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Labor-market

In chapter 6 of Capital, Marx describes precisely what he means by labor: the exchange, by someone who is free (to choose to starve or) to exchange his capacity to work, with someone, a person equipped with the money to pay for it, according to certain set of regulations:

On this assumption, labour-power can appear on the market as a commodity only if, and in 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 its possessor may sell it as a commodity, he must have it at his disposal, he must be the free proprietor of his own labour-capacity, hence of his person. He and the owner of money meet in the market, and enter into relations with each other on a footing of equality as owners of commodities, with the sole difference that one is a buyer, the other a seller; both are therefore equal in the eyes of the law. (271)

This form of “labor” for Marx is anything but a natural category:

One thing, however, is clear: nature does not produce on the one hand owners of money or commodities, and on the other hand men possessing but their own labour-power. This relation has no basis in natural history, nor does it have a social basis common to all periods of human history. It is clearly the result of a past historical development, the product of many economy revolutions, of the extinction of a whole series of older formations of social production. (273)

Granted this, when Marx is investigating the formation of surplus-value, he is investigating a phenomenon that actually takes place in capitalist societies. Companies and capitalists are really there, employing people, putting money into production lines and hiring employees, and, by and large, in the aggregate, the result of this process is the increase of wealth. How is this possible? What drives this process?

Since the broader movement of capitalist apologism has aimed to make profit by alienation — buying cheap and selling dear — seem somewhat villainous, wealth creation by such mercantalism has come to be seen as tampering with the markets. This is something of a no-no. The market, that magical mystical force, should just be let to run itself out; everyone wins this way. So opportunistic exchange is not driving wealth creation, on the whole.

With barriers to trade, monopolies, etc, the meat and potatoes of profit by alienation, having been reduced in importance, we need a way to understand how profit is made. This is were the theory of exploitation, of the creation of surplus-value comes into play. This is where Marx’s understanding of labor comes in. It is a “labor theory of value” insofar as the determinant of surplus depends on the given productive capacity of labor: the “value” of things is determined by “the labour-time necessary for the production, and consequently also the reproduction, of this specific article” (274). It is like this with labor and every other commodity. Profit comes from the difference between the price (value) of labor-power and the value of what labor power produces under the terms of its contract.

But here’s the thing: the determination, the realization of a particular value, in capitalism is in the commodity actually being sold. If you say that your time is priceless, and that you will only work for $10,000 an hour, and you hit the labor market, good luck to you. The market will evaluate your commodity and hand it back to you like a pile of rotten grapes — oh well! Likewise, if a given widget manufacturer can only get $4 per unit on the market, that is the realizable value of the widget.

This is simple. But it gets complicated with regard to the value of labor-power on the market. Remember, labor-power’s value is the value of the means of subsistence it takes to reproduce it. But this is a very elastic determination: do we take into account occassional trips to the movies, or merely the average rent and bare minimum nutritional requirements to keep a laborer alive? Marx is aware of this: “In contrast, therefore, with the case of other commodities, the determination of the value of labour-power contains a historical and moral element” (275). This is where an element of class struggle comes in: workers will tend to want to increase their wages; capitalists to drive them down. There is a given range of possibility, determined by historical mores and moral attitudes, determining how skinny laborers can become and how little profit capitalists will receive. As either limit is approached, the relative struggle of either side will intensify: laborers will either skip to another industry or organize; capitalists will either disinvest or impose austerity measures. As the value of a given labor-power fluxuates, so will the profit margin of a given industry.

Because it is only labor-power, it seems, that can enable an increase in money through exchange. The lump of labor that is exchanged for wages on the labor-market can be tweaked and employed by the capitalist as he pleases, and so he can keep all the product it makes. With the increasing impossibility of profit by alienation, the only way to make a profit is by increasing the amount of product produced by labor under the exchange rate of labor-power: this is the driving imperative of capitalism, and it is achieved either by increasing productivity, extending working hours, or simpling lowering wages. Each of these things increases the rate of profit, constitutes the “value” of a thing, and each of them is determined by the social relation of “labor.”

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13 Responses

  1. Remember, labor-power’s value is the value of the means of subsistence it takes to reproduce it. But this is a very elastic determination: do we take into account occassional trips to the movies, or merely the average rent and bare minimum nutritional requirements to keep a laborer alive?

    I’m inclined to include in this category almost everything we do when we’re not at work, especially leisure. Leisure is a way of recovering from the monotony of capitalist conditions of work. Movies, video games, booze, and porn keep us sane. We should be paid to consume them. Hell, all porn produces is the desire for more porn — we really better be paid to look at that! (It goes without saying we should be paid to clean, cook, and drive to and from work.) Supporting quote taken at random:

    In reality, the individual consumption of the labourer is unproductive as regards himself, for it reproduces nothing but the needy individual; it is productive to the capitalist and to the State, since it is the production of the power that creates their wealth … From a social point of view, therefore, the working-class, even when not directly engaged in the labour-process, is just as much an appendage of capital as the ordinary instruments of labour. Even its individual consumption is, within certain limits, a mere factor in the process of production. That process, however, takes good care to prevent these self-conscious instruments from leaving it in the lurch, for it removes their product, as fast as it is made, from their pole to the opposite pole of capital. Individual consumption provides, on the one hand, the means for their maintenance and reproduction: on the other hand, it secures by the annihilation of the necessaries of life, the continued re-appearance of the workman in the labour-market. The Roman slave was held by fetters: the wage-labourer is bound to his owner by invisible threads. The appearance of independence is kept up by means of a constant change of employers, and by the fictio juris of a contract. (Vol 1, Chapter 23)

  2. the value of labor power - is it seen individually or collectively?

    I know “struggle” is probably considered part of the price of labor, but if the subsistence wage aim is to keep workers at bay, keep the labor force constant, and so on, the value of a struggle-free is just as important to capitalists as the value of fed and sheltered workers.

    There are interesting theories of wage price - iron law of wages, and efficiency wages. Are you studying Marx for an academic purpose? I joined a Marxism Yahoo! group a while back with a friend. It’s called “Reading Capital”, but I didn’t have the time so I’m not very involved.

  3. *struggle-free workplace

  4. Jim: I dunno if that would really affect our standard of living. If we were paid for all the unpaid (I think this might fall into the category of “unproductive” labor for Marx and the other political economists) work we did, the amount of disposable income available to labor would increase in size, perhaps, but its buying power (value) would almost certainly fall. As long as capitalist relations are in place, the natural price of commodities will peg around a given point that generates a certain amount of profit.

    Also, it’s problematic to see who would be paying for this unpaid labor? There’s no contractual agreement between viewers of porn and makers of porn, or between society at large and housewives. All of this stuff is part of the necessary components of the reproduction of labor, and the cost of it is contained within the value of labour-power — especially when it was the case that there was a single wage-earner. When one person earns the wage, it has to be enough to “pay” all of the labor necessary to keep them going, and reproduce them (in children) in other forms of labor power. All the imbalances of power in such a situation notwithstanding.

  5. hyperborea: For Marx the value of labor is seen as a “social” category, as brought about according to a set of relationships between subjects.

    Struggle” in this sense doesn’t even need to be conscious, it’s just what will come about due to the inherently contradicting interests of two classes in society. The capitalist wants to maximize profit; the laborer wants to maximize wages. “Wants” here also is not even necessarily a conscious volition; take it to mean that, on the whole, agents will statistically choose the greater of two piles of money.

    The upshot of understanding how capitalist and worker interests collide results in more elaborate strategies. Ones that are not merely individual: laborers form unions; capitalist bust them, or look for free trade agreements to offshore labor to places where unions don’t exist. Etc.

    I’d read The Limits to Capital, or watch David Harvey’s lectures on it which are online, if you want an accessible introduction to Marx that is less French magicomojo and more a dry reading of what Marx was trying to analyze.

  6. Thanks I checked Harveys work out. What French authors did you have in mind?

  7. I was thinking primarily of Badiou and the sort of fetish of the “event” a lot of people seem to get got up in. And the more messy Sartre. If there’s one thing I dislike, it is politics mixed with mysticism.

  8. hi JCD,

    This is a great post. I should have read this one before the other one - I referenced that same passage about moral elements in my comment over there, if I’d have read this one first I’d have saved us both some time. I can’t remember if you’ve read it or no, but you might like Harry Cleaver’s short book Reading Capital Politically.

    I agree with the substance of this post entirely, about the determining role of class struggle. One quibble though.

    You quote Marx that “labour-power can appear on the market as a commodity only if, and in so far as, its possessor, the individual whose labour-power it is, offers it for sale or sells it as a commodity.”

    This is false. Slave labor is one example. Another is parents forcing their kids to work and taking the kids’ wages, and husbands forcing wives to work and taking the wages. Marx complains about this stuff as one evil of the factory system, which makes it clear that he recognizes it as compatible with capitalism. I think it’s useful as a point of orientation - look to the sale and sellers of labor power - and for the sake of argument - capitalism is exploitative even when apparently consensual - but as an empirical claim it’s not really true.

    Re: capitalism as exploitative even when apparently consensual, I think this is really well put:

    Profit comes from the difference between the price (value) of labor-power and the value of what labor power produces under the terms of its contract.”

    What I like about this point is what it says about exploitation as explored in v1 of Capital. Workers real wages could stay stable or even rise and working conditions could stay the same or even improve while the rate of surplus value production increases. That could happen from a relatively conflict-free version of relative surplus value. (Not likely, but possible.)
    Or, if industries producing items which enter into the reproduction of labor power became more efficient, such that the cost to reproduce labor power dropped.

    The growing surplus in turn could be re-invested to expand production or could be stored up to use in attacking workers later (I’m told that steel companies sometimes overproduce and stock up on steel in advance of contract negotiations so they’ll have stuff to sell during a strike).

    take care,
     Nate

  9. Hey Nate, thanks for your comments.

    You quote Marx that “labour-power can appear on the market as a commodity only if, and in so far as, its possessor, the individual whose labour-power it is, offers it for sale or sells it as a commodity.”

    This is false. Slave labor is one example.”

    True enough. But I think that the cost of labor-power on the market, when waged labor is the dominant form of production, is determined by a slightly different dynamic than when wealth is made by slaves or other forms of direct exploitation. I think — I could be wrong in this. It seems that when slave-labor is the dominant form, the value of a slave would be much more analogous to that of a machine as laid out in later chapters. Maybe 15. I’d have to track down the quote. Thoughts?

    The growing surplus in turn could be re-invested to expand production or could be stored up to use in attacking workers later (I’m told that steel companies sometimes overproduce and stock up on steel in advance of contract negotiations so they’ll have stuff to sell during a strike).”

    That’s interesting. Clever, nasty too. I wonder why workers in white collar industries are less likely to notice things like this? (At least, it has been my experience working as a clerk in various places, my coworkers were by and large blind to the machinations being planned by management.)

  10. hi JCD,
    I’m not sure re: slavery and the value of labor power. I’ll have to think more about it. I think part of Marx’s point is that on the one hand the value of labor power (with regard to waged labor) is determined in the same way that the value of any commodity is - via socially necessary labor time - and on the other hand that the value of labor power is determined by class struggle, as you so succinctly put it. I think both of these are true for slavery. That’s not to say there aren’t massively important differences, there are, but I think they’re differences within the categories of Marx’s that we’re talking about here (ie, we need more fine-grained categories to make sense of these differences). I’m not totally sure about that, though, and in case it wasn’t clear this isn’t an objection to your point, more of a tangent really.
    Re: white collar work, I’ll have to get back to you. I saw a talk a few weeks back on white collar unionization and decisions made by the National Labor Relations Board, I’ll have to find my notes, that might be useful. In some respects the dynamic I mention really schematically is part of some lefties criticisms of much of the labor movement in the US in the 20th century - union/management cooperation and so on making those changes possible leading to long-term restructuring. I’ve only read a little on this (can chase up references if you want) and don’t know much about the history they’re talking about, so I’m not sure about the accuracy of the claims - in terms of this actually happening empirically - but it certainly sounds possible.

    Gotta run, need to be up really early for a bus out of town, sorry if this doesn’t make sense, it’s very late.

    take care,
     Nate

  11. Argh. Sorry. I wasn’t clear - I don’t think *all* slave labor is capitalist, I just don’t think slave labor always contradicts capitalism.

  12. But do you think that slave-labor that takes place in capitalism has the same “moral element” in the determination of its value that the value of “free-labor” has? I don’t see how it could, on Marx’s account, since slaves do not enter themselves into market relations. They are not treated as subjects. They are merely things. Hence their activity has no validity (in the market sphere).

  13. hi JCD,
    Happy holidays to you. I don’t know enough about slavery to really say but my gut reaction is to say yes. I imagine one could build an argument around there being a sort of moral economy of class struggle (I think Thompson used the term moral economy to refer to peasants, not to waged laborers, but I’m not sure and even if he did I’m not sure that the term can’t be extended to waged laborers), where that moral economy is at least a partial determinant of the monetary economy - class struggle determining wages. I’d imagine a similar argument is possible - and I think plausible - around slave labor’s everyday costs for slave owners: slaves’ class struggle determining things like worktime, amount of food, acceptable treatment, etc. That’s only partly related, though. The big question here would be what relationship, if any, the sale price of slaves had to class struggle. I would want to argue for there being the same (formally the same within Marx’s categories I mean, not historically identical) moral element to the determination of slaves’ sale price as there is in waged labor. I’m not sure I could actually do that, though.

    Two things that come to mind off the top of my head - to the degree that slaves shaped policy which in turn shaped the sale price of slaves (like the end of importation of slaves in the early 19th century US), slaves played into that moral element, though mediated by the state. (Ooh that’s an interesting topic - the role of the state as mediator in the moral element of the value of labor power.) Second, insofar as the value of any commodity is the labor time socially necessary for its production and insofar as there were moral elements in the production of humans who got enslaved then there would be the same moral element. I’m not sure if reproductive labor counts here or not (I think it does count re: waged labor), since enslavement was a sort of primitive accumulation - another thing I need to think about now, but maybe things like the labor of disciplining and ‘seasoning’ slaves, which slaves’ resistance played some role in determining?)

    I’ll have to think more on this and get back to you, you’ve raised some more questions for me on this, which is always pretty cool.

    take care,
     Nate



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