How is surplus value extracted from someone who works in services?

[Red Star Rising]

As I understand it, the Marxist perception of exploitation is:

Worker makes stuff, capitalist sells that stuff, capitalist pays the worker less than he sold the product for thus making a profit with which he buys more machines and workers, repeat. And surplus value is extracted as workers do not get in return the full cost of their labour.

How does this apply to people working in office jobs or services who aren't producing material things?

[Redistribute the Rep]

Their service adds exchange value to the product, but they are paid less than the exchange value they add, so they are being exploited.

[Rudolf]

Use-values don't necessarily have to be physical objects in and of themselves but can exist in an immaterial form.

[Creative Destruction]

Well, "services" is nebulous. No one has ever provided a strict definition for which an adequate analysis can be made from. There are people in service jobs - like fast food - that produce tangible commodities, producing/cooking food as if they were making cars. Then there are those who offer purely service, like servers at restaurants, housekeepers, landscapers and what not. But, to be honest, I don't see a massive difference between that and manufacture labor. A capitalist still holds capital and still extracts surplus labor value from the workers. The same general principle would still apply. You pay people enough from your revenues for them to live on, pay fixed capital costs, and keep the rest as profit, i.e. surplus value.

[DOOM]

Depends on the nature of the work you're doing.
Surplus value is only extracted from "productive labor" (http://en.wikipedia.org/wiki/Productive_and_unproductive_labour) in which human labor is used to increase capital (Valorisation).
Financial administration jobs for example do not generate more value as the value is generated in the production process.
The worker used in this example however is only managing the circulation of capital which does not generate more value. The white-collar worker gets only a share of this value.

[socialistlawyer]

In China and Cuba surplus value among farmers equal the home appliances and luxury items that they buy. The state owns the companies selling these items and they make everybody happy. Imagine a socialist state with nothing to buy. They're trapped into a circle of dullness and boredom. Look at how North Korea built food cafeterias all over the city of Pyongyang. It's a blissful sight to look at.

[Red Star Rising]

Teachers are a good example. Are they exploited in any way?

[#FF0000]

Yes. The service itself is the product, which is being consumed as the service is being performed, if that makes sense. For example, when you go to pay for a haircut, the haircut itself is the product the haircutter's labor is going into. You might not be getting a material object out of the transaction, but it's productive labor all the same.

[Red Star Rising]

Yes. The service itself is the product, which is being consumed as the service is being performed, if that makes sense. For example, when you go to pay for a haircut, the haircut itself is the product the haircutter's labor is going into. You might not be getting a material object out of the transaction, but it's productive labor all the same.

So services are basically commodities whose production and consumption cannot are indistinguishable. That makes sense I guess.

But who is the one extracting surplus value? The hairdresser who sells their service for more than it is worth or the person who buys their labour?

[Creative Destruction]

So services are basically commodities whose production and consumption cannot are indistinguishable. That makes sense I guess.

But who is the one extracting surplus value? The hairdresser who sells their service for more than it is worth or the person who buys their labour?

iirc, for this example, hairdressers usually work on a for-rent, independent contracting basis within a shop. same with tattoo artists and what not. they're basically petty bourgeoisie. no more different than a lawyer renting out an office and working from there, for themselves. they own the means of production, in as meager a way they do, so exploitation, where it regards Marxist terminology, is irrelevant there. you might as well ask if consumers might be extracting surplus value from another, bigger business.

[RA89]

As I understand it, the Marxist perception of exploitation is:

Worker makes stuff, capitalist sells that stuff, capitalist pays the worker less than he sold the product for thus making a profit with which he buys more machines and workers, repeat. And surplus value is extracted as workers do not get in return the full cost of their labour.

How does this apply to people working in office jobs or services who aren't producing material things?

I think you're over thinking things mate. You just need to replace "stuff" with "service" imo.


Worker provides service, capitalist sells that service, capitalist pays the worker less than he sold the service for thus making a profit with which he buys more machines and workers, repeat. And surplus value is extracted as workers do not get in return the full cost of their labour.

For a hair dresser example-

A guy owns a hair-dresser shop, he pays the hair dresser employees $5 for each haircut they give. The shop charges customers $10 per haircut.
The hair dresser employee has not gotten the full value of their service. $5 less.

[DOOM]

Teachers are a good example. Are they exploited in any way?

There is no capital involved in teaching so technically no. Generally said, everything with state-involvement is not productive labor. The educational system is financed by taxes mostly and this money has been generated in production.
The neoliberal wet dream however which would involve the privatisation of the educational system would make teachers productive workers.

[PhoenixAsh]

Services in Marx were not as devloped as in our economy. So his analysis is based on the role service play in his time period and economic reality.

Services in Marx are paid for by the surplus value created by productive labour directly by the Capitalists as revenue. They do not produce surplus value but they add directly to the wealth of the capitalist or adds to his comfort and time or protection. The portion of capital spend on service is governed by the rules of production however.

If you follow Marx through in the current economic state of services becomming a commodity...then services are being sold as a commodity and thereby becomes productive labour which creates surplus value (ideally).

You can also look at it in another light where the surplus value is replaced by added value.

I am sue somebody better versed in economics will be able to correct me where necessary.

[#FF0000]

So services are basically commodities whose production and consumption cannot are indistinguishable. That makes sense I guess.

But who is the one extracting surplus value? The hairdresser who sells their service for more than it is worth or the person who buys their labour?

It depends on how that person's employment is arranged. A lot of service workers are employed the same as any other wage-earner. Some are proprietors themselves and can be described as petit-bourgeois.

I think it might get a little sticky when you're talking about domestic workers though (butlers, housekeepers, etc), but I'm inclined to believe they're generally exploited as well as domestic labor is necessary to the reproduction of capital n all that. Maybe it's different when you're talking about ultra-high end butlers like the people who manage housework at the White House but yeah.

[RedMaterialist]

The average pay of a fast food worker in the U.S. is the minimum wage, 7.25 an hour. What is the value, on average, produced by or (value "added") a fast food worker?

If it's more than 7.25 then the worker is being exploited. If it's less than 7.25 then McDonalds, etc. can't make a profit.

Someone mentioned "value added." Is there any real difference between surplus value and value added?

[Comrade #138672]

A service is a commodity embodying labor-time. Therefore, it has exchange-value, and, therefore, service workers can be exploited.

[Comrade #138672]

Someone mentioned "value added." Is there any real difference between surplus value and value added?Definitely.

Given the fundamental formula of value: W = c + L = c + v + s. We can say that L is "value added" and that surplus-value is s. Since v is almost never 0, we can say that L is generally not equal to s, and, thus, "value added" is fundamentally different from surplus-value. If v is not equal to 0, then L cannot be equal to s. In that case, L > s would hold. In other words, "value added" must be more than just surplus-value.

[Red Star Rising]

Definitely.

Given the fundamental formula of value: W = c + L = c + v + s. We can say that L is "value added" and that surplus-value is s. Since v is almost never 0, we can say that L is generally not equal to s, and, thus, "value added" is fundamentally different from surplus-value. If v is not equal to 0, then L cannot be equal to s. In that case, L > s would hold. In other words, "value added" must be more than just surplus-value.

So in layman's terms - the value added is any additional value added by the service whereas surplus value is however much of that added value is not paid back to the service worker?

[Comrade #138672]

So in layman's terms - the value added is any additional value added by the service whereas surplus value is however much of that added value is not paid back to the service worker?Exactly. But this goes for any kind of labor.

[RedMaterialist]

Definitely.

Given the fundamental formula of value: W = c + L = c + v + s. We can say that L is "value added" and that surplus-value is s. Since v is almost never 0, we can say that L is generally not equal to s, and, thus, "value added" is fundamentally different from surplus-value. If v is not equal to 0, then L cannot be equal to s. In that case, L > s would hold. In other words, "value added" must be more than just surplus-value.

I think one of the ironies of economics will be that the "value added" of the bourgeois economists is nothing more than the surplus value of Marx.

As to your formula, are your variables, W is value, and c is constant capital and L is 'value added', v is variable capital and s surplus value?

If value = constant capital + value added, then why didn't Marx include this in his calculations? Marx showed that c + v ...> (produces) c + v + s. S being the value added by the worker, the surplus value added by the worker, which is the profit of the enterprise.

Also, you seem to be saying that value added = variable capital (wages) and surplus value. But how can value added be a combination of wages and surplus value?

Do you have a link for these formulas

[RedMaterialist]

So in layman's terms - the value added is any additional value added by the service whereas surplus value is however much of that added value is not paid back to the service worker?

But no extra value (whether added, surplus or whatever you want to call it) is ever paid back to the worker.

[Red Star Rising]

I think one of the ironies of economics will be that the "value added" of the bourgeois economists is nothing more than the surplus value of Marx.

This is only true if non of the value added is paid back to the worker. If we imagine a commodity that is made or imported or whatever is worth £100 and service labour adds an additional £100 the value added and surplus value are the same only if the worker is not paid at all, if they are paid £30 for their labour then the surplus value would be £70 as 70% of the value added is not paid back to the worker.

[RedMaterialist]

This is only true if non of the value added is paid back to the worker. If we imagine a commodity that is made or imported or whatever is worth £100 and service labour adds an additional £100 the value added and surplus value are the same only if the worker is not paid at all, if they are paid £30 for their labour then the surplus value would be £70 as 70% of the value added is not paid back to the worker.

The commodity after the additional labor would be worth 100 + 30 + 70, and the capitalist can sell it for 200. But it only cost him 130. The profit of 70 is surplus value or added value or value added by the worker. I just don't see how value added/added value is any different from surplus value.

The actual words mean exactly the same, except that value added implies that someone added the value. 'Surplus' value sounds like something left over. Marxists know what it means, but a modern day worker would understand exactly what value added is. She is the one who adds the value. In fact, most big employers demand that their employees actually show a 'value added' component to their work.

[Red Star Rising]

The commodity after the additional labor would be worth 100 + 30 + 70, and the capitalist can sell it for 200. But it only cost him 130. The profit of 70 is surplus value or added value or value added by the worker. I just don't see how value added/added value is any different from surplus value.

No, the commodity was originally bought by the capitalist for 100, then the worker added another 100 making it worth 200. therefore the value added by the labour is 100 but this is not the surplus value because some of that had to go back to the worker in the form of wages. Therefore, the capitalist was not able to extract the entirety of the added value, he did manage to extract 70% of it, making the surplus value 70.

The value added is the total value that is added to a commodity by the worker (or how much more it can be sold for if we assume that it is sold for as much as it is worth).

The surplus value is the difference between the value added by the worker (in this case 100) and the wage that they are given (in this case 30, 100-30=70 so the surplus value here is 70).

[RedMaterialist]

The surplus value is the difference between the value added by the worker (in this case 100) and the wage that they are given (in this case 30, 100-30=70 so the surplus value here is 70).


In that case, wages are, strictly speaking, not an additional value, but rather a replacement of the value of the worker. Wages are, instead, a cost. But, at any rate, the value is added by the worker as is the surplus value. The capitalists say that the added-value (70) accrues to them because of their special expertise in the marketplace.

Either way it is the worker who adds the surplus value. My point is that modern economists (non Marxists) say that the worker is fully paid for any value added by them.

[Prof. Oblivion]

The valorization of the distribution process I think is where the focus of this thread should lie. Marx discussed exploitation in terms of production, which includes the "production" of services. What this doesn't focus on is the labor force associated with overhead and the supply chain, i.e. the labor associated with bringing the product to the point of sale.

For example, a clothing company produces and ships a product to an independent clothing store. The store workers, and the business, survive by selling products that are already manufactured. Are these workers being exploited even though they weren't involved in the productive process? How does this answer change, if at all, if we now change the scenario to have the same company own the store?

Further there are all kinds of workers that aren't involved in the production process that aren't in management. How are these workers exploited, if so?

[contracycle]

. The capitalists say that the added-value (70) accrues to them because of their special expertise in the marketplace.

No. They say it belongs to them because they advanced the capital which set up the firm initially. It has nothing to do with any alleged expertise, only with control over capital. A capitalist doesn't have to actually DO anything; they can sit around on a beach drinking cocktails and still make this claim, backed up by the armed might of the state to enforce it.

I suggest "value added" is a piece of jargon employed by modern economists in an attempt to describe the fact that, as Adam Smith explained, labour is the original commodity from which all others are derived, without having to employ, and thus legitimise, the Labour Theory of Value.