Monday, July 13, 2015

Marx’s Capital, Volume 1, Chapter 6: A Critical Summary

Chapter 6 of volume 1 of Capital is called “Sale and Purchase of Labour-Power,” and it discusses the nature and value of labour-power. This chapter ends section 2 of volume 1 of Capital.

Surplus value is not created by the transactions M–C or C–M in the circuit of capital (Marx 1990: 270). Marx argues that it is the special commodity called labour-power that is the source of surplus value (Marx 1990: 270).

Marx explains:
“In order to be able to extract value from the consumption of a commodity, our friend, Moneybags, must be so lucky as to find, within the sphere of circulation, in the market, a commodity, whose use-value possesses the peculiar property of being a source of value, whose actual consumption, therefore, is itself an embodiment of labour, and, consequently, a creation of value. The possessor of money does find on the market such a special commodity in capacity for labour or labour-power.” (Marx 1906: 186).
Marx defines what he means by labour-power and what conditions are necessary for labour power to exist as a commodity, as follows:
“By labour-power or capacity for labour is to be understood the aggregate of those mental and physical capabilities existing in a human being, which he exercises whenever he produces a use-value of any description.

But in order that our owner of money may be able to find labour-power offered for sale as a commodity, various conditions must first be fulfilled. The exchange of commodities of itself implies no other relations of dependence than those which result from its own nature. On this assumption, labour-power can appear upon the market as a commodity only if, and so far as, its possessor, the individual whose labour-power it is, offers it for sale, or sells it, as a commodity. In order that he may be able to do this, he must have it at his disposal, must be the untrammelled owner of his capacity for labour, i.e., of his person. 1 He and the owner of money meet in the market, and deal with each other as on the basis of equal rights, with this difference alone, that one is buyer, the other seller; both, therefore, equal in the eyes of the law. The continuance of this relation demands that the owner of the labour-power should sell it only for a definite period, for if he were to sell it rump and stump, once for all, he would be selling himself, converting himself from a free man into a slave, from an owner of a commodity into a commodity. He must constantly look upon his labour-power as his own property, his own commodity, and this he can only do by placing it at the disposal of the buyer temporarily, for a definite period of time. By this means alone can he avoid renouncing his rights of ownership over it.

The second essential condition to the owner of money finding labour-power in the market as a commodity is this—that the labourer instead of being in the position to sell commodities in which his labour is incorporated, must be obliged to offer for sale as a commodity that very labour-power, which exists only in his living self.” (Marx 1906: 186–187).
For Marx, labour is an activity and cannot be sold but labour-power is what the worker actually sells on the market as a commodity (Brewer 1984: 36).

For Marx, two conditions are necessary for labour-power to be a commodity, as follows:
(1) that the person offers his labour-power himself and is a free person (not a slave) and only sells his labour power for a limited period, and

(2) that the person is not an owner of means of production or capital (understood as money or commodities used to increase value) and thus needs to sell his labour-power to survive (Marx 1990: 271–272; Harvey 2010: 98–99).
The person who sells his labour-power alienates it but does not renounce his rights of ownership to it (Marx 1990: 271). Capitalism is that system where not only commodity production takes place but where the owners of the means of production buy the labour-power of free workers, and a large class of workers selling their labour-power is a precondition of advanced capitalism (Marx 1990: 274).

But there is a severe problem in Marx’s definition of labour-power as a commodity. It is this: it is perfectly possible for an unfree person or slave to sell his labour-power for a limited period to produce a commodity, even though he is enslaved and spends most of his time working as a slave (see also Roth and van der Linden 2014: 468–470).

There are real historical examples of this. In ancient Rome, for instance, there was the practice called the peculium in which a slave master could allow his slave to run a business which produced commodities for sale or even work as a labourer and earn wages, and later even buy his freedom (Plessis 2015: 96; Berger 1953: 624).

In the American south in the 19th century, slaves could sometimes work for wages: e.g., a New Orleans merchant John McDonogh gave permission for his slaves to undertake wage labour on Sundays and at night and keep their wages (Schafer 1997: 366). Such slaves were clearly selling labour-power to create commodities for sale to fetch a money profit. Yet Marx’s theory denies that a slave can sell labour-power that creates surplus value.

If Marx denied that slaves produced any surplus labour value in such instances, then his theory is logically incoherent and empirically dubious. Alternatively, if Marx were to admit that slaves in these circumstances did create embodied surplus labour value in the commodities they created, then his theory would still be logically incoherent as it stands.

Yet another problem is that some people can and do have considerable money savings (which they could use as capital) or even their own business, but still sell their labour-power for a money wage. But Marx says that the seller of labour-power cannot have these things. Marx seems to think of workers as “men possessing nothing but their own labour-power” (Marx 1906: 188), which is contrary to the reality of many middle class people working for a money wage today in businesses that produce commodities (especially in service industries or professions).

Marx is clear that societies with capitalist modes of production are contingent products of history, and not some product of nature:
“One thing, however, is clear—nature does not produce on the one side owners of money or commodities, and on the other men possessing nothing but their own labour-power. This relation has no natural basis, neither is its social basis one that is common to all historical periods. It is clearly the result of a past historical development, the product of many economical revolutions, of the extinction of a whole series of older forms of social production.

So, too, the economical categories, already discussed by us, bear the stamp of history. Definite historical conditions are necessary that a product may become a commodity. It must
not be produced as the immediate means of subsistence of the producer himself. Had we gone further, and inquired under what circumstances all, or even the majority of products take the form of commodities, we should have found that this can only happen with production of a very specific kind, capitalist production. Such an inquiry, however, would have been foreign to the analysis of commodities. Production and circulation of commodities can take place, although the great mass of the objects produced are intended for the immediate requirements of their producers, are not turned into commodities, and consequently social production is not yet by a long way dominated in its length and breadth by exchange-value, the appearance of products as commodities presupposed such a development of the social division of labour, that the separation of use-value from exchange-value, a separation which first begins with barter, must already have been completed.” (Marx 1906: 188).
It is no doubt true that economic systems are the result of a complex historical and social process and that we have seen many down through human history, and Marx deserves credit for this view.

How does labour-power have value?

Marx explains:
“The value of labour-power is determined, as in the case of every other commodity, by the labour-time necessary for the production, and consequently also the reproduction, of this special article. So far as it has value, it represents no more than a definite quantity of the average labour of society incorporated in it. Labour-power exists only as a capacity, or power of the living individual. Its production consequently presupposes his existence. Given the individual, the production of labour-power consists in his reproduction of himself or his maintenance. For his maintenance he requires a given quantity of the means of subsistence. Therefore the labour-time requisite for the production of labour-power reduces itself to that necessary for the production of those means of subsistence; in other words, the value of labour-power is the value of the means of subsistence necessary for the maintenance of the labourer. Labour-power, however, becomes a reality only by its exercise; it sets itself in action only by working. But thereby a definite quantity of human muscle, nerve, brain, &c, is wasted, and these require to be restored. This increased expenditure demands a larger income. If the owner of labour-power works to-day, to-morrow he must again be able to repeat the same process in the same conditions as regards health and strength. His means of subsistence must therefore be sufficient to maintain him in his normal state as a labouring individual. His natural wants, such as food, clothing, fuel, and housing, vary according to the climatic and other physical conditions of his country. On the other hand, the number and extent of his so-called necessary wants, as also the modes of satisfying them, are themselves the product of historical development, and depend therefore to a great extent on the degree of civilisation of a country, more particularly on the conditions under which, and consequently on the habits and degree of comfort in which, the class of free labourers has been formed. In contradistinction therefore to the case of other commodities, there enters into the determination of the value of labour-power a historical and moral element. Nevertheless, in a given country, at a given period, the average quantity of the means of subsistence necessary for the labourer is practically known.

The owner of labour-power is mortal. If then his appearance in the market is to be continuous, and the continuous conversion of money into capital assumes this, the seller of labour-power must perpetuate himself, ‘in the way that every living individual perpetuates himself, by procreation.’ The labour-power withdrawn from the market by wear and tear and death, must be continually replaced by, at the very least, an equal amount of fresh labour-power. Hence the sum of the means of subsistence necessary for the production of labour-power must include the means necessary for the labourer’s substitutes, i.e., his children, in order that this race of peculiar commodity-owners may perpetuate its appearance in the market.

In order to modify the human organism, so that it may acquire skill and handiness in a given branch of industry, and become labour-power of a special kind, a special education or training is requisite, and this, on its part, costs an equivalent in commodities of a greater or less amount. This amount varies according to the more or less complicated character of the labour-power. The expenses of this education (excessively small in the case of ordinary labour-power), enter pro tanto into the total value spent in its production.” (Marx 1906: 189–191).
So the value of labour-power is determined by the abstract labour necessary for the maintenance and reproduction of workers, so that this includes:
(1) the commodities needed for the worker’s subsistence;

(2) the commodities needed for the workforce to have families and reproduce itself and

(3) the cost of education and training of the skilled forms of labour. (Brewer 1984: 37).
But there is a serious and problematic aspect to Marx’s definition of the value of labour-power. Marx asserts that
On the other hand, the number and extent of his so-called necessary wants, as also the modes of satisfying them, are themselves the product of historical development, and depend therefore to a great extent on the degree of civilisation of a country, more particularly on the conditions under which, and consequently on the habits and degree of comfort in which, the class of free labourers has been formed. In contradistinction therefore to the case of other commodities, there enters into the determination of the value of labour-power a historical and moral element. (Marx 1906: 190).
Brewer puts his finger on the problem here:
“Marx’s introduction of … [sc. the] historical and moral element [sc. determining the value of labour power] is open to criticism as question begging; it comes close to saying that the value of labour-power is whatever it happens to be. It may be above physiological subsistence, since any discrepancy can be described as due to the ‘historical and moral element.’” (Brewer 1984: 37).
Since a capitalist economy with a very productive and rich economy could afford a generous minimum standard of “so-called necessary wants” (a base rate) and other more skilled workers would have a higher standard than this, the question arises why anyone should think that capitalism has an inherent tendency to keep workers poor, as Marx suggests in other chapters of Capital.

Unlike other commodities that are factor inputs which are paid for immediately, capitalists pay workers who sell their labour-power after they have given it: usually workers are paid weekly, fortnightly or even monthly (Marx 1990: 277–279).

Marx ends by noting the differences between labour power in the sphere of circulation and the sphere of production. In the former, theoretically speaking, buyers and sellers of labour-power confront one another as equals, but in the sphere of production labour power is subordinated to capitalist control (Brewer 1984: 38).

To the extent that labour-power is a special commodity very different from other commodities, Post Keynesianism would agree with Marxism. However, Marx’s view of labour-power via the labour theory of value only obscures his analysis and renders it problematic.

BIBLIOGRAPHY
Berger, A. 1953. Encyclopedic Dictionary of Roman Law. American Philosophical Society, Philadelphia.

Brewer, Anthony. 1984. A Guide to Marx’s Capital. Cambridge University Press, Cambridge.

Harvey, David. 2010. A Companion to Marx’s Capital. Verso, London and New York.

Marx, Karl. 1906. Capital. A Critique of Political Economy (vol. 1; rev. trans. by Ernest Untermann from 4th German edn.). The Modern Library, New York.

Marx, Karl. 1990. Capital. A Critique of Political Economy. Volume One (trans. Ben Fowkes). Penguin Books, London.

Plessis, Paul du. 2015. Borkowski’s Textbook on Roman Law (5th edn.). Oxford University Press, Oxford.

Roth, Karl Heinz and Marcel van der Linden. 2014. “Results and Prospects,” in Marcel van der Linden and Karl Heinz Roth (eds.), Beyond Marx: Theorising the Global Labour Relations of the Twenty-First Century. Brill, Leiden. 445–486.

Schafer, Judith Kelleher. 1997. “Roman Roots of the Louisiana Law of Slavery: Emancipation in American Louisiana, 1803–1857,” in Warren M. Billings and Judith Kelleher Schafer (eds.), An Uncommon Experience: Law and Judicial Institutions in Louisiana, 1803–2003. University of Southwestern Louisiana, Lafayette.

12 comments:

  1. If Marx denied that slaves produced any surplus labour value in such instances, then his theory is logically incoherent and empirically dubious.

    I don't see why he would have; those are all examples, as I've said already (I should stop saying "as I've said already," since it's clear that all your arguments at this point are merely retreading ground on which you've issued challenges and then ignored their answers), of capitalist relations, which is the only thing he's purporting to examine. It's the social relations that are under the microscope; if you're working X hours a day as a proletarian factory worker, that's irrespective of the Y hours a day you're a slave or the Z hours you're a serf.

    Alternatively … then his theory would still be logically incoherent as it stands.

    "Because reasons." - LK

    Yet another problem is that some people can and do have considerable money savings (which they could use as capital) or even their own business, but still sell their labour-power for a money wage.

    Sorry, are you arguing against Marx or Kalecki, now?

    Marx seems to think of workers as “men possessing nothing but their own labour-power” (Marx 1906: 188), which is contrary to the reality of many middle class people working for a money wage today in businesses that produce commodities (especially in service industries or professions).

    This is basically the same thing as the slavery note above. If some of your income is income from ownership, then you've obtained that in the capacity of a speculator, of a capitalist, of a rentier, etc. The portion of your income that comes from labor is a separate consideration. Just because you participate in multiple relations of production does not mean they don't exist. Quite the contrary.

    It is no doubt true that economic systems are the result of a complex historical and social process and that we have seen many down through human history, and Marx deserves credit for this view.

    Odd that you should say this, since you refuse to consider that anything could come "after" capitalism except more capitalism. The whole point of historicizing it is to illustrate that it's not eternal; it came from somewhere and it'll end somewhere. Contrary to Fukuyama's crap, history doesn't have an "end" (unless, of course, we wipe ourselves out or the universe hits heat death). As our means of production evolve, it's no great stretch to suppose the ways we relate to them, and to one another vis-a-vis them, can also evolve.

    Brewer puts his finger on the problem here:

    Notice, though, that this is in reference to "the number and extent of his so-called necessary wants." There is still, at day's end, a concrete materiality to these "moral" considerations. Whether the absolute baseline of a society happens to be bare material subsistence vs. living paycheck to paycheck but also possessing a TV or computer -- considered by many a necessity of living in our society -- the point is still to establish a baseline. The the particular articles consumed at the baseline aren't the key; it's about the dynamics of which they're a part.

    the question arises why anyone should think that capitalism has an inherent tendency to keep workers poor

    You're speaking from a very first-world-centric position. We live in some of the global capitals, as it were, of capital. But look up "petit bourgeois" or "labor aristocracy" (separate concepts). Our outcomes are not typical, in the global context.

    The only way capitalism can support its success stories is through what we'd deem "failures" elsewhere. The idea that everyone can live in relative terms like the first world currently does (e.g., with the USA's 5% of the world's population consuming 24% of its energy) is flatly impossible.

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  2. "Odd that you should say this, since you refuse to consider that anything could come "after" capitalism except more capitalism"

    I have never said that. This is your stupid and dishonest interpretation of the counterfactual involving near total automation.

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  3. "I don't see why he would have; those are all examples, as I've said already (I should stop saying "as I've said already," since it's clear that all your arguments at this point are merely retreading ground on which you've issued challenges and then ignored their answers), of capitalist relations, which is the only thing he's purporting to examine."

    So now you actually have the dishonesty to distort what Marx plainly says?

    Marx denied that slaves can produce labour value or surplus value:

    "On this assumption, labour-power can appear upon the market as a commodity only if, and so far as, its possessor, the individual whose labour-power it is, offers it for sale, or sells it, as a commodity. In order that he may be able to do this, he must have it at his disposal, must be the untrammelled owner of his capacity for labour, i.e., of his person. He and the owner of money meet in the market, and deal with each other as on the basis of equal rights, with this difference alone, that one is buyer, the other seller; both, therefore, equal in the eyes of the law. The continuance of this relation demands that the owner of the labour-power should sell it only for a definite period, for if he were to sell it rump and stump, once for all, he would be selling himself, converting himself from a free man into a slave, from an owner of a commodity into a commodity. He must constantly look upon his labour-power as his own property, his own commodity, and this he can only do by placing it at the disposal of the buyer temporarily, for a definite period of time. By this means alone can he avoid renouncing his rights of ownership over it." (Marx 1906: 186).

    Both Brewer (1984: 36) and Harvey (2010: 98) agree this is what Marx said and thought. You cannot be a slave and produce value or labour value.

    If you refuse to acknowledge this fact, there is no point in debating. You will not waste any further space on this thread with your nonsense.

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    Replies
    1. Marx denied that slaves can produce labour value or surplus value:

      Right. I agree. And, further, nothing in the passage you quote contradicts me. Wage labor is qualitatively distinct from chattel slavery.

      However, despite these agreements, you're being extremely inflexible in your thinking; you seem to have it in your head that if you are EVER a slave for ANY amount of time, you are a slave forevermore and therefore excluded from the category of wage labor. No; these relationships can, did, and do change all the time. If I'm a slave every day from midnight to 8 but my chains are removed and I can go seek a labor income about town as I wish from 9-5, then all we can say from this is that I am not productive of value from midnight to 8, though I may be from 9-5. During those hours, though I know I will return to slavery later, I am nevertheless not working *in the capacity of a slave.*

      Do you understand? Different relations, different social structures.

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    2. In other words, this is your desperate apologetic attempt to defend Marx -- even though you can cite no text from Marx for this view, and it relies on wilfully ignoring what Marx actually said: one necessary condition for creating surplus value is being a free person.

      Marx never says that just labouring for a money wage while being a slave can create labour value.

      And I bet you will militantly refuse to acknowledge that Marx's theory as it stands is incoherent here. This is the mentality of cult.

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    3. Finally, show me a direct citation where Marx himself says that just labouring for a money wage while being a slave can create surplus labour value.

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    4. Hedlund,

      Spare me the whining nonsense and just answer the question: show me a direct citation where Marx himself says that just labouring for a money wage while being a slave can create surplus labour value.

      I don't want a bloody stupid rant from you. Just give me the citation and I 'll look at it, and give you my opinion.

      Otherwise, you have nothing further to add to this thread.

      Delete
    5. "The price paid for a slave is nothing but the anticipated and capitalised /surplus-value/ or profit to be wrung out of the slave"

      Delete
    6. Anonymous@July 15, 2015 at 12:24 PM,

      The quote you cite is from volume 3 of Capital, Chapter XLVII, where Marx says:

      "The same reason would, in that case, serve also to justify slavery, since the returns from the
      labor of the slave, whom the slave holder has bought, represent merely the interest on the capital invested in this purchase.
      p. 732.

      So here Marx says slaves merely produce interest.

      Later he says:

      "Take, for instance, the slavery system. The price paid for a slave is nothing but the anticipated and capitalized surplus-value or profit, which is to be ground out of him. But the capital paid for the purchase of a slave does not belong to the capital, by which profit, surplus labor, is extracted from him. On the contrary. It is capital, which the slave holder gives away, it is a deduction from the capital, which he has available for actual production. It has ceased to exist for him, just as the capital invested in the purchase of land has ceased to exist for agriculture. The best proof of this is the fact, that it does not come back into existence for the slave
      holder or the land owner, until he sells the slave or the land once more. Then the same condition of things holds good for the buyer. The fact that he has bought the slave does not enable him to exploit the slave without further ceremony. He is not able to do so until he invests some other capital in production by means of the slave."
      p. 940

      It is difficult to make sense of this passage, but Marx elsewhere says that slaves are constant capital and that only variable capital creates surplus value.

      Moreover, this quote doesn't show Marx saying that just labouring for a money wage while being a slave can create surplus labour value.

      And, finally, even if Marx thinks that slaves can and do produce surplus labour value in this quotation, then that radically contradicts what he wrote in the chapter above: labour-power is the sole source of surplus value, but a person needs to be free (not a slave) to sell labour-power.

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    7. Another quote. "The entire surplus-labour of the labourers, which is manifested here in the surplus-product, is extracted from them directly by the owner of all instruments of production, to which belong the land and, under the original form of slavery, the immediate producers themselves. Where the capitalist outlook prevails, as on American plantations, this entire surplus-value is regarded as profit; where neither the capitalist mode of production itself exists, nor the corresponding outlook has been transferred from capitalist countries, it appears as rent."

      Another interesting quote: "the slave-holding states in the United States of North America (see Cairnes) or Poland, etc. [...] are associated with a world market based on capitalist production ."

      "Marx elsewhere says that slaves are constant capital and that only variable capital creates surplus value."

      Where does he say that slaves are constant capital?

      "this quote doesn't show Marx saying that just labouring for a money wage while being a slave can create surplus labour value"

      Slaves in capitalism produce surplus value. MArx says it explicitly. What's the difference how are they paid for that? They might be paid in food, clothes or money. No difference.

      >And, finally, even if Marx thinks that slaves can and do produce surplus labour value in this quotation, then that radically contradicts what he wrote in the chapter above: labour-power is the sole source of surplus value, but a person needs to be free (not a slave) to sell labour-power.

      There is a difference between logic of capital and empirical history of capital. Slave labor is somewhere in between. Marx focuses mainly on capitalism in, nomen est omen, Capital.

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    8. My response:

      http://socialdemocracy21stcentury.blogspot.com/2015/07/marx-on-slaves-as-fixed-capital.html

      Delete
  4. "This is basically the same thing as the slavery note above. If some of your income is income from ownership, then you've obtained that in the capacity of a speculator, of a capitalist, of a rentier, etc. "

    This plainly requires that Marx is wrong to think of workers merely as “men possessing nothing but their own labour-power” (Marx 1906: 188), but you are obviously so unreasonable and irrational you will refuse to see what anybody else can plainly see.

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