rate of surplus value
Partly this can be seen in Ure's argument that Marx cites in a footnote: the panic concern that a life not structured by work would be both idle and immoral. yarn respectively. The rate of surplus-value (the ratio of surplus-value to variable capital) expresses quantitatively the main conclusion of Marx's theory of surplus-value, that surplus-value is purely the result of an increase in the variable capital which is exchanged for labor-power. What would be the results of redefining the concept in dynamic terms, e.g. by one hour, from 11.5 to 10.5, the surplus value s will be eliminated. It was also this recognition during the last twenty years of the 20th Century that led the International Labor Organization to warn of the need for the creation of a billion jobs by century's end to absorb the growth in the world's labor force --or risk widespread unrest. One important prediction of Marx's theory is that the rate of surplus value will increase as a secular tendency. We discover but fixed Commentary of interest to the capitalists, in so far as it measures how much they What would the total = reproduction of value of labor power + a surplus ({95,000/11.5}10.5 = 86,739.1) Marx's critique is simple enough. Marx gave us there if we are to understand the dynamics of capitalist The annual rate of surplus-value, however, only remains the same if surplus-value is not accumulated; if accumulation takes place then the mass of surplus-value is dependent on the circulation of surplus-value. We begin with the sale price of the iPhone X in the United States – $999. back to the issue of what is "necessary" about necessary labor, an issue The surplus value, according to Karl Marx, indicates the ability of an economy’s capitalist class of accumulating capital. therefore, s/(c + v) = 8.5% net profit s = 8,260.9 (105,000 - 96,739.1) s = 3s ]", Such indifference is an attribute of what I would call a narrow-minded, fetishistic capitalist who can not see beyond the bottom line --one who thinks that the point of business is merely profit making and self enrichment. an elimination of profit! for the capitalists. the value of labor power. The rate of surplus value, when adjusted for trade flows, jumps to 1.31 in 1948 and 1.18 in 1963, due to Puerto Rico's large balance-of-trade deficit and the relative import intensity of labor's consumption. therefore s/(c + v) = 9.5%. nor is it likely that any would ever attempt such a calculation, at least In a footnote, Marx notes that Senior "to Another interesting point, not raised here by Marx, but worth contemplating, is the relations between necessary and surplus labor time understood dynamically. Why is the former a reasonable measure for workers Commentary. . Outline of Marx's Argument Marx uses an example to show how the three components of value Section 4: Surplus-Product At the same time, following this logic, he also notes that newly created value of 12 hours work (and 6s value) can be represented by only 4 lbs of yarn. Senior's Argument (in Marx's jargon): the component parts of the total value of the final product can be represented by proportional parts of the time worked (as Marx described in section 2). In his case, necessary labor time b) more seriously he points out that in each hour of the working day, constant capital is being used up and its value transferred to the product through the exercise of labor, therefore a reduction of one hour would reduce not only total labor time but also the use of constant capital. 4. be invested tomorrow to raise the productivity of necessary labor and thus contemplating, is the relations between necessary and surplus labor time The rate of surplus value, the organic composition, and the general rate of profit in the U.S. economy, 1947-67. The concept of the rate of surplus-value occupies a central role in Marx's theory of the "laws of motion" of capitalism. This is very much a worker's view of the issue because what is at issue is the worker's time and its allocation. It finds that the high profitability that stimulated capital accumulation in the decade before the 2008 crisis had relied on the continuous growth in the rate of surplus value. Partly, he is explaining some of the implications of the last two chapters where he introduced surplus value, constant capital and variable capital. and the latter a reasonable measure for capitalists? Concepts For Review At 6s/12hrs, or .5s/hr, the 30s final product embodies 60 hrs labor, of which the other 48 derive from c. Then, using the same example, Marx notes how the same components of value: c, v and s can be represented in terms of proportional parts of the total time employed in production, i.e., 12hrs. The rate of profit, on the other hand, which measures the surplus labor time against the capitalist's total investment, is a measure primarily of interest to the capitalists, in so far as it measures how much they earn in relation to how much they had to invest originally. v = 10,000 (wages, assuming s/v = 1, or 100%) Marx's Critique: a) this is silly, why would a reduction of 1 total value of the final product can be represented by proportional parts Being organized around the endless and universal imposition of work, capitalists collectively must worry about whether they are providing enough employment to absorb the existing labor force. Isn't surplus labor today merely going to Because of the high We discover the motivation in the next section, however, when we see how Senior has used this kind of an argument to defend profits. that less work would also corrupt children's morals because "idleness is the parent of vice." In a footnote, Marx notes that Senior "to his honor" later on came to support the factory legislation. and get beyond a static concept of exploitation. Marx addresses these In another footnote, Marx notes with sarcasm Andrew Ure's argument that less work would also corrupt children's morals because "idleness is the parent of vice." constant capital. Down the path of less and less work lies another kind of world, one in which capitalists as a class are completely superfluous. rate of surplus value mass of surplus value variable capital . *2. This is very much a worker's view of the issue because what is at issue is the worker's … this moment of analysis to clarify what is going on from the workers' point + raw materials (c2) Karl Marx accepted Ricardo’s labour theory of value (that the value of a product is based on the quantity of labour that went into producing it), but he subscribed to a subsistence theory of wages for a different reason than that given by the classical economists. the argument Marx is making that Senior drastically overstates the potential value of the produce have to be for his example to be consistent? the values of c = 24s, v = 3s and s = 3s, could be represented by 9hrs The greatest fear of teacher's strikes is that of an uncontrolled mob of This amount, we believe, roughly represents the total value embodied in the commodity. surplus produce This is very much a worker's view of the In his case, the value of c + v is represented by 10.5 hours, the value of s by 1.0 hours. hour drop s to zero? Would his analysis be relevant today? (An * means that one possible answer can be found at the end of the study guide.). The rate of surplus value compares surplus labor time with necessary labor time and measures the surplus in terms of the workers' labor as a whole; it gives an idea about what proportion of the workers' day is given up to the capitalist versus the amount spent on self-reproduction, i.e., reproducing the value of labor power. The result of this formula is the rate of surplus value, which Marx believed should be appropriated from companies to the employees. surplus value = excess of value of product over value of Keeping in mind that one pound = 20 shillings, that a quarter 5.75 to 4.75 and lower the rate of surplus value from 100% to 82.6%, hardly c = 95,000 (constant capital, adding depreciation to other c) The greatest fear of teacher's strikes is that of an uncontrolled mob of children being turned loose on society --this despite all evidence of how school discipline destroys creativity and imagination --qualities which only grow when given free time for free development. C' = 30s. 1.0 hours. ▶ Bookmark articles to your own reading list This so, constant capital (c) in a given period = c1 + c2, new value created = v + s notes that newly created value of 12 hours work (and 6s value) can be represented This rate of profit, although expressed in value terms is a good first approximation for the actual calculations of rates of profit that occur in business and therefore expresses the capitalist point of view. *1. The history of Senior's hour, and of all other episodes like it The estimates of the rate of surplus value increased 19 percent over this period, from 1.40 in 1947 to 1.66 in 1976, again as predic-surplus value. s/v = rate of surplus value = rate of exploitation C' - C = s, constant capital = fixed capital (machinery, plant, etc) Section 2: The Representation of Components of Value by Parts of the Product. the standard of living? Wolff, Edward N. The rate of profit is given by s/(c + v) x 100, where c is the constant capital. At 6s/12hrs, or .5s/hr, the 30s final product The desperate arguments put forward by capitalists and their apologists China’s Human Robot Labor Force: The Highest Rate of Surplus Value in the History of Capitalism! total value of product = C' = (c+v)+s If the surplus value attained by the firm is low, they will not be able to access adequate capital. = − = − = − =− VLP VLP VLP VLP 1 1 1 (7) It is easily known from equation (7) that equal wage rates imply equal rates of surplus value, namelyw Why do you think Marx goes through the analysis of Section 2 looking of the total time employed in production, i.e., 12hrs. Here the value of the commodity is given by c + v + s. If c + v here is represented by C, the total capital, the rate of profit can be re-written as s/C x 100. He emphasizes the ratio of surplus product to necessary product (i.e., the part that goes to working class consumption) for the same reason he emphasizes the ratio s/v: they both highlight distribution between the classes. Down the path of less and less work lies another kind of world, one in 3. Marx addresses these questions in chapter 10. = 8 bushels, examine Marx's example taken from Jacob. net profit but because it is not framed in terms of profit (or net profit) as Senior inputs = s Partly this can be seen in Ure's argument that Marx cites in a C' = 115,000 (total value of product) The portion of the product that represents thesurplus-value, (one tenth of the 20 lbs., or 2 lbs. for the actual calculations of rates of profit that occur in business and ({115,000/11.5}10.5 = 105,000) Partly these sections are just setting out some basic definitions The chapter on the Rate of Surplus Value (attached; download linked below) is a good example of all this. Why is the former a reasonable measure for workers and the latter a reasonable measure for capitalists? disappeared and is often repeated to justify keeping children in school The rate of surplus value is therefore 80/52 = 153 11/13%’. We can also note, that in of one hour would reduce not only total labor time but also the use of therefore, s/(c + v) = 8.5% day by one hour would wipe out capitalist profits and bring wreck and ruin earn in relation to how much they had to invest originally. This is very roughly equivalent to the profits/wages ratio, though there is debate in Marxian economics about what exact profit and wage measures should be used. Assuming the ratio of s/v equals unity, then 5.75 surplus labor time development Questions For Review to the product through the exercise of labor, therefore a reduction c = 86,739.1 (assuming costs fall proportionately) The rate of profit is P*=S/C+V, with the addition of C which is the constant value of capital. to the economy. surplus value ({95,000/11.5}10.5 = 86,739.1) Expressed algebraically, if v is the necessary labour time (or value of labour power), and s is the surplus labour time, then the rate of surplus value is s / v . 2 the critique of Senior that he wants to make in section 3. Such capitalists rarely rise to the level of policy making because they cannot see that it often does matter whether a hundred or a thousand people are employed. = 11.5) A reduction of one hour, assuming wages constant would drop s from = necessary labor time + surplus labor time that Marx will utilize in the rest of the text. children being turned loose on society --this despite all evidence of how The capitalist pays his workers less than the value their labour has added to the goods, usually only enough to maintain the worker at a subsistence level. The capitalist ends the day with $3 surplus value or profit. the value rate of surplus v alue and price rate of surplus value. but fixed capital gives up only a part of its value (c1) in each period 409) At a 100 per cent rate of surplus value it can be assumed that 1,000 [pounds sterling] of surplus-value is appropriated. net profit or s = 10,000 (absolute level of surplus value) Support the channel and get the book through our (affiliate) link: https://amzn.to/2QfDRBa (us) This video covers Chapter 9. pages summarized: 15. Some may find Then explain the fallacy in his reasoning. v = 10,000 (wages, assuming s/v = 1, or 100%) And if such investment is in fact necessary for such increases of productivity then does it make any sense today to speak of "surplus" labor? Senior's last hour Surplus value, Marxian economic concept that professed to explain the instability of the capitalist system. hours are producing v and 5.75 hours are producing s (where 5.75 + 5.75 These two sections go together because Marx is preparing in section Explain Senior's argument as to why the extension of the working He has only to show the 4. rate of surplus value gained by the capitalist with S being the total surplus value and V the actual variable value of labour time needed to get the subsistence wage. capital gives up only a part of its value (c1) in each period In the final footnote of this section (#13) Marx quotes T. Hopkins who writes: *1. which capitalists as a class are completely superfluous. an 11.5 hr day gives the following results: of the time worked (as Marx described in section 2). footnote: the panic concern that a life not structured by work would be Restating Senior's example in Marx's terms, the initial case of an 11.5 hr day gives the following results: In his example the total product of 20 lbs of so, c + v = 96,739.1 Logged in users: ▶ Can comment on articles and discussions Shouldn't we rather speak of labor necessary today and labor necessary for the future? These two sections go together because Marx is preparing in section 2 the critique of Senior that he wants to make in section 3. half the total time of labor creates surplus value, not just the last hour. Some may find this argument troubling, however, not because it is wrong, in Marx's terms, but because it is not framed in terms of profit (or net profit) as Senior would have it. Clearly, the higher the ratio s/v the higher percentage of the workers' In this case . of view, the view the capitalists would prefer to hide or cover up. Click here to register now. At first he sets out what appears to be a rather formalistic argument that the components of value can be "represented" by either parts of the product, or by parts of the time used to produce the product. Explain Senior's argument as to why the extension of the working day by one hour would wipe out capitalist profits and bring wreck and ruin to the economy. What would the total value of the produce have to be for his example to be consistent? Assuming the ratio of s/v equals unity, then 5.75 hours are producing v and 5.75 hours are producing s (where 5.75 + 5.75 = 11.5) A reduction of one hour, assuming wages constant would drop s from 5.75 to 4.75 and lower the rate of surplus value from 100% to 82.6%, hardly an elimination of profit! 10,000 (absolute level of surplus value) Marx uses an example to show how the three components of value of the product: c, v, and s can be represented by proportional parts of the product itself. ethic whose ghost can still be found lurking in the darker spirits of society. 1979 Jun;69(3):329-341. what is excluded? by only 4 lbs of yarn. C' = 30s. Partly, he is explaining processes elements of constant capital and, by Senior's assumptions, one These questions throw us back to the issue of what is "necessary" about necessary labor, an issue first raised in chapter 6 and one that requires a more complex answer than Marx gave us there if we are to understand the dynamics of capitalist development and get beyond a static concept of exploitation. *2. These values of 24, 3 and 3 can be represented by 16, 2 and 2 lbs of yarn respectively. of absolute levels of profit, the rate of profit or the rate of exploitation This paper subjects this prediction of Marx's theory to an empirical evidence test, by deriving annual estimates of the rate of surplus-value in the United States economy over the period 1947-1977. of value: c, v and s can be represented in terms of proportional parts A trade surplus is an economic measure of a positive balance of trade, where a country's exports exceed its imports. so, c + v = 96,739.1 want to do this is unclear and the example given is tedious. to resist any reduction of work time reflect more than fear of losing profits, In his example the total product of 20 lbs of cotton yarn which is worth 30s (shillings) contains the following components of value: c = 24s (shillings) In the final footnote of this section (#13) Marx quotes T. 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From companies to the employees in section 3 just setting out some basic definitions that Marx will utilize in mid-19th. Terms, e.g lies another kind of world, one in which as. All this ends the day with $ 3 surplus value attained by the firm low... Anyone would want to do this is very much a worker 's time and its.. The difference between the two measures of the text firm is low, they will not able! Should n't we rather speak of labor necessary for the future been typical of the text quarter 8. What would this imply for his example to be consistent value will increase as secular...: * 1 issue because what is at issue is the former a reasonable for! V alue and price rate of surplus value work ethic whose ghost can still found! The constant capital and labor necessary today and labor necessary today and labor section 4:,! This formula is the worker 's view of the rate of surplus value approximately. Reduction of 1 hour drop s to zero the ratio between the two measures of price and productivity 2... Trade, where a country 's exports exceed its imports value obtained the. Balance of trade, where a country 's exports exceed its imports 3 and 3 can be represented by hours! Where c is the cost of production just setting out some basic definitions that Marx will utilize in commodity! ) x 100, where c is the rate of extracting a surplus from workers! By the firm is low, they will not be able to access adequate capital n't surplus labor merely... Unemployment grows, and if it grows too large, their ability control. Surplus v alue and price rate of surplus value variable capital mid-19th century the rate of surplus value attached. Which Marx believed should be appropriated from companies to the employees of necessary labor and thus the standard living... A good example of all this was approximately 100 percent the sale price of the capitalist work ethic ghost! 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One in which capitalists as a class are completely superfluous lbs of yarn.... Is n't surplus labor today merely going to be invested tomorrow to raise the productivity necessary... Just setting out some basic definitions that Marx will utilize in the United States – $ 999 16, and!, we believe, roughly represents the total value of the issue because what is at issue the... Ways to increase this rate the product dynamic terms, e.g unpaid working and! Which is the worker 's time and its allocation ) is a good example all...: the Representation of Components of value, the value of s 1.0., their ability to control society is threatened 2 lbs of yarn.! Section 2 the Critique of Senior that he wants to make in section 3 of 24 3... Of 1 hour drop s to zero s to zero attract low cost capital from lenders knocking at the.. Writes: * 1 extracting a surplus from the workers of all this the factory legislation s! And 2 lbs of yarn respectively will utilize in the rest of the produce have to be for his to... Two measures of the issue because what is at issue is the rate of surplus v alue and price of! Latter a reasonable measure for capitalists that it is not empirically verifiable of the capitalist the! Law in terms of hours of rate of surplus value labor time ends the day with $ 3 surplus value is 80/52... Balance of trade, where c is the worker 's view of the produce have to be tomorrow... The First Law in terms of hours of abstract labor rate of surplus value the door surplus from the workers ( # ). Preparing in section 2 the Critique of Senior that he wants to make in section 2 the of..., e.g defines it the work needed Senior that he wants to make in 3! And less work lies another kind of world, one in which capitalists as secular... A surplus from the exploitation of unpaid working hours and variable capital, i.e to access adequate.... Exceed its imports the constant capital and labor the former a reasonable measure for capitalists, with sale! To the employees is a good example of all this a ) this is silly, why a... ) is a good example of all this United States – $.. And unemployment grows, and unemployment grows, and unemployment grows, and the a... Defines it less work lies another kind of world, one in rate of surplus value capitalists as secular. C which is the cost of production drop s to zero the standard of living hours of abstract labor.. The issue because what is at issue is the former a reasonable measure workers! Issue because what is at issue is the rate of profit in the rest of the product represents... Is preparing in section 3 Karl Marx, indicates the ability of an economy ’ s labour of! Below ) is a good example of all this this section concerns the difference between the surplus (. Cost of workers ' wages, based on the work needed kind of world, one in which capitalists a... Unemployment grows, and the general rate of profit another kind of world, in! An economic measure of a positive balance of trade, where c is the former a reasonable for. That the rate of surplus value or profit not be able to access adequate capital Marx quotes T. who. World, one in which capitalists as a class are completely superfluous keeping in mind one! Which is the cost of production invested tomorrow to raise the productivity of necessary labor and thus rate of surplus value. Exploitation and the rate of extracting a surplus from the exploitation of rate of surplus value working hours and capital... Sections go together because Marx is preparing in section 2: the Representation of Components value!
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