Marx divides the chapter into four sections:
(1) The Degree of Exploitation of Labour-Power;A section by section summary follows.
(2) The Representation of the Value of the Product by Corresponding Proportional Parts of the Product;
(3) Senior’s “Last Hour”
(4) The Surplus Product.
(1) The Degree of Exploitation of Labour-Power
Surplus value is generated in production, and is value over and above the value of C (the capital advanced) (Marx 1990: 320).
But C is made up of the following:
(1) c = constant capital, andSo C = c + v (Marx 1990: 320).
(2) v = variable capital.
An output commodity is produced and value equals (c + v) + s, where s is surplus value. The “capital advanced” C is c + v.
The surplus value arises only from variable capital, or that part of the capital C converted into labour-power (Marx 1990: 322). So, for example, machines cannot create surplus value (Harvey 2010: 128).
The rate of surplus value is s/v (Marx 1990: 324; Brewer 1984: 43). It is important to note that s/C is the rate of profit and is distinct from the rate of surplus value (Brewer 1984: 43).
“Necessary labour-time” is the part of the working day that the worker needs to work to pay for his own reproduction (Marx 1990: 325).
But then there is the second part of the working day:
“During the second period of the labour-process, that in which his labour is no longer necessary labour, the workman, it is true, labours, expends labour-power; but his labour, being no longer necessary labour, he creates no value for himself. He creates surplus-value which, for the capitalist, has all the charms of a creation out of nothing. This portion of the working day, I name surplus labour-time, and to the labour expended during that time, I give the name of surplus-labour. It is every bit as important, for a correct understanding of surplus-value, to conceive it as a mere congelation of surplus-labour-time, as nothing but materialised surplus-labour, as it is, for a proper comprehension of value, to conceive it as a mere congelation of so many hours of labour, as nothing but materialised labour. The essential difference between the various economic forms of society, between, for instance, a society based on slave labour, and one based on wage labour, lies only in the mode in which this surplus-labour is in each case extracted from the actual producer, the labourer.” (Marx 1906: 240–241).The necessary part of the working day is determined by the value of variable capital bought by the capitalist (Marx 1990: 326).
And the crux of Marx’s view is that the worker is not paid for his “surplus labour-time” during which he creates surplus value for the capitalist. The actual labour-power expended during this “surplus labour-time” is the “surplus-labour.”
This passage is also very interesting because Marx thinks that a slave-based economy also has surplus labour. But do slaves produce surplus value? Marx’s theory seems to deny that a slave can sell labour-power that creates surplus value.
The rate of surplus value is also equal to the surplus labour divided by necessary labour (Marx 1990: 326; Brewer 1984: 43).
According to Marx,
“The rate of surplus-value is therefore an exact expression for the degree of exploitation of labour-power by capital, or of the labourer by the capitalist” (Marx 1906: 241).This, however, is not a measure of the absolute magnitude of exploitation (Marx 1990: 326, n. 7), but merely the degree of exploitation in relation to the ratio of surplus value to variable capital advanced (s/v).
In the remainder of this subsection Marx gives some examples of all these quantities and assumes that the prices of commodities are equal to the labour values (Marx 1990: 328). At the end of the examples there comes an obscure footnote:
“The calculations given in the text are intended merely as illustrations. We have in fact assumed that prices = values. We shall, however, see in Volume III., that even in the case of average prices the assumption cannot be made in this very simple manner.” (Marx 1906: 244, n. 1).First, it is quite obvious that this footnote is referring to the examples given in the chapter and not throughout the whole of volume 1 of Capital. This is not some statement by Marx that the whole law of value in volume 1 is merely an analytical tool, and not empirical in any way, as some Marxist apologists want to make it out to be.
Secondly, this is quite obviously one point where the inconsistent theory of prices of production that Marx had sketched in the draft of volume 3 of Capital (written prior to volume 1) has intruded into the text of volume 1.
It is quite extraordinary that Marx never further explained this point about prices of production. If he had done so, of course, his whole theory in volume 1 would have quickly fallen apart, and later critics pointed to the damning inconsistencies between volume 1 and volume 3 soon after volume 3 was published.
(2) The Representation of the Value of the Product by Corresponding Proportional Parts of the Product
In this section Marx applies his analysis to the production of yarn from cotton, and argues that the output product represents merely different parts of the labour going into its production, whether that labour value is in (1) constant capital, (2) variable capital and (3) the surplus-labour:
“To split up in this manner the product into different parts, of which one represents only the labour previously spent on the means of production, or the constant capital, another, only the necessary labour spent during the process of production, or the variable capital, and another and last part, only the surplus-labour expended during the same process, or the surplus-value;” (Marx 1906: 246–247).In essence, the total value of the output commodity is c + v + s (Harvey 2010: 130).
(3) Senior’s “Last Hour”
This subsection is a description of Nassau W. Senior’s defence of manufacturers against the Factory Act (1833) and agitation for a 10 hour working day, and his idea that a reduction of one hour in the working day would destroy the net profits of manufacturers.
However, this need not concern us, except to note that this is yet another section where Marx implies that his law of value is being applied to the 19th century capitalism, and not to some pre-modern world of commodity exchange (as he and Engels were later to state).
(4) The Surplus Product
Finally, the portion of the product that can be said to represent surplus value is called the “surplus product” (Marx 1990: 338).
Marx notes that
“The sum of the necessary labour and the surplus-labour, i.e., of the periods of time during which the workman replaces the value of his labour-power, and produces the surplus-value, this sum constitutes the actual time during which he works, i.e., the working day.” (Marx 1906: 254–255).BIBLIOGRAPHY
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.