Don't blame the Unions.
When a laborer goes to work for an eight hour day in our manufacturing sector, it takes the sale of only a portion of what he produces to cover his total compensation for the day. The rest of what he produces belongs to the owner of the business and is called surplus value. From this share the owner must pay his business expenses (less labor costs) and gain his profit.…
Article comments
76 - Cindy D
RE #69
Dave,
Okay, here is what I understand of what that relationship means.
c + v -› c + v + s
I am a manufacturer I buy chemicals to make my final product. One batch of my product uses:
50 lbs salt/$25
50 lbs clay/$50
50 lbs sulfuric acid/$25
A worker mixes the ingredients, drys them, grinds them into into a powder, which is my final product. Let's call it Bourgeoisie Face Powder.
It takes one day to make a batch for which I pay a worker $100.
Bourgeoisie Face Powder Selling Price: $300-500
(c)Materials cost $100
(v)Labor $100
(s)Surplus Value $100-300
The point, as I understand it is, the only thing that added value was the labor it took to convert those materials into my product.
If there was no labor, I could sell my chemical inventory for roughly what I bought it. The labor that it takes to make the product is what adds the value to the original materials.
So,
Where does Marx get off making the assumption that the $100 investment of labor is worth more in determining the 'surplus' value (aka profit) than the $1000 invested by the capitalist in materials and facilities? That's an erroneous and biased assumption.
Marx didn't use those figures Dave. They're just an example. If we made sand candles. It might take $10 worth of materials to $100 labor to make a final product that has a value of $10(materials)+ $100(labor) + s(surplus value).
The point is the materials all by themselves are worth a sum. It's labor alone that adds value to that sum. Labor creates new value.
77 - handyguy
Labor may create the 'real' added value. But in the case of 'bourgeois' face cream, the marketing done by the capitalist adds a great deal of additional [and possibly entirely imaginary] 'value,' allowing Clinique or whoever to charge hundreds of dollars for lotion by calling it an 'age-defying serum.'
I speak as a 'marketing professional.' It's sometimes silly but lots of fun.
78 - Cindy D
Handy,
I don't know what Marx would say about that. It's interesting. I couldn't find any related information. Here is what I will say about it. Off the top of my head and angry (again, sigh). So, if it doesn't flow like good prose, I apologize in advance.
Marketing is what makes capitalism appealing to those outside the bourgeoisie.
Culture begins with indoctrination of the young, wrought with the delicacies of identity and image. It is not a universal phenomenon that youth feel inadequate. But, in Capitalist societies it is requisite. It is a given with TV advertising and the average indoctrination programs present in schools.
This system must first rob youth of its self-confidence so that they can later market it back to them. It must take all their innate largeness and turn it into small squinty-eyed meaness or insecurity--either bullying or asking "Am I okay?"
Our system lies to children. It lies about history and it lies about who they are and what it's done. It lies to them about what will make them happy. Sometimes we (as complicit slaves) lie out of fear (as parents do)--wanting them to succeed. To succeed--in this place--it's necessary to make sure they understand what they need to do to "get ahead".
Once youth is "sold" on the idea that they are "inadequate as designed", that "anyone can be rich" and the idea of the "work ethic"--there is a fortune to be made in this mine of marketing.
There will always be those who cannot adjust--they question, they develop attention problems, they recognize something is amiss, they rebel. But they are too young to understand what is wrong or they know what is wrong but can't express it in terms that are illuminating.
The rest will be good workers all supporting the bourgeoisie. Believing this is freedom and that they might get there too. Meantime selling out the real freedom of most of their compatriots--the average (the really beautiful).
79 - Cindy D
RE #75
Dave,
Try reading The Communist Manifesto (I've just finished.). It reads like someone standing in this century, at this date, and watching the neoliberal agenda unfolding.
80 - Dave Nalle
Marx didn't use those figures Dave. They're just an example.
Yes, obviously the specific figures are irrelevant. It's the basic paradigm which is flawed.
The point is the materials all by themselves are worth a sum. It's labor alone that adds value to that sum. Labor creates new value.
What of the value of the intellectual property which is the formula? What of the marketing and sales skills of the manufacturer or his sales staff? What about the overhead of the factory where the work takes place? What - most importantly - about the risk which the capitalist assumes by investing his money in the raw materials and the other aspects of overhead for the period of time between acquisition of materials and sales of the product? Hell, the capitalist probably even fronts the laborer his salary during that period.
The truth is that the one common denominator of all of these things, from acquisition of raw materials to compensation of labor is the capital which is at risk in the enterprise. Without the capital there would be no business and the person whose funds the business assumes all of the risk and should be rewarded proportionately.
Now, ideally the pay of the worker should certainly be proportional to their contribution to the overall process. They should receive a fair market wage for the time and demands of their work. But why should a worker who is selling the commodity of his labor be treated any differently than the quarryman who is selling the stone from his quarry? Both stone and labor are raw materials which go into the production of the final product.
And I have read the Communist Manifesto. It also reads like someone setting up a straw man argument, trying to redefine history into his narrow definition so that he can then argue against the bogeymen he has created himself. The idea of 'class struggle' is a reductio ad absurdam and since everything else flows from that idea and is a grand exercise in the self-referential fallacy, it fails on every level.
Dave
81 - Cindy D
Dave,
You are chock full of self-contradictions. For example, you claim you are opposed to "corporatism", yet, I find your arguments support it more than denounce it.
82 - Cindy D
Dave,
In fact, I find your arguments typically support a neoliberal agenda. This is not freedom Dave. Even you can see that.
I understand if you are conflicted. I am often conflicted. But a better person admits their conflicts.
83 - Dave Nalle
Cindy, I'm not opposed to corporations, just to 'corporatism' where there is too close a relationship between corporations and the state. Huge difference.
As for being a 'neoliberal', I think I'm more of a classical liberal. I'm not really on the same page as the Straussians or the Austrians on economics. I tend to side with Friedman on economics and he was increasingly alienated from the neoliberals after the 1970s.
I find the neoliberal position on taxation to be too moderate by far, and certainly don't agree with them on issues like foreign policy and the relationship between government and business.
And of course I'm not of one uniform mind about all things. What thinking person would be?
Dave
84 - Mark Eden
I figured that Les might be out at Republic. I'd like to see the demands there expand and the workers get the chance to see if they can run the business at at least the level required to keep themselves fed and housed through these hard times.
Handyguy says, ...the marketing done by the capitalist adds a great deal of additional [and possibly entirely imaginary] 'value'...
There are schools on top of schools of thought that have developed around this notion. Here's an old primer.
Arguments about Marx and how well his 'strawman' describes capitalism are all well and good. In the meantime the boom and bust pattern continues, and real folks are getting hurt. When the bubble that is the public trough bursts, then what?
Mark
85 - Clavos
I'd like to see the demands there expand and the workers get the chance to see if they can run the business at at least the level required to keep themselves fed and housed through these hard times.
Except that, from news reports, the workers' demands are much more realistic; they're simply asking for what they were promised under the company's work rules.
Workers running the businesses for which they work sounds great and very democratic on paper, but in practice isn't (and hasn't been) very practical; committees rarely are able to do anything efficiently, they spend too much time debating instead of making the widgets.
86 - Dave Nalle
When the bubble that is the public trough bursts, then what?
Then perhaps businesses will have learned the lesson that they are better off surviving on their own merits and the quality of their products and the work that they do rather than depending on the government and excessive credit to get by.
Dave
87 - Mark Eden
Clavos, while I appreciate the need for 'realism, how many months of their mortgages will their vacation pay cover? As businesses across the country start closing their doors because no one wants to invest, workers will need to take action in self defense. Do you expect the government to make them 'whole' or provide the necessary support and retraining and relocation funds for that purpose? Good luck with that.
Mark
88 - Dave Nalle
Mark, I agree that workers need to look out for their interests, but how do you expect workers to realistically take over most of the businesses which might fail? Can workers put together the resources to reopen a closed GM plant? And if they can, should they, when professional managers couldn't run the company profitably?
For a lesson of exactly this problem take a look at the history of the Grange movement. When the National Grange of the Patrons of Husbandry tried to move from a very successful history of collectivising farmers into the less familiar business of producing farm equipment and fertilizer for those farmers they bankrupted themselves, because they didn't have the skills or the facilities to do the job efficiently.
Dave
89 - Mark Eden
It's not that the companies cannot be run profitably necessarily. It might be that they can't be run at the level of return that investors have come to expect and demand.
Mark
90 - Clavos
That's not my point, Mark.
Again, in general terms, what makes you think that the workers can do a better job of running a business than those who have been doing so? A bad economy is a bad economy; how are the workers going to save their jobs and incomes by taking over a failing company in a failing economy?
And no, I don't expect the government to make them whole, just as I don't expect the government to make me whole if people stop buying boats; I'll find another way to make a living, and I'll do whatever it takes to do so (as I have throughout my life), including (but not limited to) relocating (even to another country if necessary), retraining, and changing industries, starting over again at apprentice level, etc.
Why have we become a nation of helpless victims?
91 - Mark Eden
You should feel free to go on off there and do what you must. I suggest that collective cooperative action is one road for workers to take to avoid becoming helpless victims.
How well they can do remains to be seen.
Mark
92 - Dave Nalle
It's not that the companies cannot be run profitably necessarily. It might be that they can't be run at the level of return that investors have come to expect and demand.
And if the workers as the new managers cannot satisfy the investors or potential new investors, where is the capital to operate the business to come from?
I do acknowledge that some small number of businesses with unique circumstances could survive such a conversion. Smaller companies with established distribution chains and outstanding orders which they could borrow against could probably make such a change, but most would either shut down or be run into the ground very quickly in a time of a weak economy.
Dave
93 - bliffle
"Without the capital there would be no business and the person whose funds the business assumes all of the risk and should be rewarded proportionately."
How are the rewards apportioned? Who decides? When?
94 - Lumpy
he who takes the risks reaps the rewards.
95 - Cindy D
Lumpy,
What of the risk a worker takes of losing her/his pension or pay or job late in life?
Does time (often a lifetime)spent working under someone else's dictatorship have any value when you risk losing your retirement savings?
What "risk" did all the companies we are bailing out take?
It seems more like he who has the power steals the rewards often without the risk.
96 - Cindy D
"Without the capital there would be no business and the person whose funds the business assumes all of the risk and should be rewarded proportionately."
The Capitalist does not take "all" the risk. Have a look back at the corporate raiders of the 80s. CEO benefits being met as obligations of worker pension funds. The owners will assure the "risks" are pushed off onto the workers whenever possible. Generally without their knowledge.
97 - Mark Eden
(For those readers who are interested in what I tried to do in the article, I have discovered this old gem in which Perlo preempts my use of the Annual Survey and its categories to estimate the rate of surplus value and its trend by 35 years. The most that I can say now is that my article brings Perlo's exercise up to date. Mark)
98 - Cindy D
Booms and slumps - what causes them?
I found this very illuminating. It is 2 pages and easy to understand for a lightweight on Marx like me.
99 - bliffle
"Booms and slumps - what causes them?"
Booms and slumps are caused by excessive positive feedback which proceeds at too high speed. Just as in any other complex system.
100 - Mark Eden
bliffle, we can construct systems that function with some pretty fine margins. You'd think it would be possible to do the same with our system of production that impacts so many liv...oh wait! I have to grab my bucket of blood and grease the cogs again. You'd think that we could come up with a better lubricant.
Mark
101 - Dave Nalle
Mark, you're supposed to render the excess workers down and use their fat for a lubricant. Blood makes everything rust and jam up.
Dave
102 - Mark Eden
Maybe that's the problem. Thanks, Dave!
103 - Dan(Miller)
During this festive holiday season, we must remember those in dire need.
Dan(Miller)