Translated from a text by Freerk Huisken
Where does the surplus over the costs advanced actually come from?
“... I now understand that, first of all, the capitalist is concerned with the surplus over the costs advanced, that this surplus is counted, like the costs, in money and that it therefore has no quantitative limit, but is boundless. So I understand that. What I don’t understand is where the surplus actually comes from. I am thinking: If an entrepreneur generates a surplus by collecting more money for the sale of commodities on the market than he paid in producing them, then nevertheless everybody does this. And if everyone does this, then the entrepreneur loses his shirt again when purchasing all the stuff he needs for production. Because that’s how the sellers of those commodities collect their surplus. Wouldn’t this, in the end, cancel itself out? There wouldn’t be a surplus, would there? Or did I miss something?”
You haven't missed anything. In fact, that’s the way it is, just as you mapped it out. And you have illustrious predecessors. K. Marx came up with the same idea and formulated it as a contradiction. In my words, what he says is this: The surplus, the thing that first makes the entrepreneur into a capitalist, is mediated by the market. But it can’t have come into being there, because the market is where exchange takes place, i.e. where equivalents – meaning equal values – change hands. And even if an entrepreneur overreaches others when selling, that can’t be the source of the surplus. Because then – as you write – everyone does it. So no surplus is created. Marx summarizes this as follows: The surplus can’t “be produced by circulation [the market], and it is equally impossible for it to originate apart from circulation. It must have its origin both in circulation and yet not in circulation.”
So much for the riddle, as you have presented it. I will try to solve it: It’s true that the surplus is always measured by the costs the entrepreneur has to advance. Only, all costs are notthe same. On the one hand, he has to advance money for material means of production, for machines, raw materials and semi-finished products, in addition to electricity, water, etc. On the other hand, the entrepreneur has to spend money on labor power by paying wages. The interaction of these two elements in the work process creates the commodities. In the labor, the material means of production are “consumed,” as Marx says. In the labor process, some of the material elements of production go entirely into the commodities – such as the semi-finished products, raw materials, etc. In other respects, the machines are “consumed” over time, as can be seen from the fact that they are worn out after a certain period and have to be replaced. According to their “consumption,” all the material elements, either wholly or in part, are included in the cost price of the commodities with their price, and it is precisely this part of the advance that the entrepreneur gets back when he sells the commodities. A surplus is not included in this.
This is completely different in the case of the purchased labor: in contrast to the material elements of production, labor is included in the determination of the cost price of the commodities not only in its price, but also in its capacity to work. The price is what the entrepreneur has paid for the workers. The capacity to work is what he now demands from them in production. Price and capacity to work are in an objective relation to each other, because the only thing interesting about the capacity to work is its relation to the wages paid. The entrepreneur wants to get more out of the labor through performance requirements than he advances for it. In other words: the entrepreneur only hires a worker if the work brings in more than it costs. Consequently, there is paid and unpaid work in every product. This means at the same time: the higher the work performance that an entrepreneur demands for the paid wages of the purchased work, the less paid work is contained in the produced goods and the more unpaid work is contained in them. In the cost price of the commodities, there is therefore, in addition to the price of the paid work, always a more or less sizeable portion of work which the entrepreneur appropriates “free of charge” when they are sold.
And this is exactly what the capitalist entrepreneurs are concerned with – even if they don’t have any concept of it: What the worker receives daily in wages, which he must support himself and his family on, and the result of the daily work performance are two completely different amounts. And this – as Marx writes – is what gives the capitalist a good laugh. By organizing his production, the capitalist ensures that he can get a lot of unpaid work out of the paid work at the same time. To this end, he sets up machines, provides the appropriate quantities of raw materials and auxiliary materials; and he knows very well – and this is not unimportant – that paying wages subordinates labor-power to his command. For this reason he can use it according to his business interest in terms of the duration and intensity of its use, just as he can get rid of it when the ratio between paid and unpaid work is no longer profitable for him.
Today, this power of command over the labor that the employer buys with the wage is regulated by collective bargaining or labor laws. The entrepreneur may do whatever he wants – if it is in keeping with the collective bargaining rules: he may lengthen or shorten the legally regulated working day; he may throw people on the street without money; he may re-assign them in the company; he may reduce their wages, etc. There are arrangements for all of these matters that have been agreed on with the representatives of the employees. And if he wants something for which there is not yet a collective agreement or legal permission, then it is usually created: e.g. part-time work, tele-work, the extension of temp work, etc.
Now the riddle at the beginning has been solved: the surplus comes about through the mediation of circulation, i.e. by purchasing labor-power on the labor market; and at the same time it does not come from circulation, because whatever is obtained in the price of commodities as a surplus over costs is the result of everything that has happened in the production process; as mentioned: through the permanent effort to get more and more unpaid work out of the paid work – today, this is long since a multiple of it.
An important finding has been made about this: this objective situation means that the relation between what wage workers produce by means of increasingly productive machines and what access to these commodities is permitted by their wages is increasingly coming apart. They, the direct producers, are separated from the ever greater amount of wealth they produce. This is the only correct measure of poverty in capitalism: it is not defined by referring to the car, the freezer or the smartphone that the wage worker owns because he needs all these things to organize his daily routine today. This is determined by the relationship between the material wealth created by the class of wage workers and the exclusion from it organized by property laws. On the one hand, this can of course be considered terribly unjust. However, it is easy to get caught up in issues of redistribution that can’t really override the “capitalist justice” that is established and protected by state power. This is because from the moment the worker receives the wage, the entrepreneur also takes control over the work. And not only that: the production process “is a process between things that the capitalist has bought, between things that belong to him. The product of this process therefore belongs to him as well...The product is the property of the capitalist, not of the immediate producer, the worker.”
All very strange in the true sense of the word!