Replies to the "but the owner bought the tools" argument?

You should ideally read Value Price and Profit, or better Capital vol 1 to understand this properly. Both are online, Value, Price and Profit is a day's reading instead of a few months though and is here: https://libcom.org/library/value-price-and-profit-karl-marx

If a capitalist has a certain amount of money, and purchases tools and rents or purchases premises, then this hasn't created anything at all - it's simply an exchange of money for tools and land. This is called fixed capital.

However your friend is right that the value of those tools gets used up as they're used to create commodities, surplus value comes only from the value added in the production process by the worker's labour power.

If a worker works ten hours, and five hours would have been sufficient for the capitalist to cover their wages, then the remaining five are surplus. This might be 50% of the working time, but it might result in only 2% profit due to the outlay for tools, materials etc. making up a much higher proportion of the total money expended to produce x amount of commodities.

The money expended on tools is part of the costs, just as the money expended on labor power. When the new product made using these tools and labor power is sold, the revenue covers these costs but also leaves something extra, i.e., profit (i.e., revenue > costs). Therefore, profit cannot be the compensation for previous expenses on tools – these expenses are already covered. (More precisely, the revenue covers the costs of tools to the extent that these tools are depreciated by using them. So, e.g., the costs of a lathe used in metalworking will be fully covered only after a few years, after thousands or millions of parts were made on that lathe and sold, leaving the lathe totally depreciated. They are still covered, though, and therefore the source of profit must lie elsewhere.)

Your friend could say – but what if the (capitalist's) work that is necessary to organize the buying of tools, the hiring of labor power, etc., is the source of profit? OK, but there are enterprises where this work is done by wage workers and not the capitalist (actually, this is the case in most companies – there's an HR department, a purchase department etc.), and these enterprises still make a profit (while also paying the workers in those departments for their work). So this work cannot be the source of profit. (Incidentally, the labor expended on purchasing tools and hiring people is, in Marx's sense, unproductive: it does not create surplus value, although it may increase that enterprise's profit. At the same time, even though these workers are unproductive, they are still exploited. But let's not get into a more complicated discussion of productive and unproductive labor and the difference between surplus value and profit.)

The person you were talking to was correct in saying that the worker would not be able to produce any value without the capitalist (otherwise, why would anyone look for work? If everyone could produce value on their own, we would be a society of small entrepreneurs.). But it also holds that the capitalist would not be able to produce any value (and, more importantly, any surplus value) without the worker's labor power (otherwise, why would they hire anyone?).

Ultimately, this stems from the fact that in a capitalist society, the objective conditions of labor (means of production) are separated from the subjective conditions (human labor power). The production of wealth is only possible if both of these conditions are united. In capitalism, this is done through the market and under the control of those who have the money to command both the means of production (i.e., to buy or rent it from others) and other people's labor power (which they also rent from others). This command also allows them to appropriate profit (ultimately, unpaid surplus labor of others). So your friend, perhaps inadvertently, pointed out an important feature of capitalism, one that makes it different from all other societies, in which production was organized differently.

Why buying isn't a form of value production: the buying and selling of commodities transfers value (from one person to another) but does not create any new value. Say you have 10 bananas and I have 5 apples. Suppose the value of these bundles of commodities is equal. If we exchange them, what occurred is the transfer of equal value between us, but no new value is created. Even if the exchange is unequal (you convince me to give you 5 apples for 5 bananas), what results is simply a redistribution of value (you now have 5 bananas and 5 apples, while I have 5 bananas), but the total value (between us) remains the same (i.e., it's still equal to the value of 10 bananas plus 5 apples). By convincing me to give up 5 apples for less than their value, you've earned a profit. But no new value was created. More generally, while the process of buying and selling can result in profit, it does not create new value. (Commercial capital, i.e., shops, supermarkets etc., works by appropriating a part of surplus value created elsewhere, by industrial capital.)

Discussions like this one tend to get confusing because people use different definitions of value. Someone might argue that, in fact, new "value" was created in the bananas and apples example, because you like apples more than bananas and I like bananas more than apples. So the "total value" "for you" is increased by the exchange, just as it is increased "for me". From Marx's point of view, this is based on a confusion of use-value with value.

The owner indeed owns the means of production, but it's the workers' excess of time spent at work which creates all possible profit of enterprise, rent of land, and interest. Those bits are just different portions of surplus value, and their only source is the extra time spent by workers, over and above what they take in wages.

Even the tools bought by capitalist A (whose value is transferred to the value of the final product) are bought from capitalist B who exploits his workers in this same manner (and who has to, to not eventually go out of business). So the value of those tools he legitimately bought also includes surplus value, originating in a free gift (made in the form of labour time) from workers to the capitalist in question. From the point of view of the capitalist, the whole situation is right and just, and he wants to recoup his investment and more, but from the point of view of workers, it's a nuisance to pay for capitalism with unpaid time. This is the basis of Marx's theory of value: that surplus value equals surplus labour equals unpaid work.

As jura says, the cost of the tools is paid from the proceeds (after selling the mass of commodities produced), just as the workers' next wage packet is paid out of them. Those proceeds are the result of this week's work, but they are needed to pay for the next round, the next week/month, etc. for as long as the company exists. It's the excess beyond those costs of reproduction which makes up profit/rent/interest, and which offers the possibility of a company growing, expanding its productive capital or the amount of workers employed, etc. So the capitalist might feel this is his reward/incentive/etc. for bringing together the elements of production, but the surplus value as such is merely the result of excess time spent by workers doing work for more time than is necessary for the reproduction of their own livelihoods, and doing so free of charge (or without remuneration).

If the capitalist did not buy any tools, rent a factory building etc., the tools or the final product would perhaps not exist in a purchasable form, but simply in a natural form (not being a commodity but a mere thing produced by someone), and a worker might still use these to produce another thing someone needed. Tools/machines etc. can exist as such, but under the capitalist spell they appear only to exist because they are commodities, or because someone can make a profit by delivering them up as such, and getting paid for the unpaid labour of his employees (the paid labour itself is not profitable, because it serves to reproduce the worker, just as the money spent on tools serves to pay for tools, or to replace them once they break).

I find the theory of ‘the extraction of surplus value’ an area where I get tripped up.

In August’s issue of Socialist Standard the usual featured article - ‘Cooking the books’ and titled ‘Are we Exploited twice?’ (page 16), was critical of The London Anarchist Communists recent pamphlet ‘Fight for the City’.

I have not yet read this pamphlet, though it was claimed to expound the theory of ‘secondary exploitation’:
‘that workers are economically exploited not just at work through producing a ‘surplus value’ over and above what they are paid for the sale of their mental and physical energies to an employer; they are also said to be exploited outside of work by landlords, moneylenders, shopkeepers and others when they spend their wages’.

I’m not going to paraphrase the whole article, but basically I think the main disagreement lies in:

‘Individual workers and groups of workers can be, and sometimes are, swindled by landlords and shopkeepers who don’t give them a product of equal value to what they pay, but this is still not extracting surplus value from the workers concerned… There is no secondary exploitation, only occasional swindling. Of course if they are ripped off workers are going to react but this cannot be described as part of the class struggle between workers and employers as essentially it is a struggle between consumers and sellers that can be settled by ensuring equal exchange.’

So ‘the extraction of surplus value’ only takes place during production of goods, not during their consumption.

I confess to scratching my thinning hair over this puzzle.

Note: the two quotes are from the Standard.

In the Marxian sense "exploitation" has a narrow meaning.

The amount at which a worker is exploited is the amount to which they work over the amount of time that is necessary to reproduce the value of their labour power. The more a worker is exploited the more surplus labour they perform for their employer. If that makes sense?

Rent is something that both capitalists and workers pay. Rent is just the purchase of a commodity so in the Marxian sense there's no "exploitation" taking place.

Though of course landlords, shopkeepers, lenders etc might try to "take advantage of" their customers, but they're not getting them to perform surplus labour for them.

darren p

The more a worker is exploited the more surplus labour they perform for their employer. If that makes sense?

It does, but only for productive workers. Unproductive workers don't produce surplus value, so on this defintion, they wouldn't be exploited. However, when Marx speaks of commercial workers (i.e., sales clerks, shop assistants etc.) in Volume II, he states that they are indeed exploited. He argues that their wage, as determined by the going rate for labor power of that particular quality, skill, etc., represents an amount of socially necessary labor time that is lower than their (individual) labor time spent at work (doing unproductive labor). So he's basically saying that if these workers were employed productively and worked the same amount of time as they do now (doing unproductive labor), they would produce more value than they're paid now (for doing unproductive labor); hence, they are exploited, although they don't produce any surplus value.

As regards se"condary exploitation" by landlords and various middlemen (as in the sweating system or in temp agencies of today), I think there are passages in Marx that would justify the use of the term "exploitation" here. Marx is sometimes very lax in using the term – I think there's a place in Volume III where he even mentions one capitalist being exploited by other capitalist (I think this is in the analysis of credit, but I'm not sure). It's hard to disentangle the more metaphorical uses from the more technical ones. The definition used by Darren above is perhaps the strictest one, but it excludes unproductive workers.

There's another sense of secondary exploitation I've seen that's getting more popular today, and is related to the the integration of the working class (specifically, it'sprocess of reproduction) into the financial sector (e.g., the money deposited in savings accounts is invested by the bank to make a profit, of which only a minuscule share is paid to the depositors, i.e. mostly workers, as interest; similarly with workers' pensions, health insurance etc.).

Also, Marx often speaks of exploitation with respect to precapitalist modes of production, so clearly there's a transhistorical aspect to it (exploitation as something which occurs in all class societies); this general concept of exploitation must be defined without concepts referring to forms which are historically specific to capitalism (like surplus value), using concepts like necessary labor, surplus labor, surplus product etc. instead.

explainthingstome

What's the problem with arguing that there's nothing wrong with the capitalist aquiring surplus value since the wage of the worker is equal to the value of the labour power she sold?

In one sense there's nothing "wrong" with it. Marx was very much wary of criticizing capitalism in moral terms. There are nice passages in Volume I where he says that the production of surplus value is no violation of equal exchange and no "injustice" to the worker. As regards the first point, exploitation is, on the contrary, the direct result of equal exchange. The commodity "labor power" is indeed – or at least under the assumptions that Marx uses – sold for its value; it is just that when this commodity is consumed, i.e., used in the labor process, it has the ability to produce more value. And as regards the second point, i.e., the "moral" question, he says something like – look, every mode of production has to be judged on its own terms, and in capitalist terms, there's nothing unjust about the capitalist appropriation the surplus value, that is just how the system works.

Marx wanted to avoid a moral critique of capitalism as much as possible (there were some historico-philosophical and political reasons for this, visible in his critique of Proudhon and utopian socialism). The target of Marx's critique is not capitalism's moral injustice or its violation of some abstract principles, but rather the real-world consequences that this basic setup (i.e., capitalists exploiting the workers) has. This would be a long list and it's basically what the three volumes of Capital are about, so here's just as a sample:

– the creation of immense wealth to produce profit, not to satisfy human need, leaving a lot of really existing needs unsatisfied although the means to take care of them are all there. All of the others can basically be traced to this contradiction between profit and needs or between value and use-value. Another way to put this is that as long as capitalism exists, people's own productive activity remains outside their control, being driven by the impersonal, "objective" imperatives of accumulation and competition (i.e., even the capitalists themselves are "victims" to some extent – this is in a way a much more powerful, systemic critique than saying "evil capitalists are leeching off workers").

– enormous waste of human labor power and means of production due to competition and the orientation of production on profit instead of needs;

– periodic unavoidable crises which destroy huge amounts of wealth, leaving perfectly usable means of production to rot, throwing millions of people out of work and housing;

– the destruction of nature due to ruthless accumulation (Marx saw this mostly in large-scale agriculture, but today it's better to think of the fossil economy and global warming);

– the creation of a mass of marginalized and excluded people for whom capital has no use (the lower rungs of the reserve army of labor; pauperism); the "overwork" of some on the one hand, the un- or underemployment of others on the other hand;

– the robbing of the producer of meaningful activity due to the (purely profit-oriented) development of forces of labor (mechanization, automation, Taylorism etc.); the subjection of human creativity to the despotism of the factory regime (which is also extended to other areas of production than just manufacturing).

– the dispossession of masses of independent producers in early capitalist history, but also in later episodes of capitalist development ("primitive accumulation"); Marx was somewhat on the fence on this, seeing capitalism as both a progressive force (destroying primitive social relations, prejudice etc.), but also as an immensely destructive force (destroying valuable social relations); sometimes he emphasized the first aspect (e.g. his 1850s writings on India) at the expense of the second (some authors think that as he grew older he had more appreciation for precapitalist relations, like the Russian peasant commune);

– one could add inter-capitalist wars, although this was developed more by later marxists in relation to WW1. The list goes on

So I think these would be better reasons to be against capitalism, than that it's "unfair" or "wrong".

explainthingstome

What's the problem with arguing that there's nothing wrong with the capitalist aquiring surplus value since the wage of the worker is equal to the value of the labour power she sold?

Sorry, one more thing – one could, of course, reply to this by saying, well, but the worker produces more value than they get in exchange (as wage). So why should it be the capitalist who appropriates the difference (surplus value)?

Well, the capitalist keeps the surplus value by virtue of their right of private property. They own the means of production and they also own labor power – at least for the period that it's used in "their" labor process (that they command as agreed voluntarily in the contract between the worker and the boss). So they also own the proceeds of that process.

We can then ask, how did this private property come about? Why are the means of production owned by someone and not someone else (or by everyone)? Why are means of production separated from labor power at all, so that they have to be united in this roundabout way via the market? And we can trace the origin of that historically.

Now, the answer of bourgeois political philosophy (Locke) and later political economy (Smith) is that at the beginning, there was a period of nobody owning anything. People, as in human subjects "owning their own person" (but nothing else) just roamed the world and anyone could appropriate anything (e.g., a piece of land by working it and erecting a fence around it). Thus property was born. Those smarter and more hard-working of our ancestors were able to appropriate more, get more land, produce more on that land, hunt more beavers and exchange their skins for more land etc. By inheritance their property grew. Then, after some time, boom, capitalism!

Marx (and later marxist historians) completely destroyed this story in his history of primitive accumulation by showing that, in fact, capitalism was first born in Britain through the forcible disposession of masses of independent peasants (and their communities, because a large part of that was communal agrarian production) by the aristocracy (with a little help from their friend, the state), turning them into beggars, bandits, indentured servants and later wage workers. (There's actually a longer argument to be made here, demolishing the liberal assumption that there ever was something like a world of independent individuals living as atoms, appropriating whatever and bartering among each other. In fact, all of the anthropological evidence available shows classless, communal forms of living and producing as the origin of human societies. Marx was extremely provident in seeing this on the basis of very early 19th century anthropology with limited evidence.)

So, ultimately, capitalist appropriation of surplus value is based (historically) on the violent, forcible destruction of a precapitalist modes of production (and their property relations).

BUT there's also a bit of danger in arguing too much about who and why appropriates surplus value. Some leftists say that, in fact, it would be a much fairer world if the workers appropriated the "surplus value" they produce, dividing it among themselves and running their enterprises efficiently without capitalists. And they identify this fairer world with socialism or communism. This line of thought existed already before Marx (e.g., English socialists using Ricardian labor theory of value to criticize capitalism). At its best, it's "market socialism". Marx basically thought it wouldn't work and thought that the underlying theoretical critique of capitalism didn't go far enough.

darren p

Though of course landlords, shopkeepers, lenders etc might try to "take advantage of" their customers, but they're not getting them to perform surplus labour for them.

Sure, but this is only true if you look at it individually – normally, a particular landlord really is not getting any of their tenants to perform surplus labor for them. But if you look at it socially, seeing two or three classes instead of individuals (landlords being part of the capitalist or perhaps the landowning class), then what occurs through exorbitant rents is that that an even greater part of the social product is appropriated by the capitalist or landowning class. If the working class pays higher rent, it's the same thing as if wages were lower for everyone (perhaps lower than the value of labor power, if we assume that capitalists pay wages equal to that value).

Similarly, if the state raises taxes for the working population and lowers them for the capitalists, the latter, again, appropriate a larger part of the social product than they normally would. The working class is forced to bear a greater part of the costs of its own reproduction (health care etc.), thus basically lowering the "real wage".

Edit: I apologize for these walls of text, I got a bit overexcited.

One thing missing in your friend's argument is a historical analysis, indicated by Jura's #11 response.

Just why the majority no longer own any land or possess the tools?

The peasant and the handicraft worker were deprived of those by land enclosures and the factory system.

They were dispossessed by the ending of the commons and cottage-industry. Capitalism created the working class (or at least in the Old World. America was a different situation) and imbued a factory discipline with ruthless use of sanctions (the Poor House, being one example) against those reluctant to accept the rule of the clock.

This was extended to India in regard to the British Empire. With the power of the state behind them, the capitalist class could suppress resistance such as the Luddites, Captain Swing etc.

explainthingstome

Yeah, I struggle to understand Capital. I find it hard to concentrate and to absorb longer texts (I put this down to a shit education followed by decades of not reading). Although lots of people recommends reading Marx himself I just haven't managed it. However, after some effort I think I now have a very basic understanding. I found the following useful.

The Law of Value- the series - videos by Brendan Mcooney: https://kapitalism101.wordpress.com/law-of-value-the-series/

Marx 200 by Michael Roberts (and reading his blog): https://thenextrecession.wordpress.com/2018/03/27/marx-200-a-new-book/

I am planning to try to read Capital (again) at some point using this (recommended by Michael Roberts), A Reader's Guide To Marx's Capital by Joseph Choonara : https://bookmarksbookshop.co.uk/view/44884/A+Reader%2527s+Guide+To+Marx%2527s+Capital

jura

darren p

The more a worker is exploited the more surplus labour they perform for their employer. If that makes sense?

It does, but only for productive workers.

Well no. There's no need to even go into the distinction between productive and unproductive labour to understand this.

Yes a worker working in a non-productive sector of the economy (let's say an insurance call centre) is not producing any new value, they are just syphoning value that has been created in other, productive, sectors of the economy.

The rate of exploitation for that worker in that industry would be the amount of value that they have syphoned that is above the value of their labour power. Or, another way of putting it, it's the amount of time they have worked over the amount of time that it takes for the cost of their wage to be recouped. No different to a coal miner.

pi

The Law of Value- the series - videos by Brendan Mcooney: https://kapitalism101.wordpress.com/law-of-value-the-series/

Those videos are great.

This was the best introduction book I found:
https://www.plutobooks.com/9781783719730/marxs-capital-sixth-edition/

jura

Sure, but this is only true if you look at it individually – normally, a particular landlord really is not getting any of their tenants to perform surplus labor for them. .

In capitalism, landlords are not getting anyone to perform labour for them full stop. Capitalism is not feudalism. They are just selling a commodity on the market like any other seller of a commodity.

Any seller of any commodity always tries to get the highest price for their commodity that the market will bear. If rents for workers flats go up it represents a rise in the value of labour power. The same is true if the price of baked beans goes up. So there's always a constant conflict between buyers and sellers of labour power. The sellers always have to fight to make sure that they get the value of what they are selling. Hence the class struggle.

Exploitation only occurs at the point of production because that is the only point where surplus labour is being performed.

explainthingstome

What's the problem with arguing that there's nothing wrong with the capitalist aquiring surplus value since the wage of the worker is equal to the value of the labour power she sold?

According to the logic and morals of the market, nothing. The worker is selling a commodity and the capitalist is buying it at a fair price.

However, seeing as surplus value is surplus labour, does it seem sensible that society spends the bulk of its time enriching a small minority rather than seeing that the needs of the majority are adequately met?

jura

darren p

Though of course landlords, shopkeepers, lenders etc might try to "take advantage of" their customers, but they're not getting them to perform surplus labour for them.

Sure, but this is only true if you look at it individually – normally, a particular landlord really is not getting any of their tenants to perform surplus labor for them. But if you look at it socially, seeing two or three classes instead of individuals (landlords being part of the capitalist or perhaps the landowning class), then what occurs through exorbitant rents is that that an even greater part of the social product is appropriated by the capitalist or landowning class.

There's a whole examination of this in Henry George's Progress and Poverty, he was a Liberal who advocated a land value tax to benefit both capitalists and workers at the expense of landlords. About 15 years since I read it and can't remember many of the details.

Edit: amazing, looks like Marx read it!

https://www.marxists.org/archive/marx/works/1881/letters/81_06_20.htm

Mike Harman

Edit: amazing, looks like Marx read it!

Seems he was a fan

Karl Marx

Theoretically the man [Henry George][1] is utterly backward! He understands nothing about the nature of surplus value and so wanders about in speculations which follow the English model but have now been superseded even among the English, about the different portions of surplus value to which independent existence is attributed--about the relations of profit, rent, interest, etc.

darren p

The rate of exploitation for that worker in that industry would be the amount of value that they have syphoned that is above the value of their labour power. Or, another way of putting it, it's the amount of time they have worked over the amount of time that it takes for the cost of their wage to be recouped. No different to a coal miner.

I don't think this is right. I don't remember Marx relating the siphoned-off surplus value to the value of labor power. But, more importantly, isn't that siphoned-off surplus value, wherever it comes from, more properly related to the values of labor power of the workers who produced it – to express their rates of exploitation? Otherwise, the mere existence of commercial capital would have the strange result of lowering the rate of exploitation of workers in industries from which it siphons off surplus value. Only the surplus value appropriated by their capitalists would go towards the rate of exploitation of industrial workers. That seems like a confusion between surplus value and profit. Why should the way surplus value is distributed via profit of enterprise and commercial profit change anything about the efficiency of its production (i.e.m the rate of surplus value or the rate of exploitation)? That is, unless we want to count some parts of the total social surplus value twice – once as produced by industrial workers, once as siphoned off by commercial workers – which doesn't seem to make much sense...

So I think that with commercial workers, one should look at the labor time represented by the wage and the labor time actually spent at work. Some of that time is unpaid (although it results in no surplus value being created, and thus does not represent capitalist "surplus labor" proper), and so commercial workers are exploited.

darren p

Any seller of any commodity always tries to get the highest price for their commodity that the market will bear. If rents for workers flats go up it represents a rise in the value of labour power. The same is true if the price of baked beans goes up. So there's always a constant conflict between buyers and sellers of labour power. Hence the class struggle.

But if wages don't follow that rise in the value of labor power, then the result is the same as if the value hadn't changed and wages simply declined. And surely paying workers less than the value of labor power is a method of increasing the rate of exploitation. Unless the rise in rents corresponds to a rise in costs for landlords, that extra money can be used to fund their private consumption, but it can also be converted into capital. In any case, the capitalists'/landowners' share (as class) of the total net product (produced by the working class) rises, or the appropriated surplus product rises, at the expense of the reproduction costs of the working class. The rate of exploitation at the social level rises.

Edit: I mean surely the truck system was a form of increasing the rate of exploitation even though it didn't occur at the point of production!

jura

I don't think this is right. I don't remember Marx relating the siphoned-off surplus value to the value of labor power.

I'm talking about the rate of exploitation, not the value of labour power.

The value that makes the wages of workers in non-productive sectors has come from the productive sector originally, there's nowhere else for it to come from.

jura

But if wages don't follow that rise in the value of labor power, then the result is the same as if the value hadn't changed and wages simply declined.

A rise in the cost of what it takes to reproduce the wage labourer *is* a rise in the value of labour power, by definition. If costs go up but wages do not follow, then the labourer will be receiving wages at below value. We're not disagreeing.

jura

So I think that with commercial workers, one should look at the labor time represented by the wage and the labor time actually spent at work. Some of that time is unpaid (although it results in no surplus value being created, and thus does not represent capitalist "surplus labor" proper), and so commercial workers are exploited.

Yes. Or as I said before, it's the amount of time they have worked over the amount of time that it takes for the cost of their wage to be recouped. No different to a coal miner.

jura

darren p

Though of course landlords, shopkeepers, lenders etc might try to "take advantage of" their customers, but they're not getting them to perform surplus labour for them.

Sure, but this is only true if you look at it individually – normally, a particular landlord really is not getting any of their tenants to perform surplus labor for them. But if you look at it socially, seeing two or three classes instead of individuals (landlords being part of the capitalist or perhaps the landowning class), then what occurs through exorbitant rents is that that an even greater part of the social product is appropriated by the capitalist or landowning class. If the working class pays higher rent, it's the same thing as if wages were lower for everyone (perhaps lower than the value of labor power, if we assume that capitalists pay wages equal to that value).

Also the conditions under which housing itself becomes a commodity, and land values increase, are mostly the same process of dispossession that accompanied industrialisation and urbanisation. In other words regardless of exactly how you see it in terms of appropriation of surplus product in general, rent (and mortgage payments) are above anything else what forces people to work for wages.

When the British colonised parts of Africa in the 1880s they very consciously attempted to create a working class dependent on wage labour (to work on farms owned by settlers). This was done by appropriating large tracts of land and culling livestock so that subsistence farming was disrupted, but also to a large extent by 'hut taxes' imposed by the state for which you'd need to earn money via wage labour to pay them.

Mike Harman

Also the conditions under which housing itself becomes a commodity, and land values increase, are mostly the same process of dispossession that accompanied industrialisation and urbanisation. In other words regardless of exactly how you see it in terms of appropriation of surplus product in general, rent (and mortgage payments) are above anything else what forces people to work for wages.

When the British colonised parts of Africa in the 1880s they very consciously attempted to create a working class dependent on wage labour (to work on farms owned by settlers). This was done by appropriating large tracts of land and culling livestock so that subsistence farming was disrupted, but also to a large extent by 'hut taxes' imposed by the state for which you'd need to earn money via wage labour to pay them.

Sure, but now aren't you talking about primitive accumulation rather than the specific nature of capitalistic exploitation itself (once the system of capitalism has been put in place)?

Nothing wrong with talking about that of course.

darren p

I'm talking about the rate of exploitation, not the value of labour power.

I apologize, I'm not following. You said "The rate of exploitation for that worker in that industry [a commercial worker] would be the amount of value that they have syphoned that is above the value of their labour power."

As a rate, the rate of exploitation can't be "the amount of value... that is above...", so I guessed, perhaps incorrectly, that you meant to say "the amount of value siphoned-off divided by the value of their labour power".

I'm saying that it's spurious to relate the siphoned-off surplus value to the value of labor power like this, because that surplus value was created elsewhere and would be properly related to the value of labor power of its producers, not those who assist in the siphoning-off. (One consequence of that would be that the rate of exploitation in productive industries would drop simply due to to siphoning-off, unles we count some parts of surplus value twice.)

darren p

Yes. Or as I said before, it's the amount of time they have worked over the amount of time that it takes for the cost of their wage to be recouped. No different to a coal miner.

I don't think we're saying the same thing. You related the siphoned-off surplus value to the value of labor power. Now you're relating the "time they have worked over the amount of time that it takes for the cost of their wage to be recouped" to "the amount of time that it takes for the cost of their wage to be recouped". They're not the same thing. The amount of surplus value siphoned-off is in no necessary relation to the time worked. A sales representative may do a dozen deals a day on good days (more siphoned-off surplus value), but no deals on other days (no siphoned-off surplus value). He or she is still working 8 hours a day and being paid the same wage.

jura

As a rate, the rate of exploitation can't be "the amount of value... that is above...", so I guessed, perhaps incorrectly, that you meant to say "the amount of value siphoned-off divided by the value of their labour power".

Ok, yes a *rate* should really be a *ratio*. Yes my bad.

I don't think we are disagreeing significantly.

jura

A sales representative may do a dozen deals a day on good days (more siphoned-off surplus value), but no deals on other days (no siphoned-off surplus value). He or she is still working 8 hours a day and being paid the same wage.

A coal miner will have more or less productive days too. Unless they are getting paid piece rate the wage represents an averaging I would have thought.

darren p

A coal miner will have more or less productive days too. Unless they are getting paid piece rate the wage represents an averaging I would have thought.

I'm sorry, you're right, that has nothing to do with anything.

darren p

Rent is something that both capitalists and workers pay. Rent is just the purchase of a commodity so in the Marxian sense there's no "exploitation" taking place.

Missed this sentence the first time but I don't think this is right and it's one reason that people get hung up on rent and landlordism vs. other commodities.

There are things about land which do have value - i.e. improvements like sewerage, irrigation, running water, electricity, access to roads, and buildings themselves are commodities. So the payment of rent incorporates both paying for these commodities, but also for the use of the actual unimproved land itself, which is not a commodity (because it's not the product of social labour).

Marx talks about this in Vol III of Capital, which I have not read. Google found a couple of posts which discuss it though - both say it's barely discussed anywhere else. I haven't read through these properly here either but dropping them in for reference:

https://critiqueofcrisistheory.wordpress.com/the-marxist-theory-of-ground-rent-pt-1/
https://www.ernestmandel.org/en/works/txt/1990/karlmarx/5.htm

Also Lenin talking about it in 1907 here: https://www.marxists.org/archive/lenin/works/1907/agrprogr/ch03s1.htm

However Marx is talking about ground rent as it gets extracted from capitalist farmers leasing from landowners, he's not talking about people renting flats in Manchester.

This is coming up again recently in the sense that ANC and EFF's recent proposals to nationalise land titles and put everything on leases mirror some of these 19th Century capitalist reform efforts.

Yeah I read someone saying once Marx never wrote a single line about cities, and I can't say I disagree. The theory of rent in Marx is entirely about agriculture, which seems like an odd oversight - what about rent in an urban setting, rent for industrial purposes, housing rent etc.?

I've had some interesting discussions with Georgists on twitter about land as a resource, in economic theory etc. and about the different ways of envisioning social revolution or reform in that area.

explainthingstome

Don't we need to morally justify the socialist expropriation of the capitalist class?

Is the justification that the expropriation will make the problems that you list (for example waste of human labour power) dissappear?

I don't think I've seen a moral argument justifying the expropriation of capitalists per se, but since the 1970s/1980s there has been a lot of discussions in Anglophone political philosophy on the morality of property (and of interventions against property), including contributions by various leftists. So I'm sure there exists some such argument. But personally I think discussions about the moral justification of private property (or its expropriation) are mostly an academic thing with little use beyond that. They also often start from "self-evident" premises such as that there is a universal right to private property, which kind of makes the whole effort circular and pointless.

The orthodox "amoral" (or almost amoral) justification for expropriation was that capitalist relations of production have become a fetter on the development of the forces of production, and so expropriating the capitalist class is justified as a necessary condition for further historical progress. I don't think this is a good justification because it starts with an assumption I don't agree with (I think capitalism still can and does develop forces of production, albeit at the expense of some very destructive consequences, but this has been true of capitalism from the start). It also does not seem to be too useful in convincing people to do something (I mean who apart from 18th and 19th century philosophers really cares about "historical progress"?).

I also think that ultimately, "at the very bottom", there are some normative (moral) assumptions behind the communist project and also behind Marx's critique (in Capital). Obviously every (libertarian) communist will say that it's better if individuals can fully realize their potential than if they're enslaved. It's better if all people have more free time. Obviously Marx thought it's better if children don't work 10 hours a day in dangerous conditions etc. etc. These are all normative assumptions (and there were also actual people in Marx's time who were prepared to defend child labor in dangerous conditions in moral terms!). They also have something to do with human needs and with a particular (philosophical) notion of what is a human being. I'd say that at bottom, the argument for communism is based on assumptions like these which are at odds with the consequences of capitalism listed in one of the posts above. So I agree with your answer in the form of a question – doing away with capitalism will do away with its consequences which are in conflict with our (normative) notion of how humans should be able to live their lives.

explainthingstome

Don't we need to morally justify the socialist expropriation of the capitalist class?

Is the justification that the expropriation will make the problems that you list (for example waste of human labour power) dissappear?

I would say that a moral justification is not the point. Rather, communism, as "the real movement to abolish the present state of things", is something borne out of the struggles of the working class against their alienation (our creative force is ultimately put to the service of another, doing things for the sake of profit rather than for the act itself or directly for the things the act does or produces) and exploitation (and that profit belongs to some capitalist fucker while my own means of living are gradually eroded away) under capitalism.

It it not necessarily because I have a clear vision of what I want in some post-capitalist future, but that I must struggle right here and now if I want to make my position under capitalism better, say in my wages or in my time spent working versus my actual life, and that this puts my into conflict against the capitalist class. In time, once I start seeing that capitalism imposes these political conditions on me and on other workers, I come to realize my common interest with those other workers in struggling against our common political condition of our dispossession of everything but our labor that puts us at the mercy of capitalism--in short, our proletarian status. This turns our conflict into a political conflict, a class conflict. And once we understand that our alienation and exploitation cannot end under capitalism, our class struggle becomes a revolutionary one against capitalism. The future is opaque and unknowable and, while we might have our guesses and wants, the society that comes after capitalism will only be made in the process of that struggle, in the act of revolution against all existing social conditions.

Of course, following jura, this does entail certain normative assumptions, namely that alienation and exploitation are experienced as bad things and that this provides sufficient motive force to struggle against capitalism. This also makes it important that we see alienation as something to abolish; if we are merely concerned with the "economic" side of things, in exploitation, then we have no reason to be against, say, self-managed exploitation (various kinds of market socialism) or even against a society that sufficiently provides us with the means to live. Even if we were able to manage our own work, if we still produce to create profit rather than directly for what we need and want, we still relate to ourselves and others only via production and exchange, and our relations between people retain the appearance of being relations between things (commodity fetishism) because of the continued necessity of controlling our lives and labor to satisfy the need to produce exchangeable value, commodities, in a society where access to exchangeable value provides the means of living.

Re the OP post, I would say that it's incredibly important to realize that, while labor does create surplus value, profit is only realized via exchange. This makes it easier to grasp that the value of a commodity does not depend on the particular labor used up on it, because it is in the necessarily social act of exchange that all particular labors are equated as quantities of abstract labor and that the value of the commodity becomes the value of its socially necessary labor time to produce it.

Mike Harman

There are things about land which do have value - i.e. improvements like sewerage, irrigation, running water, electricity, access to roads, and buildings themselves are commodities. So the payment of rent incorporates both paying for these commodities, but also for the use of the actual unimproved land itself, which is not a commodity (because it's not the product of social labour).

Well yes. But also this:

Mike Harman

However Marx is talking about ground rent as it gets extracted from capitalist farmers leasing from landowners, he's not talking about people renting flats in Manchester.

An element of the rent on a flat will be ground rent but most of it won't be that, it is a payment for the use of the building...

Edgar Hardcastle

Marx’s theory of rent sets out to explain that under capitalism, landed property is a source of unearned income going to the landlord by claiming a right over a portion of surplus value.

Surplus value is extracted from the working class during the productive process.

http://www.socialiststudies.org.uk/marx%20groundrent.shtml

Note, nothing about "secondary exploitation". Surplus value is created in production, not exchange, and is then distributed among various different capitals via the mechanism of the market.

explainthingstome

Don't we need to morally justify the socialist expropriation of the capitalist class?

Think of it the other way around. Can we morally justify the capitalist expropriation of the wealth created by the working class?

darren p

An element of the rent on a flat will be ground rent but most of it won't be that, it is a payment for the use of the building...

Well yes, but rent on a two bed house in Middlesborough is about £500/month and rent on a two bed flat in Islington is about £1500-2500/month. Land value is pretty unique compared to actual commodities. But I think the argument that rents make up part of the cost of reproduction, and therefore the MCM' capitalist ends up paying more in wages, which then goes straight out again to the landlord, is a way of explaining this without some kind of double surplus gymnastics.

explainthingstome

Also, the world has become much better over the last 100 years. Capitalism is making everyone richer and happier. Extreme poverty will dissappear in a few decades. Soon everyone will be educated and well-payed.

Are you familiar with Thomas Pogge? He makes good arguments against this kind of thing, but in favour of a more re-distributive type of capitalism. Communists can make some use of his arguments I think - but also argue that the structural nature of capitalism makes some things impossible, the types of reforms Pogge argues for being amongst them.

explainthingstome

darren p

Think of it the other way around. Can we morally justify the capitalist expropriation of the wealth created by the working class?

Well, the capitalist enables production because he owns the tools and stuff.

explainthingstome

"But that's only because private property exists", you might argue. But what's wrong with private property? Why shouldn't I be allowed to own the land and tools that I've bought? Why should I be forced to give away my private property to society as a whole?

(Has this argument already been countered in this thread without me realizing it?)

As I said, I'd generally try to avoid this debate on justifying property, but there's the "genealogical" argument on primitive accumulation: capitalist property has its ultimate origin in the expropriation of independent agricultural producers. Their private property (and/or communal property) had to be expropriated by future capitalists (and the state) to make way for capitalism. If that was justified, then why shouldn't the expropriation of capitalists be justified? And if it wasn't justified, then capitalist private property itself is illegitimate, so expropriating it shouldn't be such a big deal, morally.

One possible justification for primitive accumulation is that it resulted in a more efficient economic system (in the sense of increasing, in the long term, the standard of living for most; alhough in the case of capitalism, the long term was very long term as there was a pretty long period when people in Britain were actually worse off in capitalism in terms of their average real consumption than in late feudalism). A similar argument can then be made about the expropriation of capitalists.

explainthingstome

Also, the world has become much better over the last 100 years. Capitalism is making everyone richer and happier. Extreme poverty will dissappear in a few decades. Soon everyone will be educated and well-payed.

It seems to me that in one sense, "everyone is better off now" is almost a trivial statement. Sure, there were periods of straight-up decline in human history (in some places), but generally, I'd say it's a story of progress, faster of slower. So saying "everyone is better off today than they were 100 years ago" is not saying much. People living in feudalism were probably better off than most slaves. This does not justify feudalism, at least in my view. Or, more precisely, I don't think it justifies not rebelling against feudalism.

But perhaps the rate of improvement of the general state of things has accelerated under capitalism. However, even this isn't too clear-cut. There are reversals of fortune like wars and crises that can be seen not as random events but as more or less direct consequences of the nature of capitalism. So, for example, there has been a decline in life expectancy in the US and other developed countries recently that can be linked to preventable social issues, very generally speaking. There are wars and the looming enviromental catastrophe which at this point seems almost inevitable, both linked to the specific "laws of motion" of capitalism. So the statement "everyone is better off now" is not even strictly true, certainly not without some serious qualifications. If you look at real wages in the US or in Germany over the last 25 years, you can see that not everyone faces the same rate of improvement, and not even the same standard of living as their parents. After decades of hard-won job security, rising wages etc., there has been a turn towards increased precariousness, fragmentation of the labor market and even a declining standard of living for some. Eastern Europe, in the 1990s, experienced a wholesale decline of living standards due to the reintroduction of free market capitalism that took years to fix and for some (e.g., the Roma population) it never really got fixed. There are now people in the EU – in a country which produces the most cars per capita in the world – who basically live in conditions approaching the middle ages in terms of sanitation and heating, with localized epidemics of syphilis or measles. But their conditions could have been said to be improving only a few decades ago. So capitalist development is contradictory and it is precisely due to its essential features like its orientation toward profit, competition etc.

Also, the improvements that we've seen over the last, say, 150 years, were not God-given or natural. They were the results of fierce struggles and some terrible sacrifices by the working class, women, non-whites and others. Without the workers movement it's dubitable if most people would even have the right to vote today. So it's not like capitalism is some sort of an automatic engine of progress. Quite the contrary – left to itself, it has some pretty destructive consequences for both humans and nature.

So when looking at the standard of living, I don't think it's all that useful to compare it with that of our ancestors. It doesn't say anything about what one should reasonably expect. It makes more sense to compare it with what would be achievable at the given state of technology, productivity etc. The FAO says that even if only one fourth of the food wasted globally each year was saved, it could feed the roughly 900 million people who go hungry. And that's just one fourth of the "regular" waste. We're not even talking about what could be done with the billions of person-hours of labor time which are wasted every year in retail, real estate, marketing, finance, armaments production or outright repression.

spacious

Yeah I read someone saying once Marx never wrote a single line about cities, and I can't say I disagree. The theory of rent in Marx is entirely about agriculture, which seems like an odd oversight - what about rent in an urban setting, rent for industrial purposes, housing rent etc.?

I've had some interesting discussions with Georgists on twitter about land as a resource, in economic theory etc. and about the different ways of envisioning social revolution or reform in that area.

You and someone are quite wrong. In chapter 46 of Volume III of Capital Marx does discuss "building site rent" and also refers to a previous mention of it in chapter 12 of Volume II. In both he quotes the evidence before a Select Committee of a building contractor that:

Without speculative building, and on a large scale at that, no contractor can get along today. The profit from just building is extremely small. His main profit comes from raising the ground-rent, from careful selection and skilled utilisation of the building terrain. It is by this method of speculation anticipating the demand for houses that almost the whole Belgravia and Tyburnia, and the countless thousands of villas round London have been built. (Abbreviated from the Report of the Select Committee on Bank Acts, Part I, 1857, Evidence, Questions 5413-18; 5435-36.)

This is still the situation in Britain today and one reason why the housing problem in London in intractable.

Marx was aware of Henry George. In fact his analysis is basically the same, that ground-rent was money for nothing, not even having to invest capital that capitalists had to to make a profit:

One part of society thus exacts tribute from another for the permission to inhabit the earth, as landed property in general assigns the landlord the privilege of exploiting the terrestrial body, the bowels of the earth, the air, and thereby the maintenance and development of life. Not only the population increase and with it the growing demand for shelter, but also the development of fixed capital, which is either incorporated in land, or takes root in it and is based upon it, such as all industrial buildings, railways, warehouses, factory buildings, docks, etc., necessarily increase the building rent.

However, he didn't think much of George and regarded the Georgist Single Tax on Land as a way of reducing taxation on the industrial capitalist which would be of no benefit to workers (see his letter here)

Thanks alb, looks like you're right. I've been reading Vol II but that part clearly didn't register. I have Vol. III on the reading list next.

There are several of Marx's letters in which he mentions and critiques George, after he was sent no less than four copies of George's book Progress and Poverty by his friends and correspondents. Marx's opinion was that George's thought was an interesting if insufficient step away from bourgeois (Ricardian) economic theory, and he saw the proposal of Land Value Tax as a panacea aimed at saving capitalism (freeing it from having to support an unproductive rentier class of landowners, which capitalism inherited from previous social formations) rather than abolishing it, so basically he saw it as no more than a radical form of liberalism.

I think this is also borne out by some discussions I had with Georgists, they do not see relations between capital and labour (between wage and surplus value), as the main sociopolitical problem. Instead they think that once unproductive landownership is removed or "land value" can be taxed and redistributed, the essential relations of capitalism are basically fine, and both capital and labour will share the benefit.

spacious

I think this is also borne out by some discussions I had with Georgists, they do not see relations between capital and labour (between wage and surplus value), as the main sociopolitical problem. Instead they think that once unproductive landownership is removed or "land value" can be taxed and redistributed, the essential relations of capitalism are basically fine, and both capital and labour will share the benefit.

Yes, I agree that's a fair assessment of what Georgists stand for. Apart from wanting to introduce a Single Tax on "land values", most of them are out-and-out "free" marketeers. The only class that would benefit from this would be the capitalist class in terms of a reduction (in fact abolition) of taxes on them. The landlord class would be worse off while the position of the working class would be unchanged.

At one time, when workers in America and Britain, had not been separated so long from the land and still saw the way-out in going back to it, Georgism was a rival with Socialism for working-class support. There's a debate here that took place in 1889 between Henry George and H. M. Hyndman of the Social Democratic Federation in which George clearly came out for competitive capitalism while Hyndman argued:

We do not particularly hate landlords more than capitalists, or capitalists more than landlords. The alligator and the crocodile; it matters not which it is from the point of view of those upon whom they feed (Laughter.) We wish to get rid of both, and what we are aiming at is the abolition of the wages system – (Hear, hear.) – and that aim can only be accomplished by the abolition of private property in the means and instruments of production including the land. (Hear, hear.)

being an ignoramus when it comes to economic theory i am not sure how relevant today's article in the Guardian is. Nevertheless, it does offer interesting facts and figures and current reform proposals.

https://www.theguardian.com/business/2018/aug/28/call-to-stop-landowners-making-huge-profits-from-speculation

A related article on land prices in the UK and a call for a land tax

https://www.theguardian.com/business/2018/aug/29/uks-wealth-rises-as-land-values-soar-by-450bn-in-a-year

I didn't read the whole thread yet so sorry if I repeated stuff people said.

First of all I think when you're talking about profits being unpaid labour people sometimes make the mistake of equivocating a description of what happens in capitalism and a moral argument against capitalism.

Some people might have a problem with this explanation but essentially profit or surplus is what is the total value of what is produced minus the cost it took to produce it. Virtually every person who runs a business will tell you this.

It's also likely that even in a libertarian-communist society people will continue to produce more than we consume for situations like emergencies or because the population is growing, or even perhaps to help expand the means of production so we could build more hospitals or solar panels or something.

It's actually completely possible to accept Marx's theory of value and nonetheless support anarcho-capitalist beliefs regarding whether you should be obliged to give up some of what you own (according to anarcho-capitalist principles) to help others.

Now let's talk about the ethical part. Let's say my friends and I who all make an equal amount of income decide to quit our jobs to start a co-op. Let's say we decide that I will pay $1000 to rent an office. Does your capitalist friend really think that anyone on the left would be against the co-op dedicating a certain amount of our income to paying me back $1000, even perhaps with interest in order to deal with for example having to use my credit card more often because I spent $1000?

There's a big difference between this and the way a capitalist perpetually denies people the right to have a say in their workplaces and to continually maintain inequality. Why was it fair that the capitalist owned all that money and property in the first place?

Even if you could argue that this is somehow still technically ethical why is it desirable to maintain this inequality when we could create a system that helped alleviate suffering, allowed more people to have their voices heard, etcetera?

The argument your friend makes works for feudalism as well- Without the king's land the peasant wouldn't be able to farm. If you have a problem with the king owning your land why don't you go move to another kingdom, etc.

explainthingstome

Did forced expropriation of independent agricultural producers by the state or ruling class occur in every European country at some point? I've tried finding other examples than Enclosure in Britain but Wikipedia doesn't have a list about instances of land consolidation.

This is a great question. In any country with a large preexisting peasant population, the development of capitalism required the "freeing up" of (parts of) that population for industry. (I think it was Bordiga who said that land reform is the fundamental question of all bourgeois revolutions?) There would be different paths of getting to that result – with very different timelines, also depending on whether the peasants actually owned the land they worked or not. So one can imagine a long period of worsening living conditions, increasing debt, bankruptcies and migration from the countryside throughout several generations of peasants, but also an expropriation campaign executed in a decade or two.

I can't really say much about the histories of all European countries. One would have to look at the history of "land reform" in a given country from, say, the 19th century onwards. But in parts of the former Eastern bloc, what actually led to that result was Stalinist collectivization.

In the Slovak part of Czechoslovakia in 1948, 62% of the economically active population were involved in agriculture. That's almost the same as in 1921, when it was about 65%. But in 1965, it was 30%, in 1985, 16%. "Socialist" collectivization ended in 1960. The peasants were forcibly expropriated, the land collectivized, and mechanization (using imports from the more developed Czech lands and from other states in the Eastern bloc) along with economies of scale led to increased productivity that made a large part of the peasantry superfluous. They became miners, textile and metal workers... This was "primitive accumulation" of sorts, but with a different course than in Britain, where it took centuries and where capitalist production first emerged in agriculture.

I think the Damascene moment for Marx was as a law student he studied how the wood gatherers were being persecuted for "breaking" private property laws, the customary traditional rights being abrogated by a new breed of landowner.

darren p

In the Marxian sense "exploitation" has a narrow meaning.

The amount at which a worker is exploited is the amount to which they work over the amount of time that is necessary to reproduce the value of their labour power. The more a worker is exploited the more surplus labour they perform for their employer. If that makes sense?

Rent is something that both capitalists and workers pay. Rent is just the purchase of a commodity so in the Marxian sense there's no "exploitation" taking place.

Though of course landlords, shopkeepers, lenders etc might try to "take advantage of" their customers, but they're not getting them to perform surplus labour for them.

Thanks, Darren P; I find this distinction useful. Only an employer can exploit your labor, but anyone can rip you off.