Capitalism's Economic Law

Under slave society the source of profit was easy to see: the slaves worked while the slave owners led a life of luxury on the products of their toil. Under feudalism the source of profit was also easily seen. The serf worked for so many days on his own land and for so many days on the land of the landlord. Under capitalism the source of profit is hidden by the wage workers receive. It appears that the workers receive the full return on their day’s labour. The complicated nature of modern capitalist society clouds the issue. The capitalist class and its hired lackeys spread erroneous ideas as to the source of profit.

One illusion spread by them is that money itself the source of profit. This reflects itself in the expression, “money makes money”. This is not strictly true. If we, for example, were to heap a pile of sovereigns and silver in a room, it would remain the same amount for hundreds of years. Another more popular and more insidious idea spread by the boss is that machines are the source of profit. If, again, we were to put machines and a large quantity of raw material into a factory, it would not make a profit if it remained there until doomsday.

The real source of capitalist profits lies in the unpaid labour time of the workers — that portion of the working day over and above tie time it takes the worker to produce value equal to the value of the necessities of life. The worker under capitalism has only one thing to sell in order to live: his or her labour power, or ability to work. Unlike the tradesman or artisan of feudal society, (such as the boot-maker, weaver, etc) the worker of capitalism has no tools, nor could he compete with capitalism. So he is reduced to selling the one commodity he has: his labour power.

Labour power, like all other commodities, has a certain price. But price is only a monetary expression of value. It may go up or down a bit, depending on supply and demand. The one thing common to all commodities is that they are the product of human labour. The necessities of life, the food we eat, the clothes we wear, the trains in which we travel, the house in which we live, even money itself, are the products of human labour. As human labour is the one thing common to all commodities, it is this and only this that can serve as a measure of value. So we can say that full value of a commodity is determined by the amount of socially necessary labour spent in its production.

The capitalist buys the machines and raw material necessary to start production. Then he buys the commodity labour power and puts it to work. While this labour power is being used it creates a value greater than its own, greater than the value of food, clothing and shelter necessary to reproduce itself.

It could be that in about the first four hours of work the worker earns the necessities of life; that is, he produces value equals to these things. But he does not stop working. If he did, the boss would not make a profit. The worker must keep working right up to tile knock-off bell. It is this additional time of labour, this section of the working day for which the worker receives no remittance, that supplies the capitalist with his profit. Division of the working day — surplus value Therefore, in a working day of eight hours, the worker labours, say, for four hours to supply himself with the necessities of life and for the remaining four hours he labours for the enrichment of the boss.

This is the source of capitalist profit. It is this fact of the unpaid section of the working day that the boss hides from the working people by all the devious means at his disposal. He denies it when it suits him to and when he can no longer deny it he distorts it. He hires his intellectual stooges from academia for the purpose of refuting these facts and covering up his profits.

Lengthening of the working day is an obvious way the capitalist sees to increase his surplus is to lengthen the working day. Supposing the working day was increased to 10 hours, it would still take, say, four hours to produce the necessities of life, but instead the boss receiving four hours surplus labour (as at present) he would receive six hours. This is why the shipping companies and their spokesmen are such good advocates of the 44-hour week. They would revert to an even longer working week if the organised strength of trade unions did not stand in their way.

Reducing necessary labour time Another way they can increase their profits is by reducing the necessary labour time (that section of the working day in which the worker produces the necessities of life). Supposing they reduced the necessary time from four hours to two hours, that would give them six hours surplus labour time of value without increasing the length of the working day. They can achieve this reduction by the introduction of techniques, machines, etc, that speed up the process of work — by automation.

The favourite method of reducing the necessary labour time is that of speed-up. This drastically reduces the necessary part of the working day, as it does not take the workers as long to produce goods to the value of the necessities of life and again increases the surplus value for the boss.

Throughout the 19th century there raged what Marx called “a protracted civil war” — the hours struggle between labour and capital. It still exists today. The capitalist buys the labour power of the workers at as low a price (wages) as he can. He reasons that by working his employees for as many hours as are physically possible, he will make the most profitable use of this labour power. On the other hand, the worker who has sold his labour power is interested in short hours. The drive for maximum profits completely obsesses the employing class. They cannot under any circumstances be content with a good profit, nor a high profit nor a record profit.

It must be the maximum profit. This is the fundamental law that governs all their behaviour. Driven on blindly by that dynamic law, they are prepared to deal ruthlessly with anything or anybody standing in the way of their maximum profits.