Tuesday, September 06, 2016

Hands Down, Part 3

Really-Not really (also available here)

Smith: In 2013, the tariffs charged by the U.S. government on its apparel imports from Bangladesh alone exceeded the total wages received by the workers who made these goods. The states uses this money, as we know, to finance foreign wars, health care, and Social Security,...

TWR:  Not really. 1) The tariff imposed on these imported goods has nothing to do with increased exploitation of workers in Bangladesh.  In fact, it was the opposite, the easing of tariffs under the MFA, and the final incorporation of the world garment trade under the provisions of the general agreements that facilitated the outsourcing of garment production, and in 2005, the relentless pressure put on workers everywhere by the ending of quotas on China's portion of this trade. Mr. Smith never mentions the MFA, or the subsumption of the fabric and garment sectors under the general agreements, a remarkable omission for anyone trying to apprehend the forces unleashed in the outsourcing process.  2) Tariffs are irrelevant, absolutely meaningless, as a source of revenue in the US.  Tariffs as a percentage of government revenues has declined steadily since 1914. Today, tariffs represent about 1 percent of total government receipts.  The tariffs imposed on garments from Bangladesh amount to 1/4000th of US government receipts.  3)Social Security in the US is not financed by tariff receipts.  Social Security is exclusively funded by the payroll tax and deductions from workers, and interest received on the US government securities in which that money is invested.

Smith:  Just thirty of the 13, 920 US workers [of Apple] were production workers (receiving on average $47,640 per year) 7,789 were "retail and other non-professional workers (average wages $25,580)....

TWR:   Really? A worker in the US with an income level of $25,580, supporting 3 other family members has just enough income to be almost not-poor.  This is the great benefit outsourcing has bestowed upon hundreds of thousands in the "advanced" countries-- the chance to be "retooled" as retail workers rather than production workers, earning half the money, and almost not-poor.

Smith:  From the early 1960s, while the emerging retail giants were pioneering the outsourcing of toys, clothing, and other consumption goods, prominent electronics firms such as Cisco, Sun Microsystems, and AT&T were unleashing what was soon to become a torrent of outsourcing by hightech industry.

TWR: Not really.  Sun and Cisco couldn't unleash anything from the early 1960s.  They didn't exist. Sun and Cisco were founded in 1982 and 1984 respectively.  Sun, headquartered in California, had two production centers for building its SPARC workstations, one in Scotland and one in Oregon.

Smith: Unlike simple commodity producers who sell in order to buy, merchants buy in order to sell.  Their aim is not to acquire something they need.  But to acquire money....

TWR: Really?  Can someone point out an example of a simple commodity producer, or a system of simple commodity production?  Marx did not use those terms, referring instead to simple commodity exchange.  What is simple commodity production?  How and when does simple commodity production exist as a dominant mode of production?  Were the social organizations of the Incas and Aztecs "simple commodity production"?  How about the feudal orders with their extensive grain trading networks?  Simple commodity production?  And this "selling to buy" vs. "buying to sell" is just a tad one-sided don't you think?  The merchant also sells in order to buy, unless of course he or she makes enough in one circuit to withdraw from all future circuits, but then, if that were to be the mode of accumulation for all merchants, the system wouldn't really be a system would it?  It would be a "one-off" where accumulation basically disappeared.  The merchant may or may not do any number of things.  The simple commodity producer may or may not exist (I vote for the latter).   But the capitalist always expropriates the labor-power of others.  The capitalist does this through the "mediation," the relations of.......property, the means of production as private property that not only can, but must command that labor power to valorize production. That's the critical distinction.

Smith:  In contrast, "the rate of productivity growth in US manufacturing increased in the mid-1990s, greatly outpacing that in the services sector and accounting for most of the overall productivity growth in the US economy.....

#TWR:  Really.  Word.  Let's keep this in mind as we move on.

Smith:  "In the case of the United States...offshore outsourcing of jobs is the functional equivalent of 'imported productivity,' as the global labor arbitrage substitutes foreign labor content for domestic labor input."

TWR:  Well, that didn't last long, did it?  Would love an example, wouldn't you?  I mean first and foremost, we need to forget all about imported t-shirts, and coffee, and I-phones, which are marketed by retailers, and thus the make-ups, and mark-ups of these items have no impact on productivity in manufacturing or industry.

Secondly, the cost of the inputs of intermediate goods to production itself, say the production of automobiles, cannot have any impact on the productivity of labor, if we define productivity as the greater output of articles, use-values, per unit of labor-power.  If improvements in productivity, in the mass of goods per hour/day/week, leave unchanged the total accumulated new value, then the cost of the intermediate inputs cannot have any impact on productivity.

If an automaker spins off as a separate entity, a "supplier," and a brigade of workers into a separate company to do the work "out of house" that used to be done in house, then in fact the automaker can show a reduction in hours needed to produce each automobile, but the total hours embodied in each automobile remain the same.

If it now takes an automaker in the US 23 hours, on average to produce, an automobile as it does, (down from 27 in 2004 as it was), and a portion of that improvement in output is due to a component that was made in-house requiring 1 hour is now outsourced and falls off the automakers production time accounting, that change makes no difference to the value of the automobile, and it does not alter the improvement in productivity the manufacturer experiences.  The auto manufacturer still requires less living labor to animate the accumulated capital in the means of production and produce a greater number of automobiles.

It makes no difference to "productivity" if the seat cushions are produced in China by workers making the equivalent of $2 per hour, of if they are produced in Canada by workers making $26 per hour.  It, the cost,  makes a difference in  the value of the product, not to how quickly the worker installs the seat cushion, or how quickly the worker reproduces the value equivalent to his/her wage.

Mr. Smith takes great pains to show how wages are not dependent upon productivity....until it comes time to assess, realistically, how gains in productivity has been made in the advanced countries, and then he tells us that the "productivity is imported."

Smith: Competition between firms in imperialist and developing countries does exist.  Even in the garment sector.....

TWR:  Really.  Let's keep that in mind, too

Smith:  The integration of the Global South into the imperialist world economy since the Second World War and especially since 1980 brings together both of these trends, the dispossession of small farmers and other small producers on the one hand and the substitution of wage labor by machinery on the other. TNCs  [transnational corporations] and domestic capitalists not only exploit low-wage labor, they can can do so with advanced production processes that absorb far less living labor than those available to nineteenth-century European capitalists.

TWR: Really. Good.  Really good.  And we're right back in the grips of uneven and combined development, because capitalism still cannot "resolve" the "land question," cannot capitalize agriculture sufficiently without threatening the very existence of private property, of the means of production as private property.

Smith:  The Feminization of Labor, and the Proletarianizaton of Women

TWR:  Really. Good.  Really Good.  "The face of globalization is the face of the exploited young woman worker."-- participant (female) interrupting Fidel Castro, from the floor, during the first meeting on Globalization and Problems of Development, Havana, Cuba 1999 (if memory serves me).

Smith:  "Global Wage Trends in the Neoliberal Era": Thus the share of national income received by the bottom 90 percent of wage-earners (84 percent of the United States economically active population) earned 42 percent of the total payroll in 1980 and just 28 percent in 2011.  Thus the share of national income received by the bottom 90 percent of US employees has declined....by a staggering 33 percent.

According to the ILO's World of Work Report 2011, since the early 1990s the "share of domestic income that goes to labor...declined in nearly three-quarters of the 69 countries with available information,"  This decline is generally more pronounced in emerging and developing countries than in advanced ones.

TWR:  Really.  Agree.  Completely.  So much for the benefit to the workers in the advanced countries.  So much for the bounty that capitalism bestows upon developing countries.

Smith: Reducing the wage bill, not through investment in labor-savings technology or through wage cuts of domestically employed workers but through outsourcing to low wage countries, has dramatically risen in importance....What is especially ironic is that instead of being a means to raise the productivity of labor, new technology is being use to lower its cost through outsourcing; and instead of replacing labor through the introduction of more advanced machinery, capitalists are using new technology to replace labor with cheaper labor..........

TWR:  Really?  Guess we should forget about the earlier stuff about the share of labor declining.  There has been considerable investment in labor-saving technology in the advanced countries.  And considerable declines in industrial employment, remember Mr. Smith?  You pointed that out.  I would point out that in the US employment in the steel industry has declined some 90 percent in 45 years, and the time required to produce a ton of steel has declined 80 percent.  Or... I might point out that the fleet of container ships has grown fifteen fold since 1980, and 75 percent of that fleet is owned by...brokers based in Hamburg, Germany.  Or that, while employment has dropped in the US rail industry, loaded ton-miles per crew hour have increased, crew sizes have declined, train lengths and weights have grown dramatically since 1980, and the capital values invested in locomotives, signal systems, communication networks, track has increased.    There is nothing ironic about this.  These contradictory element are the whole of capital.  This is precisely how capital navigates between the rock and the hard place of increased extractions of surplus value and declining rates of profitability.

Smith:  Marxists argue that this ideal state is itself absurd, pointing to the third and most fallacious assumption upon which modern trade theory and indeed the entire edifice of bourgeois economy theory is based--the conflation of value and price.... 

TWR: Not really.  Marx produces the immanent critique to capitalism; a critique based on the internal make-up, requirements, assertions of the system itself.  Marx accepts the relationship,and even, the identity of price and value in his critique.  The failure of capitalism is not that price and value do not coincide.  Indeed, Marx points out how any coincidence is just that, a coincidence, and is irrelevant to self-generation of the obstacles that capital only overcomes by expanding reproduction of these conflicts.  The critique is of value, not of the non-correspondence between price and value.

Smith:  The wage (or nominal wage) is the monetary expression of the value of labor-power; the real wage is the wage expressed in terms of purchasing power, by the size of the basket of consumption goods for which it can be exchange.  

TWR: Really.  So I would expect at this point Mr. Smith would investigate the real wage in Bangladesh, in Germany, in the US, in China so that we can see exactly what constitutes "super exploitation," both in quality and quantity.  No such luck.  Not happening.  Instead we get critiques of David Harvey, Ernest Mandel; praise for the Monthly Review crew (and I thought the very rejection of value was a core principle of the Monopoly thumpers) and discussion of unequal exchange, dependency theories, "Euro-marxists," and... Marini.

Smith:  For Marx, the transition from the predominance of absolute surplus-value to relative surplus-value was necessitated.....by the finite maximum length of the working day and the minimum level of consumption required for the reproduction of the labor-power...Marini argued that another factor played a crucial role in this transition: the importation of cheap foodstuffs, and other consumer goods from colonies, neo-colonies, especially from Latin America.
TWR:  Really.  Very important to integrate the development of capitalism in the North, with developments in the South.  We should all read Marini.

Really?  The "transition" to relative surplus value, the "real domination" of capital begins in the 19th century, is well underway by the middle of that century, and tears across developed and developing capitalisms in the last-third of the 19th century, the period of the "long deflation."  Looking at global wheat supplies and production in the last-third, we find the US increasing its production 1867-1898 fourfold,  accounting for 26 percent of global supplies in 1867 and  36 percent of world supplies by 1898.  Russia accounts for 23 percent of supplies at both the beginning and end of the period.  Western Europe's share declines from 37 to 25 percent.  So at the beginning at end of the period, while supplies increase approximately 240%, the US, Russia, and Western Europe continue account for 84 percent.  We should all read Marini.  Carefully.

The end.  Really?  Really.

September 6, 2016

Friday, September 02, 2016

Hands Down, Part 2

The Parable of the T-shirt (also available here)

Mr. Smith starts his explorations into Imperialism in the Twenty-First Century: Globalization, Super-Exploitation, and Capitalism's Final Crisis (Monthly Review Press, 2016) with the story of a T-shirt, a story taken from the pages of Tony Norfield's The China Price:
In The China Price Tony Norfield recounts the story of a T-shirt made in Bangladesh and sold in Germany for €4.95 by the Swedish retailer Hennes & Mauritz (H&M).  H&M pays the Bangladeshi manufacturer €1.35 for each T-shirt, 28 percent of the final sale price, 40¢of which covers the cost of 400g of cotton raw material imported form the United States; shipping to Hamburg adds another 6¢ per shirt.  Thus €0.95 of the final sale price remains in Bangladesh, to be shared between the factory owner, the workers, the suppliers of inputs and services and the Bangladeshi government, expanding Bangladesh'a GDP by this amount.  The remaining €3.54 counts toward the GDP of Germany, the country where the T-shirt is consumed, and is broken down as follows: €2.05 provides for the costs and profits of German transporters, wholesalers, retailers, advertisers, etc., (some of which will revert to the state through various taxes); H&M makes a 60¢ profit per shirt; the German state captures 79¢ through VAT at 19 percent; 16¢ covers sundry "other items."  Thus in Norfield's words, " a large chunk of the revenue from the selling prices goes to the state in taxes and to a wide range of workers, executives, landlords, and businesses in Germany.  The cheap T-shirts, and a wide range of other imported goods, are both affordable for consumers and an important source of income for the states and for all the people in the richer countries." 
Short version? Astounding news-- merchandisers buy low to sell high.

First things first:  "to be shared between the factory owner, the workers, the suppliers of inputs..."  Shared?  Between the factory owner and the workers?  Capitalists don't share profits with workers, not in Bangladesh, not in Germany, not in China, not in the US.  They don't "share" even when they call compensation "profit sharing."

Capitalists appropriate surplus value, unpaid labor-time, from workers.  Arguing that capitalists "share" profit from workers with workers is like arguing that muggers "share" profits from mugging with their victims when they leave one victim $2.75 for a single-ride Metrocard.

Capitalists may appropriate a larger or smaller portion of the surplus value, a portion dependent upon the level of organization of the working class, market conditions, but the appropriation is always an appropriation, an equal exchange that is in fact, unequal.  "Sharing" is the mythology flogged by the bourgeoisie to veil the relations between the value of labor-power and the value that labor-power produces.

Second short version?  Advanced capitalist countries have developed extensive networks of transportation, communication, marketing, advertising not just for the purposes of  realizing the value embedded in the goods, but to actually hype the  the goods even, especially, above their value. Another shocker.

Mr. Smith citing Mr. Norfield explains:
...low wages in Bangladesh help explain "why the richer countries can have lots of shop assistants, delivery drivers, managers and administrators, accountants, advertising and a wide range of welfare payments and much else besides."
Really?  The richer countries had lots of shop assistants, delivery drivers, managers, administrators, accountants and an ever wider range of welfare payments before Bangladesh became a contract producer for H&M; before China gained full membership in the WTO in 2001; before the MFA (Multi-Fiber Agreement, or Multi-Fibre Accordance) expired in 2005 and China doubled its portion of global clothing exports.

Smith/Norfield continues:
...oppression of workers in the poorer countries is a direct economic benefit for the mass of people in the richer countries.
Fecking brilliant, ain't it?

Let's start with the cotton. Workers in the United States, utilizing hand and machinery, pick and process the cotton. These workers are paid X wages, articulated as an hourly rate paid for the entire working day Y.  In reality, the workers reproduce the value equivalent to X in  Y minus Z hours, the remaining time being surplus time, surplus value, belonging to the owner of the means of production, the property, that becomes the cotton.   The cotton workers are paid lower wages than other workers.

That cotton gets loaded into a truck, operated by a truck driver who makes a greater hourly rate than the cotton workers, but still reproduces the value of his own wage in less than the complete time of working day, yielding the employer of the driver a surplus value.

The truck is driven to a port, where the cotton in bales, maybe in containers, is unloaded from the truck by cranes manned by crane operators who definitely get paid more than the truck driver or the cotton workers, but again reproduce a value equivalent to that wage in less than the full working day.

The container containing the cotton bales is loaded onto a container ship, built in the shipyards of South Korea, by workers receiving an hourly wage lower than the crane operator but above that of the cotton workers.  The shipyard workers still reproduce the value of their own wage in less than the entire working day, week, month, year.

The ship is owned by Maersk, carries 12,000 containers and is crewed by a staff of....14 including approximately 7 officers.  Get that? 12,000/14/7.  And a few more numbers: length, 366 meters; beam, 49 meters; crew, still 14. By the way, container fleet size, measured in deadweight tons (dwt) has increased by a factor of 15 in the last 35 years.

So clearly in our daisy chain of sequential, and layered, exploitation, the lower wage rates paid to the cotton workers are essential to the entire network that circulates the capital.  All additional steps simply "pile on" and participate in the distribution of the surplus-value extracted from the cotton workers, even that labor of the shipyard workers in South Korea, who wouldn't have any jobs if it wasn't for the lower wages of the cotton workers, not to mention the still lower wage rates for the Bangladeshi workers.

Right?  Not right?  Nonsense, you say?

So do I.

That, the above, is clearly nonsense, but no less clear, and no more nonsense than Smith/Norfield's conclusion.  The point being that production of the t-shirts in Bangladesh, like the production of soybeans in Brazil, machine tools in Germany, cotton in the US, automobiles in France, is a circuit of capital that is itself part of, and made up of, other linked, continuous, but discreet circuits.  The production of any one of these commodities can be made to appear as supporting a network of communications and transportation offering services and products the total price of which far exceeds the value generated in the "original" or "base" commodity, but that fee, those prices, for those services and products do not constitute increased or intensified -exploitation of the labor power of the workers  producing the original commodity.

The owner of the truck(s) is exploiting the labor, and capturing a portion of the surplus value thrown into the entire circuit of capital, which includes the surplus value created by the truck driver(s). The port is capturing a portion of the surplus value thrown into the entire circuit of capital by the cotton producers, the truck drivers, the crane operators, and that thrown into the circuit by the shipping line crews.    All this is accomplished through exchange and by price.  Price not only represents the value of the service of the object in monetary terms, but also represents the size, efficiency, development, of the capital.

So...for example, if the trucking company raises its price for hauling the baled cotton to port, that is an attempt to change the distribution, the allocation, of the available surplus value.  The price increase does not amount to additional exploitation of the cotton workers.  The owners of the cotton enterprise may attempt to offset that additional cost by increasing the exploitation of the workers, but nothing in that additional exploitation, as nothing in the hauling rate increase, amounts to a "benefit" to the truck drivers, or the crane operators, or the port's drayage employees, or the ship's crew.

The careful reader of the Smith/Norfield parable will notice that in the advanced countries, the various players (state, executives, advertisers, retail merchandisers) are all sharing, not in the profit of the Bangladesh based t-shirt manufacturer, but in the mark-up of the t-shirt price when it reaches Germany.   That mark-up is based, in part, on the value accruing to the commodities through the labor performed in parts of the circulation process.

The mark-up is also a form of arbitrage of  the individual value, the necessary time to produce these particular t-shirts  in relation to the socially necessary time to reproduce the general commodity "t-shirts." The t-shirts are sold above their value, the labor time of production, embedded in them, but below the social value, the time necessary to produce t-shirts.

While we're on the subject of surplus-value and exploitation, it's a bit of a gob-smack that in discussing the exploitation of the Bangladeshi factory workers, Mr. Smith doesn't take the time to give us an indicator of how great the magnitude and rate of surplus value, how intense the exploitation really is. He gives us some numbers that I think we can use, but he doesn't make the effort to tease out an index to the exploitation.

I took a shot at it, believing that we can get an indication of those magnitudes and rates, establish a calculus- an approximation by accepting price as a proxy for value.

So let's see, according to Smith/Norfield, the worker at the factory earns €1.36 per day (just about the initial price of the t-shirt), for a 12 hour day, producing 250 shirts per hour, or 3000 shirts per working day.  At  €1.35 per shirt, the value of the wage is reproduced in 14.4 seconds.  Now 40 cents of each shirt price represents the cotton, and although we don't know the cost of the inputs like electricity, machinery, maintaining the work place, security to intimidate the workers, etc. we can ignore that cost completely (as Marx does in Capital, setting it to zero), or select an amount arbitrarily.  I'll arbitrarily assign a cost  equal to the price of the cotton to represent all other input costs, another 40 cents per shirt.

In a workday, then 3000 shirts are produced at a cost of €2401.36 but with a value of €4050.  The mass of surplus value appropriated is €1646.64, and the rate a cool 1212: 1.

Now Mr. Smith calls this rate, or something like this rate, "super-exploitation." I do not disagree. I think the identification of super-rates of surplus value extraction is a critical component to apprehending, and overthrowing, the domination of capital, the accumulation of human time as the property of others.

I think the identification of super rates of surplus value extraction forces us to review what and why Marx did not grapple with super-exploitation in the abstract in his theoretical expositions of surplus value in Capital, while Marx most certainly did produce examples of super rates of surplus value extraction in his practical discussions of the demands imposed by valorization process.

I think we need to understand why  Marx's "default" condition, was the condition where labor power was compensated at its value, at its cost of reproduction, and why the actual compensation of labor always, like the price of all commodities, oscillates, deviates from its value.

I do not agree that this super-exploitation amounts to a "benefit" to workers in advanced countries; or that capitalists in the advanced countries "share" the profits of super-exploitation with workers.

Part 3 to come.

September 2, 2016

Monday, August 29, 2016

Hands Down, Part 1

I hate writing book reviews.  I'll do almost anything to avoid writing one, including not reading the book.  I hate reviewing books so much, I don't even try to flog the undeniable, worldwide, global, inter-galactic, cosmic,  popularity and acclaim of TWR to publishers to convince them to send me review copies, which of course I would then never review.  But........

Introduction, the Conclusion

Who could argue with John Smith's Imperialism in the Twenty-First Century: Globalization, Super-Exploitation, and Capitalism's Final Crisis (Monthly Review Press, 2016)?

Who would want to argue with John Smith when he writes:
The vast wave of outsourcing of production process to low-wage countries, enabled by the fortuitous arrival of ICT and rapid advances in transportation technology, was a strategic response to the twin crises of declining profitability and overproduction that resurfaced in the 1970s in the form of stagflation and synchronized global recession.  
Show of hands anybody?  I know of at least one hand not clapping for this.  I know of at least one hand, arm, head, trunk, etc that argues the "fortuitous arrival" of ICT and transportation technology (by which Mr. Smith means containerization of maritime merchandise traffic) was not fortuitous, and moreover could not have been both "fortuitous" and strategic-- ("adj. Latin, fortuitus, from forte, by chance, from fors chance, luck + ous:  That is due to or produced by chance, accidental, casual." OED);  that both  had been a long time coming, a long time in the making, and had been part of the very process of declining profitability and overproduction.

The "strategy," such as it was, such as it ever is and can only be with the bourgeoisie in charge, was to drive down costs, to reduce the proportion of  living labor engaged in and by the "advanced" countries, to restrict the amount of money paid in wages in relation to the mass of capital values created, transported and realized; and that creation, transportation, and realization took place, in the main, in the advanced countries themselves.  Dreams of a world of maquiladoras, of off-shored, "floating," capitalism were not the force behind containerization and digital technologies.  The only strategy was profit. The tactic was cost-reduction.  Put those two together and you're half a heartbeat away from the the truth of "economics."  That truth is class struggle, with them as the ruling class maintaining themselves as the ruling class.

I know of a least one hand that thinks the accelerated application of these technologies, changing the technical and value compositions of capital, changing the relations between the living and objectified, accumulated, elements of production, required an initial, and then sustained assault on the working conditions, employment levels, and living standards of workers in the advanced countries.

Who can argue with Mr. Smith  when he contends:
This course was conditioned by imperialists' reluctance to reverse the expensive concessions that helped convert the workers of the Global North into passive bystanders, or even accomplices, to their subjugation of the rest of the world.
Hands up?   Hands not clapping?  Heads not nodding in agreement?  Voices not raised singing the praises of this "new" theory of imperialism that boils itself down to the same-old same-old conclusions of the 40 year old, 50 year old, 100 year old "theories" of imperialism; the same-old, same-old conclusion from the same-old, same-old theories that says workers in advanced countries are accomplices of the bourgeoisie in the exploitation of workers, subsistence producers, small capitalists, peasants,  in less advanced countries?

Who would want to be so disagreeable as to argue that in fact the history of advanced capitalism over the last 40 years has been exactly the opposite of what Mr. Smith claims: that in fact that history is the history of the reverses to the "expensive concessions" awarded to the workers of the "Global North"?  Hands up.

Who could be so disagreeable as to deny that Thatcher, and Reagan were positively reluctant to confront the workers of "their" advanced capitalisms; hesitant, stumbling, equivocating in opposing and dismantling regulatory agencies and requirements designed to protect the privileged status of workers in the Global North? Hands up.

Who can doubt that the bourgeoisie positively trembled when liquidating, privatizing, de-regulating, free-marketing their way away from the "city on the hill" and back to the gated communities that are the pride and joy of this modern world? Hands up.

Who  can doubt that outsourcing has produced greater benefits and higher standards of living for workers in advanced countries?  That defined benefit pensions aren't better funded, more secure, more widespread, covering more workers with greater benefits than they were 20 or 30 years ago? Hands up.

Who can deny  that poverty rates have declined in the US since 1979, since Deng's 4 Reforms, since the proliferation of the "special enterprise zones" throughout the world?  Hands up.

Who can doubt that workers real wages have annually increased and are higher than ever? Hands up.

Who would disagree that Thatcher caved in the face of the miners' strike in the UK?  Ran away from the confrontation?  Refused to target unions during her wishy-washy equivocating decade in office?

Who would be so churlish to argue that "equality"-- that is to say shares of national income-- in the advanced countries hasn't improved over the last 40 years, and that improvement is the direct result of outsourcing? Hands up.

Who could argue that incomes and wealth hasn't "flattened" in the advanced countries with more equitable distributions of both throughout the population? Hands up.

Hands up, because the decertification and decline of unions apparently did not precede, accompany, or occur during the "new imperialism."  

Hands up because the decline in real wages can't have taken place as the bourgeoisie utilized outsourcing to avoid challenging the concessions made at home, and in fact use outsourcing to maintain those concessions.

Hands up,  because apparently the reductions in medical coverage, the attacks on medical coverage for poor and workers launched at the corporate and the state levels, haven't really happened.

Who could disagree with Mr. Smith, with this from the conclusion into his investigation into the new imperialism of super-exploitation:
...profits, prosperity, and social peace in the imperialist countries have become qualitatively more dependent upon the proceeds of super-exploitation of living labor in countries like Vietnam, Mexico...
So hands up if you think any of this, this real world we live in now, this real world of high-wage capitalism and low-wage capitalism, feels anything or anywhere like "prosperity" and social peace?

How about you young unemployed people of Spain, Greece, Portugal, Italy, Ireland, Britain?  You digging the prosperity you have captured as accomplices to your bourgeoisie?

How about you young employed people in the United States, so lucky to earn almost enough to not quite be the working poor, and not always need food stamps and other supplements?  Grooving on the prosperity that is so synonymous with my-country-tis-of-thee?

How about you, all you workers, white collar, blue collar, teachers, mechanics, laid off, dismissed terminated let-go to find jobs,    if you're lucky, that will pay you 25-30 percent less, and which will never pay you enough to overcome that gap, to recuperate to the level of your previous earnings? How's being an accomplice working out for you?  Good, you think?  Prosperous are you?  Hands up.

Do all you still living at home with your parents, or forced to return home, are you feeling just the least bit guilty about enjoying those concessions allotted you from the super-exploitation of workers in Vietnam, Cambodia, Brazil?  Hands up.

Hands up, indeed, and up against the wall.  Someone, somebody, some bodies, some class has just been robbed of the last 40 years of its real history.

Hands up if you think I'm being unfair to Mr. Smith.  Maybe he's exaggerating for effect.  Maybe he's overstating a truth.  Maybe he means, workers in the advanced countries are in general still much better off than workers in low-wage countries.  Maybe, but no one has ever denied that.  No one has ever claimed that's not the case.  Maybe he means the living standards, working environments, social conditions are worse for workers in low-wage countries than in advanced countries.  Maybe, but again, no one has ever claimed anything else.  Maybe he means the toll taken of workers not just in workplace accidents but in the demands made upon those workers in low-wage countries is greater than the toll taken on workers in advanced countries.  Maybe, but again no one has ever claimed anything to the contrary.

Maybe he means that "things"  would be worse for workers in advanced countries if the bourgeoisie didn't super-exploit low wage labor in the 'Global South.'  Maybe.  Except there's no material basis in the needs, mechanisms of accumulation for such speculation.  The bourgeoisie do what they do to reproduce themselves as the bourgeoisie, as capitalists, as the ruling class.  The bourgeoisie could not have dispersed production globally simply through technical means. Capital is not a technology, a technique, an advance in the means of transportation.  It is a social means. It could not have transferred assets to  low-wage countries without first confronting, and repeatedly defeating the workers in the advanced countries.

 The "things would be worse" argument isn't really that without access to low-wage labor, capital would have imposed harsher conditions on labor in the "Global North."  The argument is actually claiming that if the workers had not be pushed back, had not had their wages reduced,  had not lost benefits, didn't experience greater unemployment, did not suffer reductions in the labor force in some sectors measuring more than 50 percent,  then things would have been worse.

Maybe we just take him at his word.  Maybe we just accept that he means what he says, and he meant to say it.

Maybe there's much more to his book than the conclusion.  Indeed there is, there's a lot more.  There is a lot in the book that is really, really good.  Really thought provoking.  But, we are dealing with the conclusion he draws from all the previous investigations that make up the book; we're supposed to be dealing with the result, the condensed expression of everything that has gone before.  The conclusion is supposed to be, as Marx made clear in his own critiques of capital, that moment of transition, of transformation, where the unveiling of the "economics" of things exposes the relations of classes, exposes the actual history of the conditions of labor.  That history is lost here, in Smith's book, sacrificed once again to an ideology.

But we're only at the beginning with these conclusions, and there's a lot more to be done.  Count on it.

Hands down, we're only at the beginning.

August 29, 2016

Also available HERE

Monday, August 22, 2016

Ambiguities of Surplus Value: The Necessary Meanings to the Relative Ending

1. If Marx's analysis of value is accurate, actually apprehends value as both a social relation of production and the measure of that social relation of production, then we have to "accept" the limited circumstances under which relative surplus value can be enhanced; then we have to discard the notion the notion of the intensification of labor as yielding "greater value" in the same period of time than does "less intense" labor.

2. If Marx's analysis of value is accurate,  then the specific requirement for the amplification of relative surplus value means that increasing the "productivity of labor" is not identical with increased relative surplus value; then expanding output reduces unit costs and aggregate costs but does not increase surplus value, unless and until more labor power is employed at the new level of productivity...or the improved productivity cause the value of labor power to fall.

3. If Marx's analysis of value is accurate, then if the value of the mass of products remains the same (save for changes in the constant capital embodied in the commodities), and the wage itself represents the same proportion of time necessary for reproducing labor power, then a reduction in labor power, the labor time, consumed in production brought about by increased productivity, does not represent increased surplus value.

And then...

4. Marx sees the bourgeoisie as ever vigilant to means and methods of capturing greater amounts of surplus value, greater portions of the working day.  In truth, the bourgeoisie are pretty much blind to surplus value.  Indeed, if the wage relation is a "veiled" one, obscuring the source of expanded value, the bourgeoisie are positively invested in not lifting that veil, to not even recognizing the veil as a veil.  The bourgeoisie have their eyes on the prize, all right, but the prize is the package, the expression, the appearance, the veil itself.

5. What the bourgeoisie see is cost, and the image of cost reflected in profit.   In fact, value to the class of capitalists is an image flipping between cost and profit and back again with every nod of the head or blink of the eye. The bourgeoisie don't think they are chasing surplus value, unpaid labor, they thing they are chasing minimizing labor costs as they themselves are chased by the costs of production.

6. It is to reduce those costs and flip the image to profits that the bourgeoisie expand the means of production-- both in mass and in value, as capital.  Capital realizes itself, recognizes itself, in other capitals.

7. As a consequence, the distribution of portions of the total surplus value to the most efficient, the largest capitals, through the price mechanism, the arbitrage between a commodity's individual value and social value is essential to capital.  This transfer between/among industries, between sectors, among capitals is no parlor trick. It is real.  It is necessary.  It is not, however, sufficient.

You are here--the same-old, same-old, modern world

8. Unit labor costs can be reduced so much.   The spread between individual and social values of commodities can be parlayed only so much.  Big capital can spawn and eat small capital...but  capital needs a bit fresh meat.  That fresh meat, that boost to surplus value, is provided by:
a. improved turnover, reduced time of production and reduced time of circulation
b. access to supplies of cheap labor,  internally through "interior migration" as the new sources of wage-labor are brought into production-- for example, the repeated waves of entry of women into the labor force in both "advanced" and "developing"countries in the latter half of the 20th century; or through "exterior migration," the importation of new sources of labor from beyond national borders, migrant labor subject to less protection, reduced wages, and particularly a reduced portion of the social wage
c. the emigration of capital,  through both direct investment and outsourcing bringing the virtues of exploitation to a neighborhood not always near you or just like yours.
d. attacks on labor power at home and abroad, at different or the same times, to drive the wage below the value of labor, below its cost of reproduction. The "value of labor"  we already know is always dependent on a portion of  labor power not being reproduced.
 (a) When capital embarks on the expansion of the machinery of production, of the value of these means, the point of the expansion is to turn the expanded value embedded in these means into even greater masses of value circulating in the markets, achieving realization. The expansion of production is accompanied, if not preceded by, improvement in the means of transportation and communication, reducing the lag between expropriation of surplus value in production and materialization of the surplus value as money.  Improvements in turnover derived from reductions in production time and circulation, allow the capitalist to retrieve the value of the initial capital advanced to initiate production, and recycle that value into the material means and living labor of further production cycles.  If the initial turnover is successful, then the purchase of additional material and labor-power for subsequent cycles of turnover are, in a sense, "pre-paid," requiring no additional outlay...until one of those subsequent cycles is not so successful.

That's the theory.  Measuring turnover time, empirically confirming the return and recycling of the value initially advanced is something else, and that something else is not easy.

We know that different capitals have different production times, and different circulations times, hence different rates of turnover.  The origin of the credit system is in these different rates of turnover, to bridge the gaps between production and circulation and circulation and realization, so that capital can pay capital and continue production before, during, and after turnover.

We can get an approximation, and a proxy, for how well, or poorly, the turnover of capital is proceeding by simply looking at the  days-to-payment for the billing cycles of corporations.  In 2014, the Georgia Institute of Technology performed a study of the average time taken by companies of all sizes to forward payments to their suppliers.

The average time for payment measured 46 days in 2014, up from 35 days in 2009. Now the amounts submitted in 2014 are certainly greater than those submitted in 2009, as 2009 was the trough of the recession and 2014 was, more or less, a peak in earnings growth since 2008.  However the lengthening time for payment in 2014 translates into 2.5 fewer turnovers in 2014 than 2009 even as profits expanded. And a slowdown is a slowdown, a decline in rate, even if it isn't felt until the mass of profit declines, precisely because the mass of profit temporarily offsets the slowdown.

The methods of improving the rate of turnover are exactly the same methods for reducing the costs of production and improving rates of output:  the substitution of machinery for living labor; the application of technology to the transportation and communication.   The increased turnover rates for the circulating capital, hence, is triggered by the increases in fixed capital, which fixed assets themselves embody more capital value while less is  consumed in production over a greater number of cycles.  Thus the rate of turnover of the circulating capital increases, while the rate of turnover of the total capital not only slows down, but actually spins in the other direction.  The value embedded in the fixed assets, value that circulates only incrementally, "hardens" within the design of the fixed assets to amplify the productivity of labor-power over greater numbers of production and circulation cycles.

Back in the day, Wall Street used to identify periods of expansion by the uptick in orders for trucks and telephones.  Today, the markers are container ships and digital data processing and transmission. "Slow steaming" pretty well sums up where capital is now.

(b,c,d) At root, wage-differentials are imposed upon workers not because of differences in "productivity," of "skill,"  "of need,"   Wage-differentials are imposed to preserve accumulation.  Wage-differentials are essential to accumulation.   Value cannot be produced where men and women are something more than the carcass of time.  Value cannot be produced where human laborers are compensated based on their collective, common, social needs.  Value is produced where time is lost to the satisfaction of need; where reproduction of the laborers is constantly diminished, reduced proportionately and disproportionately.

Attacking wage differentials within industries, across sectors, and most importantly, across continents is the starting point, and only the starting point, for the emancipation of labor from the wage system in its entirety.

August 22, 2016

Saturday, August 13, 2016

The Ambiguities of Surplus Value: Absolutely, Relatively, Intensely

1. Objects and Commodities

When Marx "settles" on labor as the substance common to all commodities in capital's markets, that's not because commodities share no other commonalities to their existence.  Marx settles on labor because  the condition of labor alone transforms objects into social products. 

Common physical characteristics and qualities-- mass, size, shape, electrical charge-- do not make objects commodities.  Similarities and/or differences in function, purpose, design do not make objects into commodities.  Objects of use, necessity, decoration, sustenance, navigation, and of course, destruction become commodities when they are not produced for the needs of the producers, but for purpose of alienation-produced by others for others; for commerce; for exchange.  The commodity is the form, the property, created when the condition of labor is itself a commerce, for trade, for exchange; when it is by others for others.

That labor appears both concrete, embodied in and as the specific object, and in the abstract, as a process, a vehicle, a power for making any object into a commodity, and power can be measured; power is measure.  The measurement of labor power that is labor power is called  time.

2. The Dictatorship of Time

"Economy of time: to this all economy ultimately reduces itself," wrote Marx in the Grundrisse.

Throughout history--because economics is concentrated history-- economy has been all about the allocation and apportionment of the time the society needs to reproduce itself.

All economy is the economy of time, but not all economy of time is the economy of value.  Marx said that too, not in so many words, but in so many more words, 50+ volumes worth.

For the direct producer the exchange is one of personal time for personal use.  For the commodity producer, the exchange is one of personal time for an equivalent, either in other commodities, or in a means to obtain other, all other commodities.  For the capitalist commodity producer, the exchange is not of personal time for use, or any equivalent.  The exchange is the purchase of the labor power, of the time to labor, of others. The products  belong to those purchasers of labor power not for the satisfaction of their direct needs, but for the needs of others who likewise have purchased labor-time. Capital "recognizes" itself, realizes itself only in other capitals.

Time is of the essence. Restricting the labor-time necessary for reproducing the laborers, distinguishing  labor-time between its necessary and a surplus portions, while at the same time making that distinction invisible in the products is the essence of capitalist commodity production.  It is the expression of value.  The value-form is the commerce, the traffic, in labor-time, in lost time, in alienated time, in the time of others.

Marx can and does recognize this separation of time, its fracturing and subsequent re-formation of time as value, of value as the loss of time, as the suppression of the labor process by the valorization process,  well before writing Capital, before writing the notebooks known as the Economic Manuscriptse, because of the extensive, and intensive, division of labor already made manifest in the factory system

In The Poverty of Philosophy, Marx writes:
Competition, according to an American economist, determines how many days of simple labour are contained in one day’s compound labour. Does not this reduction of days of compound labour to days of simple labour suppose that simple labour is itself taken as a measure of value? If the mere quantity of labour functions as a measure of value regardless of quality, it presupposes that simple labour has become the pivot of industry. It presupposes that labour has been equalized by the subordination of man to the machine or by the extreme division of labour; that men are effaced by their labour; that the pendulum of the clock has become as accurate a measure of the relative activity of two workers as it is of the speed of two locomotives. Therefore, we should not say that one man’s hour is worth another man’s hour, but rather that one man during an hour is worth just as much as another man during an hour. Time is everything, man is nothing; he is, at the most, time’s carcass. Quality no longer matters. Quantity alone decides everything; hour for hour, day for day; but this equalising of labour is not by any means the work of M. Proudhon’s eternal justice; it is purely and simply a fact of modern industry. 
In the automatic workshop, one worker’s labour is scarcely distinguishable in any way from another worker’s labour: workers can only be distinguished one from another by the length of time they take for their work. Nevertheless, this quantitative difference becomes, from a certain point of view, qualitative, in that the time they take for their work depends partly on purely material causes, such as physical constitution, age and sex; partly on purely negative moral causes, such as patience, imperturbability, diligence. In short, if there is a difference of quality in the labour of different workers, it is at most a quality of the last kind, which is far from being a distinctive speciality. This is what the state of affairs in modern industry amounts to in the last analysis
3.  Relatively Unambiguous....or not 

In his exploration of capitalist commodity production and the expression of value, Marx presumes that commodities exchange at their values.  This is, of course, an abstraction; values are expressed in commodity exchange only through prices, and prices are subject to all sorts of disturbances and perturbations which will cause the prices to deviate from the values that are embedded in, and are the commodities.  But deviations, oscillations, imbalances, irregularities are precisely the mechanisms through which value asserts itself; through which the "law of value"-- that commodities exchange not at the labor-time embedded in them but in relation to the social labor-time necessary for their reproduction-- materializes.

Marx maintains this exchange of commodities at value, until he can show how capital necessarily distorts the exchange as itself an  expression of the law,.  Capital's laws regarding allocation of the mass of surplus value compel an "adjustment" to these exchanges at value, an adjustment  called prices of production which operates to distribute value, without however impacting that mass itself.

That's easy.

More than easy, it's something we need to keep in focus when we discuss the wage-rate and the compensation of labor at its value; of the time necessary for its reproduction.  Marx presents us with an abstraction, a commodity, labor-power, which in the abstract is exchanged  like all other commodities, at its value, for its equivalent in value, detached value (money) in accordance with the social-labor time necessary for its reproduction.   It is the only way Marx can make an intelligible critique of the earlier theories of surplus value.

However,  that labor-power is compensated at its value, its cost of reproduction in the abstract, cannot be reversed in the concrete  by using the wage, the price of the commodity, to tell us anything hard and fast about the relative complexity of different labors; the relative productivity of  different labors; the relative "needs" of different laborers.

Compensating labor-power at its value, at a price that represents some relation to its value is  an abstraction and a fuzzy one at that.   Clearly, the costs of reproduction are mutable, and can be driven down by a number of methods and still the laborers as a class do "reproduce themselves," although perhaps not as robustly, healthfully, massively .

The "concern" of capital for the reproduction of the labor-power, of the class of laborers, the need of capital for the reproduction of labor power, the class of laborers is, like everything else in capitalism, a question of ratios, proportions, relations.  That  x percent of the working class needs to achieve compensation that enables it to come to work everyday for z years and beget y percent of replacement or additional workers in z years doesn't depend on the needs of the laborers, but on the needs of capital. If capital needs x percent to reproduce y percent in z years, the corollary that screams out the totality that is the truth is: "1-x percent do not have to be compensated at a rate sufficient to work for z years; begetting 1-y percent replacements."   

Keep that in mind whenever anyone tries to convince you that higher wages are compensation for "productivity."

4. Unambiguously Relative...or not

Marx initiates the discussion in no uncertain terms in Chapter 12, Volume 1:
Given the length of the working-day, the prolongation of the surplus-labour must of necessity originate in the curtailment of the necessary labour-time; the latter cannot arise from the former.  In the example we have taken, it is necessary that the value of labour power should actually fall by one-tenth, in order that the necessary labour-time may be diminished by one-tenth, i.e., from ten hours to nine, and in order that the surplus labour may consequently be prolonged from two hours to three.
Such a fall in the value of labour-power implies, however, that the same necessaries of life which were formerly produced in ten hours, can now be produced in nine hours. But this is impossible without an increase in the productiveness of labour. For example, suppose a shoe-maker, with given tools, makes in one working day of twelve hours, one pair of boots. If he must make two pairs in the same time, the productiveness of his labour must be doubled; and this cannot be done, except by an alteration in his tools or in his mode of working, or in both. Hence, the conditions of production, i.e., his mode of production, and the labour-process itself, must be revolutionised. By increase in the productiveness of labour, we mean, generally, an alteration in the labour-process, of such a kind as to shorten the labour-time socially necessary for the production of a commodity, and to endow a given quantity of labour with the power of producing a greater quantity of use-value.  Hitherto in treating of surplus-value, arising from a simple prolongation of the working day, we have assumed the mode of production to be given and invariable. But when surplus-value has to be produced by the conversion of necessary labour into surplus-labour, it by no means suffices for capital to take over the labour-process in the form under which it has been historically handed down, and then simply to prolong the duration of that process. The technical and social conditions of the process, and consequently the very mode of production must be revolutionised, before the productiveness of labour can be increased. By that means alone can the value of labour-power be made to sink, and the portion of the working day necessary for the reproduction of that value, be shortened.

The surplus-value produced by prolongation of the working day, I call absolute surplus-value. On the other hand, the surplus-value arising from the curtailment of the necessary labour-time, and from the corresponding alteration in the respective lengths of the two components of the working day, I call relative surplus-value.

In order to effect a fall in the value of labour-power, the increase in the productiveness of labour must seize upon those branches of industry whose products determine the value of labour-power, and consequently either belong to the class of customary means of subsistence, or are capable of supplying the place of those means. But the value of a commodity is determined, not only by the quantity of labour which the labourer directly bestows upon that commodity, but also by the labour contained in the means of production. For instance, the value of a pair of boots depends not only on the cobbler’s labour, but also on the value of the leather, wax, thread, &c. Hence, a fall in the value of labour-power is also brought about by an increase in the productiveness of labour, and by a corresponding cheapening of commodities in those industries which supply the instruments of labour and the raw material, that form the material elements of the constant capital required for producing the necessaries of life. But an increase in the productiveness of labour in those branches of industry which supply neither the necessaries of life, nor the means of production for such necessaries, leaves the value of labour-power undisturbed.

The cheapened commodity, of course, causes only a pro tanto fall in the value of labour-power, a fall proportional to the extent of that commodity’s employment in the reproduction of labour-power. Shirts, for instance, are a necessary means of subsistence, but are only one out of many. The totality of the necessaries of life consists, however, of various commodities, each the product of a distinct industry; and the value of each of those commodities enters as a component part into the value of labour-power. This latter value decreases with the decrease of the labour-time necessary for its reproduction; the total decrease being the sum of all the different curtailments of labour-time effected in those various and distinct industries. This general result is treated, here, as if it were the immediate result directly aimed at in each individual case. Whenever an individual capitalist cheapens shirts, for instance, by increasing the productiveness of labour he by no means necessarily aims at reducing the value of labour-power and shortening, pro tanto the necessary labour-time. But it is only in so far as he ultimately contributes to this result, that he assists in raising the general rate of surplus-value. The general and necessary tendencies of capital must be distinguished from their forms of manifestation...
If one hour’s labour is embodied in sixpence, a value of six shillings will be produced in a working day of 12 hours. Suppose, that with the prevailing productiveness of labour, 12 articles are produced in these 12 hours. Let the value of the means of production used up in each article be sixpence. Under these circumstances, each article costs one shilling: sixpence for the value of the means of production, and sixpence for the value newly added in working with those means. Now let some one capitalist contrive to double the productiveness of labour, and to produce in the working day of 12 hours, 24 instead of 12 such articles. The value of the means of production remaining the same, the value of each article will fall to ninepence, made up of sixpence for the value of the means of production and threepence for the value newly added by the labour. Despite the doubled productiveness of labour, the day’s labour creates, as before, a new value of six shillings and no more, which, however, is now spread over twice as many articles. Of this value each article now has embodied in it 1/24th, instead of 1/12th, threepence instead of sixpence; or, what amounts to the same thing, only half an hour’s instead of a whole hour’s labour-time, is now added to the means of production while they are being transformed into each article. The individual value of these articles is now below their social value; in other words, they have cost less labour-time than the great bulk of the same article produced under the average social conditions. Each article costs, on an average, one shilling, and represents 2 hours of social labour; but under the altered mode of production it costs only ninepence, or contains only 1½ hours’ labour. The real value of a commodity is, however, not its individual value, but its social value; that is to say, the real value is not measured by the labour-time that the article in each individual case costs the producer, but by the labour-time socially required for its production. If therefore, the capitalist who applies the new method, sells his commodity at its social value of one shilling, he sells it for threepence above its individual value, and thus realises an extra surplus-value of threepence. On the other hand, the working day of 12 hours is, as regards him, now represented by 24 articles instead of 12. Hence, in order to get rid of the product of one working day, the demand must be double what it was, i.e., the market must become twice as extensive. Other things being equal, his commodities can command a more extended market only by a diminution of their prices. He will therefore sell them above their individual but under their social value, say at tenpence each. By this means he still squeezes an extra surplus-value of one penny out of each. This augmentation of surplus-value is pocketed by him, whether his commodities belong or not to the class of necessary means of subsistence that participate in determining the general value of labour-power. Hence, independently of this latter circumstance, there is a motive for each individual capitalist to cheapen his commodities, by increasing the productiveness of labour.
Nevertheless, even in this case, the increased production of surplus-value arises from the curtailment of the necessary labour-time, and from the corresponding prolongation of the surplus-labour. Let the necessary labour-time amount to 10 hours, the value of a day’s labour-power to five shillings, the surplus labour-time to 2 hours, and the daily surplus-value to one shilling. But the capitalist now produces 24 articles, which he sells at tenpence a-piece, making twenty shillings in all. Since the value of the means of production is twelve shillings, 14 2/5 of these articles merely replace the constant capital advanced. The labour of the 12 hours’ working day is represented by the remaining 9 3/5 articles. Since the price of the labour-power is five shillings, 6 articles represent the necessary labour-time, and 3 3/5 articles the surplus-labour. The ratio of the necessary labour to the surplus-labour, which under average social conditions was 5:1, is now only 5:3. The same result may be arrived at in the following way. The value of the product of the working day of 12 hours is twenty shillings. Of this sum, twelve shillings belong to the value of the means of production, a value that merely re-appears. There remain eight shillings, which are the expression in money, of the value newly created during the working day. This sum is greater than the sum in which average social labour of the same kind is expressed: twelve hours of the latter labour are expressed by six shillings only. The exceptionally productive labour operates as intensified labour; it creates in equal periods of time greater values than average social labour of the same kind. (See Ch. I. Sect 2. p. 44.) But our capitalist still continues to pay as before only five shillings as the value of a day’s labour-power. Hence, instead of 10 hours, the labourer need now work only 7½ hours, in order to reproduce this value. His surplus-labour is, therefore, increased by 2½ hours, and the surplus-value he produces grows from one, into three shillings. Hence, the capitalist who applies the improved method of production, appropriates to surplus-labour a greater portion of the working day, than the other capitalists in the same trade. He does individually, what the whole body of capitalists engaged in producing relative surplus-value, do collectively. On the other hand, however, this extra surplus-value vanishes, so soon as the new method of production has become general, and has consequently caused the difference between the individual value of the cheapened commodity and its social value to vanish. The law of the determination of value by labour-time, a law which brings under its sway the individual capitalist who applies the new method of production, by compelling him to sell his goods under their social value, this same law, acting as a coercive law of competition, forces his competitors to adopt the new method.  The general rate of surplus-value is, therefore, ultimately affected by the whole process, only when the increase in the productiveness of labour, has seized upon those branches of production that are connected with, and has cheapened those commodities that form part of, the necessary means of subsistence, and are therefore elements of the value of labour-power.

The value of commodities is in inverse ratio to the productiveness of labour. And so, too, is the value of labour-power, because it depends on the values of commodities. Relative surplus-value is, on the contrary, directly proportional to that productiveness. It rises with rising and falls with falling productiveness. The value of money being assumed to be constant, an average social working day of 12 hours always produces the same new value, six shillings, no matter how this sum may be apportioned between surplus-value and wages. But if, in consequence of increased productiveness, the value of the necessaries of life fall, and the value of a day’s labour-power be thereby reduced from five shillings to three, the surplus-value increases from one shilling to three. Ten hours were necessary for the reproduction of the value of the labour-power; now only six are required. Four hours have been set free, and can be annexed to the domain of surplus-labour. Hence there is immanent in capital an inclination and constant tendency, to heighten the productiveness of labour, in order to cheapen commodities, and by such cheapening to cheapen the labourer himself.

The value of a commodity is, in itself, of no interest to the capitalist. What alone interests him, is the surplus-value that dwells in it, and is realisable by sale. Realisation of the surplus-value necessarily carries with it the refunding of the value that was advanced. Now, since relative surplus-value increases in direct proportion to the development of the productiveness of labour, while, on the other hand, the value of commodities diminishes in the same proportion; since one and the same process cheapens commodities, and augments the surplus-value contained in them; we have here the solution of the riddle: why does the capitalist, whose sole concern is the production of exchange-value, continually strive to depress the exchange-value of commodities?
Straight forward as can be, right?  Capitalism revolutionizes the mode of production, driving the costs of production of the necessities of life down, diminishing thereby the value of labor-power, and since commodities exchange at their value, more or less, at least in the abstract, and because labor-power is compelled to present itself as a commodity for exchange, its value, as expressed in the wage, declines, and it takes less time for the laborers to reproduce the value equivalent to their wage.

Got it.

Indeed, that is exactly what occurred in the last part of the 19th century, in the period  from 1868-1895, and  mistakenly known as the "Long Depression."  In fact, it was no depression at all, but the dramatic movement of capital in the cycles of expansion and severe contraction. Nevertheless, capital accumulated throughout the entire period, and capitalist wealth increased.  Prices entered a sustained decline.  Capital did not.

Average annual production worker earnings during the Long Deflation, 1868-1895, declined some 12 percent in money terms.  In real terms, adjusted for deflation, the earnings increased 42 percent as the prices for consumer goods plummeted by more than one-third.

Marx restricts  the origin of relative surplus value to the fall of the value of labor power, brought about by increasing productivity in production of "necessities," and stating:
But an increase in the productiveness of labour in those branches of industry which supply neither the necessaries of life, nor the means of production for such necessaries, leaves the value of labour-power undisturbed.
Now there is a level of uncertainty as to what constitutes the "necessaries" and/or "the means of production for such necessaries," an uncertainty that needs to be engaged....later.  Here and now, however, Marx demonstrates the advantage to all capitalist production inherent in advancing the productivity of labor. That advantage is the reduction in the cost , and the ability to arbitrage the variance between the commodity's individual value and its social value through the price mechanism.
This is a distribution of, an allocation from, the total surplus value thrown into the market and is not the  actual increase in relative surplus value extracted from more productive labor.

The improvement in the productivity of labor does not automatically, necessarily, and without exception, deliver greater relative surplus value.  If labor power, no matter how productive, cannot create more value in an hour than the value equal to an hour (a tautology, no?), and if the value of labor power does not fall relative to, not the mass of capital animated, but its own previous rate of compensation, and does not reduce the time necessary for reproducing the value of the wage,  then the time required for the reproduction of the labor power remains undisturbed, as does the portion of the working day dedicated to surplus, regardless of the relative decline of the mass of the labor power absorbed in the valorization process.  

What occurs in the markets through the price mechanism, is the distribution of the total surplus; it is   the arbitrage, the redistribution, until the increased productivity of labor becomes the "new normal" for production.

The unpaid portion of the labor time must rise, that ratio must be altered, while the value of product remains the same (or expands).   And that is something quite different from simply reducing the mass of the value of the labor-power employed, and with that, and in exactly the same ratio, the value of the product.


5. Eat That Contradiction

Marx, however, has to account for the compulsion of capital, the inherent tendency of capital to replace living labor with objectified labor; to expand the inanimate, non-value producing element of the capital relation.  This is what the bourgeoisie must do, after all, being capitalists..  Having organized the means of production as private property, their class property, the expansion of their wealth, the accumulation of capital in all its forms requires the expansion of the means of production as capital, as commodities themselves.

He finds the compulsion for accumulation in the necessity for expanding value, and he finds the expansion of value locked in the extraction of relative surplus value.  That extraction of relative surplus value is the "real subsumption of labor" by capital.

In Capital, Volume 1, Chapter 15, Marx writes:
Machinery produces relative surplus-value; not only by directly depreciating the value of labour-power, and by indirectly cheapening the same through cheapening the commodities that enter into its reproduction, but also, when it is first introduced sporadically into an industry, by converting the labour employed by the owner of that machinery, into labour of a higher degree and greater efficacy, by raising the social value of the article produced above its individual value, and thus enabling the capitalist to replace the value of a day’s labour-power by a smaller portion of the value of a day’s product. During this transition period, when the use of machinery is a sort of monopoly, the profits are therefore exceptional, and the capitalist endeavours to exploit thoroughly “the sunny time of this his first love,” by prolonging the working-day as much as possible. The magnitude of the profit whets his appetite for more profit.
"To replace the value of a day's labour power by a smaller portion of the value of a day's product," in this manner is not the extraction of greater relative surplus value, when the total value itself drops proportionately to the labor-power deployed.  It is again the redistribution of the total surplus value thrown into the markets by all producers, and the "exceptional" profits disappear as soon as the enhanced productivity of labor becomes standard.  Then there is no arbitrage to be conducted between the individual and social value of the commodity:
As the use of machinery becomes more general in a particular industry, the social value of the product sinks down to its individual value, and the law that surplus-value does not arise from the labour-power that has been replaced by the machinery, but from the labour-power actually employed in working with the machinery, asserts itself.
6.  And This One

Marx sees another source for the accelerated extraction of surplus value through the application of machinery in the intensification of labor.
Generally speaking, the mode of producing relative surplus-value consists in raising the productive power of the workman, so as to enable him to produce more in a given time with the same expenditure of labour. Labour-time continues to transmit as before the same value to the total product, but this unchanged amount of exchange-value is spread over more use-value; hence the value of each single commodity sinks. Otherwise, however, so soon as the compulsory shortening of the hours of labour takes place. The immense impetus it gives the development of productive power, and to economy in the means of production, imposes on the workman increased expenditure of labour in a given time, heightened tension of labour-power, and closer filling up of the pores of the working-day, or condensation of labour to a degree that is attainable only within the limits of the shortened working-day. This condensation of a greater mass of labour into a given period thenceforward counts for what it really is, a greater quantity of labour. In addition to a measure of its extension, i.e., duration, labour now acquires a measure of its intensity or of the degree of its condensation or density. The denser hour of the ten hours’ working-day contains more labour, i.e., expended labour-power than the more porous hour of the twelve hours’ working-day. The product therefore of one of the former hours has as much or more value than has the product of 1 1/5 of the latter hours. Apart from the increased yield of relative surplus-value through the heightened productiveness of labour, the same mass of value is now produced for the capitalist say by 3 1/3 hours of surplus-labour, and 6 2/3 hours of necessary labour, as was previously produced by four hours of surplus-labour and eight hours of necessary labour.
Marx has dropped the determining condition for expanding relative surplus value, the reduction in the value of the commodities that make up the value, the necessary time for reproducing the laborer.

Marx also moves away from time as the determinant of value with this exposition.  There is a "condensation of a greater mass of labour into a given period."  There is the "increased expenditure of labour in a given time."  There is a "closer filling up of the pores..."  Labor becomes "denser," and "the product [of the denser labor]  has more value than the product [of the less dense labor]."  "The same mass of value is now produced for the capitalist say by 3 1/3 hours of surplus-labour, and 6 2/3 hours of necessary labour as was previously produced by four hours of surplus-labour and eight hours of necessary labour."

How is this possible?  Marx is not discussing complex labor.  Marx is discussing a change in the level of effort such that 1 hour of labor is now equal to 1.2 hours of labor.  Time here is derivative, and is no longer determining.  

"This condensation of a greater mass of labour into a given period thenceforward counts for what it really is, a greater quantity of labour."  If this is the case then how is labor being measured? Labor-time, including socially necessary labor time,  ceases to become the axis of value, and Marx has taken us to point where perhaps joules, or kilowatt hours are underpinning the exchange of values.

Capital's markets are blind, more or less, to everything save time; the time of production, the time of circulation, the turnover time.  As Marx's so accurately observed in 1847, time is everything, man is but time's carcass.  Level of effort, human labor,  does not, or does not for long in the world of capital, determine the pace of production. The pace of production determines the level of effort.

Capital, objectified labor manifested as machinery determines the velocity, the pace, the rate of value production  The objectified labor ignores or eliminates, or abstracts  the differences in strengths, talents, skills of the individual workers; liquidating those individual characteristics in the continuous flow of a production process.

In Chapter 12, Marx writes:
The exceptionally productive labour operates as intensified labour; it creates in equal periods of time greater values than average social labour of the same kind. 
 But we know that this is not the case. In fact, in Chapter 17,  Marx is writing this:
Increased intensity of labour means increased expenditure of labour in a given time. Hence a working-day of more intense labour is embodied in more products than is one of less intense labour, the length of each day being the same.  Increased productiveness of labour also, it is true, will supply more products in a given working-day.  But in this latter case, the value of each single product falls, for its costs less labour than before; in the former case, that value remains unchanged, for each costs the same labour as before.
Costs whom the same labor as before?  Certainly not the capitalist.  Marx stipulates that the times of production are equal, and when production times are equal and a greater quantity of commodities are produced, the costs to the capitalist of the new value supplied by living labor do not change, and the costs of the labor embodied in each unit drop.

Does it "cost" the worker more?  More effort is required, but how is that made manifest in the markets?  By a higher wage?  No, the whole point of "speed up"-- of intensifying the production process is to produce greater numbers of commodities without increasing labor costs.
 Here we have an increase in the number of products, unaccompanied by a fall in their individual prices: as their number increases so does the sum of their prices.  But in the case of increased productiveness, a given value is spread over a greater mass of products.  Hence, the length of the working-day being constant, day's labor of increased intensity will be incorporated in an increased value, and, the value of money remaining unchanged, in more money.  The value created varies with with the extent to which the intensity of labour deviates from its normal intensity in the society. A given working day therefore no longer creates a constant, but a variable value; in a day of 12 hours of ordinary intensity, the value created is, say 6 shillings, but with increased intensity, the value created may be 7,8, or more shillings.  It is clear that, if the value created by a day's labour increases from, say, 6 to 8 shillings then the two parts into which this value is divided, viz., the price of labour power and surplus-value, may both of them increase and simultaneously, and either equally or unequally.  Here the rise in the price of the labour power does not necessarily imply that the price has risen above the value of labour power.  On the contrary the rise in price may be accompanied by a fall in value. This occurs whenever the price of labour power does not compensate for its increased wear and tear.
Marx here has brought us back to the case where labor power is not compensated at its value, at the cost of its reproduction, which however, is exactly the case that Marx has to put to one side to begin his critique of exchange value, of capitalist commodity production, of  surplus value.

Accelerating the production process by improving labor productivity so that less time is required for the production of any single commodity, is indistinguishable from speeding the pace of production by increasing the speed of the existing machinery.  Constant capital, "c," increases, relative to labor power.  More "c" is converted into a greater number of commodities.  Labor time per unit of "c" is diminished.  The increased portion of surplus value claimed in both processes is a result of the variation between the commodity's individual value, and its social value

Indeed, Marx recognizes this "arbitrage" at work with intensified labor, writing:
If the intensity of labour were to increase simultaneously and equally in every branch of industry, then the new and higher degree of intensity would become the normal degree of intensity would become the normal degree for the society, and would therefore cease to be taken account of. 
Sounds familiar, doesn't it?

August 13, 2016

Next Up:  So Where Are We...

Thursday, July 21, 2016

Birth of a Nation

Make no mistake about it, what's going on in Cleveland right now is a national Klonvocation of present and future lynch mobs.

If Barack Obama showed up on that convention floor, the various state delegations would be arguing about who gets to put the rope around his neck.  The convocation of lynchers would lynch him not because the economic recovery has been the weakest in the post-war period; not because drone strikes have killed thousands; not because he has pursued the deportation of migrants with a vengeance; not because use of food stamps has doubled; not because a single worker has lost a single job, but because, and only because Obama is, literally, African-American and has dared to presume he has the same right to preserving US capitalism, to use the military and its weapons against civilian populations, the same right to obstruct, prevaricate, cover-up, misdirect, misinform, murder, destabilize, manipulate, spy, provoke conflicts  as a white man. 

And if Hillary Clinton showed up, this resurrection of the Redemptionists, this expo of nightriders, would lynch her too, but only after assaulting her sexually, for she is a woman who thinks she has the same rights as the African-American who thinks he has the same rights as a white man.

It's just that simple.  Doesn't mean vote for Hillary, or vote for anyone.  It simply means, recognize this gathering of Kleagles for what it is. Lincoln and Grant-- no pictures of you on US currency; Trump and Trumpettes have targeted those slots for Nathan Bedford Forrest and D.C. Stephenson.

July 21, 2016

Wednesday, July 13, 2016

Post-It Series #4: The Shrewing of the Tame

Everything's as it should be.  Cameron, dancing on the pinheads of the Tory party, exits stage right, with a "consummate performance,"  a "valedictory," in parliament, introducing his successor, Theresa May, not to be confused with Theresa May Not, Mother Theresa,  or the children's game "Mother Theresa May I?"   Cameron plans a well-deserved private vacation-- just the immediate family, and a pig head or two, with Boris Johnson one of the pigs.

Meanwhile, everything's as it should be.  The dog's dinner known as the Labour Party breaks itself apart on the shoals of how much to, and how best to, get behind an "enlightened," "humane," integrated, efficient, inter-national capitalism, while capitalism is busy demonstrating, once again and in spades, how unenlightened, inhumane, disparate, dysfunctional, parochial it is, it was, it will be.

"All out for the defense of war criminals!"  proclaim the partisans of 'New Labor.' Our program is easy as ABC!  Anybody but Corbyn, say All Blair's Chums.

"We wish to remain...as tag-along partners in empire.  Any empire-- the US's, the EU's-- makes no difference to us. Next year in Singapore!"

Corbyn himself claims "victory" against the "coup-plotters" in that his name will be on the ballot as the ABC's force a new election for, pardon the oxymoron, party leadership.  But because Corbyn, and some other vanguard capitulationists can't be arsed to stay for the entire meeting, because they don't know they better stay for the entire meeting, the ABC's change who's allowed to vote for the new, old party leadership, thereby disenfranchising about 100,000 of those most likely to support Corbyn.

Man's a tactical genius... and a zen master for sure.    Who else could win by losing?  Besides the Confederate States of America, I mean?

Here the Tories get themselves at sixes and sevens by letting Rupert Murdoch's coffee boy pretend he's the prime minister, and Labor proves it can always one-up the Tories when it comes to morons, dunces, gits, and twits.

I expect much of the "left"-- the outside the Labor Party left-- will demonstrate its repetition compulsion neurosis and support Corbyn, once again,  advocating and abdicating for "Old Labor" as opposed to Blair Labor, and if all else fails, pleading for Corbyn to leave the shell of the LP and start a new party, which could get busy picking up exactly where the old party left-off, that is to say, going nowhere.


How about this: how about we try a new party that isn't part of the rot that has been capitalism for a century or so?  How about some first principles to that party:

1. Abolition of the monarchy.  Confiscation of all property belonging to the "royals," their relatives, their retainers, and anyone with a title (excepting professional designations only, like doctor).

2. In the interim, prior to the abolition of the monarchy and its attendant detritus, no member of the party may accept a peerage;  or any position or title historically associated with the administration of the, or to the, dictates of the British Empire.

3. Immediate withdrawal from NATO and removal of bases and soldiers belonging to other countries.

4. Immediate dismantling of British military posts outside the territory of Britain.

5. Immediate legal residency status for all those residing and/or working in Britain.

6. Prohibition against financial institutions investing in the sovereign debt of any country, including the UK.

7. Immediate freezing of all capital accounts held by institutional investment companies, hedge funds, insurance companies etc.

Now that's entertainment!

Maybe, you think?  Maybe not.... particularly if history is just a play written by idiots, played by fools, for the enjoyment of cynics.

July 13, 2016