An Introduction to Marx’s Capital—Part-12

(This is based on “Marx’s Capital” written by Ben Fine and Alfredo Saad-Filho)

                            (For Part-11, please see the blog entry dated 23-1-2012)

Surplus Value and Exploitation

1. In the previous study, we concluded that in the circulation, i.e., in the exchange of commodities, there is no generation of surplus value and only the equal values are exchanged (See the para 5 of the blog entry dated 23-1-2012).  
2. We represented this circulation of commodities by the formula C—M—C (Commodity was sold for money and that money was used for purchasing another commodity). The commodity sold and the commodity purchased was of different kinds, but of the same value.  Since these two commodities were of the same value, both were shown as C.

3.  We also concluded that in Capitalist Exchange, the capitalist invests money (value) M,   to procure means of production (land, machinery, raw materials) and labour power (worker) and organises the production. The labour power works on the means of production and produces the new commodity (output) C, which will be sold so that the capitalist realises its value Mʹ.

4. The Commodity produced (the output) has more value (which is indicated by Mʹ), than the value (money) M invested by the capitalist for the inputs necessary for producing the commodity. This capitalist exchange is represented by the formula M—C--Mʹ. The difference between the money Mʹ got by selling the commodity produced and the money M invested for procuring the inputs ( means of production and labour power), is the surplus value.(Surplus value=Mʹ˗M)

5.  If no surplus value is created in the production process, the capitalist will not take the trouble of organising the production.

6. Therefore there is no doubt that the surplus value is generated in the production. Hence among the commodities purchased by the capitalist as inputs for the production, there must be atleast one commodity which creates more value than its own value (cost).

7. Earlier, we concluded that the value of a commodity is the socially necessary labour time required for producing it. Therefore any commodity that generates surplus value must add more value (more labour time) to the output (produced commodity) than its own value (labour time required for producing it).

8. Whether such a commodity can be any one of the non-labour inputs in the production like building or machene or the raw materials etc? It cannot be, because the machene or the building or the raw material has value which is transferred to the product totally or in part. If the value of the machene is Rs 1,00,000/- and if it works for 10 years, then it will add the value of Rs 10,000/- to the commodities produced in one year. Thus it is not generating additional value, but only transferring the existing value from itself to the commodity produced. But if we say that the machene adds more value than its own value, it will be tantamount to saying that by a magic the machene will grow money! (In the company accounts, the balance sheet mentions this phenomenon of building or machene transferring their value to the produced commodity. It is indicated by showing the depreciation of the machene every year, that is, the value transferred by it to the commodities produced).Therefore it is clear that non-labour inputs cannot add add more than their value to the output. They only transfer their value to the output.

9. Hence we have to conclude that equal exchanges will not create value, and only exchange the existing equal value.Unequal exchanges cannot create surplus value, since it is nothing but deceiving another person to take more value from him in exchange for less value given to him. It is only an unequal exchange of existing values, but not generation of surplus value.
10. Therefore the only input that generates surplus value is the labour power. But how it does this? By contributing more value than its own value, to the output.

11. What is the value of the labour power? It is the cost of the wage obtained by the worker by selling his labour power. How this value (cost) of the labour power is measured? By the labour time socially required to produce the goods/services (wage bundle) purchased by him with his full wage.

12. The value of the work done by the labour power (the time for which the worker exercised his labour power for doing the work, the labour time ) will be more than the value of his wage (the labour time socially required for producing the goods/services by the worker with his full wage).

13. There is no question of the non-labour inputs contributing more than their value in production since they only transfer their value.

14.  But there is no reason why the worker cannot contribute more value to the output than the value of his labour power.

15. If the value of the labour power (wage)  is five hours labour time ( the labour time socially required to produce the wage bundle for the worker), there is no reason why it (the labour power)  cannot be utilised to  work for 10 hours( for contributing the value of 10 hours labour time to the output).

16. Therefore the labour power is the only input in the production process which contributes more value than its own value, to the output.

17. The value created by the labour power in addition to its own value is the surplus value.This surplus value is appropriated (taken possession of) by the capitalist, on the ground that he is the owner of the means of production on which the worker worked. But the means of production are not the creation of the labour power of the capitalist, and hence really not his.Therefore the surplus value is created by the worker by exercising his labour power, but is taken away by the capitalist unduly. This is the exploitation in capitalist system, the exploitation of wage labour by the capital.

18. If the labour power is not creating the surplus value and adding only its own value to the output, like all other non-labour inputs, the capitalist will not hire the worker and he will not resort to production since he will not get surplus value (that is, he will not get  more money than the money invested by him.)

19. Therefore the capital of the capitalist can expand only when the labour power of the worker contributes more value than the value of his wage that is when the surplus value is created by the excess of labour time over the value of the labour power.

20.  Therefore labour power is not creating value alone; when it is exercised as labour, it is creating value (equal to its own value) and surplus value.