An Introduction to Marx’s Capital—Part-15

(This is based on “Marx’s Capital” written by Ben Fine and Alfredo Saad-Filho, translated and published in Telugu by Prajasakti Book House and also based on the book “The People’s Marx” which is an abridged popular edition of the 3 volumes of Marx’s Capital, edited by Julian Borchardt and published by Prajasakti Book House and other references)

                            (For Part-14, please see the blog entry dated 28-1-2012)

Machinery and technological changes

1. We noted earlier that the pursuit of the capitalists for relative surplus value is the reason for continuous technological up gradation of the machinery in the factory. With technological up gradation, productivity is increased so that the consumer goods and services required for the workers for their sustenance of labour power can be produced in less time socially necessary, so that the socially necessary labour time or the necessary labour time of the working day is reduced along with consequent increase in the surplus labour time.

2. In the evolution of the technological changes, initially the physical power of the worker will be replaced by the power of the machine. Thereafter the tools of the worker become the appendages of the machine. The worker becomes the appendage of the machine, to feed the machines with raw materials or to watch over them. In this process the worker becomes the servant of the machine. The worker has to attend to the requirements of the machine in its movements in the work process.

3. Earlier when the production was carried out by the worker with his tools in the factory before the advent of the machines, the worker worked with his tools in a skilful way. The worker controlled the tool.

4. But with the advent of machines, the tools have become incorporated in the machines and the worker has become the appendage to the machine.

5. This development of technology which is a continuous process has its contradictory effects on the worker. The machine simplifies the work of the worker and hence deskills him, making his earlier skills unnecessary. But since a number of such new simple skills are required, the worker becomes multi skilled. Also, the physical stress in the work is lessened by the machine, but at the same time the pace and the intensity of the work increases.

The historical role of modern industry

6. On the historical role of the modern industry and technological development, Marx makes the following important observation:

“Modern industry never looks upon and treats the existing form of a process as final. The technical basis of that industry is therefore revolutionary, while all earlier modes of production were essentially conservative. By means of machinery, chemical processes and other methods, it is continually causing changes not only in the technical basis of production, but also in the functions of the labourer, and in the social combinations of the labour process. At the same time, it thereby also revolutionises the division of labour within the society, and incessantly launches masses of capital and of working people from one branch of production to another. But if modern industry, by its very nature, therefore necessitates variation of labour, fluency of function, universal mobility of the labourer, on the other hand, in the capitalistic form, it reproduces the old division of labour with its particularisations.

We have seen how this absolute contradiction between the technical necessities of modern industry and the social character inherent in its capitalistic form, dispels all fixity and security in the situation of the labourer; how it constantly threatens, by taking away the instruments of labour, to snatch from him his means of subsistence, and, by suppressing his detail function, to make him superfluous.

We have seen, too, how this antagonism vents its rage in the creation of that monstrosity, an industrial reserve army (means unemployed), kept in misery in order to be always at the disposal of capital; in the incessant human sacrifice from among the working class, in the most reckless squandering of labour power and in the devastation caused by a social anarchy which turns every economic progress into a social calamity.

This is the negative side.

But if , on the one hand, variation of work at present imposes itself after the manner of an over powering law that meets with resistance at all points, modern industry, on the other hand, through its catastrophes imposes the necessity of recognising , as a fundamental law of production, variation of work, consequently fitness of the labourer for varied work, consequently the greatest possible development of his varied aptitudes.

It becomes a question of life and death for society to adapt the mode of production to the normal functioning of this law. Modern industry, indeed, compels society, under penalty of death, to replace the detail- worker of to-day, grappled by lifelong repetition of one and the same trivial operation, and thus reduced to the mere fragment of a man, by the fully developed individual, fit for a variety of labours, ready to face any change of production, and to whom the different social functions he performs, are but so many modes of giving free scope to his own natural and acquired powers”. (Capital, Volume I, pp 457-58)

Productive and unproductive Labour

7. According to Marx, when the labour is hired by the capital to produce surplus value directly, it is productive labour. The productive labour is hired by capital and produces commodities for sale.

8. All other kinds of labour not producing surplus value directly, are unproductive labour under capitalism. The self employed are producing commodities for sale. But they are not wage labour. Hence they are unproductive labour. The government employees working in the offices, the managers no directly engaged in production, the cashiers, accountants, sales people even if employed by the industry are unproductive labour since they are not engaged for producing surplus value.

9. A doctor if works on his own and earns is unproductive labour. But if he is hired  by a corporate hospital for its profit, then his labour is productive labour since it is hired for producing surplus value or profit.

10. The unproductive workers also are exploited, although they do not produce any commodity. For example banking and commercial sectors are unproductive in that the labour hired in these sectors is not producing any commodities for sale or any service for sale. But here also the workers will work beyond the necessary labour time that is work for more time than the labour time equal to the value of their wage.

11. The surplus value generated by the productive labour in the commodity producing sectors is shared by the capitalists engaged in commercial activities (selling the commodities produced) and the finance capitalists who provide the money to the industrial capitalist on loan. The surplus value generated in the commodity production is shared by the commercial capitalist as the distributor’s profit (the industrial capitalist sells his commodity to the commercial capitalist at lesser price and the commercial capitalist sells it at its actual price). The banker or financier gets a share in the surplus value generated in the production, in the form of interest. The industrial capitalist gets a share in the surplus value generated in the production, as industrial profit. He also pays to the government taxes from the profit thus generated. Thus the taxes paid by the capitalists are from the surplus value generated in the production.

12. This can be illustrated as below:

a)      Price of the commodity produced=say Rs 100

b)      As per the formula we have noted earlier, the price of a commodity=cost + profit

c)      But cost=c(constant capital, the value of the machine and raw material transferred to the commodity)+v(variable capital, the wage given to the worker for producing the commodity)

d)      Therefore price=(c+ v)+s(surplus value, which is nothing but profit in money terms)

e)      Let us assume that in this price of the commodity Rs 100/-, c=Rs 60, v=Rs 20/- and s=Rs 20/-.

f)        In the s (surplus value) of Rs 20/-, the industrial capitalist who produced the commodity, say, retains Rs 15/- for himself. In such case, he will not sell the commodity to the commercial capitalist at Rs 100/- which is its price. He will give it to the commercial capitalist for Rs 95/- only so that the commercial capitalist gets the profit (commercial profit) of Rs 5/- by selling it for Rs 100/-. From the Rs 15/- profit got by him, the industrial capitalist pays interest to the banker on his loan, say, Rs 2/- and also pays Rs 1/- to the government as tax. Then he will have a net profit of Rs 12/-. Thus the surplus value of Rs 20/- generated by the industrial capital was shared by the finance capital, the industrial capital, the commercial capital and the government. Also, if the land on which the factory is built is taken on rent, the rent of the land will be paid to the landlord from this surplus value of Rs 20/- generated by the industry in the production.

g)      The workers in banks or commercial establishments help in organising the finance, and commerce will be given wage from this share of the surplus value generated in the production.