Q&A (4)

What’s in a Price

In the Capitalist mode of production, the creation and distribution of commodities and goods take form in the shape of prices. The rise and decline in prices can be attributed to many varying factors. Production of a single commodity does not occur within a vacuum, rather many different aspects and circumstances go into the production of a product that is out of the hands of the workers that produce them.

Let’s,for example, use the automobile as an illustration of this. An automobile takes its final form as a finished product in the shape of a price, let's say $40 000. If you break apart the process by which the production of an automobile occurs you find that hundreds of different forms of labour were involved in its final form. A car is composed of thousands of different mechanical parts, the majority of which are produced in different factories by different workers. We can deduce even further that the production of a single mechanical part in the car has many different aspects of labour involved with its production. The worker who labours down the mine producing ore is as much involved in the process of automobile production as the worker that assembles the finishing pieces of a single car. The same can be said for the truck driver who transports the raw material from the mine to the processing plant to be further refined into industrial grade steel. Even more so we can lump into this process the farmer, who by their production of food allows individual workers in this chain the sustenance required to be a productive producer.

We can see then, that the $40 000 dollar price tag is not some arbitrary number created out of thin air by money-crazed capitalists. The final price is the amalgamation of all other forms of labour value that goes into the production of a single product for sale on the market.

Neither are the wages that we receive just an arbitrary number created by our employers. A wage takes its form in the shape of a sale and purchase. The sale is brought forth by the worker, who confronts the market with his only true possession, that of his mind and muscle. The purchase occurs on the side of the owner who buys from the worker his time and labour. Wages are calculated by the cost of the goods and services a worker needs to consume in order to continue being a productive worker, this being the necessary things a human needs in order to live and support a family. Simply put, the price of labour is what constitutes a wage. The labour a worker expends during production adds value to the thing the worker is producing. It is this factor that creates what is called ‘surplus-value’ i.e. profit. It can then be considered that the worker, throughout one portion of the day works to produce the equivalent value of their wage, and in another portion of the day works to create profit for the capitalist. The wage a worker receives must always be less than the value of what they produce, otherwise, there is no profit to be made, and production will cease. Profit is merely the value created by the worker above and beyond the cost of the wage; it can be considered that profit is the equivalent of unpaid labour.

Consider this next time you are in your workplace, for most of your working day, you are essentially working for free.

J. HODGINS, SPC