KOREA COLUMN 9
How Workers are Exploited
In my last column I showed how for Marx classes and class struggle are created and shaped by exploitation. This reverses the way the matter is usually seen – that first classes exist and then, every now and again, one class exploits the other. It is also the case that Marx’s concept of exploitation differs fundamentally from what it is the dominant conception in our society.
According to the dominant conception exploitation is either mainly a thing of the past – eg child labour was exploited in the Industrial Revolution – or exists today only by way of exception , practiced by rogue employers who pay especially low wages. For Marx, however, exploitation is the norm not the exception. Even relatively well paid workers employed by so-called ‘good’, even ‘generous’ employers are, nevertheless , exploited. Exploitation is inherent in the capitalist wage labour relation.
‘How can this be?’ cry the employers and their supporters with one voice. ‘When we employ workers it is a fair exchange, wages for work, and a voluntary contract freely entered into by both parties. Indeed they should be grateful to us for providing them with work and if they don’t like it, let them go and work somewhere else.’
In reality this argument is false from beginning to end. Capitalists do not ‘provide work’ or ‘create jobs’. There was work before capitalism and there will be work after capitalism. Jobs, i.e. tasks that require performing, arise from human needs, and with 6 billion people on the planet, who all need feeding, clothing, housing, educating etc. etc. there is absolutely no shortage of work for those 6 billion to do. What the capitalists actually do, through their ownership and control of the means of production, is make it impossible for most people to work except by working for them. Nor, of course, do they employ people out of charity or civic duty, but in order to make a profit i.e. expand the value of their capital.
But how is this profit made? Where does it come from? Obviously by not paying the workers enough. But how are the capitalists able to get away with this daylight robbery, day after day, year after year, decade after decade and why does it all look so fair on the surface? It was one of Marx’s greatest intellectual achievements to answer all these questions and to demonstrate that beneath the façade of a ‘fair exchange’ lay the systematic extraction of unpaid labour from the workers.
The starting point of Marx’s answer is that under capitalism workers’ ability to work, their labour power, is sold as a commodity like every other commodity. The value of a commodity ( value is not the same as price but is the underlying point around which actual prices oscillate) is determined, Marx says, by the amount of socially necessary labour time required to produce it. The reason a loaf of bread sells for $1, while a shirt sells for $20 and a car for $10,000 is, in the final analysis, that it takes 10,000 times as many hours of labour (with current levels of technology) to make a car, and 20 times as many to make a shirt, as it does to make a loaf of bread.
Not surprisingly, bourgeois economists deny this ‘labour theory of value’, but in practice all capitalists know it, if only by instinct. Consider a capitalist who consistently sold his products below their value – he would run at a loss and soon go out of business. Now consider one who tried to sell his products above their value – sooner or later a rival capitalist would be able to undersell him and he would again go out of business. Competition, therefore, forces capitalists to sell their products at prices which fluctuate around their value measured in labour time.
Now apply this to the commodity of labour power and it follows that the value of labour power – its wages- is determined by the amount of labour time socially necessary to produce it, i.e. to rear, feed, clothe, train etc. the worker so that s/he is able to work. But if labour power is bought and sold like any other commodity, there is one vital respect in which it differs from all other commodities: it is creative – in action it produces more value than was required to produce it. The difference, this surplus value as Marx called it, is pocketed by the capitalist and is the ultimate source of all profit.
What it means is that the worker who works 8 hours a day, 40 hours a week, and is paid $40 dollars a day, $200 dollars a week, produces goods or services equal to their wages in say, 5 hours a day, 25 hours a week and in reality works 3 hours a day, 15 hours a week, unpaid. Unpaid labour – exploitation in its strictest sense – is, therefore, alive and well under capitalism today, just as much as it was under slavery or feudalism or in the early Industrial Revolution.
Marx’s theory of surplus value is of immense significance. It exposes the ideological, self – serving nature of the capitalist view of wage labour and opens the door to the scientific analysis of the laws of motion of the capitalist economy. But it does something else as well: it shows that at the heart of capitalist production lies a direct and irreconcilable conflict of interest. The longer the working day the greater the proportion of unpaid labour and of surplus value for the capitalist. The shorter the working day the lower the proportion of unpaid labour. The lower the level of wages, the higher the level of profit. The higher the wages, the lower the profits. Wages and profits, therefore :
…stand in inverse ratio to each other. Capital’s exchange value, profit, rises in the same proportion as labour’s share, wages, falls, and vice versa. Profit rises to the extent that wages fall; it falls to the extent that wages rise… the interests of capital and the interests of wage labour are diametrically opposed . (Karl Marx, Wage Labour and Capital)
This is how Marx’s theory of exploitation underpins his theory of class and class struggle.