Sunday, March 20, 2016

Marx’s Capital, Volume 1, Chapter 16: A Critical Summary

Chapter 16 of volume 1 of Capital is called “Absolute and Relative Surplus Value” and discusses the nature of labour, surplus value and surplus labour time. This chapter begins Part 5 of Capital (which comprises Chapters 16, 17 and 18).

Marx opens his chapter with a discussion of the nature of productive labour. Under the capitalist mode of production, the commodity ceases “to be the direct product of the individual, and becomes a social product, produced in common by a collective labourer,
i.e., by a combination of workmen, each of whom takes only a part, greater or less, in the manipulation of the subject of their
labour” (Marx 1906: 558). So the collective worker does not produce a complete use-value by himself, but only a part of it (Brewer 1984: 61; Harvey 2010: 237). Harvey (2010: 237–238) raises the question whether cleaners, janitors, managers, and the people in charge of advertising and marketing count as productive workers in factories in Marx’s theory, an interesting point.

Capitalism is a system which subordinates free labourers to capitalists (Marx 1990: 643).

Marx states:
“So far as the labour-process is purely individual, one and the same labourer unites in himself all the functions, that later on become separated. When an individual appropriates natural objects for his livelihood, no one controls him but himself. Afterwards he is controlled by others. A single man cannot operate upon nature without calling his own muscles into play under the control of his own brain. As in the natural body head and hand wait upon each other, so the labour-process unites the labour of the hand with that of the head. Later on they part company and even become deadly foes. The product ceases to be the direct product of the individual, and becomes a social product, produced in common by a collective labourer, i.e., by a combination of workmen, each of whom takes only a part, greater or less, in the manipulation of the subject of their labour.” (Marx 1906: 557–558).
In a very important passage, Marx tells us that the essence of capitalism is the production of surplus-value:
“Capitalist production is not merely the production of commodities, it is essentially the production of surplus-value. The labourer produces, not for himself, but for capital. It no longer suffices, therefore, that he should simply produce. He must produce surplus-value. That labourer alone is productive, who produces surplus-value for the capitalist, and thus works for the self-expansion of capital. If we may take an example from outside the sphere of production of material objects, a schoolmaster is a productive labourer, when, in addition to belabouring the heads of his scholars, he works like a horse to enrich the school proprietor. That the latter has laid out his capital in a teaching factory, instead of in a sausage factory, does not alter the relation. Hence the notion of a productive labourer implies not merely a relation between work and useful effect, between labourer and product of labour, but also a specific, social relation of production, a relation that has sprung up historically and stamps the labourer as the direct means of creating surplus-value. To be a productive labourer is, therefore, not a piece of luck, but a misfortune.” (Marx 1906: 558).
This definition of capitalism is highly problematic. What of self-employed workers or tradesmen? What of self-employed middle class small business-people? Marx’s definition leaves out a vast swathe of actual private enterprises that produce commodities and make profits. Productive labour in Marx’s sense implies that there are many non-productive types of labour in capitalism.

Marx’s example of a school run for profit as a capitalist enterprise implies that he accepts that service industries producing non-tangible goods are capitalist businesses, but what of self-employed and managed business people producing services?

Marx now discusses absolute and relative surplus value:
“The prolongation of the working day beyond the point at which the labourer would have produced just an equivalent for the value of his labour-power, and the appropriation of that surplus-labour by capital, this is production of absolute surplus-value. It forms the general groundwork of the capitalist system, and the starting point for the production of relative surplus-value. The latter presupposes that the working day is already divided into two parts, necessary labour, and surplus-labour. In order to prolong the surplus-labour, the necessary labour is shortened by methods whereby the equivalent for the wages is produced in less time. The production of absolute surplus-value turns exclusively upon the length of the working day; the production of relative surplus-value, revolutionises out and out the technical processes of labour, and the composition of society. It therefore presupposes a specific mode, the capitalist mode of production, a mode which, along with its methods, means, and conditions, arises and develops itself spontaneously on the foundation afforded by the formal subjection of labour to capital. In the course of this development, the formal subjection is replaced by the real subjection of labour to capital.” (Marx 1906: 559).
We must remember that the necessary part of the working day is that required for the worker to produce the value of his subsistence wage. The surplus-labour time is the excess he works over and above this. A society needs surplus labour time for capitalists and exploiters to exist:
“If the labourer wants all his time to produce the necessary means of subsistence for himself and his race, he has no time left in which to work gratis for others. Without a certain degree of productiveness in his labour, he has no such superfluous time at his disposal; without such superfluous time, no surplus-labour, and therefore no capitalists, no slave-owners, no feudal lords, in one word, no class of large proprietors.” (Marx 1906: 561).
But, to return to the point, labour is subordinated to or subsumed under capital (Marx 1990: 645).

But there are hybrid or semi-independent forms of production not totally subordinated to capital:
“It will suffice merely to refer to certain intermediate forms, in which surplus-labour is not extorted by direct compulsion from the producer, nor the producer himself yet formally subjected to capital In such forms capital has not yet acquired the direct control of the labour-process. By the side of independent producers who carry on their handicrafts and agriculture in the traditional old-fashioned way, there stands the usurer or the merchant, with his usurer’s capital or merchant’s capital, feeding on them like a parasite. The predominance, in a society, of this form of exploitation excludes the capitalist mode of production; to which mode, however, this form may serve as a transition, as it did towards the close of the Middle Ages. Finally, as is shown by modern ‘domestic industry,’ some intermediate forms are here and there reproduced in the background of Modern Industry, though their physiognomy is totally changed.

If, on the one hand, the mere formal subjection of labour to capital suffices for the production of absolute surplus-value, if, e.g., it is sufficient that handicraftsmen who previously worked on their own account, or as apprentices of a master, should become wage labourers under the direct control of a capitalist; so, on the other hand, we have seen, how the methods of producing relative surplus-value, are, at the same time, methods of producing absolute surplus-value.” (Marx 1906: 559–560).
It is notable here that banks, moneylenders and merchant traders are not, apparently, productive capital, but parasites.

The progress of capitalism means the subordination of the hybrid or semi-independent forms of production, and once it has extended widely and effected the extraction of the absolute and relative surplus value it continues its development:
“Generally speaking, the specifically capitalist mode of production ceases to be a mere means of producing relative surplus-value, so soon as that mode has conquered an entire branch of production; and still more so, so soon as it has conquered all the important branches. It then becomes the general, socially predominant form of production. As a special method of producing relative surplus-value, it remains effective only, first, in so far as it seizes upon industries that previously were only formally subject to capital, that is, so far as it is propagandist; secondly, in so far as the industries that have been taken over by it, continue to be revolutionized by changes in the methods of production.” (Marx 1906: 560).
Surplus labour time requires that workers have the time to perform unpaid labour over and above the time it takes them to work for subsistence (Marx 1990: 646 –647). As the productivity of human society rises and cooperation develops, so there arises a class of people who live off the labour of others (Marx 1990: 647).

In a highly developed capitalist society the distinction between absolute and surplus labour becomes blurred:
“From one standpoint, any distinction between absolute and relative surplus-value appears illusory. Relative surplus-value is absolute, since it compels the absolute prolongation of the working day beyond the labour-time necessary to the existence of the labourer himself Absolute surplus-value is relative, since it makes necessary such a development of the productiveness of labour, as will allow of the necessary labour-time being confined to a portion of the working day. But if we keep in mind the behaviour of surplus-value, this appearance of identity vanishes. Once the capitalist mode of production established and become general, the difference between absolute and relative surplus-value makes itself felt, whenever there is a question of raising the rate of surplus-value. Assuming that labour-power is paid for at its value, we are confronted by this alternative: given the productiveness of labour and its normal intensity, the rate of surplus-value can be raised only by the actual prolongation of the working day; on the other hand, given the length of the working day, that rise can be effected only by a change in the relative magnitudes of the components of the working day, viz., necessary labour and surplus-labour; change, which, if the wages are not to fall below the value of labour-power, presupposes a change either in the productiveness or in the intensity of the labour.” (Marx 1906: 560–561).
Because of great differences in nature, natural produce, and fertility of the soil, different regions have a different length for the necessary labour needed for subsistence:
“The result of difference in the natural conditions of labour is this, that the same quantity of labour satisfies, in different countries, a different mass of requirements, consequently, that under circumstances in other respects analogous, the necessary labour-time is different. These conditions affect surplus-labour only as natural limits, i.e., by fixing the points at which labour for others can begin. In proportion as industry advances, these natural limits recede. In the midst of our West European society, where the labourer purchases the right to work for his own livelihood only by paying for it in surplus-labour, the idea easily takes root that it is an inherent quality of human labour to furnish a surplus-product.” (Marx 1906: 564–565).
There is also a long historical process at work:
“It is only after men have raised themselves above the rank of animals, when therefore their labour has been to some extent socialised, that a state of things arises in which the surplus-labour of the one becomes a condition of existence for the other. At the dawn of civilisation the productiveness acquired by labour is small, but so too are the wants which develop with and by the means of satisfying them. Further, at that early period, the portion of society that lives on the labour of others is infinitely small compared with the mass of direct producers Along with the progress in the productiveness of labour, that small portion of society increases both absolutely and relatively. Besides, capital with its accompanying relations springs up from an economic soil that is the product of a long process of development. The productiveness of labour that serves as its foundation and starting point, is a gift, not of nature, but of a history embracing thousands of centuries.” (Marx 1906: 561–562).
The concept of “surplus labour” here actually does not require the mystical concept of abstract socially necessary labour time as deployed by Marx in the early part of the book.

Marx concludes by reviewing the Classical Political economists on the issue of surplus value and states his belief that they failed to understand its origin (Marx 1990: 652–653).

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.


  1. Marx’s example of a school run for profit as a capitalist enterprise implies that he accepts that service industries producing non-tangible goods are capitalist businesses, but what of self-employed and managed business people producing services?

    This has been answered for you already. See, e.g., this or this. Again.

    Summarizing: They're neither; they're not productive (they don't exchange their labor for "money as capital," and they don't produce surplus value), but they're also not unproductive (they don't exchange their labor for "money as money").

    The theoretical distinction between "productive" and "unproductive" wage-labor in Marx refers specifically to that: wage-labor. Independent commodity producers don't sell their labor, and so they're altogether apart from these considerations. They're using an entirely separate mode of production, and labor conducted outside the capitalist mode of production cannot be analyzed in the same terms.

    In day-to-day parlance, many might call labor any labor with social utility to be "productive." In Marx's terms, such would be termed "useful" labor (i.e., productive of use-value, whether as good or service), but productivity is an altogether separate matter from the perspective of capital. So, it's important to pay close attention to these distinctions.

    1. "Summarizing: They're neither; they're not productive (they don't exchange their labor for "money as capital,""

      Further proof of the absurd and stupid hole in Marxist theory.

      Essentially in this bizarro world theory all small business people or self-employed tradesmen who own, run and work in their own business (not employing anyone else) are not even capitalist, even though:

      (1) they privately own capital goods and produce services/goods that they sell privately

      (2) they produce money profits

      (3) they can engage private sector investment.
      No doubt years of living in an insane communist cult make Hedlund and people like him blind to the absurdities of their own theory.

    2. Is that how you define "capitalist"? I'm not sure how you came by that definition but I suppose to each his own, and I'm sure it suffices for your own theorizing. But you need to recognize how Marx defines the word -- on the basis of the capitalist social relations, i.e. the sale and purchase of labor for wages. If you're going to criticize someone, you can't rely on equivocation; only immanent critiques can truly demolish a theory, and for that you have to work from within their system. This is the same tip I've been giving you for a year, btw. I'm mentioning it for posterity more than out of any misguided hope that you'll take it.

      Anyway, (1) and (2) are both conditions of commodity exchange in general, which predates capitalism. In (2), the money "profits" of independent producers are just the realized value of their product, minus costs. The source of this revenue is thus qualitatively distinct from the hiring of others to work for less than the value of their product.

      A society without wage labor may have markets, but "capitalist" society is something that emerged much later in history. Similarly, the money-lending you describe in (3) also long predated capitalism. None of these are, in and of themselves, what distinguish our system, under which the vast majority of people sell their labor to live.

      Now, which part of the above is "absurd"?

      Also, please do elaborate more on "insane." I really value and cherish your opinion, seeing as you are an unassailable expert on every topic you see fit to discuss, including (I assume) mental health.

  2. "They're using an entirely separate mode of production, and labor conducted outside the capitalist mode of production cannot be analyzed in the same terms."

    The idea that the self-employed are outside the capitalist mode of production is laughable. Many of them own significant business assets, such as the owners of small hotels. All of them compete for customers in the market. Some of them, indeed, incorporate for tax reasons, becoming employees of companies which they themselves own. The distinction between "capitalist" and 'worker' is irrelevant to them, as they are both.

    1. "The owners of small hotels," assuming they hire employees, are not the sort of people under discussion above. If they do not, then the fact that they find themselves in competition with capitalists is irrelevant; we're discussing the relations and conditions of production, not exchange. And the exact legal fiction employed, as in your final example, does not alter one's real relationship to the means of production, which is how Marx delimits class.

      Incidentally, there's something rather familiar in your haughty and condescending tone. You been hanging around here long?

  3. Modern economics, as opposed to Marxist claptrap, recognises that an hotel is no different, in principle, from any other economic asset that generates an income for the owner. Large hotel chains, of course, are quoted on the Stock Exchange, and the shares issued by Intercontinental Group are not a different class of investment from the shares issued by BP or Exxon. Many shareholders, indeed, are also employees, which makes a nonsense of Marx's class distinctions.

    1. A hotel is no different than any other business, correct, Mr. Hotelier. But no, employee-shareholders don't "make a nonsense" of anything; people with income both from ownership and labor are not at all absent from Marxian analysis. If you'd taken even a moment to google it, you'd know that. In fact, here, let's condense those 20 or so keystrokes into a single click by linking you a summary. Voila.

      This is what kills me about online debate. Everyone's in such a damn rush to declare themselves Winner that any sense of curiosity or epistemic humility goes straight out the window. Please do your homework.

  4. Your link merely illustrates the absurdities of Marxist theory and, more importantly, the failure of its predictions.

    Quote No.1

    "Thus, as capitalist society develops, it becomes increasingly polarised into two basic classes -- wealthy bourgeois and poor proletarians:"

    Not true, comrade. As capitalism has developed, the middle class has grown and the number of poor proletarians has fallen. The proportion of the workforce who directly (or indirectly through pension savings) own company shares has never been higher.

    Quote No. 2

    Thus, the 'independent' petty bourgeois producer "... is cut up into two persons. As owner of the means of production he is a capitalist; as a labourer he is his own wage-labourer"

    Cut up into two persons? Is that the best that Marxist theory can do to salvage it credibility? One person is actually two people who belong to different classes struggling against each other! Stop wasting our time with this rubbish.

    1. "Not true, comrade. As capitalism has developed, the middle class has grown and the number of poor proletarians has fallen."

      Globally? Not at all. In the first world, sure, but I'm sure you'll agree that the middle class has been coming under fire in the past few decades.

      "Cut up into two persons? Is that the best that Marxist theory can do to salvage it credibility?"

      What's wrong with it? If you have half of your income coming from property and half of your income from wages, then the policies that you would support to bolster the former will more often than not conflict with the those favoring the latter. This seems pretty intuitive to me.

  5. An article from the Economist on the burgeoning bourgeoisie