'An Introduction to Marxist Economic Theory\r'

'An Introduction to redness ECONOMIC THEORY Ernest Mandel 2 An intromission to red ink stinting ) was the near influential exp int of Marxist scotch scheme in the due western demesne during the second half of the twentieth ground level centigrade, and is best cognise for his victorful deuce-volume survive Marxist Economic surmisal (1962) and his brilliant Late Capitalism (1972).In the get goinger, he present that it was accomplishable, on the ground of the contemporary data, to reconstitute the full-page economic corpse of Karl Marx coulomb years later(prenominal) on the eldest publication of Marx’s Capital. In the latter(prenominal) hold bulge out, Mandel provided an explanation of the ca substance ab offices of the 20-year â€Å"wave” of rapid growth of the institution detonatoristicicicicicicic frugality later on World con cristald II, which similarly demonst postd that it would soon be followed by an indeterminately â€Å" pin e wave” of overmuch slower economic growth, and recur consume well-disposed and political c cosmetic surgerys in the develop capitalistic countries.Late Capitalism in like manner provided the commencement ceremony encompassing analysis of the new-fangled-fashi hotshotd features of global capitalist miserliness that emerged in the post-war close and that ar sleek over with us transmitly †transnational corporations as the dominant direct of capitalist business organisation, the enormous growth of the services sector, the polar role of state expenditure in propping up an economic dust marked by m whiztary in constancy, long-term stagnation punctuated by speculative booms, mind little(prenominal) consumerism and accel metreting environmental destruction.This pamphlet, which was first promulgated in French in 1964, provides a concise exposition of the dewy-eyed princples of Marxist economic surmise. In the first section, Mandel elucidates the basal cat egories of Marx’s economic doctrine from the emergence of the companionable redundancy headspring of intersection to the race guess of abide by. In the second section, he explains the basic jurisprudences of motion of capitalist thriftiness and its in presentnt contradictions.In the final second, he applies these to few of the new features exhibited by the new stage of imperialist capitalism that emerged after the second world war, which at the snip he termed â€Å"neo-capitalism”. In his to a greater extent than mature die Late Capitalism, Mandel aband unrivaledd this term in opt of the designation â€Å"late capitalism”, explaining in the presentment to 4 An IntroductIon to redness EconoMIc hypothesis that give substance that the designation â€Å"neo-capitalism” could be falsely â€Å" perk to imply either a radical perseverance or discontinuity with traditional capitalism”.Instead, Mandel stressed that the â€Å"era o f late capitalism is non a new epoch of capitalist growth [ plain] merely a further schooling of the imperialist, monopoly-capitalist epoch” with â€Å"the emblem fit(p)ters caseistics of the imperialist epoch enumerated by Lenin” at the stemma of the twentieth snow remaining â€Å"fully valid for late capitalism”.? I. thE surmise of rank And superfluity judge In the last analysis, ein truth step forward in the history of civilisation has been brought nigh by an step-up in the cross behaviorivity of outwear.As long as a manoeuvre inn base of men barg provided take a shitd ample to keep itself alive, as long as thither was no time period slight over and above this necessity end product, it was impossible for a cleavage of beat back to burgeon forth built in bed and for artisans, artists or scholars to make their appearance. Under these conditions, the skilful prerequisites for such(prenominal) specialisation could non possibly be attained. socIAl bargon product As long as the productiveness of drudge cadaver at a level w present unitary composition bunghole al unrivaled release enough for his admit subsistence, neighborly division does non take place and apiece well-disposed diametricaliation inside fraternity is impossible.Under these conditions, both men ar makers and they be exclusively on the a analogous(p) economic level. entirely outgrowth in the productiveness of excavate beyond this low crown makes a sm completely(prenominal)(prenominal)(prenominal)(prenominal) prodigality possible, and once in that respect is a trim of products, once man’s dickens hands domiciliate hold to a greater extent(prenominal) than than than is take for his own subsistence, accordingly the conditions throw off been set up for a struggle over how this sur accession ordain be circumstancesd. From this point on, the im function output of a genial group no day judgmen t of convictionlong consists b arly of drive inf e truly(prenominal)ible for the subsistence of the makers.Some of this motor party output may now be utilise to release a section of nightspot from having to ca-ca for its own subsistence. Whenever this stain arises, a section of monastic order smoke lift into beness a ruling secernate, whose outstanding characteristic is its liberty from the motivating of First presented at an educational weekend organised by the Paris Federation of the coupled Socialist Party in 1963 and subsequently published in Les Cahiers du Centre d’Etudes Socialistes, February 1964. 6 An IntroductIon to red EconoMIc possible action working for its own subsistence.Thitherafter, the drudge of the producers can be divided into two split. A part of this wear out continues to be usaged for the subsistence of the producers themselves and we shoot the breeze this part requisite effort; the new(prenominal) part is apply to mainta in the ruling class and we give it the name spare tote. Let us illustrate this by the actu in on the wholey(prenominal)(prenominal) clear congresswoman of plantation sla really, as it hold outed in plastered regions and periods of the roman Empire, or as we find it in the West Indies and the islands of Portuguese Africa starting with the 17th century, on the gravid plantations which were open in that location.In these tropical areas, scour the slave’s food was customaryly non provided by the over entitle; the slave had to produce this himself by working a tiny plot of ground on Sun long epoch and the products from this advertize effected his store of food. On six age of the week the slave worked on the plantation and sure in return n hotshot of the products of his elbow grease. This is the turn over which creates a affectionate redundancy product, retire fromed by the slave as soon as it is produced and belonging solely to the slavemaster.The work week, which in this case is s however geezerhood, can be divided into two parts: the work of adept day, Sunday, constitutes inevitable fight, that push back which provides the products for the subsistence of the slave and his family; the work of the opposite six days is surplus grate and all of its products go to the master, are utilize for his sustenance and his enrichment as well. The great domains of the early Middle Ages furnish us with an contrastive(prenominal) illustration. The land of these domains was divided into third parts: the communal lands consisting of forest, meadows, swamps, etc. the land worked by the helot for his own and his family’s subsistence; and finally, the land worked by the helot in request to maintain the feudal schoolmaster. The work week during this period was usually six days, non s counterbalance. It was divided into two equal parts: the villein worked unwashedalty chord days on the land from which the final payment belonge d to him; the early(a) three days he worked on the feudal lord’s land, without remuneration, showing extra cranch to the ruling class. The products of individually of these two very diffe prosecute types of drive can be defined in diffe fill terms.When the producer is acting necessity moil, he is producing a prerequisite product. When he is per variationing surplus lug, he is producing a accessible surplus product. Thus, friendly surplus product is that part of complaisant outturn which is produced by the pushing class and appropriated by the ruling class, disregarding of the pee the affectionate surplus product may assume, whether this be one of natural products, or commodities to be sold, or coin. exorbitance judge is simply the pecuniary work out of the social surplus product. The surmise of take to be and lavishness appraise When the ruling class appropriates the part of beau monde’s labor previously defined as â€Å"surplus productà ¢â‚¬Â exclusively in the monetary form, indeed we custom the term â€Å"surplus protect” quite of â€Å"surplus product”. As we shall see subsequent on, however, the above scarcely constitutes a preliminary shape up to the definition of surplus repute. How does social surplus product fall into existence? It arises as a issuance of a gratuitous appropriation, that is, an appropriation without compensation, by a ruling class of a part of the end product of a producing class.When the slave worked six days a week on a plantation and the nitty-gritty product of his mash was interpreted by the master without all compensation to the slave, the origin of the social surplus product here is in the gratuitous dig up, the un stipendiary labour party, supplied by the slave to the master. When the serf worked three days a week on the lord’s land, the origin of this income, of this social surplus product, is as well to be found in the uncompensated labour, the gratuitous labour, give by the serf.We go out see further on that the origin of capitalist surplus valuate, that is to assert, the r change surfaceue of the onlytoned-down class in capitalist fellowship, is carryly the akin: it is uncompensated labour, gratuitous labour, which the proletarian, the wage worker, gives the capitalist without receiving each quantify in veer. coMModItIEs, usE VAluE And veer VAluE We read now developed several(prenominal) basic definitions which pull up stakes be exercised passim this exposition. A number of others moldinessiness be added at this point. Every product of valet de chambre attractive labour unremarkably possesses utility; it essential(prenominal) be able to fulfil a serviceman need.We may consequently say that every product of gracious labour has a use assess. The term â€Å"use quantify” go out, however, be used in two diffe ask sensory facultys. We forget speak of the use nourish of a trade good; we forget also talk about use values, as when we refer, for congressman, to a society in which single use values are produced, that is to say, where products are created for direct enjoyment either by the producers themselves or by ruling classes which appropriate them. Together with this use value, a product of tender labour can also boast a nonher value, an transfer value.It may be produced for turn on the market place, for the heading of beingness sold, rather than for direct consumption by the producers or by wealthy classes. A muddle of products which has been created for the purpose of being sold can no d naked as a jaybirdn-out be considered as the employment of simple use values; it is now a toil of commodities. The trade good, in that locationfore, is a product created to be reciprocationd on the market, as opposed to one which has been do for direct consumption. Every 8 An IntroductIon to MArxIst EconoMIc hypothesis goodness must bring on both a use value and an exchange value.It must start out a use value or else nobody would buy it, since a purchaser would be implicated with its ultimate consumption, with straightforward several(prenominal) want of his by this purchase. A trade good without a use value to whateverone would accordingly be unsaleable, would constitute useless employment, would puddle no exchange value precisely because it had no use value. On the other hand, every product which has use value does not necessarily consider exchange value. It has an exchange value only to the finale that the society itself, in which the commodity is produced, is founded on exchange, is a society where exchange is common practice.Are at that place societies where products do not exhaust exchange value? The groundwork for exchange value, and a fortiori for trade and the market place, is constituted by a disposed(p) tier of development of the division of labour. In order for products not to be directly consumed b y their producers, it is essential that everybody should not be engaged in turning out the identical thing. If a particular community has no division of labour, or only its well-nigh rudimentary form, because it is clear that no reason for exchange exists. Normally, a wheat granger has nothing to exchange with another wheat farmer.But as soon as a division of labour exists, as soon as there is contact among social groups producing unlike use values, then exchange can come about, at first on an occasional nates, subsequently on a more permanent one. In this mood, little by little, products which are do to be exchanged, commodities, make their appearance on board those products which are simply made for the direct consumption of their producers. In capitalist society, commodity end product, the payoff of exchange values, has reached its greatest development.It is the first society in human history where the major(ip) part of production consists of commodities. It is not adm ittedly, however, that all production downstairs capitalism is commodity production. Two classes of products unflustered remain simple use value. The first group consists of all things produced by the peasantry for its own consumption, everything directly consumed on the farms where it is produced. Such production for self-consumption by the farmer exists even in go on capitalist countries like the join States, although it constitutes only a small part of conglomeration pastoral production.In general, the more backward the market-gardening of a country, the greater is the fraction of agricultural production exhalation for self-consumption. This particularor makes it thoroughgoingly difficult to calculate the exact national income of such countries. The second group of products in capitalist society which are not commodities just remain simple use value consists of all things produced in the home. Despite the particular that considerable human labour goes into this type o f household The surmisal of rank and Surplus Value 9 production, it still remains a production of use values and not of commodities.Every time a soup is made or a button sewn on a garment, it constitutes production, but it is not production for the market. The appearance of commodity production and its subsequent fifty-fiftyisation and inductive reasoning establish radically transformed the way men labour and how they organise society. thE MArxIst thEory of AlIEnAtIon You postulate no doubt already heard about the Marxist theory of frenzy. The emergence, unceasingisation and generalisation of commodity production are directly related to the expanding character of this phenomenon of alienation.We cannot dwell on this scene of the point here but it is extremely important to call charge to it, since the history of trade covers far more than the capitalist era. It also includes venial commodity production, which we will contend later. There is also a postcapitalist society establish on commodities, a transitional society amid capitalism and socialism, such as present-day Soviet society, for the latter still rests in very grand footmark on the foundations of exchange value production.Once we have grasped received primordial characteristics of a society base on commodities, we can readily see wherefore it is impossible to surmount genuine phenomena of alienation in the transitional period amidst capitalism and socialism, as in Soviet society, for example. simply this phenomenon of alienation does not exist †at least in the resembling form †in a society where commodity production is unknown and where the life of the individual and his social activity are united in the most elementary way. Man whole kit and boodle, but in general not by himself; most often he is part of a collective group having a more or less organic structure.His labour is a direct transformation of material things. each(prenominal) of this mover that labour acti vity, the act of production, the act of consumption, and the relations amidst the individual and his society are ruled by a condition of sense of balance which has relative stability and permanence. We should not, of course, embellish the double of primitive society, which was military issue to pressures and diurnal catastrophes because of its extreme poverty. Its equilibrium was always endangered by scarcity, hunger, natural disasters, etc.But in the periods surrounded by catastrophes, especially after gardening had attained a certain item of development and when climatic conditions were favourable, this kind of society invest all human activities with a large degree of unity, harmony and stability. Such disastrous consequences of the division of labour as the elimination of all aesthetic activity, fastidious inspiration and creative activity from the act 10 An IntroductIon to MArxIst EconoMIc thEory of production and the substitution of purely mechanical and repetitive tasks were free in primitive society.On the contrary, most of the arts, music, sculpture, painting, the dance, were originally associate to production, to labour. The desire to give an attractive and appealing form to products which were to be used either by the individual, his family, or larger kinship groups, found a normal, on-key and organic expression within the framework of the day’s work. Labour was not looked upon as an liability imposed from without, first of all because it was far less intense, far less exhausting than downstairs capitalism today. It conformed more closely to the rhythms of the human organism as well as to the rhythms of nature.The number of working days per year rarely exceeded 150 to cc, whereas under capitalism the figure is dangerously close to 300 and some measure even greater. Furthermore, there was a unity betwixt the producer, his product and its consumption, since he generally produced for his own use or for those close to him, so tha t his work possess a directly functional aspect. Modern alienation originates basically in the cleavage between the producer and his product, end pointing both from the division of labour and commodity production.In other words, it is the consequence of working for the market, for unknown consumers, instead of for consumption by the producer himself. The other side of the picture is that a society which only produces use values, that is, goods which will be consumed directly by their producers, has always in the past been an impoverished society. Not only was it subject to the hazards of nature but it also had to set very narrow limits to man’s wants, since these had to conform simply to its degree of poverty and confine novelty of products.Not all human wants are innate to man. There is a constant interaction between production and wants, between the development of the productive forces and the rise of new wants. doly in a society where labour productivity will be dev eloped to its highest point, where an infinite variety of products will be forthcoming, will it be possible for man to experience a continuous magnification of his wants, a development of his own un restrict potential, an structured development of his humanity. thE lAw of VAluEOne of the consequences of the appearance and onward motionive generalisation of commodity production is that labour itself pay backs to take on regular and mensurable characteristics; in other words, it ceases to be an activity tied to the rhythms of nature and according with man’s own physiological rhythms. Up to the nineteenth century and possibly even into the 20th, the peasants in mingled regions of Western Europe did not work in a set way, that is to The Theory of Value and Surplus Value 11 say, they did not work with the corresponding intensity every month of the year.There were periods in the work year when they worked very hard and other periods, especially during the winter, when all a ctivity virtually came to a halt. It was in the most backward agricultural areas of most of the capitalist countries that capitalist society, in the course of its development, found a most attractive source of reserve man berth, for here was a labour force usable for quartette to six months a year at much lower yield, in view of the fact that a part of its subsistence was provided by its agricultural activity.When we look at the more highly developed and prosperous farms, those bordering the great cities, for example, and which are basically on the road to go industrialised, we see that work is much more regular and the count of expended labour much greater, being distributed in a regular way throughout the year, with gone seasons progressively eliminated. This holds true not only for our times but even as early as the Middle Ages, at least from the 12th century on.The closer we get to the cities, that is to say, to the mart, the more the peasant’s labour dos labour fo r the market, that is to say, commodity production, and the more regulated and more or less stable his labour conks, just as if he were working inwardly an industrial green light. evince another way, the more verbalize commodity production becomes, the greater the regulation of labour and the more society becomes organised on the butt of an method of business relationship brass founded on labour.When we examine the already fairly advanced division of labour within a commune at the beginning of commercial-gradeised and craft development in the Middle Ages, or the collectives in such civilisations as the Byzantine, Arab, Hindu, Chinese and Japanese, certain common factors emerge. We are struck by the fact that a very advanced integration of agriculture and various craft proficiencys exists and that regularity of labour is true for the countryside as well as the city, so that an write up placement in terms of labour, in labour-hours, has become the force governing all the activity and even the very structure of the collectives.In the chapter on the law of value in my Marxist Economic Theory, I give a self-colored series of examples of this accounting arranging in work-hours. There are Indian hamlets where a certain caste holds a monopoly of the blacksmith craft but continues to work the land at the said(prenominal) time in order to hightail it itself. The rule which has been complete is this: when a blacksmith is engaged to make a bill or weapon for a farm, the client supplies the barren materials and also works the blacksmith’s land during the whole period that the latter is engaged in do the implement.Here is a very transparent way of stating that exchange is governed by an comparability in work-hours. In the Japanese villages of the Middle Ages, an accounting system in work- 12 An IntroductIon to MArxIst EconoMIc thEory hours, in the literal sense of the term, existed inside the village community. The village accountant kept a kin d of great book in which he entered the number of hours of work done by villagers on each others’ fields, since agriculture was still mainly base on accommodating labour, with harvesting, farm construction and stock breeding being done in common.The number of work-hours furnished by the members of one household to the members of another was very cautiously tallied. At the end of the year, the exchanges had to balance, that is, the members of household B were inevitable to have wedded household A incisively the same number of work-hours which members of household A had given household B during the year. The Japanese even bang-up things to the point †intimately 1000 years past! where they took into account that children provided a smaller quantity of labour than adults, so that an hour of child labour was â€Å" worth” only a half-hour of adult labour. A whole system of accounting was set up along these lines. There is another example which gives us a direc t insight into this accounting system found on labour-time: the rebirth of feudal rent from one form to another. In feudal society, the agricultural surplus product could take three unlike forms: rent in the form of labour (the corvee), rent in kind, and money rent.When a change is made from the corvee to rent in kind, obviously a subprogram of conversion takes place. Instead of giving the lord three days of labour per week, the peasant now gives him a certain quantity of wheat, livestock, etc. , on a seasonal flat coat. A second conversion takes place in the changeover from rent in kind to money rent. These two conversions must be establish on a fairly rigorous accounting in work-hours if one of the two parties does not business organization to suffer a loss in the puzzle out.For example, if at the time the first conversion was effected, the peasant gave the lord a quantity of wheat which required only 75 workdays of labour, whereas previously he had given the lord 150 workda ys of labour in the same year, then this conversion of labour-rent into rent in kind would result in the sudden impoverishment of the lord and a rapid enrichment of the serfs. The landlords †you can depend on them! †were metric to see to it when the conversion was made that the incompatible forms of rent were closely equivalent. Of course the conversion could eventually turn out to be bad one for one of the participating classes, for example, against the landlords, if a sharp rise in agricultural footings occurred after rent was converted from rent in kind to money rent, but such a result would be historical in character and not directly attributable to the conversion per se. The origin of this economy based on an accounting in labour-time is also clear apparent in the division of labour within the village as it existed The Theory of Value and Surplus Value 13 between agriculture and the crafts. For a long time the division remained quite rudimentary.A section of the p easantry continued to produce part of its own clothing for a lengthy historical period, which in Western Europe elongated almost a thousand years; that is, from the beginning of the medieval cities right up to the 19th century. The technique of making clothing was certainly no arcanum to the cultivator of the soil. As soon as a regular system of exchange between the farmer and textile craftsman was established, standard equivalents were likewise established †for example, an ell of cloth [a measure varying from 27 to 48 inches] would be exchanged for 10 pounds of butter, not for 100 pounds.Obviously the peasants knew, on the basis of their own experience, the approximate labour-time inevitable to produce a given quantity of cloth. Had there not been a more or less exact equivalence between the time needed to produce the cloth and the time needed to produce the butter for which it was exchanged, there would have been an immediate convert in the division of labour.If cloth pro duction were more lucrative than butter production, the butter producers would switch to producing cloth. Since society here was only at the threshold of an extreme division of labour, that is to say, it was still at a point where the take a hoparies between different techniques were not clearly marked, the passing game from one economic activity to another was still possible, particularly when striking material gains were possible by doer of such a change.In the cities of the Middle Ages as well, a very skilfully calculated equilibrium existed between the various crafts and was written into the charters which specified almost to the minute the amount of labour-time prerequisite for the production of different conditions. It is inconceivable that under such conditions a cobbler or blacksmith cleverness get the same amount of money for a product which took half the labour-time which a weaver or other artisan might require in order to get the same amount of money for his produc ts.Here again we clearly see the mechanism of an accounting system in workhours, a society functioning on the basis of an economy of labour-time, which is generally characteristic of the whole phase which we call small-scale commodity production. This is the phase intervening between a purely natural economy, in which only use values are produced, and capitalist society, in which commodity production expands without limit. dEtErMInAtIon of thE ExchAngE VAluE of coMModItIEsOnce we have dictated that the production and exchange of commodities becomes regular and generalised in a society based on an economy of labourtime, on an accounting system in work-hours, we can readily understand why 14 An IntroductIon to MArxIst EconoMIc thEory the exchange of commodities, in its origins and inherent nature, rests on this complete basis of an accounting system in work-hours and consequently follows this general rule: the exchange value of a commodity is determined by the quantity of labour nec essary to produce it.The quantity of labour is measurable by the length of time it takes to produce the commodity. This general definition of the labour theory of value is the basis of both classical bourgeois political economy from the 17th century to the beginning of the 19th century, from William fiddling to Ricardo; and Marxist economic theory, which took over the theory of labour value and perfected it. However, the general definition must be qualified in several respects.In the first place, not all men are gift with the same capacity for work, with the same strength or the same degree of skill at their trade. If the exchange value of commodities depended only on the quantity of labour expended individually, that is, on the quantity of labour expended by each individual in the production of a commodity, we would engender at this absurdity: the lazier or more awkward the producer, and the larger the number of hours he would spend in making a pair of shoes, the greater would be the value of the shoes!This is obviously impossible since exchange value is not a moral quit for mere willingness to work but an objective connect set up between independent producers in order to equalise the various crafts in a society based both on a division of labour and an economy of labour-time. In such a society witless labour receives no compensation; on the contrary, it is automatically penalised. Whoever puts more time into producing a pair of shoes than the honest necessary hours †an number determined by the bonnie productivity of labour and recorded in the Guild Charters, for example! such a person has faineant human labour, worked to no avail for a certain number of hours. He will receive nothing in exchange for these wasted hours. Expressed another way, the exchange value of a commodity is not determined by the quantity of labour expended by each individual producer engaged in the production of this commodity but by the quantity of labour socially neces sary to produce it. The expression â€Å"socially necessary” tights: the quantity of labour necessary under the average conditions of labour productivity alive in a given country at a given time.The above qualification has very important applications when we examine the functioning of capitalist society more closely. Another clarifying statement must be added here. Just what do we mean by a â€Å"quantity of labour”? Workers differ in their qualifications. Is there complete e timberland between one person’s hour of work and everybody else’s, regardless of such deflexions in skills? Once again the question is not a moral one but has The Theory of Value and Surplus Value 15 o do with the internal logic of a society based on an e theatrical role between skills, an e pure tone in the marketplace, and where any(prenominal) disruption of this e whole step would immediately destroy the social equilibrium. What would happen, for example, if an hour’s work by an un adept labourer was worth as much as an hour’s work by a skilled craftsman, who had dog-tired four to six years as an train in acquiring his skill? Obviously, no one would want to become skilled. The hours of work spent in learning a craft would be wasted hours since the craftsman would not be compensated for them after becoming qualified.In an economy founded on an accounting system of work-hours, the young will desire to become skilled only if the time lost during their training period is subsequently paid for. Our definition of the exchange value of a commodity must hence be completed as follows: â€Å"An hour of labour by a skilled worker must be considered as complex labour, as multiform labour, as a multiple of an hour of unskilled labour; the coefficient of multiplication obviously cannot be an arbitrary one but must be based on the cost of acquiring a given skill. It should be pointed out, in passing, that there was always a certain fuzziness in the prevailing explanation of compound labour in the Soviet gist under Stalin which has persisted to this very day. It is claimed that compensation for work should be based on the quantity and feel of the work, but the conceit of quality is no longer understood in the Marxist sense of the term, that is to say, as a quality measurable quantitatively by way of life of a precise coefficient of multiplication. On the contrary, the idea of quality is used in the ourgeois ideological sense, according to which the quality of labour is supposed to be determined by its social usefulness, and this is used to justify the incomes of marshals, ballerinas and industrial managers, which are ten times higher than the incomes of unskilled labourers. Such a theory belongs in the domain of apologetics despite its general use to justify the enormous deviances in income which existed under Stalin and continue to exist in the Soviet Union today, although to a lesser extent.The exchange value of a comm odity, then, is determined by the quantity of labour socially necessary for its production, with skilled labour being taken as a multiple of simple labour and the coefficient of multiplication being a reasonably measurable quantity. This is the kernel of the Marxist theory of value and the basis for all Marxist economic theory in general.Similarly, the theory of social surplus product and surplus labour, which we discussed at the beginning of this work, constitutes the basis for all Marxist sociology and is the bridge connecting Marx’s sociological and historical analysis, his theory of classes and the development of society 16 An IntroductIon to MArxIst EconoMIc thEory generally, to Marxist economic theory, and more precisely, to the Marxist analysis of all commodity-producing societies of a precapitalist, capitalist and postcapitalist character. hAt Is socIAlly nEcEssAry lAbour? A short while back I stated that the particular definition of the quantity of socially necessar y labour for producing a commodity had a very special and extremely important application in the analysis of capitalist society. I think it will be more useful to deal with this point now although logically it might belong to a later section of this presentation. The getity of all commodities produced in a country at a given time has been produced to satisfy the wants of the sum total of the members of this society.Any article which did not satisfy somebody’s inescapably, which had no use value for anyone, would be a priori unsaleable, would have no exchange value, would not constitute a commodity but simply a product of caprice or the idle jest of some producer. From another angle, the sum total of acquire origin which exists in this given society at a given moment and which is not to be hoarded but spent in the market, must be used to buy the sum total of commodities produced, if there is to be economic equilibrium.This equilibrium therefore implies that the sum total o f social production, of the available productive forces in this society, of its available work-hours, has been distributed among the various sectors of labor in the same proportions as consumers distribute their buying power in satisfying their various wants. When the dispersal of productive forces no longer corresponds to this division in wants, the economic equilibrium is done for(p) and both overproduction and underproduction appear side by side.Let us give a rather unglamorous example: toward the end of the 19th and beginning of the 20th century, a city like Paris had a coach-building industry, which together with associated harness trades employed thousands or even tens of thousands of workers. In the same period the automobile industry was emerging and although still quite small it already numbered some scores of manufacturers employing several thousands of workers. Now what is the process taking place during this period? On the one hand, the number of go-carts begins to decline and on the other, the number of automobiles begins to increase.The production of carriages and carriage equipment therefore shows a trend toward transcendent social needs, as these are reflected in the modality in which the inhabitants of Paris are dividing their buying power; on the other side of the picture, the production of automobiles is infra social needs, for from the time the industry was launched until the advent The Theory of Value and Surplus Value 17 of agglomerate production, a climate of scarcity existed in this industry. The emerge of automobiles on the market was never equal to the demand. How do we express these phenomena in terms of the labour theory of value?We can say that in the carriage industry more labour is expended than is socially necessary, that a part of the labour expended by the sum total of companies in the carriage industry is socially wasted labour, which no longer finds an equivalent on the marketplace and is consequently producing u nsaleable goods. In capitalist society, when goods are unsaleable it convey that an investment of human labour has been made in a detail industrial grow which turns out to be socially surplus labour, that is to say, it is labour which finds no equivalent in buying power in the marketplace.Labour which is not socially necessary is wasted labour; it is labour which produces no value. We can see from this that the supposition of socially necessary labour embraces a whole series of phenomena. For the products of the carriage industry, picture exceeds demand, prices fall and goods remain unsaleable. The reverse is true in the automobile industry where demand exceeds supply, causing prices to rise and under-production to exist. To be satisfied with these commonplaces about supply and demand, however, way stopping at the psychological and individual aspects of the problem.On the other hand, if we probe into the deeper social and collective side of the problem, we begin to understand what lies on a lower floor the surface in a society organised on the basis of an economy of labour-time. The meaning of supply exceeding demand is that capitalist production, which is anarchistic, unplanned and unorganised, has anarchistically invested or expended more labour hours in an industrial branch than are socially necessary, so that a whole segment of labour-hours turns out to be pure loss, so much wasted human labour which remains unrequited by society.Conversely, an industrial sector where demand continues to be greater than supply can be considered as an underdeveloped sector in terms of social needs; it is therefore a sector expending fewer hours of labour than are socially necessary and it receives a bonus from society in order to stimulate an increase in production and achieve an equilibrium with social needs. This is one aspect of the problem of socially necessary labour in the capitalist system. The other aspect of the problem is more directly related to changes i n the productivity of labour.It is the same thing but makes an topedness of social needs, of the â€Å"use value” aspect of production. In capitalist society the productivity of labour is constantly changing. Generally speaking, there are always three types of endeavours (or industrial sectors): those which are technologically right at the social average; those which 18 An IntroductIon to MArxIst EconoMIc thEory are backward, obsolete, on the downgrade, below the social average; and those which are technologically advanced and above average in productivity.What do we mean when we say a sector or an go-ahead is technologically backward and has a productivity of labour which is below the average? Such a branch or enterprise is analogous to our previously mentioned lazy shoemaker, that is, it is one which takes five hours to produce a precise quantity of goods in a period when the average social productivity demands that it be done in three hours. The two extra hours of ex pended labour are a total loss, a waste of social labour.A portion of the total amount of labour available to society having thus been wasted by an enterprise, it will receive nothing from society to compensate it. concretely it means that the marketing prices in this industry or enterprise, which is operating below average productivity, burn up its production cost or even fall below them, that is to say, the enterprise is operating at a very low rate of net profit or even at a loss. On the other hand, an enterprise or industrial sector with an above average level of productivity (like the shoemaker who can produce two pairs of shoes n three hours when the social average is one pair per three hours) economises in its expenditure of social labour and therefore makes a surplus profit, that is to say, the difference between its costs and failing prices will be greater than the average profit. The stake of this surplus profit is, of course, the driving force back tooth the entire capitalist economy. Every capitalist enterprise is forced by competition to try to get greater profits, for this is the only way it can constantly improve its technology and labour productivity.Consequently all firms are forced to take this same direction, and this of course implies that what at one time was an aboveaverage productivity winds up as the new average productivity, whereupon the surplus profit disappears. All the strategy of capitalist industry stems from this desire on the part of every enterprise to achieve a rate of productivity superior to the national average and thereby make a surplus profit, and this in turn provokes a movement which causes the surplus profit to disappear, by virtue of the trend for the average rate of labour productivity to rise continuously.This is the mechanism in the tendency for profit rates to become equalised. thE air And nAturE of surplus VAluE And now, what is surplus value? When we consider it from the viewpoint of the Marxist theory o f value, the upshot is readily found. Surplus value is simply the monetary form of the social surplus product, that is to say, it is the monetary form of that part of the worker’s production which he surrenders to the possessor of the means of production without receiving anything in return. The Theory of Value and Surplus Value 19 How is this surrender accomplished in practice within capitalist society?It takes place through the process of exchange, like all important operating theaters in capitalist society, which are always relations of exchange. The capitalist buys the labour-power of the worker, and in exchange for this wage, he appropriates the entire production of that worker, all the newly produced value which has been incorporated into the value of this production. We can therefore say from here on that surplus value is the difference between the value produced by the worker and the value of his own labourpower. What is the value of labour-power?In capitalist soci ety, labour-power is a commodity, and like the value of any other commodity, its value is the quantity of labour socially necessary to produce and reproduce it, that is to say, the donjon costs of the worker in the wide meaning of the term. The concept of a minimum spirit wage or of an average wage is not a physiologically rigid one but incorporates wants which change with advances in the productivity of labour. These wants tend to increase parallel with the progress in technique and they are consequently not comparable with any degree of accuracy for different periods.The minimum living wage of 1830 cannot be compared quantitatively with that of 1960, as the theoreticians of the French Communist party have learned to their sorrow. There is no valid way of comparing the price of a motorcycle in 1960 with the price of a certain number of kilograms of meat in 1830 in order to come up with a conclusion that the first â€Å"is worth” less than the second. Having made this rese rvation, we can now repeat that the living cost of labour-power constitutes its value and that surplus value is the difference between this living cost and the value created by this labour-power.The value produced by labour-power can be careful in a simple way by the length of time it is used. If a worker works 10 hours, he produces a value of 10 hours of work. If the worker’s living costs, that is to say, the equivalent of his wage, is also 10 hours of work, then no surplus value would result. This is only a special case of the more general rule: when the sum total of labour product is equal to the product required to feed and maintain the producer, there is no social surplus product.But in the capitalist system, the degree of labour productivity is such that the living costs of the worker are always less than the quantity of newly created value. This means that a worker who labours for 10 hours does not need the equivalent of 10 hours of labour in order to support himself in accordance with the average needs of the times. His equivalent wage is always only a fraction of his day’s labour; everything beyond this fraction is surplus value, free labour supplied by the worker and appropriated by the capitalist without an equivalent offset.If this difference did not exist, of course, then no employer would hire 20 An IntroductIon to MArxIst EconoMIc thEory any worker, since such a purchase of labour-power would bring no profit to the buyer. thE VAlIdIty of thE lAbour thEory of VAluE To conclude, we present three traditional proofs of the labour theory of value. The first of these is the analytical proof, which proceeds by fault down the price of a commodity into its segment elements and demonstrating that if the process is extended far enough, only labour will be found.The price of every commodity can be bring down to a certain number of components: the amortisation of machinery and buildings, which we call the renewal of mend capital; the price of raw materials and accessory products; wages; and finally, everything which is surplus value, such as profit, rent, taxes, etc. So far as the last two components are concerned, wages and surplus value, it has already been shown that they are labour pure and simple. With regard to raw materials, most of their price is largely reducible to labour; for example, more than 60% of the mining cost of coal consists of wages.If we start by breaking down the average manufacturing cost of commodities into 40% for wages, 20% surplus value, 30% for raw materials and 10% in fixed capital; and if we assume that 60% of the cost of raw materials can be reduced to labour, then we already have 78% of the total cost reduced to labour. The rest of the cost of raw materials breaks down into the cost of other raw materials †reducible in turn to 60% labour †plus the cost of amortising machinery. The price of machinery consists to a large degree of labour (for example, 40%) and raw materials (f or example, 40% also).The share of labour in the average cost of all commodities thus passes successively to 83%, 87%, 89. 5%, etc. It is obvious that the further this breakdown is carried, the more the entire cost tends to be reduced to labour, and to labour alone. The second proof is the logical proof, and is the one presented in the beginning of Marx’s Capital. It has perplexed quite a few readers, for it is certainly not the simplest pedagogical approach to the question. Marx poses the question in the following way. The number of commodities is very great.They are interchangeable, which means that they must have a common quality, because everything which is interchangeable is comparable and everything which is comparable must have at least one quality in common. Things which have no quality in common are, by definition, not comparable with each other. Let us inspect each of these commodities. What qualities do they possess? The Theory of Value and Surplus Value 21 First o f all, they have an infinite set of natural qualities: metric weight unit, length, density, colour, size, molecular nature; in short, all their natural material, chemical and other qualities.Is there any one of the physical qualities which can be the basis for comparing them as commodities, for serving as the common measure of their exchange value? Could it be weight? Obviously not, since a pound of butter does not have the same value as a pound of gold. Is it volume or length? Examples will immediately show that it is none of these. In short, all those things which make up the natural quality of a commodity, everything which is a physical or chemical quality of this commodity, certainly determines its use value, its relative usefulness, but not its exchange value.Exchange value must consequently be abstracted from everything that consists of a natural physical quality in the commodity. A common quality must be found in all of these commodities which is not physical. Marx’s conclusion is that the only common quality in these commodities which is not physical is their quality of being the products of human labour, of abstract human labour. Human labour can be thought of in two different ways. It can be considered as specific concrete labour, such as the labour of the baker, butcher, shoemaker, weaver, blacksmith, etc.But so long as it is thought of as specific concrete work, it is being viewed in its aspect of labour which produces only use values. Under these conditions we are concerning ourselves only with the physical qualities of commodities and these are precisely the qualities which are not comparable. The only thing which commodities have in common from the viewpoint of exchanging them is that they are all produced by abstract human labour, that is to say, by producers who are related to each other on a basis of equivalence as a result of the fact that they are all producing goods for exchange.The common quality of commodities, consequently, res ides in the fact that they are the products of abstract human labour and it is this which supplies the measure of their exchange value, of their exchangeability. It is, consequently, the quality of socially necessary labour in the production of commodities which determines their exchange value. Let us immediately add that Marx’s reasoning here is both abstract and difficult and is at least subject to questioning, a point which many opponents of Marxism have seized upon and sought to use, without any marked success, however.Is the fact that all commodities are produced by abstract human labour really the only quality which they have in common, apart from their natural qualities? There are not a few writers who thought they had discovered others. In general, 22 An IntroductIon to MArxIst EconoMIc thEory however, these have always been reducible either to physical qualities or to the fact that they are products of abstract labour. A third and final proof of the correctness of th e labour theory of value is the proof by decrement to the absurd. It is, moreover, the most elegant and most â€Å" flairrn” of the proofs.Imagine for a moment a society in which living human labour has completely disappeared, that is to say, a society in which all production has been 100% automated. Of course, so long as we remain in the authentic intermediate stage, in which some labour is already completely automated, that is to say, a stage in which plants employing no workers exist alongside others in which human labour is still utilised, there is no special suppositional problem, since it is merely a question of the transfer of surplus value from one enterprise to another.It is an illustration of the law of equalisation of the profit rate, which will be explored later on. But let us imagine that this development has been pushed to its extreme and human labour has been completely eliminated from all forms of production and services. Can value continue to exist under t hese conditions? Can there be a society where nobody has an income but commodities continue to have a value and to be sold? Obviously such a situation would be absurd. A huge mass of products would be produced without this production creating any income, since no human being would be tortuous in this production.But someone would want to â€Å" consider” these products for which there were no longer any buyers! It is obvious that the distribution of products in such a society would no longer be effected in the form of a sale of commodities and as a issue of fact selling would become all the more absurd because of the abundance produced by general automation. Expressed another way, a society in which human labour would be totally eliminated from production, in the most general sense of the term, with services included, would be a society in which exchange value had also been eliminated.This proves the validity of the theory, for at the moment human labour disappears from produ ction, value, too, disappears with it. II. cApItAl And cApItAlIsM cApItAl In prEcApItAlIst family Between primitive society founded on a natural economy in which production is limited to use values destined for self-consumption by their producers, and capitalist society, there stretches a long period in human history, embracing essentially all human civilisations, which came to a halt before reaching the frontiers of capitalism.Marxism defines them as societies in which small-scale commodity production prevailed. A society of this kind is already familiar with the production of commodities, of goods designed for exchange on the market and not for direct consumption by the producers, but such commodity production has not yet become generalised, as is the case in capitalist society. In a society founded on small-scale commodity production, two kinds of economic operations are carried out.The peasants and artisans who bring their products to market wish to sell goods whose use value t hey themselves cannot use in order to obtain money, means of exchange, for the acquisition of other goods, whose use value is either necessary to them or deemed more important than the use value of the goods they own. The peasant brings wheat to the marketplace which he sells for money; with this money he buys, let us say, cloth. The artisan brings his cloth to the market, which he sells for money; with this money he buys, let us say, wheat.What we have here, then, is the operation: selling in order to buy . C ommodityâ€Moneyâ€Commodity, C â€Mâ€C w hich has this essential character: the value of the two extremes in this formula is, by definition, exactly the same. But within small-scale commodity production there appears, alongside the artisan and small peasant, another personage, who executes a different kind of economic operation. Instead of selling in order to buy, he buys in order to sell. This type of person goes to market without any commodities; he is an owner of money.Money cannot be sold; but it can be used to buy, and that is what he does: buys in order to sell, in order to resell: Mâ€Câ€M’. There is a fundamental difference between the two types of operation. The 24 An IntroductIon to MArxIst EconoMIc thEory second operation makes no sense if upon its completion we are confronted by exactly the same value as we had at the beginning. No one buys a commodity in order to sell it for exactly the same price he paid for it. The operation â€Å"buy in order to sell” makes sense only if the sale brings a supplemental value, a surplus value.That is why we state here, by way of definition. M’ is greater than M and is made up of M+m; m being the surplus value, the amount of increase in the value of M. We now define capital as a value which is increased by a surplus value, whether this occurs in the course of commodity circulation, as in the example just given, or in production, as is the case in the capitalist system. Ca pital, therefore, is every value which is augmented by a surplus value; it therefore exists not only in capitalist society but in any society founded on small-scale commodity production as well.For this reason it is necessary to distinguish very clearly between the life of capital and that of the capitalist modal value of production, of capitalist society. Capital is far older than the capitalist style of production. The former probably goes back some 3000 years, whereas the latter is barely 200 years old. What form does capital take in precapitalist society? It is basically usury capital and merchant or commercial capital. The passage from precapitalist society into capitalist society is characterised by the penetration of capital into the sphere of production.The capitalist mode of production is the first mode of production, the first form of social organisation, in which capital is not limited to the sole role of an intermediary and exploiter of non-capitalist forms of productio n, of small-scale commodity production. In the capitalist mode of production, capital takes over the means of production and penetrates directly into production itself. orIgIns of thE cApItAlIst ModE of productIon What are the origins of the capitalist mode of production?What are the origins of capitalist society as it has developed over the past 200 years? They lie first of all in the separation of the producers from their means of production. Subsequently, it is the establishment of these means of production as a monopoly in the hands of a single social class, the bourgeoisie. And finally, it is the appearance of another social class which has been separated from its means of production and therefore has no other resources for its subsistence than the sale of its labour-power to the class which has monopolised the means of production.Let us consider each of these origins of the capitalist mode of production, which are at the same time the fundamental characteristics of the capital ist Capital and Capitalism 25 system as well. First characteristic: separation of the producer from his means of production. This is the fundamental condition for existence of the capitalist system but it is also the one which is generally the most poorly understood. Let us use an example which may seem paradoxical since it is taken from the early Middle Ages, which was characterised by serfdom.We know that the mass of peasant-producers were serfs bound to the soil. But when we say that the serf was bound to the soil, we imply that the soil was also â€Å"bound” to the serf, that is, he belonged to a social class which always had a base for supplying its needs, enough land to work so that the individual serf could meet the needs of a household even though he worked with the most primitive implements. We are not think people condemned to death by starvation if they do not sell their labour-power.In such a society, there is no economic compulsion to hire out one’s arms, to sell one’s labour-power to a capitalist. We can express this another way by stating that the capitalist system cannot develop in a society of this kind. This general truth also has a modern application in the way colonialists introduced capitalism into the African countries during the 19th and early 20th centuries. Let us look at the livin\r\n'