Surplus Value

[Lefteris]

Can someone explain surplus value or suggest some books on it?
The Wikipedia article is too complex for me and most of its sections has some issues so not sure if it's reliable anyway.

[Q]

Can someone explain surplus value or suggest some books on it?
The Wikipedia article is too complex for me and most of its sections has some issues so not sure if it's reliable anyway.
I don't want to be this guy, but the best book on the subject is the book on the subject (http://marxists.org/archive/marx/works/1867-c1/index.htm).

[exeexe]

It goes like this:
http://i58.tinypic.com/2wnu3d4.jpg

[Q]

That picture doesn't explain at all where 'market value' comes from though and is therefore incomplete. It also doesn't explain the need for money or what it is and how exactly the worker is trapped in this system.

Really, don't do it with silly gif pictures and read the real thing. David Harvey gives you a solid guideline (http://davidharvey.org/reading-capital/) in reading Capital.

[Anglo-Saxon Philistine]

It also conflates value with price, and implies that the "economy with free workers" is somehow preferable even though it is simply petty commodity production, an obsolete social form almost completely destroyed by capitalism.

Also the workers are producing pixel dicks. I can't be the only one who's noticed.

[exeexe]

That picture doesn't explain at all where 'market value' comes from though and is therefore incomplete. It also doesn't explain the need for money or what it is and how exactly the worker is trapped in this system.

Really, don't do it with silly gif pictures and read the real thing. David Harvey gives you a solid guideline (http://davidharvey.org/reading-capital/) in reading Capital.

I know that, i assume people know what market value is and etc

[Workers-Control-Over-Prod]

das Kapital (http://http://marxists.org/archive/marx/works/1867-c1/index.htm)

[Gramthusser]

You are paid what you need to stay alive. Say, that takes 3 hours to accomplish. All the value you produce for the next 5 hours goes to the capitalist. That's surplus value.


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[Luís Henrique]

I know that, i assume people know what market value is and etc

Very dangerous assumption, I would say.

Luís Henrique

[RedMaterialist]

You are paid what you need to stay alive. Say, that takes 3 hours to accomplish. All the value you produce for the next 5 hours goes to the capitalist. That's surplus value.


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Why then does the capitalist pay you, say, $10.00 per hour for the entire 8 hrs?

The market value or exchange value of the worker, on average, is $10.00 per hour. Yet the worker produces a value of $15.00 per hour and the capitalist takes, appropriates, this added value as profit.

Marx says that only human labor can produce more value than it consumes.

Modern economists use the term "value added." They don't have the slightest clue that they are talking about "surplus value."

[GiantMonkeyMan]

Another of Marx's texts that essentially deals with most of the content of Capital but in a shorter and slightly more simplified form is Value, Price and Profit (http://libcom.org/library/value-price-and-profit-karl-marx) and it has a section specifically dedicated to surplus value, so that might be of interest to you.

[Comrade #138672]

That picture doesn't explain at all where 'market value' comes from though and is therefore incomplete. It also doesn't explain the need for money or what it is and how exactly the worker is trapped in this system.

Really, don't do it with silly gif pictures and read the real thing. David Harvey gives you a solid guideline (http://davidharvey.org/reading-capital/) in reading Capital.I agree, but pictures are not necessarily unhelpful. The picture just needs to be improved.

[Dave B]

Just for discussion.

I don’t much like the idea of;

‘the market value or exchange value of the worker’

'Formally' the value of labour power is the amount of value or time required to maintain it in its original condition or reproduce it.

There can be a difference here between the theoretical, or abstract if you like, and the ‘practical’.


Taking a western first world capitalist position of workers, as it goes, at the end of a say a forty hour week I am going to need stuff that contains and is produced by 30 hours of other people’s productive effort in order to reproduce my ability to work.

Otherwise, as the theory goes, I will loose the will to live and go completely to pieces and degenerate into a ‘crippled condition’ and without my holidays to the Algave and flat screen TV’s, my productivity and my labour power will be impaired and depreciate.

Which is a bit crap in my opinion when it comes to many ‘middle class’ decadent western workers.

[Although pampering the workers to increase their productivity was an almost an accidentally successful strategy for say the Quaker capitalists, and Robert Owen, whose achievements in that cost- benefit direction were for a long while considered as seminal for the capitalists themselves.]

It is a bit different at the cutting edge of manufacturing and real raw capitalism in action that has been transferred to the third world which is where Karl came from, and where they are actually at ‘subsistence’ level and on the flip side any further lowering of wages does actually impair the productivity of their workers.

Not a problem if there is a load of fresh blood and healthy peasants being thrown off the land and onto the labour market or you can just kidnap them from Africa and work them to death in a carefully calculated seven years.

The benefits being sufficient to pay for the replacement of that labour power on the New Orleans slave market etc.

The record is probably 28 days in Auschwitz; that is from the German doctors who were interested in that kind of thing.


I think the market value of labour power(s) has always been a little bit of a weak point in Marx’s theory.

Although he did stipulate that his theory depended on the free movement of labour power eg economic migration of labour, which was not a ‘political’ problem then, and the free movement of capital.

And labour power is still a commodity and potentially a skilled one and if the supply is low it can command a higher market price.

[bropasaran]

Can someone explain surplus value or suggest some books on it?
The Wikipedia article is too complex for me and most of its sections has some issues so not sure if it's reliable anyway.

What is "surplus value"?
http://anarchism.pageabode.com/afaq/secC2.html#secc21

I would suggest going trough the entire sections B and C if you're interested in economic theory, there are index pages, so you can just look at particular questions you're interested in.

[RedMaterialist]

Just for discussion.

I don’t much like the idea of;

‘the market value or exchange value of the worker’

'Formally' the value of labour power is the amount of value or time required to maintain it in its original condition or reproduce it.

There can be a difference here between the theoretical, or abstract if you like, and the ‘practical’.


Taking a western first world capitalist position of workers, as it goes, at the end of a say a forty hour week I am going to need stuff that contains and is produced by 30 hours of other people’s productive effort in order to reproduce my ability to work.

Otherwise, as the theory goes, I will loose the will to live and go completely to pieces and degenerate into a ‘crippled condition’ and without my holidays to the Algave and flat screen TV’s, my productivity and my labour power will be impaired and depreciate.

Which is a bit crap in my opinion when it comes to many ‘middle class’ decadent western workers.

[Although pampering the workers to increase their productivity was an almost an accidentally successful strategy for say the Quaker capitalists, and Robert Owen, whose achievements in that cost- benefit direction were for a long while considered as seminal for the capitalists themselves.]

It is a bit different at the cutting edge of manufacturing and real raw capitalism in action that has been transferred to the third world which is where Karl came from, and where they are actually at ‘subsistence’ level and on the flip side any further lowering of wages does actually impair the productivity of their workers.

Not a problem if there is a load of fresh blood and healthy peasants being thrown off the land and onto the labour market or you can just kidnap them from Africa and work them to death in a carefully calculated seven years.

The benefits being sufficient to pay for the replacement of that labour power on the New Orleans slave market etc.

The record is probably 28 days in Auschwitz; that is from the German doctors who were interested in that kind of thing.


I think the market value of labour power(s) has always been a little bit of a weak point in Marx’s theory.

Although he did stipulate that his theory depended on the free movement of labour power eg economic migration of labour, which was not a ‘political’ problem then, and the free movement of capital.

And labour power is still a commodity and potentially a skilled one and if the supply is low it can command a higher market price.

But using your example, wouldn't 30 hours of labor be the market value of labor power (or wages) and 40 hours be the value produced by the worker? The capitalist then takes the 10 hours of labor created as profit.

[Anglo-Saxon Philistine]

I don't know, Dave, could you set a larger font size maybe? I think there are people a few blocks from my apartment that couldn't read your post.

The price of reproduction of labour-power - which includes a bit more than simply keeping the worker alive - represents the minimum wage below which the capitalist can't go without hurting the rate of profit of his enterprise, except in truly extraordinary circumstances (slavery is a pre-capitalist form of labour, where the employer is responsible for insuring the reproduction of the labour-power of the slave). Of course, nothing would stop him from paying his workers more - except that the market punishes those who do. If the capitalist pays his workers a wage that is significantly higher than the price of reproduction of labour-power, his rate of profit will go down significantly compared to other enterprises in that sector of industry, and when that happens, bad things happen to the generous capitalist.

All of this assumes that there are no reforms such as a minimum wage, insurance etc. These drive wages up - which is why the bourgeoisie resisted them and why it aims to dismantle them now, when the postwar expansion of capitalism has long since passed - but they do so across the board, giving no single enterprise a comparative advantage.

Then, of course, there is the labour aristocracy, bought off by imperialist cartels, who can afford to do so due to superprofits arising from the exploitation of the neo-colonies. But that is a Leninist position that Dave presumably doesn't want to hear about, although his rant sounds like something a Maoist Third-Worldist might post. Leave it to the guy who always praises Christianity to rave about "decadent" "middle-class" (what's that? what kind of class is the middle class? what are its relations to the means of production?) workers with their (gasp!) holidays to Algarve.

[DigitalBluster]

The following is overly simplistic, like the first cartoon, and so it's open to the same criticisms, but it deserves to be posted because Fred Wright (http://images.library.pitt.edu/f/fredwright/) already did it, and did it better:

http://links.org.au/files/surplusvalue.jpg

Anyway, you can't expect a cartoon to be anything but simplistic, and so as long as it might provide an "Aha!" moment, without misleading, then it can serve a purpose.

[RedMaterialist]

Can someone explain surplus value or suggest some books on it?
The Wikipedia article is too complex for me and most of its sections has some issues so not sure if it's reliable anyway.

Maybe this. Workers puts together a car on an assembly line. The parts, tools, screws, bolts, factory depreciation, etc are all worth 15,000. The workers time is worth 10,000. When the car is finally completed it is worth 35,000; i.e. there has been a surplus value produced of 10,000, which is embodied in the car when it rolls off the assembly line and which the capitalist takes as his profit.

But, where does this surplus value come from? It is the surplus value added to the parts during the process of assembly.. The worker is not paid for this added value. The parts, screws, bolts, oil, etc. all had to be put in motion by a human being; the result is worth more than the sum of its parts, as it were.

It is only a human being who can add this surplus value. When robots are used to perform this operation the rate of profit decreases because a capitalist cannot suck profit from a machine, the machine will only produce the costs of what went to its production. It is only the human which can create more value than what went into the human's production. Only a human can grow a wheat field which can feed 10x the number of humans used to produce the wheat.

When robots make cars and wheat with limited human involvement what you get is cheaper cars and dheaper wheat. And thus less profit. Less profit means capital moves away from that production to something else and thus causes crisis which destroy jobs and factories, then the whole process starts up again..the 7-10year cycle.

[USAneedsCommunism]

Wow cool explanation in that image, thanks. You know one of the main problems i see in capitalist economic models is that because the main objective of business owners is to make a lot of money, they necessarily have to sell their goods and services at a much higher price than the cost of the good and service. So for example I suspect that if a Honda Accord of the year 2014 is priced at around 26,000 dollars, who knows if the cost of making that car is much lower like 7000 dollars. And the same happens with internet and cable-tv and dish satellite providers, where the costs are real real low, like 5 dollars per month and yet cable-tv and dish satellite providers like Dish Network sell their monthly packages at 40 dollars per month

So another benefit of a dictatorship of the proletariat (socialism) is that the prices of most goods and services would be lower, than in the current dictatorships of the capitalist class that exists in most countries of the world right now

[Slavic]

Wow cool explanation in that image, thanks. You know one of the main problems i see in capitalist economic models is that because the main objective of business owners is to make a lot of money, they necessarily have to sell their goods and services at a much higher price than the cost of the good and service. So for example I suspect that if a Honda Accord of the year 2014 is priced at around 26,000 dollars, who knows if the cost of making that car is much lower like 7000 dollars. And the same happens with internet and cable-tv and dish satellite providers, where the costs are real real low, like 5 dollars per month and yet cable-tv and dish satellite providers like Dish Network sell their monthly packages at 40 dollars per month

So another benefit of a dictatorship of the proletariat (socialism) is that the prices of most goods and services would be lower, than in the current dictatorships of the capitalist class that exists in most countries of the world right now

That is more of a vulgar view of economics, basing profit on cheating the market.

You have to understand what creates a value. Labor creates a value which is measured by the amount of hours labored. A commodity contains within it all the hours of labor used to create its.parts and shape it, this total is its value.

People have value to, our value can be seen as the amount of labor needed for us to stay alive: food, housing, entertainment. When a person workers for more hours than the hours of labor needed for his survival, then he is producing surplus value.

[Brutus]

So another benefit of a dictatorship of the proletariat (socialism)...

The revolutionary dictatorship of the proletariat is not socialism- it is the transitional phase between capitalism and socialism. The DotP is capitalism being dismantled by the working-class, through the means of destroying the law of value by constructing a scientifically planned economy that produces in accordance to a common plan. Socialism is the set if conditions that result from the destruction of capitalism: a stateless, classless, wage-less society with free access to the things produced.

[ckaihatsu]

[23] A Business Perspective on the Declining Rate of Profit

http://s6.postimg.org/yuivdcyy5/23_A_Business_Perspective_on_the_Declining_Rat.jpg (http://postimg.org/image/yuivdcyy5/)

[USAneedsCommunism]

Hi Brutus: Thanks a lot for that clear explanation about the meaning of the word socialism. I thought that socialism was the temporary workers-dictatorship between the overthrow of capitalist governments and the begining of the communist anarchist system. I thought that workers-dictatorship is the same thing as socialism, and communism is the same thing of the anarchist state-less phase in the far future






The revolutionary dictatorship of the proletariat is not socialism- it is the transitional phase between capitalism and socialism. The DotP is capitalism being dismantled by the working-class, through the means of destroying the law of value by constructing a scientifically planned economy that produces in accordance to a common plan. Socialism is the set if conditions that result from the destruction of capitalism: a stateless, classless, wage-less society with free access to the things produced.

[Luís Henrique]

All of this assumes that there are no reforms such as a minimum wage, insurance etc. These drive wages up - which is why the bourgeoisie resisted them and why it aims to dismantle them now, when the postwar expansion of capitalism has long since passed - but they do so across the board, giving no single enterprise a comparative advantage.

Yes, except for the problem of international competition.

Luís Henrique

[zumacraig]

My question is always 'how did the capitalists acquire ownership of the means of production in the first place?' Historically, the land was taken and fortunes that bought the 'means' were built on slave labor. However, that doesn't totally dispel the myth of the 'self made man'. That's always the argument I get from people. Thoughts?

[RedMaterialist]

My question is always 'how did the capitalists acquire ownership of the means of production in the first place?' Historically, the land was taken and fortunes that bought the 'means' were built on slave labor. However, that doesn't totally dispel the myth of the 'self made man'. That's always the argument I get from people. Thoughts?

Here are some simplified, not well organized, thoughts, for what they are worth.

When the slave econmy (the Roman Empire) ended, the slaves more or less ended up as serfs in feudalism. Some of serfs who had artisnal skills, carpenters, weavers, etc. managed to escape the feudal estates and move to the towns. Former slaves with those skills also did the same. Over 500-600 yrs the feudal system developed as far as it could.

I would say that around 1100 or so the town artisans began to associate into corporations, guilds, etc. for the purpose of protecting their monopolies in the various trades, but, more importantly, to protect themselves from the marauding feudal lords. There is a famous painting by Brueghal, I think, which shows a merchant riding in a caravan looking backward anxiously for highway robbers.

This association slowly developed into a class, the burghers, the beginnings of the bourgeoisie. The early burghers owned their own means of production, the looms, tools, etc.

What happened then is not entirely clear to me. But the merchant economy expanded and when America was discovered there was a huge influx of gold and silver (from the Spanish brutality in the use of slaves in the mines.) Thus, there was massive "investment" in Western Europe based robbery of slaves.

The new money led to improvements in machinery, the most famous being the power loom for weaving. The new machines forced the owners to begin the extensive use of division of labor, far beyond what it had ever been.

The bourgeoisie then began importing labor from the feudal estates. The feudal lords wanted to expel the serfs and peasants because it was more profitable to raise sheep, etc., than to take rent from the serfs, and the landlords began "clearing," literally, their estates. The serfs were thus a class of people who owned nothing except their ability to work, they owned no land, no housing, no tools, nothing except their labor. The proletariat class was born.

The bourgeois then had a perfect answer to their labor shortage. The labor shortage became a permanent labor oversupply (Engel's army of the unemployed,) and the workers were forced to compete with themselves, resulting in wages that barely kept them alive. And since they owned no means of production they owned none of their own product.

It was the dream of the bourgeois come true: workers paid at the minimum possible and the capitalist owning everything produced by the worker. The profit came from the difference between the starvation wages and the value which the workers produced.

From then on the sky was the limit for the capitalist as long as the workers were kept starving. Factory production expanded to modern industry, from a few hundred workers per factory to millions of workers in thousands of industries. And finally, to the monopolization of the means of production and the control of the entire society by finance capital.

As Marx showed, the fundamental basis for the capitalist system is to separate the workers from their means of production.

As far as the myth of the self-made man, it is obviously extremely important for the capitalist to hide from the working class, and, I suppose, from himself the true nature of the capitalist system. Thus, no one should complain about the system because everyone can become another Bill Gates, working in their garages creating the next Microsoft.

Bill Gates was not a particularly good computer programmer and he was one of thousands. And there were hundreds of small computer companies trying to develop their own operating systems. Gates got extremely lucky. A programmer named Steve Jobs wrote a program that used something called the "windows" system. You could have dozens of "windows" open on one computer. Jobs forgot one thing, however. He forgot to trademark or patent his invention. He probably assumed that nobody would dream or would be capable of putting a stranglehold on "windows."

Gates may be a shitty programmer, but he certainly knew a good thing when he saw it. He immediately trademarked, patented Windows, got the US government to protect his monopoly and now he controls 85% of the world computer operating system market.

In my view Gates shows the classic capitalist development: he started small, stole ideas from his competitors, and created a monopoly with the support of the government. He now imports low wage programmers from India exactly as the first bourgeois manufacturers did in the Middle Ages.

Slavery, murder, rape robbery, theft, monopoly and cheap labor. That's how the capitalist owns the means of production. They also use profits from this system to pay cheap labor to build their factories, banks, etc., thus restarting the system all over again, which then collapses every 7-10 years.

This is not to say, however, that all of these gigantic means of production should be destroyed. What needs to be done is for society to take over the means of production. When the next Steve Jobs comes along then the next revolution in production will happen. However, under socialism the new production will be developed according to a rational plan. At least IMO.

[zumacraig]

@RedMaterialist-

Thanks for the response. Make sense. The self made man is a myth, but those few lucky SOBs like Gates are exceptions that prove the rule. Even in his situation he stole in order to make money. What's sad is miserable workers cling to that statistically nonexistent probability that they will 'make it big someday'. I'm inclined to say where's the revolution!

[ckaihatsu]

Hi Brutus: Thanks a lot for that clear explanation about the meaning of the word socialism.




I thought that socialism was the temporary workers-dictatorship between the overthrow of capitalist governments and the begining of the communist anarchist system. I thought that workers-dictatorship is the same thing as socialism, and communism is the same thing of the anarchist state-less phase in the far future


[7] Syndicalism-Socialism-Communism Transition Diagram

http://s6.postimage.org/jy0ua35yl/7_Syndicalism_Socialism_Communism_Transiti.jpg (http://postimage.org/image/jy0ua35yl/)

[exeexe]

I'm inclined to say where's the revolution!
There cant be a revolution before a substantial part* of the population support the idea of a revolution.
Even if say 5% of the population were revolutionary and took an extreme risk and got extremely lucky and the revolution was a success, what should prevent the rest of the population and thus society from falling back into old habits?

*does not equate to 50%