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Politics and Activism

Understanding Our Chains

The Heist of Surplus Value

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Understanding Our Chains

“The proletarians have nothing to lose but their chains. They have a world to win. [Working people] of all countries unite!” (1) Many regard Karl Marx as a hero, a genius in the realm of politics, economics, and social studies. Many more regard him as a villain and threat upon the western world. This second viewpoint could not be more wrong, the antagonisms of current and old capitalism will inevitably be the sword in which the proletariat holds. There remains no ethical consumption under capitalism due to the theft of surplus value from the working class. To understand this exploitation we must understand the process of commodification. The process of commodification is a necessary component to understanding how labor is extracted from the laborer and turned into surplus value which at the end of the day lines the pockets of the capitalist.

First let us understand what exactly “ethical consumption” means. There is a common conception that we can consume ethically under commodities that were “appealing to our best self,” as in consuming items through fair trade, that are humanely killed, etc. (6) This sort of ethical consumerism fails to take into account the human component to the equation. We should define ethical consumption as “what is morally good or correct in the purchasing of goods or services by the public.” (7) (8) In this way we create a focus on the ethicality of the commodity itself rather than the public’s choice in what goods are consumed. This mentality functions as a process to rearticulate the relationship between blame and who it is placed on.

We will continue our analysis with the idea of the commodity. A commodity in short is something produced to be bartered with for either money or another commodity. For example at a family dinner your grandmother makes a turkey for thanksgiving and gives it to you to eat. This process is not a commodification of the turkey. However the process of your grandmother exchanging something for the raw foul is a commodification of the turkey. This form of commodification of what we can call products is the sort of this-for-that that makes up a market. As Richard D. Wolff renowned economics professor explains: “A market is a mechanism of distribution of resources and products. It involves distribution by means of quid-pro-quo exchange: so many of one commodity will be provided in exchange for so many of another. When money enters into market exchanges, they involve a commodity on one side of the exchange and money on the other.” (2) This basic notion of a commodity in itself does not pose an unethicality inherently, however it is naive to think this discounts the crux of my argument. To understand the unethicality we must understand how a commodity has value. We start with labor value; labor value is the base value of a resource or commodity (which can be one and the same). The amount of labor put into a commodity is not a subjective one (meaning it is not the individual amount of labor put in), but rather the average of societies ability to produce a commodity. The second type of value is the use value, perhaps the simplest of values to understand, this value simply boils down to how useful an item is. This type of value remains subjective to the owner and the potential buyer but also has a societal purpose in what we refer to as the exchange value. Exchange value takes the subjective and societal values of a commodity to determine exactly how much it should be exchanged with. Exchange value has the base of the labor value and the societal use value, and then from here the personal/subjective value acts as a price variant in individual instances. If we look to a super market we find that the manufacturing of similar shovels remain at similar prices due to labor value and use value, however at the subjective level we find a price variant based on a personal need for the commodity. (3)(4)

After understanding what a commodity is we must determine exactly how one is produced. The production of a commodity may not be the literal production of an item, but commodification occurs at the point of exchange. Anything has the potential to be commodified in a capitalistic sense; this is where some unethicality in consumption comes in. We start with what is needed to produce an item in a market sense (labor, land, resources, time), and begin to commodify them in an exchange process in order to acquire the other items of production. This exchange remains the basis of all trade and economics and therefore is not inherent to capitalism, for even in a leftist society (communist, left anarchist, etc.), some form of exchange takes place. Even in the Soviet Union we find state ran stores chains such as Beryozka in which the proletarian could purchase state goods at a relatively cheap price. (5) However, it is in the production stage of the commodity in which we find the unethicality takes place.

Let us say there is a factory that produces a commodity, this commodity sells for 200 U.S. dollars, costs 20 dollars to make and takes one hour to make with a single 15 dollar an hour laborer. This may seem like a perfectly logical setup to make a profit, however there is an inequality between what is put into the commodity and what the commodity is worth. Put into an equation we find that: 15+20 comes out to equal 200. This due our ability to reason is thoroughly illogical, in no world does 35 equal 200. There remains one place where this can exist, the market. This unequal equation shows a fundamental unethicality in the process of consuming a commodity. Between the time that resources (labor and raw material) are expended and the commodity is sold, the heads of the company generate a surplus value in which does not go back to the laborer, but instead lines the pockets of those who have done the least amount of work, stock holders and those who own the means of production. This generates two common counter arguments in response, the first being “Don’t the shareholders deserve a piece of the profit?” and the second being “Surplus value is good, it stimulates the economy and allows the market to function.”

To the first counter argument I rebut very simply that no the stock holders do not deserve the profit for the labor of another. The stock holder does nothing to earn a stake in the profit, although all those bourgies out there are screaming “but what about the corporations who need stock holders to start up?” My response is simple; stocks are nothing more than a means to steal value and profit away from the common worker. In fact the argument that we must have stock holders is not only wrong but in fact almost a twisted mirror to the truth. The stock market is partially responsible for the 2008 great recession by funding the banks more and more while disastrous decisions were being made by the bankers. (9) Even if you don’t buy either of those arguments, statistically Stocks generate little of the revenue for most business “It makes sense: shareholders supply only a small fraction of a bank’s funding (most comes from depositors and bondholders), yet they get all the upside if the bank books big profits.” (9) Let alone from this sort of “win-win” scenario, we find stock holding remains unethical for the theft of profit over the laborer. Surplus value is profit that is withheld from the worker by those who labor none.

The second argument in favor of surplus labor is much simpler: “surplus value is good because it generates the revenue needed for a corporation to expand or give benefits.” This argument although simpler is much better. However, it remains incorrect in its assumption that in the eyes of the leftist all money generated by surplus value is bad. No, the argument is that it becomes theft as the elite class uses it to enrich themselves. As this sort of value is being directly used on the proletarian through methods of benefits or ensuring that your employees have jobs through expansion is not theft for it is directly used on the laborer. However this remains a utopian dream in the capitalist world, to remain competitive you are forced to find prices to exploit the worker. “Within capitalist relations, the capitalist has purchased the right to exploit workers in production. He pays them, on average, enough to meet their customary needs, but he has purchased the right to push them to produce more than it costs him for the use of them. As a result, the worker produces additional value, more money, profits, for the capitalist—the worker produces more capital for the capitalists. And that capital, the result of the exploitation of workers, goes into the accumulation of more means of production. What you see when you look at capital is the result of past exploitation.” (10) Here lies the competitive nature of capitalism, one where ethical consumption remains a pipe dream. As Professor Lebowitz explains the expansionist tendencies of the capitalist in seizing the means of production forces other owners of labor to scramble to purchase more means as well. This “take all” scenario leads to ultimately an impossibility of ethical capitalism. Now the most obvious argument against this claim is a utopian one of “what if?” “What if there are no more means to seized by the capitalist?” The answer is simple and twofold: imperialism and globalization mean that the means of production are infinite in a competitive market, and that the capitalist will not give the money back to those with less social power, exploitation of the laborer to line the pockets of the wealthy is an inevitability. When we look to countries such as Chile under the neoliberal dictator of Augusto Pinochet we find both accounts to be true. The United States (a capitalist and very imperialistic nation) backed a coup detat of the democratic elected socialist government of Chile. (11) Without the support of the U.S. it is highly unlikely this coup would have been successful. (11) Due to this imperialism from the U.S. corporations were able to slip in and exploit the Chilean people while the profits were funneled heavily towards U.S. corporations. (12)

In short, we find consumption under capitalism is unethical due to the theft of surplus labor from the worker. This simple statement is not a total damnation of surplus labor but rather a damnation of labor extracted that is not cycled back towards the laborer. This remains impossible under capitalism due to the constant attempts at endless expansionism and competition. We empirically see that through economic imperialism that a new layer of unethicality is unleashed, exploitation of smaller states by larger states and corporations. This imperialism also makes it impossible for capitalism to be ethical as it functions as the driver behind wealth production in capitalistic societies. Pinochet’s disgusting leadership is proof in every sense that capitalism remains unethical through its theft and refusal to give the laborer the profit they had earned. In honor of Fidel Castro we recite a quote of his: “I find capitalism repugnant. It is filthy, it is gross, it is alienating... because it causes war, hypocrisy and competition.” (13) Just as Castro’s time has ran out, capitalism’s gross exploitation is reaching its end. It remains up to us as a solid left front to oppose this sort of violence towards the non-capitalist class; we have only our chains to lose.

  1. Karl Marx “The Communist Manifesto” Section 4
  2. Richard D. Wolff Professor of Economics Emeritus, University of Massachusetts, Amherst, and currently a Visiting Professor in the Graduate Program in International Affairs of the New School University in New York. Wolff has also taught economics at Yale University, City University of New York, University of Utah, University of Paris I (Sorbonne), and The Brecht Forum in New York City.“Q and A” http://www.democracyatwork.info/welcome_to_econ_a_q_a_with_richard_wolff
  3. Investopedia “Labor Theory of Value” http://www.investopedia.com/terms/l/labor-theory-of-value.asp
  4. Karl Marx “Capital Abridged” Section 1
  5. Dr. Anna Ivanova Institute of Russian History Russian Academy of Sciences
  6. Julie Irwin Harvard Buisness Review https://hbr.org/2015/01/ethical-consumerism-isnt-dead-it-just-needs-better-marketing
  7. Oxford Dictionary https://en.oxforddictionaries.com/definition/ethical
  8. Oxford Dictionary https://en.oxforddictionaries.com/definition/consumption
  9. Justin Fox The Atlantic http://www.theatlantic.com/magazine/archive/2013/07/stop-spoiling-the-shareholders/309381/
  10. Michael A. Lebowitz Professor Emeritus of Economics at Simon Fraser University “What Keeps Capitalism going?” http://monthlyreview.org/2004/06/01/what-keeps-capitalism-going
  11. Peter Kornbluh “The Pinochet Files”
  12. Mark Ensalaco “Chile under Pinochet: recovering the truth”
  13. Fidel Castro Great Revolutionary and Cuban Leader no date
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