As producers strive to attain a level of productivity that would give them a competitive edge over other producers, the entire production process changes. It incorporates innovative technology that speeds up and diversifies the provision of products, at the same time as it renders a lot of jobs redundant and squeezes as much work as possible out of every remaining employee. This accounts for capitalism’s dynamism, thanks to which less and less overall work time is required to generate the economy’s glut of commodities. It also accounts for the fact that, even as some people work so hard that they barely have time to see their loved ones, there are more people out there with the same skills who are suffering the effects of unemployment, underemployment and poverty. A hallmark of capitalism, when you consider it in its global totality, is the gross disparity between the mind-boggling amount of stuff that is produced and then left to waste, and at the same time the desperate deprivation and widespread struggle to earn basic necessities, or the backbreaking overwork by some alongside the demoralizing unemployment of others.
For the wheels of production to keep turning (and continue employing workers as well as financiers and auxiliary providers of machinery and services who would facilitate the production, circulation and sale of commodities), those who set these wheels in motion have to reinvest in their business to avoid losing it. But they also have to potentially profit from it to encourage the efforts and risks of multiple business endeavors. The economy must therefore have enough readily available and useable physical, material and financial resources to fuel enterprise and to incentivize the competition among various lines of business and industry. To guarantee this availability, there has to be incessant accumulation of a global surplus.
While an inanimate system cannot have a deliberate purpose, it can have a sort of inner dynamic that makes sense in terms of a goal it appears to be advancing. In capitalism, accumulation is this goal. Capitalism’s cumulative excess is called surplus, because the capital that is accumulated globally cannot be invested profitably in the activities from which it stems, or be absorbed back into society in the form of anything the population could use or enjoy. A surplus is nevertheless always generated by overproduction, and the prospects of pocketing some of it as profit incentivizes entrepreneurial risk-taking. The goods and services that people can access and hold onto, in turn, must be limited in order to stimulate surplus-inducing competition among them for these things. Surplus’s embodiment in profit or revenue, or in the expectation of profit or revenue sometime in the future, must likewise be high enough to urge reinvestment in ever more production of ever more commodities.
In a capitalist market, the general rule is for things to be exchanged freely for different things of equal value without force or theft. Under conditions of free and equivalent exchange, surplus can only be generated in one way: by workers producing more value in the form of the products and services to which their work contributes, than the value represented in the pay they receive for it. Karl Marx called this exploitation, because even when no one deliberately sets out to do anyone any harm and even when employers are just as happy or unhappy as their employees, work is not fully remunerated. The contribution in value that workers make to the commodities they help produce is larger than the value of the stuff they can purchase with their paychecks, however lowly or prestigious their jobs. And whatever they earn, even if they are earning good money, they are contributing to the production of more; otherwise no one would employ them and pay them for their work.
Additionally, earnings from work are generally (but with notorious exceptions) not enough to allow workers to ultimately stop working: otherwise there would not be enough workers to produce the economy’s surplus. Finally, earnings from work should (again with exceptions) nevertheless suffice to finance workers’ and their families’ food and shelter, health, education and training at a level that is accepted in their society; otherwise the economy’s workforce would not be up to the task of working and generating a surplus. Capitalism’s accumulation through the extraction of unremunerated value from work and its embodiment as profit and revenue is made invisible when it is euphemized as growth. This gives surplus a positive aura of progress, deflecting attention from its human costs.
Competition between independent producers transforms the entire production process in a way that reduces barriers that might hamper or slow down the profitable production and circulation of goods and services. Small industry either grows to become large industry or disappears. Enterprise is economized through technological sophistication or else the entrepreneur is priced out of business. National economies are (unevenly) integrated into a world market in order to survive and—in the case of more powerful economies—to profit from business with less powerful ones. The subsequent increase in productivity makes it cheaper to produce all of the food, clothing, housing, transportation and other goods and services on which workers spend their paychecks. If they can buy the stuff they want for less money, employers and clients can pay workers less in aggregate and relative value. This, while their work and their services contribute more to the economy’s surplus because they yield greater value than they cost. Capitalism thereby generates extraordinary wealth that is reinvested or concentrated at the top, however slowly or fitfully. It is a jagged trajectory whereby, despite advances and respites that workers in some regions or industries can win through political or personal victories, work loses value and employment conditions become more strenuous and precarious.
If surplus-extracting work was all that capitalism had to offer the people subject to it, however, it is hard to imagine how it could have remained intact for all this time, let alone gathered steam. Work could not always be hard and underpaid, with significant portions of the wealth that workers create escaping their reach, without these workers growing so disgruntled as to struggle constantly to break away or replace capitalism with a more just system of production and distribution. Historically, of course, workers have often tried to do just that. But others eschewed collective struggle, not only for threat of backlash but because they felt they had something to lose by revolting. A major factor entered the considerations of workers when they could finally, in large numbers, accrue a portion of the social surplus that they had themselves created.
It is hard to figure out anyone’s precise contribution to goods and services whose composites are manufactured, combined and circulated by numerous people and machines, in multiple stages, separated from each other in time and space, and then to compare the value of these goods to the buying power represented in each worker’s paycheck. Typically, we just assume that we’re paid the competitive value of our work. We are certainly free—in theory at least, if seldom in practice—to charge a higher price for our services or seek employment elsewhere if we’re unsatisfied. Sure, we might nevertheless recognize our collective disadvantage and organize to resist the system that disadvantages us. But when we are given something extra if we play by the rules—something whose existence and value are independent of our work, something the possession of which might give us leg up on those who do not possess it, and something the loss of which would be a calamity—we have good enough reason to turn a blind eye to our predicament.
When Marx wrote about class in his magnum opus Capital, he wrote about it in the structural sense, as the outcome of the production process being divided between ownership and non-ownership of the material resources it feeds on. He saw this division as generating antagonism between capital and labor: the less that labor is paid, the more resources can be accumulated in the form of a surplus that capital can pocket. And conversely, the greater the power of labor, the more of this surplus it can take back for itself. What Marx did not do in this study was to equate labor and capital with actual working classes and capitalist classes. Important reflections on the living conditions of workers and on aspects of class politics notwithstanding, his approach was more structural than historical, concerned with exposing the opaque logic of the capitalist system. But if we were to take a more historical approach, we would see that workers have indeed been enlisted into agendas associated with capitalists, in a way that has obscured the antagonism between labor and capital that Marx described. This, if you will, is the true purpose of the middle class.
We can have some of the surplus we create and enjoy it, too, despite our vulnerability as people who have to work for a living and despite the exploitation of our work in the creation of surplus. The institution that affords us this benefit is the very institution that has