20th WCP: In Defence of Marx's Account of the Nature of Capitalist Exploitation

According to Marx, "at any given epoch of a given society", there is "a quantity of necessaries" recognized as "the necessaries of life habitually required by the average worker" (Capital 1: 519). The variation in the type and amount of goods recognized as the necessaries of life between different epochs and different societies is due to the different "physical conditions" and to the different "degrees of civilization" and "comfort" prevalent (171).

In advanced capitalist societies, the necessaries of life include, for example, a heated dwelling, food, clothing, and access to some means of transportation, be it public or private. But the average laborer in advanced capitalist society has access not only to the necessaries of life but to a variety of luxury items as well. For example, the average worker has access to at least some subset of the following luxury items: "fine" food and drink; an automobile; a television set; a hi-fi set.

In this paper, I will (I) explain Marx's theory of the nature of capitalist exploitation; and (II) indicate how the phenomenon described in the previous paragraph may be interpreted as evidence against Marx's theory, and sketch an interpretation of this phenomenon according to which it is consistent with Marx's theory. My interpretation will suggest that the average worker's access to luxury items can be explained by the necessity in capitalism of reproducing the working class.

(I) In some of his early works, Marx suggests that the poverty of the workers goes hand in hand with capitalist production. For example, in "Alienated Labor" he claims that in capitalist society, "labor produces marvels for the wealthy but it produces deprivation for the worker" (61). Indeed, "so much does the realization of labor appear as diminution [of the worker] that the worker is diminished to the point of starvation" (61).

This view, that as a necessary result of the capitalist mode of production the average worker is deprived of many of the necessaries of life, is one that Marx had abandoned by the time he wrote Capital. In Capital, Marx suggests that it is not part of the "inner essence" of capitalist exploitation that the worker be deprived of the necessaries of life. To the contrary, the reproduction of the capitalist mode of production requires the reproduction of the class of workers, which in turn requires providing the workers with the necessaries of life.

According to Marx, understanding the nature of capitalist exploitation involves "recogniz[ing] the inner essence and inner structure" of capitalism as well as the relationship between the inner essence and its "outer appearance" (Capital 3: 168). Let the ideal capitalist society denote the (impossible) capitalist society in which inner essence and outer appearance coincide. Marx describes the ideal capitalist society as one in which all production takes the form of commodity production. Commodity production is the production of use-values or "useful things" (Capital 1: 36), not for the sake of consumption or use, but rather for the sake of exchange. Commodity production is therefore also the production of exchangeable things or "depositories of exchange-value" (36). Now define the value of a commodity (in Xs, where X is a unit of time) as the amount of "labour-time [in Xs] socially necessary" for the production of the article, where the labor-time socially necessary to produce an article "is that required to produce [it] under the normal conditions of production, and with the average degree of skill and intensity prevalent at the time" (39). According to Marx, in an ideal capitalist society things exchange at their values — "equivalent [is] exchanged for equivalent" (194). In other words, given a universally accepted equivalent or money-commodity, the prices of commodities are proportional to their values.

Labor-power is the commodity whose use or consumption is labor of average skill and intensity. Marx notes that "the value of labour-power is determined, as in the case of every other commodity, by the labour-time necessary for the production, and consequently the reproduction, of this special article" (171). But, unlike other commodities, labor is a commodity whose "use-value possesses the peculiar property of being a source of value" (167). It is this special feature of labor-power which accounts for the exploitability of the worker. The situation can be described as follows: The worker and the capitalist meet in the market with their "goods". The worker comes with labor-power and the capitalist with money (as well as with the commodities which he sells). (1) With his money, the capitalist buys means of production, which include instruments of production and raw materials, and labor-power. We may assume that equivalent is exchanged for equivalent. By consuming his newly bought commodities — in other words, by setting the laborer to work with the means of production — the capitalist initiates the production of value. It follows from the definition of value, that the value of the commodities produced in this process of "productive consumption" is the sum of the values of the means of production used up plus the labor-time. If the worker works (per day) more than the amount of time which is the value of a days worth of labor-power, then the capitalist will possess, by the end of the productive process, more value than he did when he got to the market. This additional value that the capitalist ends up with is what Marx calls surplus-value. It is the appropriation by the capitalist of the surplus-value created by the worker's labor that constitutes the exploitation of the worker by the capitalist. The capitalist maximizes surplus-value by having the worker work the entire workday. (2) Even though the worker may be doing the same thing all workday, it is possible to split up the days' work into two parts, namely necessary labor and surplus labor. Necessary labor is the labor-time (socially) necessary for the production of new value equal to the value of the labor-power that the capitalist has bought. Surplus labor is the labor-time which constitutes the remainder of the workday. The surplus labor of the worker is "unrequited" since the worker receives in wages only the value of his labor-power (540). When one recognizes that the fruits of the worker's surplus labor are reaped by the capitalist, the exploitation of the worker by the capitalist and the similarities between capitalist exploitation and exploitation in slave societies and feudal societies become clear.

According to this analysis, in the ideal capitalist society, the capitalist class pays the working class enough for its reproduction, and therefore enough for the necessaries of life, but no more. To pay more would be to exchange their money for something of lesser value. And though the capitalists might profit nonetheless, it would be in spite of the fact that they were not getting their "money's worth" in the market.

According to Marx, the fact that capitalists profit insofar and only insofar as they exploit laborers and thereby gain possession of surplus-value is not apparent in actual capitalist societies — surplus-value is the "invisible and unknown essence" of capitalist exploitation (Capital 3: 43). This is because, in actual capitalist societies, prices are not proportional to value. As such, the profit and the surplus-value associated with a particular commodity generally do not coincide, and the connection between profit and surplus-value is obscure.

Prices are not proportional to value in actual capitalist societies because the individual capitalist is concerned, for any given time period, with making as much money as possible given the amount of money she already possesses, she will invest her money in the sphere of production with the greatest Z-ly rate of profit, where Z is a unit of time. (3) The pattern of investments induced by the concerns of the individual capitalists tends to "the equalization of profit rates" in the different spheres of production. This occurs as follows: Suppose a particular sphere of production has an above average profit rate. Then, there will be an inflow of capital into that particular sphere of production. This will cause an increase in the supply of the commodity which is produced in this sphere of production, which will in turn force down the price of the commodity and thereby the rate of profit in the sphere of production. This fall in the profit rate will continue until the profit rate in this sphere of production equalizes with the average profit rate. Marx refers to the prices that result from the equalization of profit rates in all branches of production as the prices of production.

In Marx's analysis, the fact that in actual capitalist societies the prices of commodities are not proportional to their values but tend instead to their prices of production does not in any way cast doubt on the fact that the (only) source of profit is surplus-value:

There is no need to waste words at this point about the fact that if a commodity is sold above or below its value, there is merely another kind of division of surplus-value, and that this different division, this changed proportion in which various persons share in the surplus-value, does not in any way alter either the magnitude or the nature of that surplus-value. (43)

The "transformation" from prices proportional to value to prices of production must be interpreted as a mere redistribution of surplus-value between capitalists such that individual capitalists benefit to the extent that they contribute to the capitalist enterprise as a whole:

Although in selling their commodities the capitalists of the various spheres of production recover the value of the capital consumed in their production, they do not secure the surplus-value, and consequently the profit, created in their own sphere [of] production. What they secure is only as much surplus-value, and hence profit, as falls, when uniformly distributed, to the share of every aliquot part of the total social capital from the total social surplus-value, or profit, produced in a given time by the social capital in all spheres of production. (158)

This "transformation" does not in any way alter the situation of the workers. Whether prices are proportional to value or tend to prices of production, the workers never get any share of the surplus-value they create. So in an actual capitalist society, as in the ideal capitalist society, the average laborer gets paid per day what it takes to reproduce him as a worker per day. There will, of course, be fluctuations in the price of labor-power away from its "natural price" due to alterations in supply and demand. These fluctuations will however be momentary and of limited magnitude (Capital 2: 411).

(II) Having explained Marx's theory of the nature of capitalist exploitation, I turn now to the issue of if — and, if so, how — Marx's theory accords with the fact that the average worker in advanced capitalist societies has access to luxury items.

Since the laborer gets paid per day what it takes to reproduce him as a worker per day, the average laborer in a capitalist society will not be deprived of the necessaries of life. He will also, however, not be paid enough in wages to afford luxuries not necessary for his reproduction as a worker. Marx himself suggests that all that is necessary for the reproduction of the class of workers is that they be given the necessaries of life as well as access to the training that is necessary for the development of their labor-power (Capital 1:519). Now the question arises: How can we account for the average worker's access to certain luxury items in advanced capitalist societies? It seems that if this is not to be interpreted as evidence of the successful workings of anti-capitalist force(s) in these societies, then it must be interpreted as evidence against Marx's theory of the nature of capitalist exploitation. (4) For, even if we assume that Marx has overlooked certain elements necessary for the reproduction of the working class, it is not clear how the consumption of luxury items by workers could ever be viewed as one of these elements.

It may be supposed that another way to account for the average worker's access to certain luxury items in advanced capitalist societies is argue that the consumption of luxury items by workers is essential to the evasion of crises of overproduction. According to Marx, capitalism suffers chronic crises of overproduction. Marx describes these crises as follows:

The quantity of commodities created in masses by capitalist production depends on the scale of production and on the need for constantly expanding this production, and not on a predestined circle of supply and demand, on wants that have to be satisfied. Mass production can have no other buyer, apart from other industrial capitalists, than the wholesaler. Within certain limits, the process of reproduction may take place on ... an increased scale even when the commodities expelled from it did not really enter individual or productive consumption....[If this occurs], commodity-capitals compete with one another for a place in the market. Late-comers, to sell at all, sell at lower prices. [If any commodities remain], their owners must declare their insolvency or sell at any price.... Then a crisis breaks out. (Capital 2: 75-76)

But given this description, there is no reason to believe that crises of overproduction would not occur if workers' wages were high enough to give workers at least limited access to luxury items. Crises of overproduction occur because capitalist production expands blindly, in the sense that an expansion of production is not always coordinated (even by the market) with individual and productive consumption. Altering the standard of living of the average worker does not alter this feature of capitalism. And so capitalists gain nothing by paying workers more in order to create a greater market for their commodities.

My view is that we can make sense of the average worker's access to luxury items by interpreting the consumption of luxury items by the workers as essential to the reproduction of the class of workers as a class of "willing victims" of exploitation. It is essential to capitalist society that the class of workers be a class of willing victims since, as Marx points out, workers are not serfs or slaves and must therefore seek a condition which is, in fact, one of exploitation of their own accord. But if the workers have "nothing to lose but their chains," then their physical production and reproduction (by means of the necessaries of life) may be their reproduction not as a class of workers, but rather as a class of revolutionaries.

If the workers are to be willing victims of exploitation, they must, at least to some extent, be satisfied with their condition. But because in capitalism the worker's labor is done "at the motive power of capital" (Capital 1: 571), it is not in her productive activity that the worker can expect to find any satisfaction. Her labor is a mere means to satisfaction, not a source of satisfaction in and of itself. It is as a consumer, therefore, that the worker must find contentment in her life. And so, to be in any way satisfied the worker must have access to at least some luxury items. But, if the workers have at least limited access to luxury items, then they also have something to lose besides their chains. (5)

It may be argued that "truly human" satisfaction or complete satisfaction presupposes the satisfaction of production-oriented desires. This claim does not conflict with my conclusion. That one is not satisfied in a way that befits a human being or is satisfied in only a limited way does not imply that one is not interested in preserving one's condition. The illusion of freedom, fear of change, and the hyper-cultivation and satisfaction of consumer-oriented (rather than production-oriented) desires seem to be enough to provide the worker with a significant amount of satisfaction; and even if this satisfaction cannot be described as "truly human," it has proved to be sufficient to coopting the workers as supporters of capitalism.

Marx assumes that, due to the nature of capitalism, the working class can only infrequently enjoy "relative prosperity" in which it has access to "articles of luxury ordinarily beyond its reach" (Capital 2: 410-411). Evidence that Marx was wrong to make this assumption is not necessarily evidence against Marx's view of the nature of capitalist exploitation. What Marx himself does not consider is the possibility that the consumption of luxury items on the part of workers can play a crucial role in the reproduction of the working class.