Capital - "A class of buyers who do not sell."

[Red Star Rising]

In chapter 5 of Capital Marx makes the following statement:

"The consistent upholders of the mistaken theory that surplus value has its origin in the nominal rise of prices or in privilege which the seller has of selling too dear assume therefore that there exists a class of buyers who do not sell, i.e. a class of consumers who do not produce."

This seems a bit odd from a modern perspective.

While such a situation, of a class who exist chiefly as consumers, was likely impossible during Marx's time due to the relative destitution of the masses it seems today that the opposite is true. If we look at an iPhone, its components altogether come to a cost of about $90 and the labour used to make them is extremely cheap because they're usually mad in sweatshops, and yet they go on the market for upwards of 3 or 400. This seems to be an extraction of surplus value from a class of people whose very purpose in the capitalist system is to consume.

[Anglo-Saxon Philistine]

Cheap labour is not the same as low labour-value - in fact it usually means that the workers who supply cheap labour are highly exploited, and the ratio of their wages and the exchange value of the commodities they produce is lower than the equivalent ratio for unionised workers in the metropole.

Now, how do the people who buy iPhones get the money to buy iPhones with? As we can't all have mortally ill uncles in America, I am going to assume that most of them get it either by selling products, or their own labour-power. So the assumption that there is a class that buys but does not sell is wrong.

[RedMaterialist]

In chapter 5 of Capital Marx makes the following statement:

"The consistent upholders of the mistaken theory that surplus value has its origin in the nominal rise of prices or in privilege which the seller has of selling too dear assume therefore that there exists a class of buyers who do not sell, i.e. a class of consumers who do not produce."

This seems a bit odd from a modern perspective.

While such a situation, of a class who exist chiefly as consumers, was likely impossible during Marx's time due to the relative destitution of the masses it seems today that the opposite is true. If we look at an iPhone, its components altogether come to a cost of about $90 and the labour used to make them is extremely cheap because they're usually mad in sweatshops, and yet they go on the market for upwards of 3 or 400. This seems to be an extraction of surplus value from a class of people whose very purpose in the capitalist system is to consume.

I've often wondered about the same thing.

One possible explanation is that the surplus value produced in manufacture of the components is actually about 200-300 dollars, but Apple only pays a fraction of that because the workers are more slaves/serfs than workers under capitalism. In other words, under slavery it might cost a slave owner a few cents for labor to produce a bale of cotton which might sell for $100 and the surplus value would be $99, not counting non-labor costs. (A bale of cotton usually weighs about a hundred pounds.) A slave, therefore, produces surplus value (but not a commodity) at an extremely low cost. Suppose, for example, in 1860 the British cotton dealers could somehow set up a clothing factory in the southern U.S. and force a cotton plantation owner to sell the bale of cotton for $50. Then they could produce cloth (by using slaves in the factory) and sell it for the equivalent of $100 (not counting any additional cost) in Britain. It seems to me this is the same process being used by Apple in China, although technically the workers in China aren't slaves. (I think the British actually did this in India and China in the 19th century.)

This might mean that wage labor is really based on some kind of world standard rather than the standard of any individual country. The workers and consumers of the developed west thus pay the full value of the commodity produced by the cheap wages of China.

Another factor is the use of robots and machinery to produce things like the iphone which is probably 85% produced by robots. That would lead to a class of consumers who only purchase and do not produce. The profit would be extracted from that class by the use of credit advanced them to make the purchases. But since that credit is fictitious and not based on any real production of value, then one day the reckoning has to be made and the whole system comes crashing down.

Marx also noted, I think in the same chapter, that a capitalist who sells a commodity also has to purchase commodities (raw materials, etc.) and thus is not only a seller who can sell at a premium but also a buyer who has to pay a premium, except, of course for the one commodity, labor. So, for every commodity except labor, the transaction is a wash for the capitalist and cannot produce any profit.

[contracycle]

Surplus value is extracted from productive labour, not from consumers. I suspect that what Marx is pointing out here is that the capitalist approach, wrongly, treats "consumers" and "workers" as distinct categories, when they are in fact the same people.

This is, then, precisely what leads to capitalist enterprises slashing wages and reducing the number of workers, while failing to realise that in so doing they are also reducing the capacity of the market as a whole to consume the very same stuff they wish to sell.

It's seen again in the idea of "consumer power"; the propaganda tools of capitalism have largely persuaded most people that the only effective form of power they wield is as consumers, not as producers - that they can make the choice to buy or not buy, but not to work or not work (strike).

[RedMaterialist]

Now, how do the people who buy iPhones get the money to buy iPhones with? As we can't all have mortally ill uncles in America, I am going to assume that most of them get it either by selling products, or their own labour-power. So the assumption that there is a class that buys but does not sell is wrong.

What kind of jobs are people working to earn the money to buy an iPhone 6? They can't all be Wall Street traders. The median individual income in the u.s. is only about 25K.