What is surplus value

If a person who owned a million pounds decided to spend it he could live, without working, for forty years at the level of £25,000 p.a. before being broke. If the million pounds was invested at an average of five per cent. interest p.a. over 40 years, it would enable him to live at the level of £50,000 a year for the same time, and he would still have his million. Who said that you can’t cat your cake and still have it?

Surplus value is the sole source of all rent, profit and interest, and the exploitation of the Working Class is the source of all surplus value. Capital is wealth used in the reproduction of wealth in order to extract profit. This is investment of money as distinct from spending it.

In early commodity production the producers were owners of their means of production, raw materials, etc. They owned the articles they made and they sold them. The right of a person to own what his labour created was a recognised principle. Modern capitalism excludes the working class from ownership of the means of production. The worker is compelled to sell his ability to work in order to live. He sells his labour power as distinct from his labour. The value of the commodity labour power is determined by the amount of food, clothing, shelter, etc., required to reproduce the mental and physical energy expended and to reproduce other wage slaves. For example, the value of engineering labour power is approximately 5s. per hour. In working an hour the engineer may produce value exceeding 15s. These social and historical aspects are of great importance.

Money can be transformed into capital, of which there are two aspects. Constant capital consists of machinery, raw materials, and so on; variable capital, in money form, purchases labour power. Labour is the positive or creative factor. In modern society, labour is the source of all wealth. Irrespective of how gigantic, complex and costly the productive machinery may be, it is all a product of labour.

In the productive process, let us assume a capital of £10,000 invested, of which £7,500 is constant and £2,500 variable. We also, for convenience, assume that the total capital is consumed in the process of production, although this in fact rarely happens. If 10,000 articles valued at 25s. each are created, the total product is £12,500, an increase of £2,500 on the original capital. Where does this increase come from? Neither constant nor variable capital can grow or expand. The original value invested can only re-appear, in new form, in the new wealth created If we take one article, value 25s., depreciation of machinery and the raw materials re-appear here at a value of 15s., variable capital at 5s., making a total of 20s. invested by the employer. But he sells at 25s. Labour power is the only commodity which can produce more than it itself consumes. Of course, the worker can’t sell his labour, because having sold his ability to work, his labour is his master’s property. The difference between the value of labour power and the value of labour is, therefore, 5s. in this case, surplus value, or unpaid labour.

The manufacturer would argue that the £2,500 is a modest twenty-five per cent profit, a reward for his thrift and directive ability. It is quite true that, considered as a rate of profit, it is 25 per cent. of the original sum invested. However, the increase arises directly out of the variable portion of capital and to determine the extent of the exploitation of the workers we must consider its relation to surplus value.

In our example we have £2,500 wages against £2,500 surplus value; or a 100 per cent, rate of exploitation. In other words, the total variable capital advanced, in this case, represented half of the value of the embodied labour.

Let us now take a producer who owns his means of production, a tailor for example. Let us suppose that be purchases his raw materials, he spins, weaves and tailors the coat. The wear and tear of his machinery together with the raw materials used costs, say £6. His labour power in the process is valued at £7. The total product is £13. His embodied labour is the source of the new wealth— the coat—and this he realises in full in selling the coat for £13. Had he been a wage slave, compelled to sell his labour power, as distinct from his labour he might have received about £3 10s. l0d. wages, or half the value of his labour power. The other half would go into the pocket of his master, as profit, surplus value. When people own their own instrument of production and sell the products of their own labour neither profit nor surplus value arise.

We can also regard this exploiting process from the standpoint of labour time. Workers are employed at a given wage, say £10 per week, for a specified working week of 44 hours. If the rate of exploitation is 100 per cent., then in the first half of the week they produce, in new wealth, value equal to their wages. In the second half a similar quantity is produced. The working week, therefore, includes 22 hours of surplus labour time.

In every process of production capital is expanded and accumulated. The immense mechanism of production today is the outcome of countless generations of unpaid labour, of surplus value. This Marx calls dead labour returning vampire like to suck the blood of living labour. This vast productive equipment, the natural resources and the labour of society, has been the inheritance of the propertied class for hundreds of years and is utilised for their private gain. The inheritance of the producers, the workers, has been continued poverty, in various degrees of severity. The accumulation of capital and the expansion of the means of production, generally speaking, brings greater exploitation to the workers. Capitalism has produced these twins and will always maintain them as long as it lasts.

The Marxian theory of value clearly shows the facts of our economic and social life in modern society. The abolition of capitalism is the sole means by which this state of affairs can be ended, in order to enjoy the fruits of their labour men and women must re-organise society on a Socialist basis. Only on this foundation can the great productive machinery, resources of nature and the labour of society be utilised to full capacity for the benefit of all of mankind. This great social change is possible and practical whenever a majority of workers decide to bring it about.

J. H.