Explaining Surplus Value and Exploitation

Socialism is a society in which all the members of the community collectively and democratically determine their way of living. In order to do so, they must control the use to which technology and resources  – the means of production – are put. 

Every capitalist competes with every other one for a market. When they sell similar goods, their competition is obvious. Even when they sell altogether different goods, like TV sets and houses, they still compete for the limited wage-packet of the worker. If one capitalist does not compete, he is lost. Others will acquire his buyers.

Competition means under-selling and price-cutting on the one hand, and on the others, advertising wars  Whoever can undersell or spend more money on advertising is sure to win and knock the others out of the running. In other words, the bigger the amount of capital under your control, the bigger it is going to become. Only the very big capitalists can afford the techniques of mass production. Only the big ones can buy raw materials in bulk.

To become big the capitalist must first squeeze out his weaker competitors and add their capital to his – centralization of capital – or make as much profit as possible from his current sales and reinvest it – accumulation of capital. The first method is of no direct interest to the worker as it matters very little who the boss is. If the capitalists want to fight things out amongst themselves, it is their business. It is of little interest for another reason: it adds nothing to the productive powers of society; the national wealth does not grow as a result of it. In fact all it leads to is the concentration of the same amount of wealth in fewer and fewer hands.

We are interested mainly in the second form of capitalist growth: the accumulation of capital. It is accumulation which has made capitalist society the dominant form of society in the world. This is what affects the worker most directly. How do capitalist firms accumulate? Where does the money which they reinvest come from?

The source of accumulation – surplus value

In order to produce commodities for the market, every capitalist must buy other commodities which he uses in production. The things he buys are mainly: machines, raw materials or semi-finished goods, and labour-power. Machines, raw materials or semi-finished goods, although an item of expenditure on the part of one capitalist, are commodities sold by other capitalists and appear as part of their incomes. Those capitalists also spend money on machines, raw materials or semi-finished goods and labour-power, the money spent on machines, raw materials and semi-finished goods being the income of yet another group of capitalists who spend money on... and so on indefinitely. Whenever one capitalist spends money on machines, etc., that money is part of the income of other capitalists who then hand it over to yet other capitalists for machines, etc. If all the capitalists belonged to one great trust these transactions would not take place and the only buying and selling that there would be is the buying of labour-power by the capitalists and the selling of it by the workers and technicians in exchange for wages and salaries. Taken all in all, the capitalist class (not the individual capitalist) has only one expense – buying labour-power. Whatever remains to that class after its purchase of labour-power is profit (surplus value).

That part of the capitalist’s expenditure which is spent on machines, raw materials and unfinished goods goes the rounds from one capitalist to another in a perpetual circle – this is the social wealth that has already been created. If the productive forces of capitalism were to remain static and not increase, this expenditure would appear like a constant, fixed fund thrown from hand to hand in an endless relay race of production, each capitalist handing on to the next the exact amount required to renew his stock of machines and raw materials. No profit would be made on such sales as each capitalist would swap exactly that amount of machines, etc., for an equivalent amount, and, when all the exchanges were done with, everyone would be where he started.

There is, however, one item of expenditure which makes all the difference, namely, wages and salaries – the expenditure on labour-power. This expenditure is the only one which is not a transfer of goods already produced from one capitalist to another. It is the only item of expenditure which is productive in the dual sense of producing the wealth of society and in the sense of producing profits for the capitalist. Labour alone produces wealth.

The capitalist controls the physical means of production; the workers control nothing but themselves, the capacity to work. They are driven to work, to sell their labour–power to the capitalist, in order to keep themselves and their families. When they sell, they demand a ‘living wage’ for their labour-power, and, if unions are strong and there is not much unemployment, they usually get it. Of course there are exceptions, but by and large, for the working class as whole, this is true.

If the worker produced exactly that amount of products which he could buy for his or her weekly wage plus what would replace the raw materials and machinery used up in its production, the capitalist would clearly not make a profit. Profit can only be made when the workers produce more than their wage bill and the depreciation of machinery and the depletion of stocks of raw materials put together, i.e. when they produce surplus value, value over and above the wages necessary to maintain themselves and their families.

Adapted from here

https://www.marxists.org/archive/kidron/works/1958/socialism/5712-socialism.html

The need for revolution

The world about us is falling to pieces. 

The younger generation understand that the environment is collapsing, but they do not know what to do about it.
 
Marx and Engels defined socialism as the rule of working people. They will decide how socialism is to work. To use the word “socialism” for anything but working people’s power is to misuse the term. Nationalisation is not socialism but state capitalism, with no relation to socialism. Nor is the “Welfare State” socialist but another form of state capitalism. For sure, an improvement on capitalism with no welfare, just as a 40-hour week is an improvement on a 60-hour week. But it is still not socialism. If we want a class-free society, we have to create a new model of economics.

The greatest problem awaiting solution in the world to-day is the existence of extreme poverty side by side with extreme wealth. The greater the grip capitalism has, the more intense is the poverty of the many and the more marked are the riches of the few. How comes it that the men and women who till the soil, who dig the mine, who runs the machines, who build the factories and the houses, who create the whole of the wealth, receive barely sufficient to maintain themselves and their families yet those who do not get involved in production – the employing class – obtain more than is enough to satisfy their every comfort, and luxury? To every observer it is obvious that the life of the workers is one of penury and of misery. 

The only saleable commodity they possess  – their power of working – they are compelled to take to the labour market and sell for a subsistence wage. In return for this wage, they create value far in excess of the value paid them as wages. The difference between these two values is taken by the employing class, and constitutes the source of profit, interest, and rent. These three forms of exploitation are the result of the unpaid labour of the working-class. So long as the capitalist system of society it will not be possible for the workers to do little more than slightly modify their condition, and their power in this direction is becoming more and more limited by employers intent to defeat the working class. 

The Socialist Party is convinced that by laying down a clearly defined body of principles in accord with essential economic truths, and by consistently advocating them, swerving neither to the right nor to the left, but marching uncompromisingly on toward their goal, they will ultimately gain the confidence and the support of the working-class. Men and women of the working-class, it is to you we appeal. To-day we are a small party, strong only in the truth of our principles, the sincerity of our motives, and the determination and enthusiasm of our members.

Socialist internationalism arises from the practical experience of the workers who felt that they had to cooperate with each other across frontiers and boundaries in order to defend their interests, their wages and their working conditions. The day-to-day experience of someone standing at the factory bench next to a foreigner who, often through necessity, undersold his or her labour, brought an understanding of common interests, an instinctive kind of internationalism. Socialist internationalism is solidarity that transcends borders. Socialist internationalism is anti-patriotism and of anti-nationalism. The whole wide world is our fatherland, our motherland, our homeland. We shall neither keep ancient nationalities nor constitute new ones. For sure, workers of a particular nation in order to throw off the yoke of the ruling class must be organised nationally yet it will be unable to attain its full emancipation until there has been effected a global uprising of the workers of all lands. Any social revolution must necessarily be worldwide. 

Fellow-workers must not think so much of their country as of their solidarity with the workers of all countries. Socialism is concerned about the transformation of nation-states to a universal commonwealth.

Freedom will not be given to us.

Everywhere people are now waking up to the oppression and exploitation which is a daily fact of their lives. The lies of the ruling class about “prosperity” are being further exposed more and more everyday. There is prosperity – but it is for a handful of rich capitalists – the conditions of the working people are getting worse and worse. Austerity casts all the burden on the workers – wages stay the same, but profits continue to rise. The source of all these conditions and injustices is capitalism. 

This system of capitalism is set up with one thing in mind – to make the most profits possible for the handful of people who own the big banks and corporations. It is the system under which we, and our parents and grandparents before us, have done all the work. We mine the mines, build the buildings, manufacture all the products: and then get just enough to live on – if we fight hard enough for it! On the other hand the small capitalist class builds up huge fortunes off of our labour and do no work themselves, except running all around the world spending the money that we made for them. The Socialist Party stands for the complete overthrow of the capitalist system. 

Rising out of conditions that have long become unsupportable and the oppressive conditions under which the vast majority of wage workers must live is forcing the members of that class to seek a solution. It is said that our ideas are impractical, from the standpoint of old institutions, interests and their beneficiaries, that is true. There can be no common interests between those who own the tools, the machines, factories, mines, mills and land, with the workers who do all of the producing. One class does all the work, produces all, suffers all the hardships necessary to accomplish the task. The other class owns, but does not know, nor cares to know, how to produce wealth. One class works long hours under conditions generally and necessarily established by and suitable to the masters of industry, receives low wages, so that there may be high dividends and profits for the masters. For it must be borne in mind longer hours mean greater wealth produced, low wages mean greater profits for the capitalists. Shorter hours mean less production by each worker or group of workers, therefore the expense to the masters is greater to produce a certain amount of wealth. High wages, shorter hours, better shop conditions that will protect life and limb are objected to by the capitalist for a thousand and one “reasons,” but really because it all means greater cost—thus less dividends. Who can be so foolish as to talk of peace between these two classes?

The Socialist party is the only party which honestly represents the working class. The Socialist Party being the political expression of the rising working class stands for the absolute overthrow of the existing capitalist system and for the reorganisation of society into an industrial and social democracy. We are not asking you to give your votes to ourselves but only that you its policies, and satisfy yourselves as to what its principles are, what it stands for, and what it expects to accomplish. This will mean an end to the private ownership of the means of life; it will mean an end to wage slavery; it will mean an end to the army of the unemployed and it will mean an end to poverty. It will mean the beginning of a new era and the dawn of happier days. It will mean that this earth is for those who inhabit it and wealth for those who produce it. It will mean society organized upon a co-operative basis, collectively owning the sources of wealth and the means of production, and producing wealth to satisfy human wants and not to gorge a privileged few. The Socialist Party, the first and only international party is the party of the dispossessed and the impoverished. It is the party of emancipation. It stands for a world-wide democracy, for the freedom of every man, woman and child, and for all mankind.

 The Socialist Party is the only party which stands unequivocally for the working class on the political field. Its object is to overthrow the capitalist system of private ownership, abolish wage slavery and achieve the freedom of the whole working class and, in fact, of all humanity.

Low-quality jobs

Analysis by The Health Foundation found that 36 per cent of employees in Scotland - the equivalent of 830,000 workers - were engaged in jobs with perceived negative aspects such as low levels of autonomy, well-being, and security - as well as low pay.

The think-tank said such jobs were more likely to cause stress and other factors linked to poor health.

Trade unions and labour force experts have warned that increasing numbers of workers are relying upon precarious roles, with few of the benefits offered to those in permanent staff positions.

https://www.scotsman.com/lifestyle/more-than-a-third-of-scots-working-in-low-quality-jobs-1-5085801

Free Stuff

In Scotland there is free prescriptions for medicines,  we have nation-wide free travel on the buses for the over-60s. The Scottish Parliament has now passed legislation that makes  tampons and sanitary pads freely available at designated public places such as community centres, youth clubs and pharmacies.

Why do we stop there? Why not extend free access to all necessary goods and services?

The problem of production — of how to produce enough for everybody — has been solved. Mankind’s long battle to conquer scarcity has been won. Potential abundance is a reality. The task is to make abundance itself a reality.

A society of abundance is not an extension of today’s throwaway consumerism, with its enormous waste of resources. It does not mean people will acquire more and more useless and wasteful gadgets. It simply means that people’s material needs, both as individuals and as a community, will be fully satisfied in a rational way.

Contrary to what is popularly believed people are not inherently greedy; human needs are not limitless. From a material point of view, human beings need a certain amount and variety of food, clothing and shelter; what this is in individual cases can soon be discovered by the individual himself — and would be if there were free access to consumer goods and services. 

But, it may be objected, with free access wouldn’t people take more than they needed? But why should they if they can be certain (as they would, be given the productive power of modern industry and the common ownership of the means of production) that there would always be enough to go round? When all consumer goods and services are freely available people could be expected to take only as much food, clothing etc. as they felt they needed. To take any more would be abnormal and pointless.

Reforms cannot fix capitalism

Reform means a change from within. Reform skims the surface, and limits itself to external tinkering. Socialism is not a reform, it is a revolution. The Socialist Party is not reformers; we are revolutionists when the instruments of production shall be owned no longer by the minority, but shall be restored as  common wealth. No longer shall people be in poverty nor classes, class distinctions and class rule shall, as they necessarily must, have vanished. By revolutionary socialism we do not mean an appeal to arms. We mean by revolutionary socialism the capture of the political power by the working class as opposed to the capitalist class. This is the essence of revolutionary socialism. Whoever holds this position is a socialist. On the other hand, those who thinks we are to get socialism through any of the old political parties, that person is not a socialist at all.

Our system of production is in the nature of an orchestra. No one man, no one town, no one state, can be said any longer to be independent of the other, every individual therein, is dependent and interdependent upon all the others. The nature of the machinery of production; the subdivision of labour, which aids cooperation and which cooperation fosters, and which is necessary to the production that civilisation requires, compel a harmonious working together of all departments of labour, and thence compel the establishment of a central directing authority, of an orchestral director, so to speak, of the orchestra of the cooperative commonwealth. Today, production is left to anarchy, and only tyranny is organised.

Many organisations and movements have clamoured for the allegiance of the workers during the twentieth century, all claiming some panacea, some new project which would, at long last, make capitalism palatable. The Socialist Party’s aim is for a practical — and ecologically viable — alternative to the market and the state, a new way of living in which we can all give according to our abilities, and take according to our needs. The means to achieve this must be in harmony with the end itself: democratic, peaceful and without leaders trying to run society on our behalf. Not many have heard of us; fewer will know what we stand for.

The fact is present-day society cannot be run in the interest of the great majority. It does not matter what government we choose, they must dance to the tune of capitalism. The problems they grapple with are self-evidently endemic to the system itself. 

Present-day society is massively wasteful and inherently destructive — not just of our environment and resources but of our hopes and aspirations. It is time to organise for a real alternative. Socialism is about improving all aspects of human life. The task of the Socialist Party today is to make more socialists, by reasoned argument and democratic persuasion.

The desire for socialism as a just social system runs deep among workers. The Socialist Party teach that the wage workers and their employers have nothing whatever in common and that there is no community of interest between them. A state of class war is the natural relation between the wage earners and the employers and workers would never be satisfied with the wages they get, but should strike at all opportune times in order to secure whatever wages he can extract from his employer. “Right” and “wrong” are meaningless terms in the wage earner’s war for higher wages. This class war is unremitting and bitter, to be regarded only as a temporary expedient until workers shall eventually, by revolution take over all wealth assumed. The goal of socialism is freedom from hunger and poverty, freedom from war, from meaningless toil, from exploitation, from racial and sexual oppression, freedom to live without the state – these are the real freedom we strive for.

We are opponents of the state. The state is a weapon of class war. The state by its very nature is an instrument of domination and oppression – a means by which one section of the population forcibly holds down another. States cannot be other than institutions of violence. This applies to the so-called workers’ state just as it does to the capitalist state. The capitalist state is an instrument for maintaining the exploitation of the many by the few. The workers’ state similarly is an instrument of the majority for suppressing the minority of exploiters. In the socialist society of the future the state will wither away and marking the disappearance of class society.