Labor, Surplus: Marxist And Radical Economics
Labor, Surplus: Marxist And Radical Economics
The theory of capitalist accumulation devised by Karl Marx (1818–1883) rests upon the labor theory of value, according to which capitalists (i.e., owners of the means of production) appropriate the surplus value produced by the workers (i.e., owners of labor power or the capacity to labor) whose labor power they purchase. Capitalists then sell the products in which surplus value is embodied, and keep the profits for themselves. If, after commodities are sold, capitalists were to end up with an amount of capital equal to that spent purchasing the elements of the production process—that is, without profits—they would not invest. Investments are profitable, however, because the product can be sold for a sum greater than the original investment. In the production process, workers produce not only value but surplus value —that is, value greater than the value of their labor power; it is the sale of surplus value that is the source of profits. The value of the means of production is incorporated, unchanged, in the product, as machines and tools wear out and are eventually replaced by others. The difference between the value of labor power (i.e., the amount capitalists spend in wages) and the value labor power produces in the production process (i.e., the amount capitalists collect once the product is sold) is the profit capitalists appropriate. To understand why this is so, it is necessary to examine the main features of the capitalist production process.
Labor power, under capitalism, is a commodity that has the property of producing value. The value of labor power, like the value of any other commodity, is determined by the labor time necessary for its production and reproduction. As labor power is a capacity of living workers, its value is resolved in the labor time necessary for the production of the means of subsistence (i.e., a historically established bundle of commodities) necessary for the maintenance, and reproduction over time, of the individuals whose livelihood depends on their ability to sell their labor power in exchange for wages (Marx  1967, pp. 169–171). The use-value of labor power is its exercise in the production process where, combined with means of production and various materials, it produces specific useful goods, or use-values. Capitalists purchase the elements of the production process: means of production, raw materials or already processed materials, and labor power. They consume the use-value of labor power by setting the workers to work. Capitalists control the labor process and own its products, a quantity of use-values which, when sold, become commodities imbued with value and exchange-value (Marx  1967, pp. 174–175).
Workers sell their labor power for wages sufficient for the sustenance of themselves and, to a variable extent, their families. Once sold, the use-value of their labor power belongs to the capitalist who, being in control of the production process, can fix the length of the working day within limits set by the outcome of struggles between the capitalist class and the working class (Marx  1967, p. 235; Weeks 1981, p. 69). The working day can be divided in two parts of varying duration. During a number of hours that depends on the quantity of labor time necessary to produce the workers’ means of subsistence, workers produce a value equivalent to their wages. In this portion of the working day, workers engage in necessary labor, which is spent in necessary labor time. It is necessary because workers need to replenish their energies and because capitalists need a productive labor force. The working day, however, lasts longer than the time necessary to produce the value of the wages. Workers are compelled to engage in surplus labor, creating value for the capitalist during surplus labor time. Capitalists seek to lengthen the quantity of surplus labor time by keeping wages low, thus decreasing the quantity of necessary labor time. The lower the value of the commodities necessary to maintain and reproduce labor power, the lower the wages and the higher the quantity of surplus labor time. The ratio of surplus labor to necessary labor, which can also be stated as the ratio of the surplus value to the value of the wages or variable capital, is the rate of surplus value that “expresses the degree of exploitation of labor-power by capital, or of the laborer by the capitalist” (Marx  1967, pp. 216–218). The higher the rate of exploitation, the greater the profits and the power of the owners, who constantly strive to increase the rate of exploitation by lengthening the working day or by introducing technology intended to speed up the production process or replace workers with machines.
In the processes of capital accumulation, the proportion of capital invested in means of production (i.e., constant capital) and labor power (i.e., variable capital) can remain constant or it can change. If it remains constant, the more capital is invested, the greater the demand for laborers; as technology remains the same, the rate of exploitation remains unchanged. Growth in the demand for labor can lead to higher wages as long as profits are not diminished. When wages rise to the extent of undermining profits, capitalists may choose to slow down investments, thus producing a decline in employment and wages, or they may force workers to labor longer hours, thus lengthening the proportion of the working day spent in surplus labor. With the development of the forces of production (i.e., technological changes increasing the productivity of labor), it becomes possible for capitalists to augment their profits while reducing, at the same time, the demand for labor: more capital is invested in constant capital and less is spent in wages or variable capital. The greater the productivity of labor, the lower the quantity of labor time spent in necessary labor, the greater the proportion of the working day spent in surplus labor, and, therefore, the greater the profits.
Technological changes and growth in the productivity of labor result in changes in the division of labor and in the quantity and quality of the demand for labor. Changes in the division of labor increasing the demand for more skilled labor result in higher wages for those fortunate enough to have those skills, or access to the necessary training to acquire such skills. At the same time, these changes devalue formerly needed skills and push masses of workers into underemployment and unemployment. The relatively privileged position of skilled workers, however, is not permanent, as capitalists seek to lower wages through processes of de-skilling (i.e., breaking up skilled jobs into their constituent elements) even as they develop new technologies that eventually will render such jobs obsolete, in a never-ending cycle of skilling and deskilling that exploits and discards workers as mere things to be used as needed in the process of capital accumulation (Braverman 1974).
Quantitative changes in the demand for labor reflect changes in the composition of total capital invested; that is, in the proportion of capital invested in constant and variable capital. As capital investment and the productivity of labor increase, the demand for labor decreases relative to the quantity of capital invested (Marx  1967, p. 629). These changes in the composition of capital are reflected in fluctuations in the employment rate and growth in unemployment. It would seem that there are too many workers, that the labor force is increasing too fast, that workers are having too many children, and so on. But, as Marx observed, this apparent increase in the size of the laboring population is an illusion: “it is capitalistic accumulation itself that constantly produces … a relatively redundant population of laborers … a surplus population” (Marx  1967, p. 630). As capitalists use increasingly productive technology (e.g., assembly lines, automation), less and less labor time is needed to produce larger quantities of products and a growing proportion of workers become unemployed and even unemployable, thus constituting a “reserve army of labor” or relative surplus population (RSP), which has important economic and political effects: its presence limits the bargaining power of workers even at times of economic growth.
Within a national economy, the RSP can assume three forms: (1) the floating RSP, which is manifested when rapid and drastic technological changes substantially alter the location and kind of capital investments and the organization of production, thus producing rapid declines in employment; (2) the latent RSP, which emerges in rural areas as agribusiness replaces small, laborintensive farming and farmworkers migrate to the urban and industrial areas; and (3) the stagnant RSP, which includes masses of workers permanently expelled from the labor force, able to obtain only irregular employment but remaining largely unemployed, constituting a large reserve of very low-paid, low-skilled, and unskilled labor power (e.g., today’s poverty and near poverty population in the United States, largely dependent on welfare and irregular, minimum-wage employment). The stagnant RSP becomes “a self-reproducing and self-perpetuating element of the working class, taking a proportionally greater part in the general increase of that class than the other elements” (Marx,  1967, p. 640).
Exploitation is “a social (society-wide) phenomenon under capitalism” (Weeks 1981, p. 64); it is at the core of the Marxist concept of social class, as an exploitative relation between capitalists and workers. While this seems a clear and useful definition, changes in the forces of production since the mid-nineteenth century have produced qualitative changes in the social and technical divisions of labor, thus altering the composition of the working population. In advanced capitalist social formations, like the United States, the proportion of workers exploited at the point of production, producing surplus labor for the owners of capital, has declined relative to the proportion of workers employed in services, white-collar, technical, professional, and managerial jobs. Automation and information technologies have contributed to the decline in the proportion of well-paid blue-collar workers that, in the United States, were considered “the backbone of the middle class.”
Were Marxist social scientists to define the working class using as the sole criteria the production of surplus labor by manual workers, they would have to conclude that the size of this class is dwindling. The Marxist theorist Nicos Poulantzas (1936–1979), for example, argued that only productive workers (i.e., workers who produce surplus value) are part of the working class, unlike unproductive workers, whose work is located in the other spheres of the mode of production (e.g., circulation). Not all productive workers, however, are members of the working class; technicians and engineers, for example, occupy a contradictory class position, for they contribute to the production of surplus value while placed in positions of authority over the labor process, thus representing the power of capital. Classes cannot be identified solely on economic criteria; ideological and political criteria—namely, location in the relations of production and the social division of labor—matter as well (Poulantzas 1973, pp. 31–35).
When examining classes empirically, at the level of social formations, the capitalist/working class dichotomy is submerged under the heterogeneity of the technical and social division of labor, and the existence of noncapitalist classes, such as the petty bourgeoisie (independent producers) and the peasantry. Social scientists are compelled to introduce additional criteria for defining classes, such as, for example, contradictory class locations based on property relations, levels of skills and knowledge, and location in authority relations (e.g., Wright 1997). The heterogeneity of the working population does not obliterate, however, the importance of the underlying division between capitalists and workers and the significance of surplus labor in the process of capital accumulation. As capitalists seek to increase profits and lower labor costs, they continuously revolutionize the organization of production and change the kind and location of investments. Capitalist accumulation strategies result in changes in the quantity and quality of the demand for labor, changes in the social and technical division of labor, and, consequently, changes in the social stratification profile that can be documented in a given society at a given time. These changes reflect not only technological imperatives and competition among capitalists, but the extent of capitalist power over the working classes.
In the United States, where labor is relatively powerless if compared with its counterpart in Western Europe, globalization has resulted in declining benefits and real wages for the working classes; a decline in job security, benefits, and employment opportunities for the middle classes; and deepening wealth and income inequality. Downsizing, outsourcing, deindustrialization, growth in poorly paid service jobs, temporary and contingent employment, and, consequently, growth in the size of all the forms of the RSPs, especially the stagnant RSP, are some of the effects of capitalist efforts to lower labor costs.
The value of labor power in poorer countries is very low, thus resulting in a higher rate of exploitation; capitalists seeking higher profits flock to those countries, intensifying inequality and the growth of their RSPs, thus triggering massive migration flows toward the wealthy countries. The working classes in the wealthy capitalist countries, therefore, face national and global RSPs that have effectively contributed to the undermining of workers’ bargaining power. Contributing to the lowering of the value of labor power in the rich countries is the export of cheap commodities from China and other exceedingly low-wage countries, which thus lowers the overall cost of the bundle of commodities necessary for the maintenance and reproduction of the working population.
To conclude, at the level of analysis of social formations, surplus labor plays a lesser role in the identification of social classes. However, at the level of analysis of the capitalist mode of production, globally considered or within a country, it is not possible to understand changes in the empirically observable stratification system without taking into account the dynamics of class exploitation and capital accumulation, which, as capitalists pursue the appropriation of as much surplus labor as feasible, constantly alter the structure of opportunities of all working people.
SEE ALSO Accumulation of Capital; Class; Labor, Surplus: Conventional Economics; Marx, Karl; Profits; Surplus Value; Unemployment
Braverman, Harry. 1974. Labor and Monopoly Capital: The Degradation of Work in the Twentieth Century. New York: Monthly Review Press.
Marx, Karl.  1967. Capital. Vol. 1. New York: International Publishers.
Poulantzas, Nicos. 1973. On Social Classes. New Left Review 78: 27–54.
Weeks, John. 1981. Capital and Exploitation. Princeton, NJ: Princeton University Press.
Wright, Erik O. 1997. Class Counts: Comparative Studies in Class Analysis. Cambridge, U.K.: Cambridge University Press.
Martha E. Gimenez