Capitalism abhors limits of any sort, precisely because the accumulation of money power is in principle limitless. Capitalism perpetually strives, therefore, to transcend all limits (environmental, social, political and geographical) and to convert them into barriers that can be bypassed or circumvented. This gives a definite and special character to the capitalist mode of production and imposes specific historical and geographical consequences on its development. We now turn to consider how the limits encountered in this chapter—of total available labor force and rate of exploitation—are converted by capital into a barrier that can be overcome.
CHAPTER 12: THE CONCEPT OF RELATIVE SURPLUS-VALUE
Chapter 12 proposes a simple argument with a few complicated wrinkles. Yet it is a chapter that it is all too easy to get wrong. The initial argument goes like this:
The value of a commodity is determined by the socially necessary labor-time congealed in it, and this value diminishes with increasing productivity. “In general, the greater the productivity of labour, the less the labour-time required to produce an article, the less the mass of labour crystallized in that article, and the less its value” (131).
The value of labor-power as a commodity is affected by all manner of historical, cultural and social circumstances. But it is also tied to the value of the commodities that laborers need to reproduce themselves and their dependents at a given standard of living.
The value of labour-power can be resolved into the value of a definite quantity of the means of subsistence. It therefore varies with the value of the means of subsistence, i.e. with the quantity of labour-time required to produce them. (276)
Other things remaining equal, therefore, the value of labor-power will decline with rising productivity in those industries producing the goods laborers need to reproduce themselves.
In order to make the value of labour-power go down, the rise in the productivity of labour must seize upon those branches of industry whose products determine the value of labour-power, and consequently either belong to the category of normal means of subsistence, or are capable of replacing them. (432)
For the capitalists, this means that they can lay out less in the way of variable capital because the workers need less money to meet their needs (as fixed by a given standard of living). If capitalists have to lay out less for variable capital, then even if the length of the working day is fixed, the ratio s/v, or the rate of exploitation, rises. A greater mass of surplus-value thereby accrues to the capitalist even though the length of the working day is fixed.
This process in no way involves any infringement of the laws of exchange. To be sure, capitalists will seek to purchase whatever labor-power they can at less than its value, and that will augment the mass of surplus-value they receive. “Despite the important part which this method plays in practice, we are excluded from considering it here by our assumption that all commodities, including labour-power, are bought and sold at their full value” (431). So once again, acceptance of the market logic and the theses of classical political economy take precedence over the study of actual practices, demonstrating once more Marx’s commitment to deconstructing the utopian theses of classical political economy on their own terms. One other peculiar result arises out of Marx’s mode of reasoning. “An increase in the productivity of labour in those branches of industries which supply neither the necessary means of subsistence nor the means by which they are produced leaves the value of labour-power undisturbed” (432). Therefore, reducing the value of luxury goods by increasing productivity does not yield relative surplus-value. It is only the declining value of wage goods that matters.
This produces a conundrum. Why would individual capitalists raise the productivity in their own particular industry producing a wage good, when all capitalists will benefit? This is what is now called a free-rider problem. The individual capitalist who goes out, innovates, reduces the price of a wage good and so reduces the value of all labor-power gains no particular or singular benefit from so doing. The benefit accrues to the whole capitalist class. Where is the individual incentive to do that?
Could relative surplus-value arise through a class strategy? While Marx does not mention it in this chapter, he earlier related a case where this was so—the abolition of the Corn Laws (tariffs on wheat imports) as a result of the collective agitation of the Manchester industrialists. The cheaper wheat imports that resulted brought down the price of bread, and this allowed wages to be reduced. This sort of class strategy turns out to have been of great historical importance. The same reasoning exists now in the United States with respect to the supposed advantages of free trade. The Wal-Mart phenomenon and cheap imports from China are welcomed because cheap goods reduce the cost of living to the working classes. The fact that money wages have not risen much for workers over the past thirty years is made more palatable since the physical quantity of goods they can acquire has increased (provided they shop at Wal-Mart). In exactly the same way that the nineteenth-century British industrial bourgeoisie wanted to reduce the value of labor-power by allowing cheap imports, so the reluctance to block cheap imports in the United States today derives from the need to keep the value of labor-power stable. Protectionist tariffs, while they might help keep jobs in the United States, would result in price increases which would create pressures for higher wages.
It turns out historically that there have been many state-organized strategies to intervene in the value of labor-power. Why, for example, does the State of New York not charge sales taxes on food? Because that is seen as fundamental to the determination of the value of labor-power. On occasion, the industrial bourgeoisie has supported rent control, cheap (social) housing and subsidized rents and agricultural products because that, too, keeps the value of labor-power down. So we can identify many situations where there have been and still are class strategies worked out through the state apparatus to reduce the value of labor-power. To the degree that the working classes gained a modicum of access to state power, they could use it to increase their income in kind (through state provision of many goods and services) and so raise the value of labor-power (in effect claiming back a part of the potential relative surplus-value for themselves).
Marx eschews any mention of these kinds of issues in this chapter almost certainly for the same reason he dismissed the way capitalists perpetually seek to purchase labor-power at less than its value. Conscious class strategies and state interventions are not admissable in the theoretical framework Marx has established. We don’t necessarily have to follow him all the way on this, particularly to the degree we are interested in actual histories. But he nevertheless accomplishes something very profound by sticking to the restrictive assumptions of free-market utopianism. He shows how and why individual capitalists might be impelled to innovate (without any class or state interventions) even though the return on their innovation goes to the whole capitalist class.
“When an individual capitalist cheapens shirts, for instance, by increasing the productivity of labour, he by no means necessarily aims to reduce the value of labour-power and shorten necessary labour-time in proportion to this.” The individual capitalist does not act on the basis of a generalized class consciousness even though “he contributes towards increasing the general rate of surplus-value” through his actions. Marx then warns: “the general and necessary tendencies of capital must be distinguished from their forms of appearance.” This peculiar phrasing signals that something special