Labour: Just another Capitalist Party.
The Labour Party won the general election in July of this year. Keir Starmer promised pain and austerity blaming the Tories. Any pain and austerity will fall on the working class not the rich and wealthy capitalist class.
Disgruntled workers turned to Labour to throw out the detested Tories. For thirteen years the Labour Party was in the wilderness. Under Jeremy Corbyn they fought amongst themselves as he was seen as “too Left” to ever win an election and a different leader, Keir Starmer, was elected who gradually distanced himself from Corbyn and became indistinguishable from the Tories by continuing an austerity programme which will fall squarely on the workers’ shoulders. The Labour Government praises private enterprise and the profit motive. They court capitalists and hold meetings with various employers’ groups.
And they also support capitalism’s wars. Tony Blair supported and sent troops to the wars in Iraq and Afghanistan. Starmer’s government want to allow Ukraine to use British storm Shadow missiles to be fired into Russia thereby escalating a war that has seen thousands killed. Meanwhile the amount of money already sent to Ukraine for military aid since the war began stands at £7.8bn This money comes out of the Treasury reserve, not Ministry of Defence spending. It was a previous Labour Government that ended free dental care to pay for the Korean War. Foreign secretary David Lammy has just announced a further £600m support for Ukraine.as thousands of pensioners see £300 taken away from them.
The Labour Party is, as it always has been, just another party of capitalism. The Prime Minister, the Labour MPs and most of its membership accept the class ownership of the means of production, the profit motive, the wages system and the armed forces including nuclear weapons. It wants to see economic growth and courts those capitalists who might invest in British capitalism.
Politically, the existence of the Labour Party has wide practical and theoretical implications for understanding socialism. This was put forward in ‘Questions of the Day’( S.P.G.B publication, March 1978):
“The evolution of the Labour Party is a practical confirmation of the theoretical case against reformism. With a working class that has never at any time understood or wanted socialism. The Labour Party, instead of gradually transforming capitalism in the interest of the workers, has been gradually transformed from a trade union pressure group into an instrument of capitalist rule”.
The practical case against reformism can be seen by how quick the Labour Government was in taking away the £300 a year Winter Fuel Heating contribution to the elderly and refusal to remove the Conservative policy of denying access to universal credit for a third child. As with all
Governments it is “pain now: jam tomorrow”. With the Labour Government as with other governments the working class will never see the jam. However, its theoretical reformism; its belief that reforms will solve the problems facing the working class does not lead to socialism but to the persistence of the profit system with all its economic and social problems.
The Socialist Party of Great Britain is, and always has been, opposed to the Labour Party. We are often asked why. People who think that the Labour Party has socialism as its aim cannot understand how the SPGB can be hostile to the Labour Party. And when we explain that the Labour Party’s aim is not at all what we mean by socialism they are still not satisfied. They say that, even if this is true, how can we be opposed to all the praiseworthy and progressive things the Labour Party is trying to do under Keir Starmer, why don’t we give them a helping hand?
The answer to this question lies in the difference of theory about human society, and in particular about the capitalist social system in which we live. On the one hand, the SPGB holds a theory of social revolution concluding that the profit system can never be run in the interests of the working class. On the other hand, the Labour Party’s policies are based on the erroneous belief that political reforms can bring about social justice, that capitalist commodity production and exchange for profit can be made to work equitably, and that a Labour Government will serve the interests of the working class.
Is capitalism a system of society with economic laws that regulate its workings and limit the policies and actions of governments – as socialists hold – or is it a mere chance mixture of “good” and “bad” institutions that can be improved at will by any government that wants to do so – as the Labour Party believes?
The truth is that capitalism leaves little choice in the way it has to be administered. It is not the good intentions of the Labour Party supporters that are at fault, but their idiotic belief that they can remould capitalism to their heart’s desire. The reality is that since 1906 capitalism has moulded the Labour Party into just another party of capitalism. Its mission, now, as then is to run British capitalism better than the Tories. Labour is a party of capitalism.
This could not be further from the position of the SPGB. We call upon the working class to reject capitalism and the political parties of capitalism, like the Labour Party. Capitalism can be replaced by socialism: the common ownership and democratic control of the means of production and distribution by all of society. All that is required is a majority class conscious, democratic, political organisation of workers to end the class system. Those who waste time and energy deflecting workers’ attention from understanding and acting upon their class interest stand in the way of the movement for socialism.
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Socialism and Religion
Unlike other political parties, the Socialist party of Great Britain is not prepared to compromise its position and embrace superstition, faith and ignorance. Socialists do not canvas the religious vote at elections or embrace radical Islam like the capitalist Left, notably the SWP or court the support of Christain fundamentalists like the Republican Party in the US.
Religion is a fiction for keeping millions of workers throughout the world tied to spiritual leaders who tell then what to read, how to act and what to think. An important socialist principal is that workers do not need leaders, neither spiritual nor political. The SPGB, having no leaders, is unique in not allowing someone holding religious beliefs to join the Party.
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Does the Working Class need the Capitalist Class?
Monty Python’s ‘Life of Brian’ is a film about a man who is mistaken for the Messiah and is a biting social satire on religion. However, like all satire it is highly conservative. Satirists want to preserve or reclaim something that is lost; morality, manners, a way of life or the social mores of a particular ruling class.
Juvenal, the first Roman satirist looked back longingly to the mannerism of a landed Roman aristocracy. He hated the nouveau riche and the proletariat. His is the famous saying that the Roman proles were bought off with a diet of “bread and circus”. A similar jibe is thrown at the working class today, although “bread and circus” has been replaced by celebrities and commercial sport
‘Life of Brian’ was set in the Roman occupation of Jerusalem. There is scene in the film where a group of leftist rebels – the “Judean People’s Front”, a parody of left-wing politics in the UK at the time, denigrate the usefulness of the Roman way of life. They are opposed to Roman rule and are dedicated “to dismantle the entire apparatus of the Roman Imperialist State”, .
“Whatever have the Romans done for us?” is the sneering question from one of the leaders of the revolutionary Judah People’s Front. Then, one after another comes the reply from the assembled comrades; “sanitation”, “medicine”, “education”, “wine” “public order” “public health” and so on.
Of course, the satirical point being made by the Monty Python set, is that the question “whatever have the Romans done for us” transposed to our time would become “Whatever have the capitalist class done for us?”.
Whatever have the capitalist class done for us?
Marx gave a positive account of what the capitalist class had achieved. In the ‘Communist Manifesto’ he wrote:
“The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than all preceding generations together…what earlier century had even a presentiment that such productive forces lumbered in the lap of social labour?”
And he went on to say:
“Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones”.
And he continued:
“…the need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere”
Despite the technology, integrated global system of production, distribution and communication the answer the Monty Python group had in mind is that capitalism has given employment to the working class. It had turned a majority of society into wage slaves much as the Roman ruling class lived off the work of chattel slavery.
Marx urged workers to think for themselves. Socialism was to be established by the working class and no one else. ‘Life of Brian’ illustrates this well. Brian is followed everywhere mistaken for the Messiah:
Brian: Please, please, please listen! I’ve got one or two things to say.
The Crowd: Tell us! Tell us both of them!
Brian: Look, you’ve got it all wrong! You don’t NEED to follow ME, you don’t NEED to follow ANYBODY! You’ve got to think for yourselves! You’re ALL individuals!
His followers pay no attention to Brian and find themselves, as a consequence, all crucified at the end of the film.
Does the working class need the capitalist class?
This leads to an important political question. “Does the working class need the capitalist class?” The Socialist answer is no. Not because of a moral revulsion against employment. But on the grounds that employment is wage slavery resting on class exploitation, class privilege and the private ownership of the means of production and distribution.
Capitalism is a social system in which, except for a small minority of the world’s 8.2 billion inhabitants (worldmointors.info), each day involves a struggle to either subsist or exist. Subsist as a working class and to reproduce itself as an exploited class. To create social wealth of which only a fraction is received in the form of wages and salaries. And for millions of others, it is an existence which is usually a few hours long or fades out through lack of water, food and medicine.
According to the United Nations Food programme for 2021, “There is 400 trillion dollars of wealth on the earth today, and…9 million people die from hunger every year…In the height of COVID, billionaires’ net worth increase was $5.2 billion per day. At the same time 24,000 people die per day from hunger”. That is what capitalism does to our class on a daily basis. Death through poverty and ill health for a large section of our class and class exploitation for the remainder.
Capitalism’s record has two sides to it. Of course, it has meant improvements in most areas of human existence for some, whether measured in comfort, education, health, productivity, or income levels. But on the other side, whose components are casually ignored or brushed aside by those who extol the “triumph of capitalism”.
Do workers need to be exploited? We do not. We can do without the capitalist class. They have long outgone their historical usefulness.
Employment and Class Exploitation
For the majority of the world’s population what capitalism has done is to turn us into wage slaves. It has imprisoned us in the wages system and shackled us with debt. It has condemned us to a life-time of schooling for employment, an adult life-time of employment, periods of unemployment and then discomfort and insecurity in old age.
Marx might have highlighted the triumphs of capitalism but he also showed that the constraints imposed on the productive forces gives us the necessity of socialism – the common ownership and democratic control of the means of production and distribution by all of society, but it all rests on class exploitation.
It was not until ‘Capital’ that Marx demonstrated, with his theory of surplus value, how the working class were exploited. Capitalists and workers meet on ‘apparent’ equal terms in the ‘free market’ and the workers sell their ability to work or ‘labour power’ to the capitalists. The capitalist pays the worker a wage or salary according to the value of labour power. The value of labour power is the amount of socially necessary labour embodied in the commodities the workers must consume to produce and reproduce themselves and their family.
The capitalists pays the workers according to the exchange value but obtains the use value of the commodity labour power. This distinction between use value and exchange value of labour power is important to an understanding of Marx’s theory of surplus value.
Workers sell their labour power to the capitalists at its value. The capitalists now have control over the workers’ labour power. The workers, in the production process, lose their freedom, they must do as the employer’s command. Workers cannot produce what they need nor distribute products to those who need them. Workers have to work, say, an eight-hour day. They produced the necessary value of their wage or salary in less than their contracted hours, however, workers have to work those extra hours for nothing. It is in this period of free labour that the capitalists make their surplus value and profit. The products of labour are the property of the capitalists to be sold for a profit. The needs of the working class go unmet.
Abolish class society
One of the many problems facing workers is housing provision. Throughout the 20th and now 21st centuries reformers, politicians and governments have tried to solve the housing crisis without success. They will soon be joined by the Keir Starmer’s Labour government. Who erroneously believe reforms to the planning system is the answer when the only solution, as Engels pointed out in his pamphlet ‘The Housing Crisis’ is first the abolition of capitalism. Capitalism has developed technology and social production to the point where sufficient high-quality housing can be built. This is the material basis of socialism held back by the profit motive, the wages system and private property ownership.
Most workers cannot buy a house on the wages and salaries they receive. They certainly cannot afford a house that meets the needs of their family as they grow and develop. Most workers have to live in cramped and unhealthy housing. They have to live with their parents or with friends and as they get old, often have to live in houses which they cannot afford to heat or repair. According to the 2021-2022 English housing survey, 14% of households in England (3.5 million) live in homes that fail to meet the woefully inadequate Decent Homes Standard.
The so-called housing problem is really no problem at all. There is no reason why houses cannot be built to meet the varying needs of the population. The land exists, the building materials and transportation exists and so do the builders, architects, engineers, brick layers, carpenters and electricians. What prevents good high-quality housing from being built is the class monopoly of the means of production. Land, resources, building materials, transportation and so on are privately owned and are only used if there is a profit to be had.
Remove employers and employment and workers will be able to produce directly and solely to meet human need. Housing would be built that reflects how socialists want to live; built to be flexible, environmentally sound and an enjoyment for workers to design and build. Without employment there would be enjoyment in work and satisfaction in living in a socialist world where there will be an association “In which the free development of each is the condition for the free development of all.” (Marx ‘Communist Manifesto’)
The working class might have its modern-day bread and circus. But it is a bread and circus that comes with a price. And that price is class exploitation, class misery and class subservience.
At the end of Life of Brian, the dozens of crucified men sing out “Look on the Bright Side of Life”. The song is apathetic resignation that there can be no change; the stiff British upper lip while all around is misery and death. An apathetic resignation that nothing changes. There is no escape from Roman occupation just as there is no escape from capitalism and wage slavery. Revolutionary socialism and the desperate need for socialist activity and growth as a democratic and political force does not get a look in. Such is the conservatism of satire.
If the working class create all the social wealth in society, why do they need the capitalist class? Why not produce and distribute without employers, labour markets, buying and selling and money? Why not produce directly to meet human need, housing, food, health care, education, transport and communication. The development of the productive forces has long made socialism a feasible proposition. Socialism, a world social system just producing “from each according to ability to each according to need”. In socialism people will take part in production to the best of their abilities, and freely and directly take what they need to live worthwhile lives in a rational and balanced global social system.
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What is the Class Struggle?
Socialists define class and class struggle in an objective way with respect to the means of production and distribution. In capitalism there are two classes; the capitalists and the workers; those who owned the means of production and those who did not.
The class struggle is the dynamic of history since the inception of private property ownership. In essence it is the conflict between the material interests existing between classes in society; giving rise to strikes and lock outs, trade unions, employers’ associations and the political parties of capital. And it is governments passing anti-trade union legislation and using troops to break strikes. While, on the contrary, the Socialist Party of Great Britain, is an expression of the material interest the workers have in pushing, politically, the class struggle to its limit with the abolition of capitalism.
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Capitalist Class and Ruling Class
British Capitalism in the 19th Century
There is a common belief that the capitalist class and ruling class are synonymous terms and that consequently, wherever capitalism exists the government will of necessity be in the hands of the owners of capital.
It is a mistaken view. Numerous examples can be found of countries in which there was and is no such identity. One example is British capitalism in the nineteenth century.
Frederick Engels dealt with this in his 1892 Introduction to ‘Socialism, Utopian and Scientific’.
He said:
“It seems a law of historical development that the bourgeoisie can in no European country get hold of political power – at least for any length of time – in the same exclusive way in which the feudal aristocracy kept held of it in the Middle Ages. In England, the bourgeoisie never held undivided sway. Even the victory of 1832 left the landed aristocracy in almost exclusive possession of all the leading Government offices”.
Engels pointed out that it was not until 1867 that the capitalists got their first representative in the cabinet, and that the aristocracy long continued to provide the officers for the army.
It was normal for the Prime Minister to be in the House of Lords. Of the eleven Prime Minister from 1832 to 1902, nine were in the House of Lord and only two in the Commons.
It was not until 1911 that the power of the House of Lords to block House of Commons Bills was cut down to a maximum delay of two years and that the Lords were deprived of the power to interfere at all with Money Bills.
G. Kitson Clark, Reader in Constitutional History, University of London also dealt with it in his ‘An Expanding Society: Britain 1830-1900’ (Cambridge University Press 1967 page 28).
He described how “the nobility and country gentry”, by making seemingly valuable concession and cultivating public opinion “contrived to govern England for three-quarters of a century”, and how John Bright for the capitalists consequently called the 1832 Reform Bill “a sham”.
The politically subordinate position of the capitalists was shown by the war with Russia, 1853-1856, the Crimean War.
They were solidly against the British government being involved in the war but were unable to prevent it. The government was more influenced by the big meetings calling for war, organised by those described by Mrs. Olive Anderson, Lecturer in History, Westfield College, as “the urban lower middle and working classes” (‘Public Administration’, Summer 1963).
Louis Boudin, in his ‘Socialism and War’ (1916. Page 190) told how John Bright “used his great eloquence for the propaganda of peace ad profit, but was defeated by Ernest Jones, the Chartist, who was campaigning for war”.
Boudin quoted a letter to the ‘New York Tribune’ (July 25th, 1853) written by Marx, describing how a resolution against the war, moved at a “Great Peace Meeting in Halifax” was, to Marx’s gratification, voted down by an immense majority, in favour of an amendment “pledging the people to war, and declaring that before liberty was established peace was a crime”.
The Military Dictatorships
The people who constitute the government are those who have effective control of the machinery of government, including the armed forces; a necessary condition for which is, that, the civil authorities have been able to bring the armed forces under their control, as in Britain and other countries with a “Parliamentary system”.
In many countries, past and present, army officers able to count on army loyalty to themselves have thrown out the civil authorities and taken over the government.
While these conditions prevail – and many dictatorships have survived for years -the capitalist class is no more in the position of a ruling class than were British capitalists in the 19th century. Among the countries which have recently been under military rule are Nigeria, Ghana, Burma, Argentina and Chile.
The Changed Make-Up of the Capitalist Class
Marx defined “class” in terms of individuals having the same source of income.
“There are three great social groups whose members, the individuals forming them, live on wages, profit and ground rent respectively, on the realisation of their labour-power, their capital, and their landed property”.
Within the capitalist class there have been and are wide variations. Many early capitalists were the working managers of the businesses they owned, themselves providing the technical knowledge. Similar businesses are to be found to-day among the group classified as “self-employed”.
But most “capitalists” have moved away from what was typical and known to Marx in the middle of the nineteenth century. Nowadays a majority of the people with sufficient wealth to be able to live on the income they derive from the ownership of property, have ceased to have direct contact with industrial and commercial enterprises.
Engels noticed the beginning of the process in the 1860s. More and more wealthy capitalists were “fed up with the regular tensions in businesses and therefore wanted merely to amuse themselves or to follow a mild pursuit as directors or governors of companies” (Engels ‘On Marx’s Capital’ page 119).
They preferred to invest their money in government securities, such as Consuls, giving a fixed but safe income, far removed from industry. Through the development of the company share system, with the financial liability of share-holders limited to the amount they paid for the shares, and through companies becoming larger and larger, each with thousands of shareholders, most of the “owners” of the company have no contact with its operations beyond voting to elect members of the Board of Directors. As voting is by the number of shares each shareholder possesses, it means in practice that it is usually a small number of big shareholders who elect or become members of the board.
Then there are the huge sums of money lent to the banks and building societies in the form of deposits, which give the depositors who draw income from it, not even the appearance of direct contact with industry.
And the Unit Trusts, in which the Trust buys shares, receives the dividends and distributes to the people who have invested their money by buying “Units” in the Trust.
There are again the “capitalists” who derive their income from the government or Local Authorities whose securities they have bought.
Summing up, most of the functions of the “working capitalists” of early capitalism are now performed by wage and salary earners, employed by companies for that purpose.
Who controls the Government and by What Means?
Under a parliamentary system as it operates in Britain, with universal suffrage without a property qualification, the government consists of those whose party has a majority in the House of Common (not necessarily a majority of votes at a general election – no government since World War II has had such an elective majority). Which means that no party can become the government without the votes of workers who constitute some 85% of the electorate.
The capitalists and their dependents who have the votes do not make up more than a small minority of voters. If we assume that the Tories are financed from capitalist sources, as the Labour Party is financed by the Unions, the bigger financial resources of the Tory Party do not enable them to attract more votes. At six of the thirteen elections since World War II the Labour Party has been successful and become the government.
In such circumstances to describe capitalists in Britain as being “a ruling class” is absurd. It is equally absurd to describe the party which happens to become the government (the Tory Party or the Labour Party) as being a “class”.
Under Tory Government or Labour Government, capitalism persists in Britain because the great majority of workers support it with their votes: either because they approve of it or because they believe that no alternative system of society is possible.
The Purpose of a Socialist Majority Gaining Political Control
The purpose of a socialist majority gaining democratic political control of the machinery of government including the armed forces was set out in the SPGB’s pamphlet ‘Object and Declaration of Principles’, 1975). The pamphlet stated:
“It is necessary for a socialist working class to gain political control, but only for the purpose of dispossessing the capitalist class and opening the way for the community as a whole to take over the means of production and distribution and democratically use them for the good of all”
Hardy. 1990
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A Matter of Class
Tory leadership contender Kemi Badenoch was derided in the media after claiming that she became working class when she worked at McDonalds.
She said: “I grew up in a middle-class family, but I became working class when I was 16, working at McDonald’s”
Badenoch and her detractors in the media had no understanding of why someone is working class, The working class is composed of the men and women who, excluded from ownership of the means of production and distribution, are forced by economic necessity to sell their mental and physical energies in order to live through employment.
For the purpose of this definition, a worker is not distinguished by the way they dress, speak, or where they live or the job they do, but by how they get a living. Anyone who has to work for wages or salary is a worker. In Britain most of the population are workers including Badenoch’s mother who was a university lecturer. Working at MacDonalds Badenoch was a member of the working class. As a Parliamentarian she is still a member of the working class. Unless, that is, she lives of the unearned income of rent, interest and profits. As a Tory she is a class traitor.
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Marx on Labour Time Vouchers
Socialist society will have the problem of deciding how much of its productive resources will be devoted to consumption goods and how much will be withdrawn from producing consumption goods to be devoted to long term projects designed to increase the production of consumption goods in the future. Marx used as an example the railways, which he said, “do not produce any useful effect for a long time — a year or more.” Marx didn’t know about modern capitalism; they would take far longer than a year if they were at it now. A similar idea was put in the ‘Critique of the Gotha Programme’ where Marx points out the amount of annual production that has to be provided for the maintenance and extension of the means of production, and also the provision of reserves of goods to meet destruction arising out of natural catastrophes. He pointed out that capitalism always has to produce more of everything than actually reaches the market. Some of it gets destroyed by deterioration, there are earthquakes and floods and so on, and Marx is saying that with socialism you will have the same problem. You won’t be able to abolish earthquakes by democratic resolution. So society will have to set aside labour and resources for developing its productive forces and also to maintain a reserve against natural catastrophe.
Another remark made in the ‘Communist Manifesto’ which has got a very modern ring, is that socialist society will have to devote some of its energy to bringing into cultivation waste lands and the improvement of the soil generally. Marx and Engels had already put on record in 1848. in the ‘Communist Manifesto’, that socialism involves the abolition of buying and selling, it involves the abolition of the wages system, and that in other words, socialism means what we would describe as having “free access”. But in the ‘Critique of the Gotha Programme’ Marx also put forward the idea that you could not go straight into what he called the higher phase of communism. Society, as it emerged from capitalism had to go into a lower phase, when as he said, it was suffering from what he called a narrow bourgeois outlook. He wasn’t talking about the narrow bourgeois outlook of the capitalist, he was talking about the narrow’ bourgeois outlook of everybody, including the workers. Marx said from this that you would have to have a labour voucher system.
Labour vouchers?
He said that in this “lower phase“, because production wasn’t enough for “free access” that is unrestricted free access, and also because people would suffer from a “narrow bourgeois outlook” and would not know how to run socialist society, you would have to have a labour voucher system. Every individual would work and would be issued with a labour voucher according to either the duration or intensity of the work. On the strength of whatever was marked on the paper the individual would withdraw consumer goods from the communal store.
My reaction is this, I know a lot of people treat it seriously, but I think we should throw the whole thing overboard for various reasons. We do not contemplate that the working class will take power for socialism while they are all suffering from a “narrow bourgeois outlook“. In 1875, Marx and Engels knew that the material conditions for socialism did not exist, not in our sense of the word, nor in their long-term sense of the word. Therefore, they were saying that we would have a “dictatorship of the proletariat” which however way you interpret it means that you are basing it on the fact that there is a “narrow bourgeois outlook“.
Marx dodged all the real questions here. He says that you give people labour vouchers based either on duration or intensity of work. In spite of all the experts who deal with job evaluation and so on. I do not know for most industries, anyway at all, by which you can measure the intensity of every individual’s work. There are some industries where you can look at the quantity produced in a day or a week or something like this, but Marx himself then goes on to say that this will result in some people having a higher standard of living than others because, to use his words, some individuals are mentally or physically superior to others and can therefore produce more in a given time or work longer hours.
I think we should reject the idea. Who is going to have the authority for issuing these tickets, how is it going to be done, and how is it going to satisfy these workers with a “narrow bourgeois outlook“? Imagine saying to half the workers, “of course you are going to have a higher standard of living than the other half”.
Marx also mentioned that, apart from some people being mentally and physically superior to others, some would have larger families than others, so that as for 40 hours work, they both get the same, the ones with the
larger families would all be on a lower standard of living. How did Marx contemplate making the dissatisfied workers accept this; how is he going to prevent them from raiding the food store or forging tickets or something like this? I would say that as we are not contemplating socialism coming when there is a “narrow bourgeois outlook“, we should have nothing whatever to do with it.
However, we do not get rid of one problem. This is the problem that in the early stage of socialism there will be not enough produced to have “free access” in our sense of the term. We have got to accept that there won’t be enough for free access all over the world.
We have also got to accept that sometimes there are big differences between the standard of living of some workers and the standard of living of others.
I read from The Times correspondent that he reckons that the highest paid craftsmen in this country are what he calls compositors working with obsolescent lino type machines who are getting £548 a week and they are working alongside people who are getting £70 or £80 a week. Well, imagine Marx with his labour voucher system going to these compositors and saying: “Well, of course, you will have to come down to some more realistic level for the time being“.
I would suggest that as we don’t accept that there will be a “narrow bourgeois outlook” we are saying that the workers in the mass understand socialism, know what they are doing and know what their responsibilities are. That faced with the problem that there are 1,000 million people in the world in absolute poverty and that there are workers ranging from quite high standards of living down to a very low one, that with the advent of socialism, the obvious thing to do with the production problem is this. That it would be put to socialists that we are going to have free access, but the administrative organisation, whatever it is, appeals to the workers on a high standard of living: “Don’t take advantage of it“. In fact, ask them, in the early days of socialism, not only “don’t take advantage of it” but accept a lower standard of living and devote your energies, if necessary, work longer, to try to help the people in the rest of the world who are on a standard of living far below you. This is the only socialist answer to this problem. (“H” ‘Socialist Standard’ July 1983)
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Marx: Surplus Value and Class Exploitation
Introduction: What is Surplus Value?
What is surplus value? To understand this fundamental Marxian concept, it is important first to be clear what value and the commodity, labour power are.
Unlike modern economists, Marx uses a labour theory of value to study economic relations and to explain the class struggle between the working class and the capitalist class over the intensity and extent of exploitation.
Value is determined by the amount of socially necessary labour embodied in a commodity. Socially necessary labour time corresponds to normal production conditions with average skill and intensity of labour.
All serious economists had a labour theory of value. Marx called these economists the “Classical School”. These classical economists included David Ricardo, who applied a theory of value in his book “On the Principles of Political Economy and Taxation” (1817).
Although Marx was influenced by Ricardo, he rejected the attempt to discover universal economic laws which are unchanging over time or social systems. For Marx, capitalism and its economic categories were historically specific. A future socialist system would have no commodities, no buying and selling, no labour market, no classes and class relationships. These were all economic categories associated with the profit system.
And unlike, David Ricardo, Marx applied the labour theory of value to labour itself. For Marx, Labour power, under capitalism, is a commodity like any other, with a use-value and an exchange-value. Labour power, or the ability of a worker to work, has a use for the capitalist or they would not buy it, and it has an exchange value in as much as a worker sells their labour power for a wage and salary. Workers need wages or salaries to buy food, pay the rent and mortgages and to buy other necessary commodities in order to survive.
The value of labour power, according to Marx’s theory of value, is determined by the socially necessary labour time embodied in this peculiar commodity to produce and reproduce the workers and their families as an exploited class.
On the value of labour power Marx remarked:
“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 also the reproduction, of this special article. So far as it has value, it represents no more than a definite quantity of the average labour of society incorporated into it.” (Capital vol. 1, p.81).
Therefore, labour power, as the most important commodity of all, is like all other commodities, subject to the labour theory of value for the determination of its value.
Capitalist exploitation involves the contradiction – labour is free under the profit system but is exploited through the dispossession of the working class of the means of production and distribution. The contradiction can only be resolved by a socialist majority establishing the common ownership and democratic control of the means of production and distribution by all of society. Then, and only then, would there be free and voluntary labour producing directly to meet social need.
Until socialism is established workers cannot produce directly to what society needs nor take directly from what is produced. Workers are imprisoned within the deliberate rationing of the wages system. What workers receive in their pay packet is not enough to lead worthwhile lives and flourish as human beings. Wage slavery springs to mind.
Class Exploitation
All class societies exploit. There was exploitation in ancient Greece and Rome during the period of chattel slavery. There was exploitation by the Lord and Bishops against the serfs during feudalism. And now there is exploitation in capitalism by a capitalist class minority over a working-class majority.
Exploitation in capitalism is more difficult to see than in previous class systems. You can see a slave producing goods and services for free, you can see the buildings where the surplus grain produced by the serfs was kept for the benefit of the lord of the manor. Slaves were bought and sold.
Serfs had to carry out free time or services for the Lord.
However, the working class are also exploited. Today we take the buying and selling of labour power for granted. To sell someone’s ability to work on the labour market appears natural. The reality of class exploitation – of a few getting hold of additional value created by the working class majority – is hidden from view.
However, beneath the apparent equality of the contract between capitalist and worker there is class exploitation.
Class exploitation is a necessary feature of capitalism: its life blood. The working class is not exploited because of cheating, low wages, and ruthless, bullying employers. The working class is exploited because, in the process of commodity production, the workers are paid the value of their labour power but the employer gets the use of this commodity to create an additional value.
Marx gave this definition of labour power. By Labour power Marx meant:
“…the aggregate of those mental and physical capabilities existing in the physical form, the living personality, of a human being, capabilities which he sets in motion whenever he produces a use-value of any kind” (Capital Vo. 1 Chapter. 6, p.270 Penguin ed.).
The working class not only produces a value equivalent to their wage but a surplus value which is the basis of the capitalist profit. Profit, as surplus value, is made in production and realised in circulation.
Surplus value appears in the form of the unearned income of rent, interest and profit. Surplus value as profit also provides for the up-keep of the capitalist state through taxation on the capitalist class.
The origin, nature and distribution of what Marx called “surplus-value” plays an important role in his analysis and critique of capitalism. In the first volume of Capital, Marx devotes Chapter 6 of the book to the sale and purchase of labour-power and then pens three complete sections to give a detailed understanding of surplus-value. In Part 3 he looks at the production of absolute surplus value, in Part 4 the production of relative surplus value and in Part 5 the production of absolute and relative surplus-value.
Marx thought that his theory of surplus-value his most important contribution to the economic analysis of capitalism.
In a letter to Engels he wrote:
“The best points in my book are: 1. (this is fundamental to all understanding of the facts) the two-fold character of labour according to whether it is expressed in use-value or exchange-value,
which is brought out in the very First Chapter; 2. the treatment of surplus-value regardless of its particular forms as profit, interest, ground rent, etc. This will be made clear in the second volume especially. The treatment of the particular forms in classical political economy, where they are forever being jumbled up together with the general form, is an olla potrida (rotten pot of stew)” (Marx, letter to Engels of 24 August 1867).
Labour Power
To grasp the ideas of surplus value first requires an understanding of labour power, the commodity the working class sells the capitalist in exchange for a wage or salary.
At the beginning of chapter 6 of Capital, Marx gives a definition of labour-power. In the chapter “The Sale and Purchase of Labour-Power” he wrote:
“We mean by labour-power, or labour-capacity, the aggregate of those mental and physical capabilities existing in the physical form, the living personality, of a human being, capabilities which he sets in motion whenever he produces a use-value of any kind” (p. 270).
Marx made plain that workers do not sell their labour but their labour power. Although labour is the substance and labour-time the measure of value, labour itself has no value – only labour power has value.
The value of labour power is the amount of socially necessary labour time embodied in the commodities the worker and his family must consume to produce and reproduce themselves as an exploited class.
The capitalist pays the worker according to the exchange value but obtains the use value of the labour power. Labour power is a peculiar commodity in that the value it creates in production is in excess of its own value.
As for surplus labour, surplus value arises as the difference between the length of the working day, say eight hours, over which the worker is contractually obliged to labour for the employer, and the socially necessary number of hours, say five, during which the worker can produce
the commodities necessary to maintain and reproduce their labour power.
Another way of looking at the exploitation of labour power is that what
the capitalist pays the worker is the equivalent to five hours’ work, whereas the worker’s labour is performed over the entire length of the working day of eight hours. The difference between the eight and five hours is the three hours of unpaid labour. This is the source of the capitalist’s profit.
Surplus Value
Marx defined surplus value under capitalism in the following way:
“The exact form of this process is therefore M-C-M’ where M’ = M + AM = the original sum advanced plus an increment. This increment or excess over the original value I call surplus value. The value originally advanced therefore, not only remains intact while in circulation, but ads to itself a surplus value or expands itself. It is this movement that turns it into capital” (Capital Vol1 p 71).
The existence of surplus value comes from the unique commodity, labour power.
Marx wrote:
“In order to extract value out of the consumption of a commodity our friend, the money-owner, must be lucky enough to find, within the sphere of circulation, on the market, a commodity, whose use-value possesses the peculiar property of being a source of value, whose actual consumption, therefore, is itself an objectification of labour, and hence a creation of value” (Capital Vol. 1, Chapter IV, p.270).
The value of labour power is determined by the value of commodities in the subsistence basket required for the maintenance of the worker and the means of reproducing more workers. It varies between countries and over time.
Marx continued:
“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 also the reproduction, of this specific article.” (Capital Vol. 1, Chapter VI, p. 274).
These means of subsistence must include:
“..the sum of the means of subsistence necessary for the production of labour-power must include the means necessary for the worker’s replacement, i.e. his children, in order that this race of peculiar commodity-owners may perpetuate its presence on the market, the means necessary for the labourer’s substitutes, i.e., his children, in order that this race of peculiar commodity-owners may perpetuate its appearance in the market…” (Capital vol. 1, Chapter. VI, p. 275).
For educated skilled workers like mathematicians and engineers, we must add the costs of education in terms of the value of commodities. Marx explained:
“..the costs of education vary according to the degree of complexity of the labour-power required. These expenses (…) form a part of the total value spent in producing it.” (Capital Vol. 1 Chapter VI, p.276).
Unlike other commodities, the value of labour power has a ‘moral’ and “social” element in it, which would vary from country to country and over time. Marx stated:
“In contrast therefore, with the case of other commodities, the determination of the value of labour-power contains a historical and moral element. Nevertheless, in a given country, at a given period, the average quantity of the means of subsistence necessary for the labourer is a known datum” (Capital Vol. 1 Chapter VI, p. 171).
Surplus value, then, is surplus labour or unpaid labour. More precisely it is class exploitation.
It is important to note that the subsistence level is not a physical minimum. Marx rejected the “Iron theory of wages”. The subsistence level increases
over time due to the class struggle and the needs of capitalists to have an educated and healthy working class to exploit.
Marx was equally explicit that this subsistence was not a physical minimum. He remarked:
“The ultimate or minimum limit of the value of labour-power is formed by the value of the commodities which have to be supplied every day to the bearer of labour-power, the man, so that he can renew his life process. That is to say, the limit is formed by the value of the physically indispensable means of. If the price of labour-power falls to this minimum, it falls below its value, since under such circumstance it can be maintained and developed only in a crippled state and the value of every commodity is determined by
the labour-time required to provide it in its normal quality” (Capital vol. Ch. 6 1, p. 276-277).
There is nothing in Capital to suppose Marx believed the amount of the workers’ pay would become worse and worse and, as a class, they would all end up in a “crippled state”.
Absolute and Relative Surplus Value
Surplus value is all about class exploitation. The production of surplus value is directly related to the rate of exploitation of workers in the workplace (total surplus value divided by wages).
There are essentially two ways to increase this rate.
- Increasing the length of the working day (absolute surplus value).
- Decreasing the value of labour power, i.e., decreasing necessary labour (relative surplus value).
Absolute surplus value can be increased by an extension of the working day, the intensity of work, overtime (paid or not), “management restructuring” and making fewer workers work more for less, limiting
breaks and so on. Nevertheless, this increasing of the length of the working day by employers depends on the relative strengths of the capitalist class and the working class.
Workers need rest and leisure, too much pressure at work can mean physical and mental illness. And there is also the limit of 24 hours imposed by the working day.
Workers, although engaged in a constant struggle for more wages can also struggle for more time off, better working conditions, trade union representation and other benefits if the class struggle tilts in their favour.
As Marx wrote:
“Hence, in the history of capitalist production, the establishment of a norm for the working day presents itself as a struggle between collective capital, i.e., the class of capitalists, and collective labour, i.e. the working class” (Capital Vol. 1, Chapter. X, p. 344).
The production of relative surplus value, however, doesn’t suffer from these limitations, making it the main way of increasing surplus value for the capitalist.
Relative surplus value is produced through the reduction of the value of labour power (variable capital) by means of improvements in the production of commodities which form part of the subsistence basket of the working class.
In this case, with the working day and wage remaining the same, the value of labour power falls leaving a higher surplus value.
There are several ways to achieve this result, such as introduction of better machinery, a better organization of the workplace, and so on. Increasing productivity also increases surplus value and profit.
Rate of Surplus Value
In developing his theory of surplus value, Marx gave a definition of the rate of surplus value, or the rate of exploitation.
He first distinguished between constant capital and variable capital.
Constant capital includes raw materials and machinery. They are called constant capital because they simply transfer their value to the final commodity.
The value of raw materials gets transferred in full to the final commodity, while only a fraction of the value of fixed capital (machinery) gets used up in the process of commodity production and transferred to the final commodity.
Variable capital refers to that part of capital which alters in value during the process of production, namely, the commodity labour power.
Variable capital refers to that part of capital which alters in value during the process of commodity production, namely labour power
The rate of surplus value or the rate of exploitation is defined as the ratio of surplus value to the value of variable capital.
The rate of surplus value can be defined as:
S’(V) = surplus value/ variable capital = surplus value/ value of labour power = surplus labour/necessary labour.
With these equations Marx was able to show “capital in motion” as it moved from one economic crisis to the next¨; from one cycle of class exploitation to the next.
This class exploitation is possible for one essential reason: the unequal social relationship between capital and labour, which is masked by the formal exchange relationship between them.
The underlying social reality, highlighted by, Marx, is in reality an unequal relationship between the class of capitalists, who monopolise the means of production and distribution and who buy and exploit labour-
power with money capital, and the disposed class of workers, who are forced to sell their ability to work in order to survive.
Conclusion
Political economy or economics is not a particularly exciting subject. The 19th century critic, Thomas Carlyle thought economics was the “dismal science”. But it is important to understand capitalism in order to reject it in a revolutionary way.
Marx’s critique of capitalism, using his theory of value to explain class exploitation and the class struggle deserves an audience. It is important that workers understand that they have diametrically opposed interests to the capitalist class and its political agents.
The value of labour-power, therefore, comes back down to that of a social relation – ultimately of a class struggle between the working class and the capitalist class; a struggle for higher wages and better working conditions on the side of the workers, and greater profits on the side of the capitalists.
Marx explained why workers are forced to defend their interests in trade unions and in strike action. He showed the limitations of trade union action. He set out to show why capitalists try to increase the intensity and
extent of exploitation. And he explained why workers are more successful at certain stages of the trade cycle than at others.
More importantly, Marx showed why capitalism can never be run in the interest of the working class. While the capitalist class own and control the means of production and distribution to the exclusion of the majority of society, the working class will be exploited and never have their needs met. It will always be second best or not at all. Therefore, workers have no choice but to democratically and politically join together and organise into socialist political parties to replace the profit system with: “an association, in which the free development of each is the condition for the free development of all” (Communist Manifesto). All quotes from Karl Marx Capital Volume 1 Penguin Classics 1990 ed.
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The Grenfell Fire: They Died for Profit
The report into the fire at the Grenfell High Rise Block which claimed the lives of 72 people was published this month. Everyone who took part; the architects, suppliers, local authority, management company even the fire brigade were all blamed. The media and politicians were horrified. The Starmer government would implement the recommendations of the report so it would not occur again.
Two important facts about the fire were missing. The first fact missing from the report was that the fire took place within the capitalist system where corners are cut to the capitalist’s desire to maximise profits. Furthermore, it was workers who were housed in the flats, too poor to find other forms of accommodation. As workers they were seen as an embarrassment to the Local Authority and the rich who lived in the borough of Kensington.
The second fact is why the surprise that it happened. Housing disasters happened in the past and will happen again in the future. This is because the profit motive is the primary drive of capitalism whether it is the construction industry or transport, or sewage. In Marx’s words:
“To accumulate, is to conquer the word of social wealth, to increase the mass of human beings exploited by him, and thus to extend both the direct and indirect sway of the capitalist.” (Capital Volume !, Chapter . XXIV, p. 592).
The second fact missing from the final report and why the death associated at Grenfell will be repeated is because under capitalism there is an imperative to accumulate. The function of all capitalists, if they want to remain capitalists, is to accumulate:
“Accumulate, accumulate! That is Moses and the prophets! Accumulation for accumulation’s sake, production production’s sake “(Capital Volume 1, Chapter. XXIV, p.595). So how to prevent another Grenfell fire? The workers must replace capitalism with socialism, they must democratically and politically replace the profit system with the common ownership and democratic control of the means of production and distribution by all of society, A conclusion glaringly missing from the Grenfell report.
