Surplus Value: Foolproof?

[Ranting Lefty]

Hey guys,

I am a committed lefty but my knowledge isn't as deep and comprehensive as it should (I am working on it).

Anyway, a few months ago I finished Das Kapital Vol 1 and I was really impressed by the theory of Surplus Value. To me it seems like a foolproof proof (no pun intended) for the necessity of exploitation in capitalist systems. (without exploitation there are no profits).

However a lot of righty-types proclaim that surplus value is a useless theory that is totally incorrect, citing as evidence the factors of innovation and technology in profit making.

Are these cappy counter-arguments valid? I personally think they are a cover-up. Technological advances certainly haven't reduced working hours or risen wages, all that was accomplished by the unions (I'm from UK). As for innovation, I'm not ruling it out of profit making (Apple's innovative technology has made it a market leader) but I'm pretty sure that it wouldn't be able to sell its products quite so cheaply without paying its employees fabricating these products in the East (or wherever they do it) ridiculously low wages.

Would appreciate your thoughts on the matter,

Thanks comrades.

[bricolage]

I'm not an expert here and I may have got things confused but hasn't technological innovation a lot of times gone hand in hand with attempts to decrease the workforce, thus allowing the rate of profit to be maintained but at a lower variable cost of wages. This is of course reliant on being able to recoup the cost of the machinery etc in time.

In terms of innovation sure bright sparks will be able to get ahead of competitors but the base production remains the same and you can have as many scientists, engineers as you want, like you said you still need your workforce to put the bits together.

[Ranting Lefty]

Technological advances in terms of production certainly have reduced the human workforce, for instance, in the case of car manufacture where all the old divisions of labour have now been superseded by highly efficient conveyor belt assemblage systems. But while more efficient, profit is only a guarantee ceteris paribus. As Marx clearly points out, technology is constant capital, i.e. it cannot be exploited. What you pay for you get. How can there be a profit in a competitive system? This would only work in a monopoly. In a highly competitive system you simply wouldn't make a profit out of a machine-based production system. The costs would be equal or more than the revenues. Only in a monopolistic system where price-fixing can occur would this bring in profits.

Innovation, the other argument, also only works for a limited amount of time. It didn't take Apple's competitors long to emulate or even in some cases improve upon their new ideas, in terms of the electronics market. That advantage is short-lived. The returns gradually diminish as other competitors muscle in stealing the initiative.

Another important element that I forgot to mention is advertising, which is a huge part of modern capitalism, perhaps the most important part. Effective propaganda can sidestep the issue of the infallible inverse price/demand curve to some extent but ultimately price is king. How do you guarantee low prices? Only one way: low costs of production. The other alternative is to monopolise the market and make price irrelevant. The former requires exploitation of human labour because constant capital cannot be exploited (with a machine you get what you pay for, with a human being you can pay as little as you want because of its variable nature) and the latter is against what all capitalists are supposed to believe in, the free market.

So as far as I can see there simply isn't an argument in favour of capitalism and Marx's theory remains supreme. But then I'm not particularly well-versed in economics...

I really want to get this discussion going...this topic fascinates me. I'm so ignorant of its complexities. I'm sure there are a million factors I haven't considered...

[DaComm]

Don't worry comrade, their arguments are invalid. The Capitalists are not classified as "technology", and the tasks performed by the technology in use is totally unrelated to the Capitalist's task of coordination dictation. Besides, said technological advancements like, say, new machines only actually contribute once a worker uses them. And also, for innovation, Capitalists are actually rarely the ones who "innovate"; that is mostly performed by people in research/development groups, scientists, and frequently, those who combine mental AND physical labor. Innovation is rarely attributed to the Capitalist, so why is it justifiable that they can extract surplus?

[Dean]

However a lot of righty-types proclaim that surplus value is a useless theory that is totally incorrect, citing as evidence the factors of innovation and technology in profit making.

This argument is nothing without a quantitative expression, that is a magnitude of the net value supposedly given to society via this method.

It is precisely because such advances serve the interests of the accumulation of capital rather than the interest of the advancement itself, that is the salability of a cure rather than the cure itself serves to motivate the act, that its ultimate modification to the direction of research, for instance, is deemphasized from the study of critical issues of human illness.

And this also dictates where the value will be transferred: since the models are consistently profit-interested, the complete fulfillment of certain needs is deemphasized, instead there is a preference for nominal, temporary fulfillment which leaves open a market for the industry in question.


Since the capitalists are attempting to apply a model of value to the specific entrepreneurship and capitalist positions involved, they should be able to explain in some quantitative sense what value is applied. Otherwise, they are engaged in nothing more than market mystification: "we know they do good, but we can't really apply a specific, quantitative relationship to that good, so we just let the market decide."

It's an appeal to the state of the world today as a justification for a conservative economic model.

[Ranting Lefty]

Thanks for the reponses guys! Interesting topic.

I think Dean's point is particularly valid. The ultimate end is capital accumulation NOT improvement in consumer living standards, quite right. As Galbraith writes in The Affluent Society, capitalists confuse, on purpose, economic growth with social improvements leading to an obsession with growth and the production of frivolous goods in order to perpetuate their own hegemony. There is a whole myth built up around the capitalist system as being infallible, stock markets are seen as inevitable, trade cycles a necessary evil. No-one in the media ever questions the whole nature of the system...

[∞]

The theory of surplus value exists, from class exploitation directed by a capitalist.
A worker receives X amount of wage to meet a status quo. Now of course the owner of capital will be accumalating profit for his investment. However, a surplus labor does not exist in a capitalist economy, the inability to meet the status quo is detrimental to the entire company. 99.99% of the time the status quo is met. Sometimes not initially....
http://opus1journal.org/images/glossary/consumer_surplus.gif

As for Labor Value, one can only attain it in a communistic society. We can only uphold it if there is direct mangement direct market of production.
Thats exactly why they can't provide an alternative to labor value. Their entire system is blank, egoist, and based on struggling, when struggling is not necessary. Even Adam Smith upheld the idea...

The whole produce of labour does not always belong to the labourer. He must in most cases share it with the owner of the stock which employs him.

BTW: I mean the Marxist surplus labor and surplus value.