomenon is rationalization, or speed-up.)⁴

Lately psychologists have been called in to determine vocational adaptation, so that the capitalists save the cost of putting square pegs into round holes. The advantages of radio music in creating rhythms that speed up production have found experimental scientists to plot their curves and plead their effects!

Cumulative Advantages of Large Capital

Since the economies of production require the assembled presence of many men, the larger the capital, the more it can provide both variable capital and constant capital, so that once society begins seeking relative surplus-value the cumulative advantages of large capitals come in to play. The present concentration of wealth began four hundred years ago. It slew the employer of one man where now it sidetracks companies employing a thousand. The descriptions given before of the manufacturing and machine processes as the historical foundations of capitalism may be re-read here uniquely for their significance as the secular trend of the special attribute of capitalism, relative surplus-value.

Social Acquisitions of the Capitalists

Since the productive forces of co-operation cost the capitalist nothing, it might be asked what else he obtains gratis. Steam and water are nature’s gifts. The achievements of science are free to all producers. The electric field costs nothing, but the electric telegraph that uses these principles is frightfully expensive in its mechanical costs.

The tool remains, but it is a machine which handles it and the laborer uses it indirectly by way of that mechanism. By utilizing natural force, the social force of labor, the heritage of science and machinery, modern industry has raised productive forces immeasurably.

But this increased productive force is not purchased by an increased expenditure of labor. Machinery, as we have seen, creates no new value, but transfers its own value to its products. The product is made dearer in proportion to the value of the machine. As the modern machine embodies infinitely more value than handicraft tools, that weight of value is a tremendous mass being transferred into every product; it is carried by every article it makes.

This seems contrary to popular belief which instinctively holds that by its immense productive power the value of machinery must prove a steadily lessening part of production. Marx’s whole theory of the dynamics of capitalism is based on this assertion of increasing constant capital weight.

How Does Machinery Cheapen Commodities?

How then does machinery cheapen commodities (as we know it does) if it transfers into them an ever greater mass of value? Let us see what appears to contradict Marx’s position.

The machine, in the first place, transfers its value bit by bit. If it is long-lived, then, apart from the coal or oil it consumes, it gives its natural force gratis, and it very slowly is transformed into the value of each product. Prorated, it might become extremely small per unit. It compensates for its cost by the immense command it has over the forces of nature. If, then, machines can be made less costly and more efficient in the use of natural force, they will transfer less value to the new product. When machines are made by machinery they are cheapened, and this tendency is steadily gaining. Where then is the importance of Marx’s thesis?

Given the rate at which machinery transfers its value to the product the amount of value so transferred depends on the value of the machinery. The less labor it contains the less it imparts to its products. But the less value it yields to its products the more productive it is, the nearer it comes to being a transformation of natural force without cost.

A comparison of commodities produced by hand with the same commodities produced by machinery shows that in the machine-made product the value due to the instruments of labor increases relatively to the value added by labor, but it decreases absolutely.

That is, if in handicrafts a carpet made by a hand loom transfers 100 labor hours of the loom’s wear and tear and takes up 500 hours of labor, in the machine economy the cost of the loom-machine might be 90 hours and the labor only 200. Here the machine has cut, or replaced, labor from 500 to 200 hours; it has saved 300 hours, at a transfer cost of 10 hours less. Relatively it represents the ratio of 90 to 200, or 31 per cent of the value produced, whereas the old hand loom represented the ratio of 100 to 600, or 16⅔ per cent. Yet total value has been cut from 600 to 290, a net saving of 310 hours despite its lesser absolute value as constant capital, and despite its increase of constant capital in the value composition of the carpet from 17 to 31 per cent. So its economies do not contradict but confirm the paradox of Marx; the relative weight of constant capital in the commodities has increased.

It has to work out this way because the productiveness of a machine is measured by the labor it displaces. Less labor must be spent in manufacturing the machine than is eliminated by its use. The limit of a machine’s utility is its saving of labor-power purchased, that is, its gain of relative surplus-value.

How Machinery Displaces Labor-Costs

How is the statement of Marx that the less value in a machine the greater its productivity, reconciled with the greater percentage of constant capital in the products? By this: that it saves more labor than it costs, so that relatively to the reduced labor, it must rise, and the weight of value transferred from it thus be a higher proportion of the value.

NOTE: An important difference of calculation will show the subtlety of Marx’s method. Ricardo says machines cost less labor than they displace even when the money cost is the same. Marx comments: A machine replaces labor-power but labor-power is less than the value it creates. The machine’s money-value represents all the labor in its production, in no matter what proportion it represented wages and surplus-value. Hence the real economy of a machine is the difference between its value and only the labor-power it replaces, not the total value added by labor. Dead labor is less, then, than the living labor it replaces.

Since the difference is computed as between the cost of the machinery and merely of the labor-power it replaces, it follows that where labor-power costs little it may not pay to buy any machinery. The higher the labor-power cost in any country, then, the more likely the utilization of machinery. The United States had, for decades, real wages that were much higher than England and its utilization of machinery was proportionately higher. England’s level of wages was higher than most of Europe; she was more mechanized than any European country, and was followed closely by Germany. China, India, pre-Soviet Russia and Romania trailed the list of civilizations.⁵ The Socialists follow Marx in his assertion that once surplus-value is abolished, and the labor basis of calculation for replacing machinery thus greatly augmented, the advance in mechanization will fully correspond for the first time, unreservedly, to the full technical knowledge of mankind.⁶

Footnotes

1. Most industrial workers produce means of production. An increase in their wages cannot lead to an increase in the workers’ cost of living. This is used by Marx in didactic fashion to answer the “axiom” that higher wages annul their own effects by proportionately raising the workers’ costs. (See his Value, Price and Profit.)

2. See the preceding chapter on Manufactures.

3. Reserved for detailed treatment in the Theory of Profit.

4. Taylor, Gantt, Bedaux, and all the other “efficiency engineers” argue that their perfect schemes of muscular co-ordination, etc., do not fatigue the worker but rather eliminate the jerks and discontinuities that really are what hurt him. They do not work in this exquisite, unfailing rhythm themselves.

5. Source: The Economic Forces of the World, prepared by the Dresdner Bank, Berlin, in 1927 (available in English).

6. Not that Marx denies the great utilization of machinery inspired by the need for relative surplus-value. What we shall see, later on, is that Marx assumes that the process hitherto described will grow more irregular and the rate of increased utilization of machinery diminish. The chapter on Imperialism and the General Crisis will deal with this inversion of historic tendencies.

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